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Russia oil production

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Russian oil production considered to be at "over peak" stage with increases mainly due to offshore drilling. In 2014 total petroleum and other liquids production in 2014 were 10.8 Mb/d  (EIA). Russia crude oil production in late 2015 was around 10.20M, up from  10.08Mb/done year ago. That's was an unanticipated, even by Russian Ministry of Energy result of activities of small companies. which managed to increase of  production by  1.12% from one year ago, when most analysts expected a slight decline (Russia Crude Oil Production (Monthly, Barrels per Day).

Despite severe depreciation of ruble and sanctions, in 2015 Russia managed to reach the level of production that exceed the level of former USSR period. At the same time most of Russia's fields are mature fields and the production from them is declining for long time,  offset only by new more expensive projects with less total volume. Unless Arctic oil and other expensive oil are economical to produce (which requires over $100 bbl price) the national path for Russian production is iether long plato fed by projects coming online, which were started during "good times" (and now face losses, not profits)  or straight down as capital expenses were slashed in 2015 tot he bones.  

Russian oil extraction (red) and oil exports (green) in metric tons

 

In 2015 Russia managed to increase exports the first time in six years, but that does not change general situation: internal consumption is growing pretty robustly with growth of car fleet and decline of production due to national depletion of  conventional oil wells. The latter became more and more difficult to compensate with new discoveries. And new fields, even if such exist, can't be now tapped because capital expenditures by most Russian oil companies now are slashed to the bone (Russia is more like the USA in this respect with over dozen of major oil companies producing  oil).

At current oil prices Arctic oil now is out of reach and only existing platforms will remain in production. All of them are losing money. conventional wells are still profitable with same remaining profitable up to $20 per barrel. Still for the next several years Russia probably will be able to keep the current level of production due to huge previous investments dome in 2010-2014 in a few new fields (Bloomberg Business, December 20, 2015):

The other big boosts to Russian production this year have come from a few mid-sized new fields like those of Severenergia in the Arctic Yamal region. Co-owners Novatek OJSC and Gazpromneft PJSC invested in the $9.2 billion project back when oil prices were high. With most of the capital already committed, operating costs now are relatively low and output of gas condensate, a light and especially valuable form of crude, is up five-fold this year.

One side effect of falling oil prices -- the 52 percent plunge in the ruble over the last two years -- has helped Russian oil producers, chopping their costs in dollar terms since between 80 and 90 percent of their spending comes in rubles.

... ... ...

To be sure, few in the industry expect Russia to be able to sustain the current performance for more than a few years. Tax hikes and lack of financing have cut deeply into exploration drilling, which is down 21 percent this year, and handicap the larger new projects that are needed to replace the country’s older fields as they run dry.

... ... ...

In some parts of the Russian oil patch, low prices are already causing pain. At $40 a barrel, “half of our fields could be stopped. Heavy oil, low horizons, mature horizons are all unprofitable at a price of $40-45. We are waiting for better times,” Russneft OJSC Board Chairman Mikhail Gutseriev said in an interview on state television early this month.

Unfortunately just before the oil prices crush Russia was engaged in several high cost drilling projects in Arctic and was caught naked when oil price dropped. ( see Petroleum industry in Russia - Wikipedia).  Timing can't be more bad as this is a really expensive oil, probably around $60 per barrel or higher at wellhead.  Which are now sold at a huge discount.  Igor Sechin proved to be a weak leader of the Russia major state owned oil company Rosneft.  Government refused to bail out the company which faces large external debt and it was saved by some "white knife" billionaire.

Moscow Exile, December 19, 2015 at 11:19 am

Undeterred by OPEC’s decision to keep pumping and drive out U.S. shale rivals, Russian oil output continued to grow, in October setting a new monthly record for the post-Soviet era. Explorers have remained profitable under a friendly tax system and low production costs.

Mystery Benefactor

Rosneft assuaged concerns over the sustainability of Russia’s biggest corporate debt load after the company received a $15 billion advance payment for oil supplies from a source the company didn’t identify, according to quarterly reports published Nov. 13. The inflow of cash will help Rosneft meet $2.5 billion in debt due in the fourth quarter, $13.7 billion in 2016 and $11.3 billion in 2017, according to a presentation on its website.

See: One Year Into New OPEC Era, You Made 12% Buying These Oil Bonds

It looks like the board is in denial of the blunder with overinvest they made:

18 December 2015
Rosneft Holds Board of Directors Meeting

On December 18, Rosneft Board of Directors considered in Vladivostok interim results of its 2015 operations, the business-plan for 2016-2017, the Long-term development program and the energy efficiency program of the Company.

The following decisions were taken:

1. The Board of Directors considered and acknowledged 2015 Rosneft interim results and the intermediate results of the implementation of the long-term development program of the Company. The Board of Directors welcomed the results of the implementation of programs aimed at raising efficiency in challenging economic environment: the Company maintained low levels of OPEX and eased its debt burden.

2. The Board of Directors considered and acknowledged the business-plan for 2016-2017, structured in accordance with a conservative macroeconomic scenario and focused on the implementation of the Long-term development program of the Company, approved by the Government of the Russian Federation.

Within the ambit of delivering strategic goals of boosting production, securing deliveries of oil and oil products, maintaining a market share (both in Russia and abroad), the Company plans to increase capital expenditures by a third (compared to 2015 levels). The investment development program envisages the achievement of strategic goals of hydrocarbon production growth by means of accelerated commencement of oil and gas greenfields whilst exercising a balanced external financing program. After the completion of transition to Euro-5 motor fuels production in December 2015, refineries’ modernization program will be focused on increasing processing depth. Also, the program of cutting operating costs and enhancing operating and financial efficiency will be continued. Hence the leadership in the industry by the operating costs and capital costs will be guaranteed.

... .... ...

Commenting on the results of the Board meeting, Rosneft Chairman of the Management Board Igor Sechin said: “Measures taken by the Company for strengthening its oilfield services business dimension in 2015 enabled Rosneft to increase production in order to guarantee supplies to its traditional markets while keeping operating and capital expenditures at the record-low levels. The Company consistently generates free cash flow, providing funding sources for its investment decisions in accordance with 2015-2016 business plan approved by the Board of Directors and the Long-term Development Program”.

In August 2014, it was announced that preparations by the Russian government to sell a 19.5 percent stake in the company were underway and would most likely be sold in two tranches. So far this chunk of the company was not sold, probably because of low oil prices. 

Russia oil internal consumption is generally more or less stable and growling at a very slow page outside several 'abnormal" years. In 2016 it will not probably grow much as the economy remain is conditions close to recession. Lukoil chairman has said that he  expects Russia to produce less oil  in 2016 than in 2015

Russia internal oil consumption is currently around 3.3 Mb/d, up from 3.2 Mb/d one year ago. This is a change of 3.15% from one year ago.

2005 2,785.14 1.25 %
2006 2,803.47 0.66 %
2007 2,885.10 2.91 %
2008 2,981.92 3.36 %
2009 2,888.53 -3.13 %
2010 3,081.82 6.69 %
2011 3,352.11 8.77 %
2012 3,395.11 1.28 %
2013 3,320.00 -2.21 %

It is expected that it will continue to grow by around 0.1 Mb/d per year as car fleet is rapidly growing.. Also Russia will process more raw oil in 2016 then in 2015 which also negatively influence export of raw oil. Russia oil consumption per capita is still four times less then in the USA (15 vs 60 bbl/day per 1000 people)

Russian leadership have found itself unprepared to the dramatic drop of oil prices and now will take moves to refine more oil at home, and selling less raw oil. The fact that Russia sells mostly unprocessed oil was a blunder that costs Russia billions and Putin had shown ability to learn from mistakes. 

Russia's Key Energy Statistics world rank
Total Primary Energy Production
2012
55.296
Quadrillion Btu
3
Total Primary Energy Consumption
2012
31.522
Quadrillion Btu
3
Dry Natural Gas Production
2011
22,213
Billion Cubic Feet
2
Total Petroleum and Other Liquids Production
2014
10,853
Thousand Barrels Per Day
3
Total Primary Coal Production
2013
388,013
Thousand Short Tons
6

Compare that with the USA

United States' Key Energy Statistics world rank
Total Primary Energy Production
2012
79.212
Quadrillion Btu
2
Total Primary Energy Consumption
2012
95.058
Quadrillion Btu
2
Dry Natural Gas Production
2011
22,902
Billion Cubic Feet
1
Total Petroleum and Other Liquids Production
2014
13,973
Thousand Barrels Per Day
1
Total Primary Coal Production
2013
984,842
Thousand Short Tons
2

 


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[Oct 10, 2017] Central-Eastern European pipeline gets go-ahead

Oct 10, 2017 | marknesop.wordpress.com

et Al , September 30, 2017 at 7:24 am

Euractiv: Central-Eastern European pipeline gets go-ahead
https://www.euractiv.com/section/energy/news/central-eastern-european-pipeline-gets-go-ahead/

An ambitious gas pipeline project connecting Bulgaria, Romania, Hungary and Austria received a shot in the arm on Thursday (28 September), when all of the involved parties signed a memorandum of understanding for the project, a vital part of Europe's efforts to wean itself off Russian gas

"We are at a very advanced stage with the BRUA project. We issued the building permit, we are conducting procedures for assigning the construction works, and contracts have already been signed for the design part and for the part concerning equipment for stations," Romanian Energy Minister Toma Petcu revealed.

"In December, the contracts for the execution part are going to be signed and pipe procurement is going to be finalised," Petcu added
####

Plenty more at the link.

Patient Observer , September 30, 2017 at 8:36 am
BRUA will be able to transport gas from the Black Sea and, when supply comes online at the end of the decade, from the Caspian too.

It is intended to cut Eastern and Central Europe's dependence on Russian gas, an important part of the European Commission's third energy package and the CESEC group's objectives.

Black Sea gas? Where again? Crimea does apparently have significant off-shore deposits of undeveloped gas. It is difficult to find an article via Google on the subject that does not have an anti-Russian slant (you know, something like just facts) but here is something on the topic:

http://www.zerohedge.com/news/2014-05-20/putins-crimea-bonus-vast-oil-and-gas-fields

I don't know if there are other sources of Black Sea gas directly accessible to the EU.

Caspian sea gas seems a looong way off, if ever it were to happen.

Patient Observer , September 30, 2017 at 10:21 am
Thinking more about the BRUA pipe line, It could be a make work project for the region with PC overtones (e.g. Crimea's little escapade will soon end bringing Black Sea gas back to Europe). The usual graft and corruption will also keep Brussels bureaucrats and local counterparts fat and happy.
et Al , September 30, 2017 at 2:00 pm
It fits in to the Energy Union progapanda that Brussels is spreading. There at least it makes some sense that where ever you are in the EU, member states will have access to energy resources from wherever else in the EU. Of course, the real question is of price and is something completely different. Does anyone else think it is insane to ship LNG to Krk off Croatia to be pipelined to the rest of the Balkans? Is this a bribe to Qatar or something? Or American LNG to say Antwerp or through the Med?

