I read the article last night. I agree with a lot of it. It noted what I thought; the Israeli deal with Russia is a way for Israel to market the gas (without using the moslem Arabs) and for Russia it helps tighten their control of the gas market.
It’s also interesting what they said about declining Saudi oil production. I remember 08 Bush went to the Saudis to grovel to them to get them to increase production. It was the oil price shock that triggered the financial meltdown and burst the housing bubble. The impression I got from reading between the lines on the story was not that the Saudis WOULDN’T increase production, it was that they COULDN’T.
The article is also correct about the end of OPEC. It’s really a dead letter organization, with so many non-OPEC sources of oil becoming available. OPEC could only exist where Saudi Arabia was able to set oil prices, and the United States was the largest importer. In that relationship, we and the Saudis pretty much set the world oil price. Now, we are no longer the dominant importer and Saudi is no longer the dominant producer when you look at the global market as a whole. Yes, both countries still carry economic weight in the oil markets, but we don’t dictate them. Thus, the creation, and now the end, of the “Petrodollar” as the article points out.
In this new oil and gas market, though, with the advent of fracking and so many other players, I don’t see how Russia can come to dominate. Yes, they have large reserves. But they won’t be able to set the price. What they can do is monopolize Europe and be a major supplier to China and perhaps India.
What is interesting is that we may no longer be a major player in the world energy market. Or maybe I’ll say we shouldn’t. If we hadn’t been corrupted by Saudi and Chicom money, both in Congress, the bureaucracy, and the courts, North America should be an energy autarky right now, and for the next 25 years.
There is a major realignment going on in the world right now. The post-World War 2 system is coming to a close. The issue of Syria was bigger than most people realize, because it has the potential to end the Post-World War 2 order the way the assassination of Franz Ferdinand ended the Post-Napoleonic order. But the time is not ripe yet. The power blocs have not yet firmly coalesced. The Syrian crisis may be similar to the Moroccan Crisis of 1905, where war wasn’t a real possibility, but it began the process of cementing the opposing power blocs so that sooner or later, a crisis will occur where one of the two power blocs believes that the option for war is a “now or never” proposition.
Thank you!
I appreciate your insights on this. Did you ever read a book titled “The Fourth Turning”?
Your comments on the end of the “post WW2 system” remind me of that book’s main idea - that we are in a “crisis” cycle - one which happens every fourth generation.