Still, the EU pipeline projects are small change compared to the amount spend on the Common Agricultural Policy and other stuff. I guess its just another 'Do Something' schtick to make Brussels seem relevant to EU citizens like me. Speaking of which, I enjoyed data and telecoms free roaming this summer when I went to the g/f's folk's place this summer. It was.. surreal. And normal. The fact that national EU telecomms operators have been shafting their own customers so hard and for so long and it took f($*ing Brussels to force it through shows which side their own states are on. A sorry state indeed!

marknesop , September 30, 2017 at 3:55 pm
It must be said again – Russia does not intend to sit idle in the LNG business either. And if the planned Kaliningrad terminal comes online by the end of this year as planned , it will not only position Russia attractively in the LNG market (does it cost more to bring European gas cargoes from Kaliningrad, or across the Atlantic?), it will bring increased energy independence to Kaliningrad itself. A cruise terminal is planned as well.
kirill , September 30, 2017 at 11:38 am
These clowns are a combination of corrupt and delusional. The only non-Russian gas coming via the Black Sea would be hypothetical sources via Turkey from Qatar/Iran and the Caspian basin. There is no source of natural gas in the Black Sea that, for example, Bulgaria could develop to feed this pipe.
marknesop , September 30, 2017 at 12:54 pm
Europe is forever bragging about weaning itself off of Russian gas, when what it is mostly doing is taking Russian gas and moving it around through connectors, and then reselling it to each other. A prime example – although not European – is Ukraine, which claims to have taken no Russian gas throughout 2015 and 2016 during which time it sourced most of its gas from Slovakia, supplied at 90% and above levels by Russia.

Ukraine claims to be getting gas from Yurrup at cheaper prices than Gazprom offered for direct supplies. If that's true, Slovakia is selling gas to Ukraine for less than it paid for it. And there's a word for people like that.

[Oct 04, 2017] The Logical (and Coming) End to the US Empire by Robert Abele

No so fast... Five years later (the article was written in 2013) the US empire is still going strong. meanwhile from 2013 to 2017 it managed to counterattack resource nationalists (killing Kaddafi) and and win in Libya, making the country a colony again. I think Venezuela is the next. Oil prices dropped more then 50% in 2014 (from over $100 to less then $50 per barrel ) and did not yet recovered...
Notable quotes:
"... For an example of the ethical problems of empire, think about the completely unjustifiable attacks on civilians done by the U.S. in Afghanistan, Iraq, Libya, Syria, and most prominently in Pakistan and Yemen, especially done by drones. Or consider U.S. use of torture, from Abu Ghraib to Guantanamo Bay. As everyone knows by now, ethical and humanitarian appeals have been completely and categorically rejected by U.S. leaders, not beginning with 9-11, certainly rejected with greater vigor since then. ..."
"... But there is another, often overlooked, analysis of U.S. actions, that is the logical result of engaging in the actions of Empire, and that concerns the logical consequence of using massive amounts of resources to attempt to control the resources being used (the second use of the term resources here includes citizens; the people of a city or nation). As the economic, logistic, and humanitarian costs all rise in direct proportion to Empire's actions, the sustaining of the Empire becomes impossible, on the basis of its own internal logic. ..."
"... When the issue of blowback is added "i.e. that other nations and peoples are unlikely to cooperate willingly in having their resources, humanity, and very lives removed from them "the end result, Empire's fall, could be hastened, and is certainly assured. We can now predict not only how it will happen, but also its imminent coming. ..."
"... First, the heaviest resource consumers of fossil fuels, in order, are the U.S. military, U.S. citizens, China, and India. The Department of Defense per capita energy consumption is 10 times more than per capita energy consumption in China, or 30 times more than that of Africa. ..."
"... Oil accounts for more than three-fourths of DoD’s total energy consumption. The Post Carbon Institute estimates that abroad alone, the U.S. military consumes about 150,000 barrels per day. In 2006, for example, the Air Force consumed 2.6 billion gallons of jet-fuel, which is the same amount of fuel U.S. airplanes consumed during all of WWII (between December 1941 and August 1945) (from The Resilience Group of the Post Carbon Institute, www.resilience.org ). ..."
"... This essays suggests that these two solid arguments should now be combined with an institutional-logical analysis to demonstrate not only the intrinsic, natural limits to empire, but to show reasons how and why empire must and will ultimately disintegrate due to the hubris of ignoring natural limitations of unbridled consumption coupled with attempts at singular control over others' resources and peoples. ..."
Jul 29, 2013 | www.counterpunch.org

There are numerous legal and ethical arguments that can and have been made in opposition to U.S. foreign policy of raw aggression. For an example of the illegalities of U.S. Empire, examine the Geneva Conventions, all four of which directly proscribe what they each call outrages to human dignity, in particular humiliating and degrading treatment (I, 1, 3). The outrages are named specifically as torture, mutilation, cruel treatment, taking hostages, murder, biological experimentation, and passing sentences on prisoners without benefit of a regularly constituted court.

Additionally, the Hague Conventions of 1899 and 1907 both underscore the Geneva Conventions and expand the traditional ethical concerns to rights and duties of neutral states by banning the use of poison gases or arms, destroying or seizing enemy private property, attacking towns and cities that are undefended, pillaging, collective punishment, servility of enemy citizens, and bullets made to wreak havoc once inside the human body. Prescriptions to limit the conduct of war include the requirements to warn towns of impending attacks, to protect cultural, religious, and health institutions, and to insure public order and safety.

For an example of the ethical problems of empire, think about the completely unjustifiable attacks on civilians done by the U.S. in Afghanistan, Iraq, Libya, Syria, and most prominently in Pakistan and Yemen, especially done by drones. Or consider U.S. use of torture, from Abu Ghraib to Guantanamo Bay. As everyone knows by now, ethical and humanitarian appeals have been completely and categorically rejected by U.S. leaders, not beginning with 9-11, certainly rejected with greater vigor since then.

But there is another, often overlooked, analysis of U.S. actions, that is the logical result of engaging in the actions of Empire, and that concerns the logical consequence of using massive amounts of resources to attempt to control the resources being used (the second use of the term resources here includes citizens; the people of a city or nation). As the economic, logistic, and humanitarian costs all rise in direct proportion to Empire's actions, the sustaining of the Empire becomes impossible, on the basis of its own internal logic.

In whatever historical epoch you choose, if you take your compass and draw a circle around any given tribe, you can see the desired extent of their territorial claims for resource control. One thus can see that particular group's

  1. resource consumption; and
  2. circle of desired resource control. But when two further historical developments are added, such as
  3. technologically-driven consumption (e.g. fossil-fuel guzzling appliances and cars, etc.); and
  4. now necessary desires for global resources needed to feed that group's consumption habits "then the situation expands sufficiently to become one of using extensive amounts of the very resources one is attempting to control (in the U.S. case, oil and money) for the sake of controlling the resources over which one needs to exert control! This circular logic cannot be maintained when it meets
  5. a scarcity of resources; and
  6. the natural-institutional-logical antinomy of using resources in massive amounts to control the resources you are using for control. In other words, the empire based on this pattern must end when it runs headlong into resource scarcity, and/or natural-logical contradictions involving its own internal (economic and resource) limitations.

This argument against U.S. Empire is not based on ethical or legal grounds (although those remain the best arguments in favor of voluntarily ending empire and regaining our citizenship [civil rights] and humanness) "since those arguments have been put asunder by the U.S. administrators of empire. Rather, the institutional-logical analysis argues that an empire such as the U.S. has constructed exhausts itself by being unable to expand fast enough to control everything it seeks in order to continue its dominance.

When the issue of blowback is added "i.e. that other nations and peoples are unlikely to cooperate willingly in having their resources, humanity, and very lives removed from them "the end result, Empire's fall, could be hastened, and is certainly assured. We can now predict not only how it will happen, but also its imminent coming. Here's how.

First, the heaviest resource consumers of fossil fuels, in order, are the U.S. military, U.S. citizens, China, and India. The Department of Defense per capita energy consumption is 10 times more than per capita energy consumption in China, or 30 times more than that of Africa.

Oil accounts for more than three-fourths of DoD’s total energy consumption. The Post Carbon Institute estimates that abroad alone, the U.S. military consumes about 150,000 barrels per day. In 2006, for example, the Air Force consumed 2.6 billion gallons of jet-fuel, which is the same amount of fuel U.S. airplanes consumed during all of WWII (between December 1941 and August 1945) (from The Resilience Group of the Post Carbon Institute, www.resilience.org ).

Second, concerning the global dimension of resource control, one needs only to understand the preferred method that U.S. Empire acolytes use to justify their actions abroad: the state of emergency that was declared after 9/11 has continued unabated since then, due to the ongoing threat of terrorism (see Jeremy Scahill, Dirty Wars: The World is a Battlefield , for the latest detailed instances of this process.). The domestic equivalent to his war has been well underway since 9-11. (For detail on the domestic front, see also Trevor Aaronson, Terror Factory , regarding FBI domestic use of the ongoing threat of terrorism to deny basic civil rights to citizens).

This allows U.S. government administrators to maintain a state of exception to the rule of law. Georgio Agamben, in his book States of Exception , defines this phrase as extraordinary governmental actions resulting from distinctively political crises. As such, the actions of such administrators are in-between normal political operations and legal ones. This no man's land of government policy is not only difficult to define, but brings in its wake a suspension of the entire existing juridical order. Thus, states of exception are those in which a government in fact suspends the rule of law for itself, while attempting to maintain some semblance of legal order, for the purpose of consolidating its power and control (see Georgio Agamben, States of Exception , Chapter Two).

Regarding the scarcity of resources issue, none other than the World Bank produced a detailed study of demand and supply projections for the immediate future. The study projects that, on the basis of current consumption and immediately precedent rises in it, the demand for food will rise by 50% by 2030, for meat by 85%, for oil by 20 million barrels a day, and for water by 32%, all by the same year.

This is met by alarming statistics and predictions from the supply side. In their report, they state that global food growth rates fell by 1.1% over the past decade, and are continuing to fall, while global food consumption outstripped production in seven of the eight years between 2000 and 2008. Further, the Food and Agricultural Organization and the UN Environment Program estimate that 16% of the arable land used now is degraded. Intensifying competition between different land uses is likely to emerge in future, including food crops, livestock, etc., and the world's expanding cities. Current rates of water extraction from rivers, groundwater and other sources are already unsustainable in many parts of the world.

Over one billion people live in water basins in which the physical scarcity of water is absolute; by 2025, the figure is projected to rise two billion, with up to two thirds of the world's population living in water-stressed conditions (mainly in non-OECD countries).

On oil , the International Energy Agency has warned consistently that there is a significant risk of a new supply crunch as the global economy recovers. Additionally, the IEA's chief economist argues that peak production could take place by 2020 (from the World Development Report 2011, Background Paper: Resource Scarcity, Climate Change and the Risk of Violent Conflict, www.worldbank.org ).

The conclusion from all of these points is nearly obvious: if resources are even relatively scarce, and the habits of and desires for consumption continue to rise among nations, and especially among the citizens of Empire (as has been documented in part above), and if control over those resources is the goal of Empire, but if the Empire consumes more resources than it can logistically or economically control due to natural limitations of those resources themselves, and/or to the consumption of more resources than is either available to it or that it needs to survive, then the power of the Empire will naturally-logically end in a sharp decline, and soon (For applicable details on this, see Richard Heinberg, The Brief, Tragic Reign of Consumerism "and the Birth of a Happy Alternative, www.postcarbon.org ).

With all indicators predicting that the contradictions of Empire's resource consumption, circle of desired resource control, scarcity of resources, and contradiction in resource use and control, are all about to collide in a few years, not decades, it is time to start planning for a post-Empire future. To that end, any psychologist reading this analysis will recognize themes of realistic conflict theory, which is a theory which explains how intergroup hostility can arise as a result of conflicting goals and competition over limited resources

The key point in bringing this psychological theory into the discussion is that in this theory, it is concluded that friction between groups can be reduced only in the presence of superordinate goals that promote united, cooperative action (see Wikipedia on Realistic Conflict Theory for a good overview, summarized here. https://en.wikipedia.org ). Note the agreement of the ethical, legal, and psychological analyses of Empire's oppression: the most effective resolution to oppression, (empire) dominance, and conflict is united, cooperative action, not the attempt to control or destroy people and nations who stand in the way of our control.

We have seen that progressives have had available to them a standard two-pronged argument against empire "American or any other". Progressives have for good reason appealed consistently to the ethical and the legal arguments available to help stem the desires for world and resource domination.

This essays suggests that these two solid arguments should now be combined with an institutional-logical analysis to demonstrate not only the intrinsic, natural limits to empire, but to show reasons how and why empire must and will ultimately disintegrate due to the hubris of ignoring natural limitations of unbridled consumption coupled with attempts at singular control over others' resources and peoples.

Dr. Robert P. Abele holds a Ph.D. in Philosophy from Marquette University He is the author of three books: A User’s Guide to the USA PATRIOT Act (2005); The Anatomy of a Deception: A Logical and Ethical Analysis of the Decision to Invade Iraq (2009); Democracy Gone: A Chronicle of the Last Chapters of the Great American Democratic Experiment (2009). He contributed eleven chapters to the Encyclopedia of Global Justice, from The Hague: Springer Press (October, 2011). Dr. Abele is a professor of philosophy at Diablo Valley College, located in Pleasant Hill, California in the San Francisco Bay area.

[Sep 25, 2017] The EU is again taking the position that transit of Russian gas through Ukraine after 2020 is a priority.

Notable quotes:
"... I know it's an analogy I have used before – as Lucy in the Peanuts ..."
"... Washington is the big brother Poroshenko turns to when he wants help to stymie Russia's efforts to build circumferential commercial links around Ukraine, and instead for Ukraine to have an important linking role in Russia's energy business with Europe – in short, for Russia to continue using Ukraine to transit its gas to Europe. ..."
"... In Ukraine's current condition, it is at serious risk of collapse. And a country that sends its gas across Ukraine is a country that cannot afford to let Ukraine turn into a failed state, at any cost. Just to put a cherry on top of this splendiferous vision, complications actually can be introduced, at a whim, into Europe's energy supply, should they get uppity. ..."
"... This is no time for Russia to weaken in its resolve. But it is also no time for Germany to allow itself to be rolled. Somebody is going to be a major gas hub for Europe, and in the current climate it is going to be Germany or Ukraine. Germany should ask itself what Ukraine has done for it which would merit such sacrifice. ..."
Sep 25, 2017 | marknesop.wordpress.com

Originally from: The West is as Thick as the Earth's Mantle

First, I ran across an hilarious post on Interfax Ukraine, which I was just going to offer for everyone's amusement. It featured the 17-year-old CEO of Naftogaz, Andriy (it's very important to Ukrainians that they spell their names differently from the Russian spelling, because they are not ignorant Slavs like the Russians, but the descendants of billion-year-old-carbon extraterrestrials) Kobolev, blubbering about how Siemens had caved in to pressure from the Russians, and stopped the sale of compressors to Naftogaz that it needed to modernize its Gas Transit System (GTS). He's not really 17, of course; he just has that Richie Cunningham kind of face that makes him look perennially pubescent, complete with red hair. That's part of what makes the article funny. There's more, but we'll get to that, in a bit.

Then it occurred to me that I've seen a loose series of pieces lately which mention Ukraine and gas transit, such as Ken Rapoza's piece for Forbes (which I mentioned already, in the comments to the previous post), where he unaccountably suggests that Russia has discovered it still needs Ukraine. As I argued on that occasion, Ukraine's soulful big-eyed caricature of trustworthiness is unlikely to fool anyone in Russia, and merely underscores how important it is for Russia's continuing progress and uncoupling from the west that it circumvent Ukraine, and not rely on it for anything.

But then I ran across this . The EU is again taking the position, or at least it appears so from the gobbling of the human turkey Maros Sefcovic, that transit of Russian gas through Ukraine after 2020 is a priority. And I thought, holy shit. Are we really going to go through all this all over again? And then I thought, what's a word for people who are incapable of learning? It's plain that western bureaucrats see themselves – and I know it's an analogy I have used before – as Lucy in the Peanuts comic strips , holding the football for Charlie Brown (Russia), only to snatch it away at the last second so that Charlie Brown/Russia falls ignominiously on his ass, to great amusement. What's a word for people who are so stupid that they believe everyone else is too stupid to see through their self-interested mendacity?

So I searched "What do you call people who are incapable of learning?" This site – somewhat unkindly – suggested "thick". Fair enough, I thought.

... ... ...

But that wasn't the part that made me laugh. No, what I found funny was Kobolev's pouty insistence that Nord Stream II be opposed as a 'politically-motivated project'. Just as if leaning on the jellyfish President of the European Commission to force Russia to continue transiting Europe's gas through the slow-motion collapse that is Ukraine had nothing whatsoever to do with politics. Nope, that just stands out as a solid business decision in every way, doesn't it?

Let's get something up-front and on deck right now, so that there is no ambiguity to confuse the issue. Washington was behind the Maidan turning into a violent insurrection, and the USA remains behind the scenes pulling the strings at the SBU . A very frank phone conversation between State Department neoconservative cookie-distributor Victoria Nuland and United States Ambassador to Ukraine Geoffrey Pyatt, in which the eventual composition of the coup government was planned in unambiguous detail should be all the evidence anyone needs that the entire process was manipulated and micromanaged. Lest anyone forget, Nuland's choice, 'Yats' – Arseniy Yatsenyuk – was such a political dung-magnet that he lasted only 26 months in the job. To be fair to him, he was tasked with implementing the IMF's favourite reform (because it's the only one the IMF really knows); austerity, in the poorest country in Europe. And it is the United States of America which continues to have its arm up the back of Kiev's shirt, making its mouth move. Washington is the big brother Poroshenko turns to when he wants help to stymie Russia's efforts to build circumferential commercial links around Ukraine, and instead for Ukraine to have an important linking role in Russia's energy business with Europe – in short, for Russia to continue using Ukraine to transit its gas to Europe.

Why is that, do you suppose? What's in it for Washington?

Dragging Ukraine into the west's orbit has long been a goal for Washington, dating back to the late and mostly-unlamented Zbigniew Brzezinski's 'grand chessboard' strategy – a geostrategic imperative, he said, to ensure American primacy in the world. Russia without Ukraine, quoth the pushing-up-daisies Pole, would never attain great-power status. And America has sort of gotten to like the feeling of being the only great power in the world.

The strategic value of Ukraine, then, is manifold. It can be stirred at any time to whip up global ire against Russia. NATO military exercises in Ukraine can be used to parade western might across Russia's doorstep. But its real value lies in continued gas transit by Russia between the source and Russia.

For one thing, it's the money – more than $ 2 Billion a year out of Russia's pocket and into Ukraine's, in transit fees. Once Russia is committed to continuing to use Ukraine as a transit country, transit fees can always be used as leverage to negotiate sweet energy deals for Ukraine, against the threat of interrupting Europe's gas supply. Europe would play its part by acting hysterically terrified and victimized. But that's still pretty small potatoes.

In Ukraine's current condition, it is at serious risk of collapse. And a country that sends its gas across Ukraine is a country that cannot afford to let Ukraine turn into a failed state, at any cost. Just to put a cherry on top of this splendiferous vision, complications actually can be introduced, at a whim, into Europe's energy supply, should they get uppity.

There is no room in this sugarplum daydream for an independent Germany which is a gas hub for Europe, perhaps not even with Mutti Merkel at the helm.

Perhaps some sort of medal could be struck for Sefcovic, for his relentless determination to herd Russia into a horrible bargain which would see it constantly bargaining and negotiating with greedy and lawless Ukraine for the expensive privilege of transiting its gas through Ukraine's whistling, creaking pipelines. In other circumstances, such dedication might be admirable. But I'm pretty confident that nobody in Russia is buying it. Europe has made an increasingly half-hearted attempt to stop Nord Stream II, and has learned instead that if it wanted to make a sensible legal argument, it should never have allowed the first pipeline; that's what, in the legal business, is known as 'precedent'.

All of which leads us to suspect that the real remaining antagonist to the Nord Stream II pipeline is somebody whom it should not by rights concern at all, since that entity is neither part of the supply chain nor the end user of the product – Uncle Sam.

This is no time for Russia to weaken in its resolve. But it is also no time for Germany to allow itself to be rolled. Somebody is going to be a major gas hub for Europe, and in the current climate it is going to be Germany or Ukraine. Germany should ask itself what Ukraine has done for it which would merit such sacrifice.

[Sep 17, 2017] Absence of common sense articles on the gas wars issue is really alaming by Nikos Tsafos

Notable quotes:
"... The critics allege that Nord Stream 2 is a political project. So what? When the Obama Administration authorised liquefied natural gas (LNG) exports from the United States, did it have politics in mind? Sure. When the Lithuanians turned to LNG to lessen their reliance on Russia, were they pursuing a political project? Well, the importing vessel is called "Independence." Saying that Nord Stream 2 is a political project does not get you very far ..."
"... I can't believe it has taken this long for Euractiv to post a normal article on NordStream II. Sure, it is not the Russophobic shitrag that EUObserver carrying bs opinions from self-acclaimed 'apolitical' energy expert Srijben de Jong, but absence of common sense articles on the issue are few and far between. I'll give this a '1 Hurrah!'. Let see if if it spreads. ..."
Jul 13, 2017 | marknesop.wordpress.com

et Al , July 12, 2017 at 11:23 am

Euractiv: Nord Stream 2 doesn't matter
https://www.euractiv.com/section/energy/opinion/nord-stream-2-doesnt-matter/

By Nikos Tsafos | enalytica

Nord Stream 2 continues to divide Europe. That's a pity. For all the noise, Nord Stream 2 is just a distraction – it doesn't really matter. Here's why, writes Nikos Tsafos.

Nikos Tsafos is president of enalytica, an energy consulting firm, and an adjunct lecturer at the Johns Hopkins School of Advanced International Studies (SAIS).

The critics allege that Nord Stream 2 is a political project. So what? When the Obama Administration authorised liquefied natural gas (LNG) exports from the United States, did it have politics in mind? Sure. When the Lithuanians turned to LNG to lessen their reliance on Russia, were they pursuing a political project? Well, the importing vessel is called "Independence." Saying that Nord Stream 2 is a political project does not get you very far

####

I can't believe it has taken this long for Euractiv to post a normal article on NordStream II. Sure, it is not the Russophobic shitrag that EUObserver carrying bs opinions from self-acclaimed 'apolitical' energy expert Srijben de Jong, but absence of common sense articles on the issue are few and far between. I'll give this a '1 Hurrah!'. Let see if if it spreads.

[Aug 26, 2017] First tanker crosses northern sea route without ice breaker

Aug 26, 2017 | marknesop.wordpress.com

et Al , August 24, 2017 at 4:05 pm

Al Beeb s'Allah GONAD (God's Own News Agency Direct): First tanker crosses northern sea route without ice breaker
http://www.bbc.co.uk/news/science-environment-41037071

The specially-built ship completed the crossing in just six-and-a-half days setting a new record, according to tanker's Russian owners.

The 300-metre-long Sovcomflot ship, the Christophe de Margerie, was carrying gas from Norway to South Korea .

The Christophe de Margerie is the world's first and, at present, only ice-breaking LNG carrier.

The ship, which features a lightweight steel reinforced hull, is the largest commercial ship to receive Arc7 certification, which means it is capable of travelling through ice up to 2.1m thick. ..
####

Another misleading headline, which is a pity because I wanted to say that the downside would be that it makes for shit Gin & Tonics if there is no ice!

Just as a reminder of FAKE news by the previous President that was met with raptured adulation by the professional media:

Neuters 3 August 2014: Obama: 'Russia Doesn't Make Anything'
http://www.businessinsider.com/obama-russia-doesnt-make-anything-2014-8?IR=T

karl1haushofer , August 25, 2017 at 1:07 am
Are you sure that tanker was built in Russia?
Moscow Exile , August 25, 2017 at 1:19 am
LNG TANKER CHRISTOPHE DE MARGERIE sails under the Cypriot flag and is registered in Limassol, Cyprus.

The vessel was built by Daewoo Shipbuilding Marine Engineering.

As we all know, Russians cannot make anything.

marknesop , August 25, 2017 at 12:03 pm
Was the ASIA VISION built in the USA ?
davidt , August 25, 2017 at 1:24 am
For information only, I think the boat was built by the South Korean firm DSME.

[Aug 26, 2017] Gas princess Tymoshenko might be back on power as Poroshenko lost the trust of Ukranians

Aug 26, 2017 | marknesop.wordpress.com

karl1haushofer , August 25, 2017 at 12:23 am

I would not call Julia Tymoshenko "pro-Russian". She was part of the Orange revolution leaders in 2004.
Moscow Exile , August 25, 2017 at 1:07 am
You are absolutely correct about her not being "pro-Russian", albeit she is an "ethnic" Russian: she is pro-Yulia Tymoshenko, nothing else..

Tymoshenko started off as a businesswoman in Dnepropetrovsk (now Dnipro), her home town, and with the help of the former governor of her home province, the unbelievably corrupt former Ukrainian prime minister, "Mr. 50%" Lazarenko, became immensely wealthy in an amazingly short time, not least because, for an appropriate fee, Prime Minister Lazarenko gave her control of the Ukrainian gas industry.

Tymoshenko was a brunette when she started of her business career and at that time only spoke Russian, which is both her mother tongue and the first (and probably only) language of her Russian mother. Her first foray into business was running a video-hire firm in Dnepropetrovsk, where she flogged off bootleg soft-porn imported from Poland.

The "Gas Princess" then saw that there was much more wealth to be further garnered by her entering what is laughably called in the Ukraine "politics". She changed her image to one of, I suspect, a latter-day Lesya Ukrainka, and the rest is history.

She also seriously studied the Ukrainian language, which on her own admission, she did not speak until she was in her 30s: she speaks nothing else now, in public at any rate.

The "Orange Revolution" for dear Yulia was just another opportunity for her to make even more lolly.

Moscow Exile , August 25, 2017 at 2:07 am

Ukrainians remember that in the 1990s, before the braids, Tymoshenko was a shrewd businesswoman with dark hair and a dark side: tough, unrelenting, unforgiving, and in a league with then-Prime Minister Pavlo Lazarenko. She amassed an enormous fortune in the natural gas business. People started calling her "The Gas Princess." And there she was helped by the sweetheart deals Lazarenko allegedly sent her way.

Given all the talk that later charges against Tymoshenko were trumped up or falsified in the Ukraine, it's probably important to know that her ally Lazarenko was prosecuted in the United States, where he was convicted and imprisoned for money laundering and other crimes. Tymoshenko was not charged in that case and she has denied wrongdoing, but she was named explicitly as part of the conspiracy detailed in the indictment.

"Lazarenko received money from companies owned or controlled by Ukrianian [sic] business woman Yulia Tymoshenko in exchange for which Lazarenko exercised his official authority in favor of Tymoshenko's companies, and Lazarenko failed to disclose to the people and government of Ukraine that he was receiving significant amounts of money from these companies."

Tymoshenko moved from business to politics when she entered parliament in 1996. Three years later, when Lazarenko fled the country (claiming people were out to kill him), Tymoshenko helped found the Fatherland Party on an anti-Lazarenko anti-corruption platform.

Yulia Tymoshenko: She's No Angel

marknesop , August 25, 2017 at 12:06 pm
That prosecution is important, because the USA knows full well many of the details of Tymoshenko's business relationship with Lazarenko. Consequently, it could probably make or break her – exactly the position Uncle Same likes to be in with his relentless spying and snooping on everyone and everything.
Moscow Exile , August 25, 2017 at 12:28 pm
That's why Washington has Merkel by the balls -- metaphorically speaking, of course.

[Aug 26, 2017] Certainly Naftogas managers doing a lot to help themselves, aren't they?

Aug 26, 2017 | marknesop.wordpress.com

August 24, 2017

marknesop , August 24, 2017 at 1:12 pm

Well, well; look at that – Naftogaz made a profit of 22.6 Billion hryvnia in 2016 , most of it from transit fees.

The same Naftogaz which plans to tack on an extra $5 Billion to its demands from Gazprom – already $12.3 Billion – for what it says was underpayment of transit fees between 2009 and 2016. The same Naftogaz that squeals what a reliable partner it is whenever there is mention of building a pipeline around Ukraine so Russia will not have to transit gas through it.

Certainly doing a lot to help themselves, aren't they?

et Al , August 24, 2017 at 3:49 pm
For 2016, its an odd 25 hryvnia to the dollar so their gained transit fees were a little below $1 billion.

[Aug 26, 2017] Lithuania has accepted the first batch of liquefied natural gas from the USA

Aug 26, 2017 | marknesop.wordpress.com

moscowexile , August 21, 2017 at 9:17 am

The beginning of the end?

Литва помогает Америке покорить Европу
Литва приняла первую партию сжиженного природного газа из США

Lithuania helps America conquer Europe
Lithuania has accepted the first batch of liquefied natural gas from the USA

.... ... ...

The first consignment of liquefied natural gas (LNG) from the United States has arrived at the port of Klaipeda. The Lithuanian authorities hope that the country will become a regional distribution centre (hub) for US gas. They also believe that supplies of overseas raw materials will help reduce gas prices in neighbouring countries and Lithuania itself.

Analysts do not consider Lithuania's gas policy rational and effective, noting that Russian pipeline gas is now much cheaper than LNG.

marknesop , August 21, 2017 at 11:10 am
There is nothing you can do to stop an ideologue who turns up his/her nose at cheaper local supply of a particular commodity because he/she dislikes the supplier, and elects to purchase more expensive goods from an alternate source. The fact is, Lithuania could become a hub for US LNG, and bring down gas prices for its customers so that they were eager to purchase it. Lithuania could accomplish this through the simple expedient of buying American gas at a high price – compared with Russian pipeline gas – and selling it at a lower price than Russia was willing to do. Of course, somebody would have to absorb the cost of the price difference, and that would be Lithuania. If Lithuania is willing to do that, as I said, she cannot be stopped from doing it by anything short of the poverty which will eventually result.

Knock yourself out, Grybauskaitė. If you were ordered to describe her policies in one word, 'irrational' would probably do quite well. Americans will be comforted to know there is more than one irrational president in the world.

[Aug 25, 2017] Oil consumption in Russia from 1995 to 2016 (in million metric tons)

get=

> > > > > >

[Aug 11, 2017] The Trump Presidency is effectively over. It ended on the day he signed the Sanctions Bill. A velvet junta has assumed control of the executive branch. Trump's family and advisors await conviction. The Generals are now in charge and will lead us into the next war sooner than later.

Aug 11, 2017 | www.moonofalabama.org

RenoDino | Aug 7, 2017 10:50:25 AM | 88

fast freddy | Aug 7, 2017 11:36:47 AM | 89

Sanctions, but US still buying billions of dollars worth (including baksheesh) of rocket engines and screwing around with international space station boondoggle (million dollar toilet seats, hammers and widgets). And more baksheesh.

Try to google search a fixed price on one Russian rocket engine.

Just Sayin' | Aug 7, 2017 11:39:59 AM | 90
This 'Pipelineistan' [Bullshit?] conspiracy: The war in Syria has never been about gas
Paul Cochrane
Wednesday 10 May 2017 10:57 UTC

The pipeline hypotheses do not stand up to the realities of how energy is transported through the Middle East in the 21st century

3. No Qatari offer to Damascus

The pipeline narrative, from 2013 onwards, also makes much mention of Damascus rebuffing an alleged Qatari offer in 2009 to build a pipeline. This part of the story hinges around statements by unnamed diplomats in a 2013 Agence France-Presse article about a meeting between Russia's President Vladimir Putin and Saudi Arabia's Bandar bin Sultan.

Qatar's then-Emir Sheikh Hamad bin Khalifa al-Thani (R) and First Lady Sheikha Mozah bint Nasser al-Misned (L) welcome Syrian President Bashar al-Assad and his wife Asma at Doha airport in January 2010 (AFP)

The report says: "In 2009, Assad refused to sign an agreement with Qatar for an overland pipeline running from the Gulf to Europe via Syria to protect the interests of its Russian ally, which is Europe's top supplier of natural gas."

But Dargin says: "There are no credible sources that show that Qatar even approached Syria in 2009 and was rebuffed in the process. I am not saying it definitely did not occur, rather there is no evidence supporting this claim."

Syrian experts also support Dargin's rebuttal, highlighting the burgeoning economic and political ties between Doha and Damascus.

'An important aspect that we don't talk about is the Syrian government never said the Qataris were fighting for a pipeline' - Jihad Yazigi, Syria Report

Yassin-Kassab says: "The absurdity is that relations between the Assad regime and the Qataris were excellent until summer 2011. Assad and his wife and the Qatari royal couple were also being portrayed as personal friends."

Although Assad may have repeatedly criticized Qatar since late 2011 onwards for supporting "terrorists," he has never publicly stated that Qatari support for the rebels was over a future pipeline.

Jihad Yazigi, editor of economy website Syria Report, says: "An important aspect that we don't talk about is the Syrian government never said the Qataris were fighting for a pipeline; that is telling in itself, that Assad never mentioned it."


4. The Moscow-Tehran connection

Then there's the other part of the Pipelineistan puzzle – the Iran-Syria pipeline, also known as the Islamic Pipeline.

Yazigi explains: "The Islamic pipeline has been talked about for years. There were pre-contract memorandums of understanding, but until July 2011, there was no formal signing [between Syria and Iran]. You can't argue this is a serious reason to destroy the whole country. "

While the project was politically expedient, it ignored economic and energy realities. First, the project was estimated to cost $10 billion, but it was unclear who would foot the bill, particularly as Tehran was – and still is – under US and international sanctions, as is Syria, since 2011.

Second, Iran lacks the capabilities to export significant amounts of gas. Sanctions mean it cannot access the advanced US technology that would allow it to exploit gas from the South Pars field that borders Qatar.

dh | Aug 7, 2017 11:41:03 AM | 91
@71 James, there are many small contractors involved in Nordstream in several countries. The sanctions are designed to squeeze them out and make Nordstream impossible.

It's not unlike the strategy being used against NK. They are designed to make life even more difficult for ordinary people....perhaps drive them into China and cause China to attack NK.

Skip | Aug 7, 2017 12:04:55 PM | 93
@15

"Not me! Term limits mean nothing more than the elimination of the ability of the voters to assess candidates based on legislative track records. The result is that every two years the voters will have to choose representatives with no past history of legislation. Disaster."

Gag me with a spoon. This argument is so old and so worn thin. Statistically 95+% of these fools are reelected because the highly cerebral voters you refer to have elevators that almost never go to the top of the building.

Money, money money. That's what drives the engine of elections. Incumbents have it working for them in so many ways: PACs, corporate centers of influence; radio and teevee.

All of the alternatives you propose are red herrings. They are only workable in heaven, not here on Terra Firma.

Remember, all of that institutional memory brought about by all of the 'experienced' members of congress got us where we are today. And, it's gotten them a 10% approval rating.

karlof1 | Aug 7, 2017 12:16:45 PM | 94
Grieved @66 & 67--

Thanks for your reply and endorsement.

Something to consider when dealing with the Revolutionary time period is what part of the populous is considered "The People," as in "We The People"? And just how equal in reality were those people in 1776 when the phrase "All men are created equal" appeared?

This is of great importance when we look at the proportion of the populous that was allowed to have a stake in the process and compare that with the amount of time it took until a majority was finally deemed to have equal rights under the law--1920 within USA

Although it can be argued that full equality under the law is still lacking as Glenn Greenwald did to great affect in With Liberty and Justice for Some: How the Law Is Used to Destroy Equality . Two works providing info on this issue are The Right to Vote: The Contested History of Democracy in the United States and People of Paradox: An Inquiry Concerning the Origins of American Civilization , although there are many others.

Is the United States federal government reformable? IMO, as currently constituted, no. A new document and associated institutions needs to be written and built, although some current institutions will have a place within the new construct.

Yes, I did write a Constitution 3.0 using Madisonian principles not long after the fiasco of the 2000 election to use as a classroom discussion tool. But to have any chance at making that reality, the Rule of Law must be reinstated within the Outlaw US Empire in order to bring the Deep State to Justice and thus its destruction.

Arioch | Aug 7, 2017 1:30:51 PM | 97
One jewish journalist (link was posted here few days ago) nicely pointed out these sanctions are the stupidest thing US could have possibly done. Not only it forges even closer Russia-China-Iran alliance, it also alienates the closest and strongest ally US have - the EU.

@18 - or the opposite. If Trump really is isolationists and if he wants USA isolate itself on the two Americas, then he has two options: make America turn its back on the world, or make the world turn its back on America. The first option he failed, DC regime is stronger than POUTS. Then - the second option.

Just Sayin' | Aug 7, 2017 2:56:49 PM | 99
Not only it forges even closer Russia-China-Iran alliance, it also alienates the closest and strongest ally US have - the EU.

Posted by: Arioch | Aug 7, 2017 1:30:51 PM | 96

What's wrong about that statement is that the EU nations are not US Allied states - they are US vassal states. A bit of a difference between those two: "allied state" and "vassal state"

[Aug 11, 2017] Russian gas pipelines to go ahead despite U.S. sanctions by Oksana Kobzeva and Alissa de Carbonnel

marknesop.wordpress.com

New U.S. sanctions will make it harder for Russia to build two gas export pipelines to Europe but the projects are unlikely to be stopped.

U.S. President Donald Trump has reluctantly signed into law further sanctions on Russia but some of the measures are discretionary and most White House watchers believe he will not take action against Russia's energy infrastructure.

This would allow Gazprom's two big pipeline projects to go ahead, although at a higher price and with some delays.

... ... ...

Gazprom warned investors last month that the sanctions "may result in delays, or otherwise impair or prevent the completion of the projects by the group."

With all that in mind, the Russian gas giant is taking steps to reduce the impact of sanctions.

It has accelerated pipe-laying by Swiss contractor Allseas Group under the Black Sea for TurkStream - even though there is no final agreement on where the pipeline will make landfall in Turkey. It is also hurriedly building a second TurkStream line to export gas to Europe.

"The construction of the second line is underway just in case the sanctions hit," a senior Gazprom source told Reuters.

A spokesman for Allseas said 100 km of the 900-km first line have been built since June 23 and preparatory work is underway for the second line.

THE UKRAINIAN CONNECTION

The biggest cost of any delays to the new lines could come from increased transit fees paid to Ukraine, the route by which Russian gas has traditionally reached Europe. Nord Stream 2 and TurkStream bypass Ukraine, but if they are brought into use late, Gazprom will have to continue using the Ukrainian route and may have to pay more for the privilege.

The European Union, fearing sanctions will hurt oil and gas projects on which it depends, said it was ready to retaliate unless it obtained U.S. guarantees that European firms would not be targeted.

Five Western firms that have invested in Nord Stream 2 - Wintershall (BASFn.DE) and Uniper (UN01.DE) of Germany, Austria's OMV (OMVV.VI), Anglo-Dutch Shell (RDSa.L), and France's Engie (ENGIE.PA) - say it is too early to judge the impact of sanctions.

For now, they are standing by their pledge of up to 950 million euros ($1.13 billion) each to finance the 1,225 km (760 mile) Nord Stream 2.

... ... ...

RISK PREMIUM

The sanctions law is however expected to hamper Gazprom's efforts to raise money. "The price of any project automatically increases," said Tatiana Mitrova, director of the Skolkovo Energy Center.

... ... ...

[Aug 09, 2017] Liberating Europe from Russian Gas

Notable quotes:
"... The sanctions bill has been promoted as one that appropriately penalizes Russia for its international misbehavior. The always-cited examples being the invasion of Georgia in 2008 and the (alleged) invasion of Ukraine in 2014. (As though these in any way rival in their impact and ramifications of the U.S. invasion of Iraq, based on lies, in 2003, or the U.S./NATO-led assault on Libya sold in the UN Security Council as a "humanitarian" intervention supported by Russia, that turned out to be a grotesque regime change operation culminating with Hillary Clinton's public orgasm following Muammar Gadaffi's sodomy-murder. "We came, we saw, he died!") ..."
"... Russia is always depicted in the corporate media as an "adversary." It acts, we are told ad nauseam, against U.S. "interests" around the world. Its involvement in Syria is (to support the survival of the secular modern Syrian state against the most savage opponents imaginable) is somehow objectionable (whereas U.S. bombing of Syria, condemned by Damascus as a violation of Syrian sovereignty and clearly in violation of international law, is treated as a matter of course). Its role in the bombing of Aleppo, resulting in the reconquest of the city from al-Nusra and its allies, was depicted by the U.S. media as a bad thing. Meanwhile U.S. bombing of Mosul, to retake that city from ISIL, is treated as heroic, however many thousands perish in "collateral damage." Anyway CNN won't cover it and has fewer reporters on the ground there than RT does. ..."
"... Russian Prime Minister Dmitry Medvedev matter-of-factly tweeted: "The Trump administration has shown its total weakness by handing over executive power to Congress in the most humiliating way." But where will this power lead? ..."
Aug 09, 2017 | www.counterpunch.org

But U.S. policy now, under the Trump administration, is to promote U.S. energy exports to Europe to replace Russian ones. It is both old-fashioned Cold War Russophobia and old-fashioned inter-capitalist, inter-imperialist contention.

The sanctions bill has been promoted as one that appropriately penalizes Russia for its international misbehavior. The always-cited examples being the invasion of Georgia in 2008 and the (alleged) invasion of Ukraine in 2014. (As though these in any way rival in their impact and ramifications of the U.S. invasion of Iraq, based on lies, in 2003, or the U.S./NATO-led assault on Libya sold in the UN Security Council as a "humanitarian" intervention supported by Russia, that turned out to be a grotesque regime change operation culminating with Hillary Clinton's public orgasm following Muammar Gadaffi's sodomy-murder. "We came, we saw, he died!")

https://www.youtube.com/embed/Fgcd1ghag5Y?feature=oembed

Hillary Clinton on Gaddafi: We came, we saw, he died

Russia is always depicted in the corporate media as an "adversary." It acts, we are told ad nauseam, against U.S. "interests" around the world. Its involvement in Syria is (to support the survival of the secular modern Syrian state against the most savage opponents imaginable) is somehow objectionable (whereas U.S. bombing of Syria, condemned by Damascus as a violation of Syrian sovereignty and clearly in violation of international law, is treated as a matter of course). Its role in the bombing of Aleppo, resulting in the reconquest of the city from al-Nusra and its allies, was depicted by the U.S. media as a bad thing. Meanwhile U.S. bombing of Mosul, to retake that city from ISIL, is treated as heroic, however many thousands perish in "collateral damage." Anyway CNN won't cover it and has fewer reporters on the ground there than RT does.

Russia is depicted as "provocative" when it mobilizes military forces within its own territory (and Belarus), in response to massive NATO exercises involving 31,000 troops in Poland last June that the German foreign minister criticized as "warmongering."

Russian Prime Minister Dmitry Medvedev matter-of-factly tweeted: "The Trump administration has shown its total weakness by handing over executive power to Congress in the most humiliating way." But where will this power lead?

The concept, as articulated by Sen. John McCain and Sen. John Hoeven in a 2014 Wall Street Journal op-ed, is to "liberate our allies from Russia's stranglehold on the European natural-gas market." But as the Washington Post has observed, "The problem is that Europeans don't necessarily want to be liberated. Russian gas is much cheaper than American LNG, and could become even cheaper to undercut the United States if it entered the European market. American LNG suppliers prioritize their own profits over America's strategic advantage anyway, and are likely to want to target more lucrative markets than Europe, such as Japan. Finally, the Russian gas supply is likely to be more reliable than the United States', since it involves predictable long-term contracts, whereas U.S. production capacity rises and falls, as it becomes cheaper and more expensive to extract American unconventional hydrocarbons."

The McCain-Hoeven piece was of course written before there was any talk about Russian "election meddling." But that issue was used to justify the sanctions bill. That, plus miscellaneous Russian actions, basically in response to U.S. actions (as in Ukraine, where!as everyone should know!Hillary Clinton's crony Victoria Newland helped organize a putsch in February 2014, designed to pull Ukraine into NATO, although that effort has failed and anyway lacks German support).

The U.S. at this point (under Trump) is taking actions towards Russia that recall those of the Truman administration. The warm, fuzzy (and miserable, abjectly weak) Russia of the 1990s under Yeltsin is now a reviving world power within an emerging Eurasian trade system. The relationship between Russia and China will stay strong even if the U.S. takes measures to sabotage trade relations between Russia and Europe.

Meanwhile, the sanctions law has produced general European outrage. This is not the anti-Trump outrage that accompanied his withdrawal from the Paris Agreement. It is outrage at the U.S. legislature for its arrogance in demanding Europe shoot itself in the foot, to show Washington deference. In other words, the entirety of the divided, troubled U.S. polity is seen as a problem. This is as a new Pew Research Center report showing that only 49% of the world's people now hold a positive view of the U.S.

German Foreign Minister Sigmar Gabriel and Austrian Chancellor Christian Kern have publicly condemned the law, which could prevent them from benefiting from the planned Nord Stream 2 pipeline, declaring: "we cannot agree with threats of illegal extraterritorial sanctions against European companies which take part in the development of European energy supply." Brigitte Zypries, head of Germany's Ministry for Economic Affairs and Energy, says the new sanctions are "against international law, plain and simple Americans cannot punish German companies because they [do business] in another country." The foreign ministers of Germany, France, Austria, Italy and Spain have protested. Jean-Claude Juncker, president of the European Commission, said the bill could have "unintended unilateral effects" on the EU's energy security, adding, "America first cannot mean that Europe's interests come last."

This is not just a provocation of Russia, but of the whole world. It's leveled by a bipartisan effort, and general (although insane) consensus that Russia is trying to revive the Soviet empire, is constantly interfering in foreign countries' elections, and represents an "existential" threat to the U.S. and its freedoms, etc. (Because!reputable media talking heads opine routinely!Putin hates freedom and wants to oppose it, by electoral interference in Germany, France, Italy, etc.)

U.S. politicians!many of whom who do not believe in global warming or evolution, and cannot find Syria or Ukraine on the map!have boldly gone where no one has gone before: to risk a trade war with traditional allies, to force them to more firmly embrace the principle of U.S. hegemony. This when the U.S. GDP has dropped below that of the EU, and U.S. clout and credibility in the world!in large part due to global revulsion at the results of U.S. regime-change wars!is at low ebb.

Medvedev predicts that "relations between Russia and the United States are going to be extremely tense regardless of Congress' makeup and regardless of who is president. Lengthy arguments in international bodies and courts are ahead, as well as rising international tensions and refusal to settle major international issues." No bromance here.

Meanwhile Sen. Lindsey Graham!an extreme reactionary and warmonger now lionized my the mainstream media as some sort of "moderate" and adult in the room!informs NBC's Today Show that reports that "there is no military option" on North Korea are "just false."

"There is a military option: to destroy North Korea's nuclear program and North Korea itself. He's not going to allow -- President Trump -- the ability of this madman [Kim Jong Un] to have a missile that could hit America. If there's going to be a war to stop him, it will be over there. If thousands die, they're going to die over there. They're not going to die over here -- and he's told me that to my face."

[Jul 30, 2017] Are the Latest Russia Sanctions Really About Forcing US LNG on Europe?

Notable quotes:
"... Of course they are; and it's so bloody transparent that nobody is fooled. Please check the link below: http://russia-insider.com/en/politics/eu-ready-retaliate-if-us-imposes-new-russia-sanctions/ri20467 ..."
"... The U.S. is waging full scale war against Russia; economic sanctions are war and Japan attacked Pearl Harbour for almost identical sanctions on oil and energy imports. Vladimir Putin is the Cool Hand Luke of Russia; let hope the outcome is not like the movie. The E.U. seems to have had a recent spinal transplant; let's just see how it plays out ..."
"... The Western, eastern stuff is irrelevant. Russia isn't the aggressor in the situation. Putin will enjoy a population much more willing to stand against U.S. aggression which is largely dependent on an ignorant U.S. population. ..."
"... Merkel will be under pressure as these sanctions are simply a tax on EU citizens and corporations to support American corporate profits without providing better products. Given the EU political structure and the lack of a "cool" President, I suspect the next Congressional delegation will be shocked to find they aren't well received. ..."
"... I personally doubt that the Blob/US financial interests are 'jealous' of them -- they just think that Russia, like other countries, should kowtow to them, and allow them to buy whatever part of the Russian society and economy and land they like. ..."
"... I had thought of it the other way around: that the insistence on unprofitable fracking was to support America as a world power. Got to have some way to bribe Europe away from the Russians. Is there actually enough gas to do that? I know there's quite a bit. ..."
"... The Dragon in the Sea ..."
Jul 26, 2017 | www.nakedcapitalism.com

Anti Schmoo , July 26, 2017 at 5:17 am

Are the Latest Russia Sanctions Really About Forcing US LNG on Europe?

Of course they are; and it's so bloody transparent that nobody is fooled. Please check the link below: http://russia-insider.com/en/politics/eu-ready-retaliate-if-us-imposes-new-russia-sanctions/ri20467

Anti Schmoo , July 26, 2017 at 5:30 am

The U.S. is waging full scale war against Russia; economic sanctions are war and Japan attacked Pearl Harbour for almost identical sanctions on oil and energy imports. Vladimir Putin is the Cool Hand Luke of Russia; let hope the outcome is not like the movie. The E.U. seems to have had a recent spinal transplant; let's just see how it plays out

Anti Schmoo , July 26, 2017 at 5:34 am

I dare say, Russia is more self sufficient than the U.S. and almost every other country on the planet. Do the research; it's very enlightening.
The U.S. is a very jealous hegemon and can't bear this reality

Foppe , July 26, 2017 at 6:31 am

It's also got half the population, and a far less diversified economy (fwtw), so it's not exactly a apples to apples comparison.

Anti Schmoo , July 26, 2017 at 8:43 am

Have you ever thought to question your comparitive references? Most views of Russia are western-centric in the extreme. Russia is not western or European in any sense of that reality; Russia is a very different culture/s and sees things drastically different than the western-centric POV. Just sayin

NotTimothyGeithner , July 26, 2017 at 9:14 am

The Western, eastern stuff is irrelevant. Russia isn't the aggressor in the situation. Putin will enjoy a population much more willing to stand against U.S. aggression which is largely dependent on an ignorant U.S. population.

Merkel will be under pressure as these sanctions are simply a tax on EU citizens and corporations to support American corporate profits without providing better products. Given the EU political structure and the lack of a "cool" President, I suspect the next Congressional delegation will be shocked to find they aren't well received.

Foppe , July 26, 2017 at 10:38 am

I'm confused. Who was it who brought up "Russia is more self-sufficient than the US and almost every other country on the planet? That implies that you feel self-sufficiency (with respect to certain metrics) is something that one should value. Let's say other people do not share that meta value: does that then mean they are wrong?

I personally doubt that the Blob/US financial interests are 'jealous' of them -- they just think that Russia, like other countries, should kowtow to them, and allow them to buy whatever part of the Russian society and economy and land they like.

Mel , July 26, 2017 at 10:08 am

I had thought of it the other way around: that the insistence on unprofitable fracking was to support America as a world power. Got to have some way to bribe Europe away from the Russians. Is there actually enough gas to do that? I know there's quite a bit.

Damson , July 27, 2017 at 1:13 am

Yes indeed.

It's looking like quite the little diplomatic spat between the EU and Capitol Hill.

Here's the Russian envoy to the EU on talks to ban funding by EU banks for US business, if the US law is declared invalid in the EU :
http://tass.com/politics/957927

Note the bill bans not just business with Russians in Europe, but also Eurasia.

OBOR is clearly a target too.

So are the Chinese going to pipe up?

For this is nothing less than gloves – off imperialism .

timbers , July 26, 2017 at 6:38 am

Anyone know if it's possible the German's will act w/o the EU? In other words, unilaterally?

I'm asking because the article says EU may not be the "required" unanimous in responding to the U.S. sanctions & LNG so there may not be an official EU retaliation (though it seems there was much stronger opposition to the EU imposing Russian sanctions in 2014 in the first place but supposedly that was a "unanimous" decision).

Will Germany be a total puppet to the U.S.? Or might it start to move towards Russia which seems to be in Germany's business interest?

Ignacio , July 26, 2017 at 7:52 am

Germany wants to ensure stable gas supply for as long as possible. A pipeline thas goes through the sea and does not depend on third countries that migth disconnect the pipeline (like Ukrania) allows for a durable contract. So the US is not only intefering with russian interests but with german ones. I don't think Germany considers US shale LNG supply a robust enough alternative competitive in price and duration with russian gas. My guess is that in this case, Germany won't be a total puppet.

No spine no pain , July 26, 2017 at 9:05 am

Anti Schmoo put it very well "The E.U. seems to have had a recent spinal transplant"

EU has been following every global US initiative enthusiastically even though it only hurts Europeans: wars and invasions, TTIP, TiSA, CETA etc.

On top of being emasculated and spineless with regards to national and continental interests the current leaders of EU are neoliberals so they don't care about a new 'market solution' for gas. Will subsidize the higher prices for companies while the citizens pay the price.

Mel , July 26, 2017 at 11:30 am

:) q.v. Frank Herbert's very old novel The Dragon in the Sea (aka Under Pressure .) Being by Frank Herbert, it's about psychology, but it's also about petroleum pirating by submarine. Yeah, I guess the price per barrel must have been pretty high.

Harry , July 26, 2017 at 7:28 pm

The pipelines that go under the sea have lower capacities. They work to reduce the impact of ukrainians et al blackmailing gas supplies. They do not eliminate the need to route gas overland.

ZeWorldIsMine , July 26, 2017 at 6:52 am

Sadly, Sigmar Gabriel's word means nothing.

He's an opportunitist and may advocate something one day and oppose it the next day.
He is absolutely not trustworthy. A total pushover.
And I wouldn't expect much from the rest of the german government, too.

The german media could pick it up and put pressure on politicians.
But due to the pathetic state the germain mainstream media are in (with exceptions),
I expect they'll just stop bringing up this issue and let people forget about it.

Maybe other european countries will be more resistant, maybe

Clive , July 26, 2017 at 7:25 am

Plus Japan -- a big LNG importer historically as it has no conventional energy sources of its own -- is going to lessen its LNG demand as the nuclear restart gathers pace. Whatever you might think of the safety aspects, Japan has 50+gW of embedded nuclear generating capacity with a residual economic life of 20+ years on average. It is simply inconceivable that this plant, much of which, unlike Fukushima which was end-of-life, is mid-life and has decades of viable reactor runtimes available, will be mothballed and decommissioned without generating another kW of power ever again.

The LNG glut will only continue and probably get noticeably worse once all, or at least the vast majority, of Japanese reactors are brought back on line, which will be 5 years from now at the outer limit. Cutting off Russian gas into Europe (and the rest of the world) will be a big plus for the US. LNG liquefaction plant is a massive capital outlay, has big fixed costs and is highly operationally geared, so even small reductions below peak output have a big hit on plant profitability. It is those "wheels" the US plant operators will want to keep turning. Conversely, the regasification plants (based in EU countries) don't need to operate flat out, they're designed to have peaks and troughs as LNG consignments come in and get processed, then sit around for a bit waiting for the next one. Which, again, is why the US is bothered about restricting Russian supply, the EU not so much.

rjs , July 26, 2017 at 8:24 am

there is no surplus US LNG to be forced on Europe, it's a myth we are still importing more natural gas from Canada than we are exporting to Mexico and liquifying for export moreover, our own natural gas production has been falling year over year for 15 months straight i wrote about exactly this situation two weeks ago:
http://www.economicpopulist.org/content/great-us-natural-gas-exports-myth-6112
all the data is included. you can repost it if you want.
we are contracting to sell US natural gas at below the cost of US production, and it's gonna come back and bite US natgas users big time when a shortage develops here..

ambrit , July 26, 2017 at 8:39 am

IS natgas users would be anyone who uses American electricity, right? Another 'regressive' tax on the way. Really, this is not New Cold War oriented, but Class War materiel.
Time for work.

rjs , July 26, 2017 at 10:10 am

there's been a gradual shift back to coal for generating over the past half year or so whether that's because of price or because the utilities see what's coming i couldn't tell you..

Yves Smith Post author , July 26, 2017 at 5:43 pm

See the comments above, the US is flaring a ton of gas now due to supposedly to lack of delivery mechanisms.

rjs , July 26, 2017 at 6:24 pm

maybe i'm projecting too much, but i see us heading down the same path that Australia took


How energy-rich Australia exported its way into an energy crisis
- Australia exported 62% of its gas production last year, according to the BP Statistical Review of World Energy. Yet its policy makers didn't ensure enough gas would remain at home. As exports increased from new LNG facilities in eastern Australia, some state governments let aging coal plants close and accelerated a push toward renewable energy for environmental concerns. That left the regions more reliant on gas for power, especially when intermittent sources such as wind and solar weren't sufficient. Shortages drove domestic gas prices earlier this year in some markets in eastern Australia to as high as $17 per million British thermal units for smaller gas users such as manufacturers. On the spot market, gas prices have gone from below $1 in 2014 to roughly $7 today .. In March, Australia's largest aluminum smelter cut production and laid off workers because it said it couldn't secure enough cheap energy.

the problem is that we are are contracting to export natural gas at today's low prices, which wont pay for tomorrow's production..

Carolinian , July 26, 2017 at 8:36 am

Perhaps the most interesting and depressing thing is that 419 to 3 vote. Who were these heroes who dared to defy the Blob?

Clearly defeating Hillary was not enough. TPTB will have their war with Russia–cold or hot–or bust.

NotTimothyGeithner , July 26, 2017 at 9:35 am

The U.S. much like Team Blue hid behind our "cool" President and 9/11 for so long, no one knows how to act. This is a trade war where we picked a fight with our most loyal vassals on behalf of one industry which needs to be replaced anyway. Do you remember Hollande? He joined with Obama against "OMG Russia." Macron's honey moon is over.

Vatch , July 26, 2017 at 10:00 am

http://clerk.house.gov/evs/2017/roll413.xml

The 3 no voters were Justin Amash of Michigan, John Duncan of Tennessee, and Thomas Massie of Kentucky. All are Republicans.

Carolinian , July 26, 2017 at 11:20 am

Thanks.

p7b , July 26, 2017 at 9:27 am

One aspect of the US natgas pipeline situation !

Due to resignations early in the Trump administration, and refusal of the Senate to approve new FERC nominees, the FERC, whose approval is needed for building interstate energy transport infrastructure, now lacks a quorum (having only 1 of the minimum 3 members out of 5 total). A number of pipeline projects originating in marcellus were approved around end of 2016 prior to the resignations, and are due to come on line in 2018, but many dozens more are now awaiting permitting -- both for domestic use and to transport to LNG export, as the piece above states.

The other interesting thing is that in the past, the explicit strategy of the US was to use domestic natgas domestically, but no longer, it seems.

Pipelines would raise prices at the wellhead and lower prices elsewhere in the country. If the lack of approval goes on for a few more years, it may have an impact on: the battle between natgas and wind for the medium-term dominance of newly added utility scale electric generation in the US, and the timing of how fast we can retire coal electric.

Lastly, besides Russia, Qatar is also a major natgas exporter to Europe, so they'll get their gas either way, they'll just pay more. A points of reference there -- I belive Germany is currently using coal as its main domestic baseload electric fuel – as prices were relatively high until recently, they're using NG for home heating only. Now everyone needs to retire coal for obvious reasons.

JohnnyGL , July 26, 2017 at 10:28 am

Jamming up FERC shouldn't be underestimated. They've got a huge amount of discretionary authority to blast through state and local laws and regulations at will. It's amazing how the oil/gas industry gets 1-stop shopping for all it's regulatory requirements.

oh , July 26, 2017 at 10:15 am

It's sickening to see how much power the Petroleum companies have over Congress. Bribes work well in our country. We need a wholesale re-haul of CON gress.

TheCatSaid , July 26, 2017 at 10:19 am

Regarding possible EU development of a spine, a recent George Webb video from just about 3 days ago said he's been told by some of his IC sources that Germany has been printing DMs on the quiet. I take this with a pinch of salt but it's intriguing nonetheless. If true, Germany must also be looking at the IT issue as well.

yan , July 26, 2017 at 11:14 am

EU is still threatening to cancel Poland voting rights for 1 year, even after the President vetoed the legislation regarding judiciary reform (which was to my understanding the main bone, albeit the country is keen on going full Adolph). Maybe it has something to do with this?

vidimi , July 26, 2017 at 11:25 am

i thought the president signed the bill despite saying he would veto it?

vidimi , July 26, 2017 at 11:23 am

thanks for this article, it's really a remarkable powerplay. the stakes are so high that it's unfathomable that it doesn't backfire spectacularly. this looks like an exercise in hubris that future historians will be long discussing.

more than forcing the EU to use american LNG, it is an attempt to force the EU to back american efforts to replace assad in syria. remember, syria is what stands in the way between bahraini/saudi gas and oil pipelines to europe.

the US is already at war against russia, they just haven't yet started shooting at each other. but also, any chinese silk road to europe will have to use russian assets and infrastructure, so this, potentially, affects them, too.

dcblogger , July 26, 2017 at 2:46 pm

Trump Is Being Moved Aside So That Conflict with Russia Can Proceed
http://www.paulcraigroberts.org/2017/07/26/trump-moved-aside-conflict-russia-can-proceed/

Rosario , July 26, 2017 at 3:54 pm

All stupidity with the Russia hysteria aside this may be all the faster at forcing a move to renewables in the US. NG is the bounciest of all carbon based fuels WRT price. Once they start pumping US NG into more foreign markets the price will climb, which will squeeze utilities that have moved en mass into NG based generation and prove that renewables are even more cost effective. Petty politics may end up having a silver lining 5 years down the road, and at this point I am open to any route to renewables, even the sloppiest, unintentional ones.

Synapsid , July 26, 2017 at 6:43 pm

Rosario,

If exporting US NG causes its price to rise domestically, utilities that had been using coal can shift back to it. That happened recently.

Rosario , July 26, 2017 at 7:43 pm

Sure, but the ball is in another (higher) cup as the cost graphs go. I suspect it is going to get increasingly difficult to transition back and forth with the lowering costs of renewables. Also, coal is not getting any cheaper to extract and it definitely hasn't reduced its externalities. We'll see, big utilities move in herds and it takes years to make a full transition. They may flood back to coal, and build new plants (I doubt it), but they will eventually get burnt and have to swing back again. In the absence of purposeful national level policy (what I prefer) this is the only way the market based approach will turn away from fossil fuels.

Olaf Lukk , July 26, 2017 at 4:02 pm

"Instruments of political sanctions should not be connected with economic interests"?

This echoes the rationalizations of Wall Street when they crashed the economy in '08. Let's not let politics interfere with the right to make money?

The sanctions against Russia were put in place in response to its annexation of Crimea and its support of insurrection in Eastern Ukraine. They have been extended, and expanded, in response to Russian meddling in the recent presidential election. To what extent their cyber warfare had an effect is debatable, but Trump's stonewalling on the issue practically guaranteed the lopsided vote on the latest sanctions.

The LNG issue has some valid points, but it ignores an issue which I have not seen addressed on Naked Capitalism: Just how much is Trump- and those in his administration (infested with alumni of the vampire squid)- beholden to Putin and his fellow oligarchs?

Trump appears to be the Pied Piper of Putin Patsies. I can't help but wonder why.

Yves Smith Post author , July 26, 2017 at 5:51 pm

Crimea was not "annexed". The US destabilized Ukraine. The government in Kiev came in as a result of a coup even thought elections were scheduled for a mere six weeks later and Yanukovich would clearly have been voted out. The new government tore up the current constitution and went through no legal process whatsoever to do that. That is not the behavior of a legitimate government.

Even though neo-Nazis are a very small percentage of the voters, they got 15% of government positions. The head of the defense department gave a speech in which he encouraged ethnic cleansing of Ukrainians of Russian origin, saying that any soldiers who removed them could keep their property.

Crimea petitioned to join Russia after a referendum that approved of that move by a large margin. The US used precisely the same mechanism with Kosovo. Are you about to call that an annexation?

We have repeatedly discussed how the idea that Russia has influence over Trump is nonsense.

Better trolls, please.

GeorgW , July 26, 2017 at 8:26 pm

http://www.rollingstone.com/politics/features/taibbi-what-does-russiagate-look-like-to-russians-w493462# -Amazed, that you never linked this

Yves Smith Post author , July 27, 2017 at 12:33 am

I'm not omniscient and I've been unable to read for more than a week due to an eye injury, as Lambert told readers.

Lambert Strether , July 27, 2017 at 12:47 am

Did you suggest it at the time? The newsflow is a gusher right now. It's simply not possible to give notice to everything. So do feel free to stifle your amazement.

Adding, it is a very good story (although I'm not a Russia hand). So readers may enjoy it even at this late date which was, I take it, the real point of your comment.

TheCatSaid , July 26, 2017 at 9:48 pm

Plus the assertion of Russian "meddling" in the 2016 election was never proven–it was only asserted and repeated ad nauseum. Recent investigations have shown that in fact the DNC and Podesta emails were insider leaks, they were not outsider hacks. The technical analysis showed evidence that Russian "footprints" had been specifically inserted to cause Russia to be blamed.

In contrast the US has a well-established track record of meddling in other countries elections and setting up regime change in various ways. Ukraine is one example, as Yves described. There are many others, think of the US-sponsored coups in Latin America. They seem to be trying to pull off another coup in Venezuela since their 2002 attempt didn't work out. And Obama didn't hesitate to publicly endorse Macron just a couple days before the French election.

jo6pac , July 26, 2017 at 10:11 pm

Thank You, Thank You

Lambert Strether , July 27, 2017 at 12:52 am

> the Pied Piper

Highly unfortunate, then, that the Clinton campaign maneuvered to have Trump as their opponent, using just that phrase ("Pied Piper") .

clarky90 , July 26, 2017 at 9:16 pm

"the latest US sanctions against Russia, which passed the House today by a 419-3 margin ".

and

"Republicans and Democrats agreed almost unanimously, by 97 votes to 2 , to impose new sanctions on Russia in the Senate on Wednesday"

I have been a member of many organizations, and do not recall seeing this kind of "unanimity" when voting on significant and controversial resolutions. Clearly, a majority of US Americans want peace, particularly with Russia (a Christian democracy). How and why did the People's Representatives/Senators find the "courage" to vote against the People's wishes??? Hmmmmmmmm?

To put the vote into a context, 77 years ago; on

" ..July 14–15, 1940 – Rigged elections held in Latvia and the other Baltic states. Only one pre-approved list of candidates was allowed for elections for the "People's Parliament". The ballots held following instructions: "Only the list of the Latvian Working People's Bloc must be deposited in the ballot box. The ballot must be deposited without any changes." The alleged voter activity index was 97.6% . Most notably, the complete election results were published in Moscow 12 hours before the election closed. Soviet electoral documents found later substantiated that the results were completely fabricated. Tribunals were set up to punish "traitors to the people." those who had fallen short of the "political duty" of voting Latvia into the USSR. Those who failed to have their passports stamped for so voting were allowed to be shot in the back of the head.

July 21, 1940 – The fraudulently installed Saeima meets for the first time. It has only one piece of business!a petition to join the Soviet Union. (The consideration of such an action was denied throughout the election.) The petition carried unanimously. .."

https://en.wikipedia.org/wiki/Soviet_occupation_of_Latvia_in_1940

Is the Neo-NKVD whipping the Senate and USA House members into voting in the "correct" way?

It is the nearly 100% vote that bothers me- Not what I would expect in a free and open minded democracy.

Olaf Lukk , July 29, 2017 at 4:03 am

So the US congress voted almost unanimously to impose sanctions because they were worried that otherwise, they would be shot in the back of the head?

Makes perfect sense to me!

Mark W. , July 27, 2017 at 1:10 am

Read Petrodollar Warfare and The Hidden Hand of American Hegemony for a start and a lot of this will become more clear. The Iraq war, the U.S. instigated coup in Ukraine, U.S. backed attempt at regime change in Syria and the demonization of Russia all concern oil supplies and who will be allowed to supply what to whom, and more importantly in what currency such sales will be denominated. All of this stuff is about trying to maintain the dollar's reserve currency status. Isn't this becoming clear by now. Americans are still trying to understand why they invaded Iraq. Was it WMDs, Al Qaeda, to bring freedom and democracy to the towel heads? Hussein decided in 2000 that Iraqi oil sales would be denominated in Euros, three years later he was conveniently dead.

Yves Smith Post author , July 27, 2017 at 3:09 am

While I agree that the US has hegemonic aspirations, the petrodollar thesis is all wet.

Since the 1600s at least, countries have pursued mercantilist policies. That means first of all that they like running trade surpluses. That allows them to have more jobs than their own economies would support, keeping their citizens happy. They can also be net savers without having a drag on the domestic economy.

But who will be the chump that exports jobs and has crappy growth to accommodate the mercantlists? The US has signed up for that role, in large measure because the US cares more about the 1%, the 0.1%, and the interest of US multinationals than its citizens.

As long as everyone else wants to run trade surpluses and we are the only big player willing to run sustained trade deficits, the dollar will remain the reserve currency. China has absolutely zero interest in running trade deficits despite pining after the cachet of having the reserve currency. The Eurozone maybe could have been a contender, but not with Germany being fiercely mercantlist and Germany's insistence on not rebalancing within the Eurozone creating perceived breakup risk.

mark , July 27, 2017 at 3:19 am

@Yves
In order to answer your question to German language readers in the article.
There are several differences this time compared to previous instances of perhaps controversial US-policy in Europe.
First of all the official positions of the German and Austrian government as well as the EU-Commission are in harsh opposition to the bill while previously only opposition politicians or fringe business interests voiced negative opinions.
Secondly the issue has been spread around in the relevant German business press a great deal, yesterday alone about a dozen news agency reports were published, all with pretty much the same tone and content. It has also been picked up by the op-ed pages in the papers today. This is in stark contrast to previous instances like a leader from Die Linke blaming the refugee crisis on US wars in 2015, Nato expansion to the east and troop build up in the Baltic or the planned upgrade of US nuclear weapons stationed in Germany. All three topics are out of mainstream discussion and anyone bringing up a negative opinion, like the mentioned politician from Die Linke, is ridiculed.
Thirdly while the EU needs the approval of all members to establish sanctions it could do a great deal to prosecute a trade war via executive decisions by the EU-Commission alone. While there has been no official indication how the threatened retaliation is going to look like several simple measures come to mind. For instance the EU could suspend the EU-US privacy shield agreement thereby increasing the cost of doing business in the EU for US companies by a significant amount, it would also be likely that cartell/market dominance investigations might result in harsher fines for US companies and more restricted mergers, something which has been brought up by EU officials sometime ago is to require all foreign or only US banking and maybe other financial institutions to be seperate concerns with full capitalisation and no dependencies on the US-holdings.

To summarise: it looks like a significant amount of the German "business community" is not amused and views the bill as a direct attack on its interests and tries to use their influence with the goverment against it. This raises the likelihood of something more than mere talk to above 0%. In any case the image of the US has taken another hit, this time with a group of people with mostly very positive opinions about close US-German relations.

Yves Smith Post author , July 27, 2017 at 5:51 am

This is VERY helpful. Thanks so much!

Damson , July 27, 2017 at 5:04 pm

Of course, the gas suppliers won't necessarily be in US – others plan to benefit from the Russian sanctions :

http://m.dw.com/en/eu-to-cut-gas-dependency-on-russia-with-israel-pipeline/a-38269274

What do people think the Syria carve – up is really about?

vidimi , July 26, 2017 at 11:23 am

thanks for this article, it's really a remarkable powerplay. the stakes are so high that it's unfathomable that it doesn't backfire spectacularly. this looks like an exercise in hubris that future historians will be long discussing.

more than forcing the EU to use american LNG, it is an attempt to force the EU to back american efforts to replace assad in syria. remember, syria is what stands in the way between bahraini/saudi gas and oil pipelines to europe.

the US is already at war against russia, they just haven't yet started shooting at each other. but also, any chinese silk road to europe will have to use russian assets and infrastructure, so this, potentially, affects them, too.

dcblogger , July 26, 2017 at 2:46 pm

Trump Is Being Moved Aside So That Conflict with Russia Can Proceed
http://www.paulcraigroberts.org/2017/07/26/trump-moved-aside-conflict-russia-can-proceed/

Rosario , July 26, 2017 at 3:54 pm

All stupidity with the Russia hysteria aside this may be all the faster at forcing a move to renewables in the US. NG is the bounciest of all carbon based fuels WRT price. Once they start pumping US NG into more foreign markets the price will climb, which will squeeze utilities that have moved en mass into NG based generation and prove that renewables are even more cost effective. Petty politics may end up having a silver lining 5 years down the road, and at this point I am open to any route to renewables, even the sloppiest, unintentional ones.

Synapsid , July 26, 2017 at 6:43 pm

Rosario,

If exporting US NG causes its price to rise domestically, utilities that had been using coal can shift back to it. That happened recently.

Rosario , July 26, 2017 at 7:43 pm

Sure, but the ball is in another (higher) cup as the cost graphs go. I suspect it is going to get increasingly difficult to transition back and forth with the lowering costs of renewables. Also, coal is not getting any cheaper to extract and it definitely hasn't reduced its externalities. We'll see, big utilities move in herds and it takes years to make a full transition. They may flood back to coal, and build new plants (I doubt it), but they will eventually get burnt and have to swing back again. In the absence of purposeful national level policy (what I prefer) this is the only way the market based approach will turn away from fossil fuels.

Olaf Lukk , July 26, 2017 at 4:02 pm

"Instruments of political sanctions should not be connected with economic interests"?

This echoes the rationalizations of Wall Street when they crashed the economy in '08. Let's not let politics interfere with the right to make money?

The sanctions against Russia were put in place in response to its annexation of Crimea and its support of insurrection in Eastern Ukraine. They have been extended, and expanded, in response to Russian meddling in the recent presidential election. To what extent their cyber warfare had an effect is debatable, but Trump's stonewalling on the issue practically guaranteed the lopsided vote on the latest sanctions.

The LNG issue has some valid points, but it ignores an issue which I have not seen addressed on Naked Capitalism: Just how much is Trump- and those in his administration (infested with alumni of the vampire squid)- beholden to Putin and his fellow oligarchs?

Trump appears to be the Pied Piper of Putin Patsies. I can't help but wonder why.

Yves Smith Post author , July 26, 2017 at 5:51 pm

Crimea was not "annexed". The US destabilized Ukraine. The government in Kiev came in as a result of a coup even thought elections were scheduled for a mere six weeks later and Yanukovich would clearly have been voted out. The new government tore up the current constitution and went through no legal process whatsoever to do that. That is not the behavior of a legitimate government.

Even though neo-Nazis are a very small percentage of the voters, they got 15% of government positions. The head of the defense department gave a speech in which he encouraged ethnic cleansing of Ukrainians of Russian origin, saying that any soldiers who removed them could keep their property.

Crimea petitioned to join Russia after a referendum that approved of that move by a large margin. The US used precisely the same mechanism with Kosovo. Are you about to call that an annexation?

We have repeatedly discussed how the idea that Russia has influence over Trump is nonsense.

Better trolls, please.

[Jul 29, 2017] Collateral Damage

Notable quotes:
"... République en marche ..."
Jul 29, 2017 | www.unz.com

Do they know what they are doing? When the U.S. Congress adopts draconian sanctions aimed mainly at disempowering President Trump and ruling out any move to improve relations with Russia, do they realize that the measures amount to a declaration of economic war against their dear European "friends"?

Whether they know or not, they obviously don't care. U.S. politicians view the rest of the world as America's hinterland, to be exploited, abused and ignored with impunity.

The Bill H.R. 3364 "Countering America's Adversaries Through Sanctions Act" was adopted on July 25 by all but three members of the House of Representatives. An earlier version was adopted by all but two Senators. Final passage at veto-overturning proportions is a certainty.

This congressional temper tantrum flails in all directions. The main casualties are likely to be America's dear beloved European allies, notably Germany and France. Who also sometimes happen to be competitors, but such crass considerations don't matter in the sacred halls of the U.S. Congress, totally devoted to upholding universal morality.

Economic "Soft Power" Hits Hard

Under U.S. sanctions, any EU nation doing business with Russia may find itself in deep trouble. In particular, the latest bill targets companies involved in financing Nord Stream 2, a pipeline designed to provide Germany with much needed natural gas from Russia.

By the way, just to help out, American companies will gladly sell their own fracked natural gas to their German friends, at much higher prices.

That is only one way in which the bill would subject European banks and enterprises to crippling restrictions, lawsuits and gigantic fines.

While the U.S. preaches "free competition", it constantly takes measures to prevent free competition at the international level.

Following the July 2015 deal ensuring that Iran could not develop nuclear weapons, international sanctions were lifted, but the United States retained its own previous ones. Since then, any foreign bank or enterprise contemplating trade with Iran is apt to receive a letter from a New York group calling itself "United Against Nuclear Iran" which warns that "there remain serious legal, political, financial and reputational risks associated with doing business in Iran, particularly in sectors of the Iranian economy such as oil and gas". The risks cited include billions of dollars of (U.S.) fines, surveillance by "a myriad of regulatory agencies", personal danger, deficiency of insurance coverage, cyber insecurity, loss of more lucrative business, harm to corporate reputation and a drop in shareholder value.

The United States gets away with this gangster behavior because over the years it has developed a vast, obscure legalistic maze, able to impose its will on the "free world" economy thanks to the omnipresence of the dollar, unrivaled intelligence gathering and just plain intimidation.

European leaders reacted indignantly to the latest sanctions. The German foreign ministry said it was "unacceptable for the United States to use possible sanctions as an instrument to serve the interest of U.S. industry". The French foreign ministry denounced the "extraterritoriality" of the U.S. legislation as unlawful, and announced that "To protect ourselves against the extraterritorial effects of US legislation, we will have to work on adjusting our French and European laws".

In fact, bitter resentment of arrogant U.S. imposition of its own laws on others has been growing in France, and was the object of a serious parliamentary report delivered to the French National Assembly foreign affairs and finance committees last October 5, on the subject of "the extraterritoriality of American legislation".

Extraterritoriality

The chairman of the commission of enquiry, long-time Paris representative Pierre Lellouche, summed up the situation as follows:

"The facts are very simple. We are confronted with an extremely dense wall of American legislation whose precise intention is to use the law to serve the purposes of the economic and political imperium with the idea of gaining economic and strategic advantages. As always in the United States, that imperium, that normative bulldozer operates in the name of the best intentions in the world since the United States considers itself a 'benevolent power', that is a country that can only do good."

Always in the name of "the fight against corruption" or "the fight against terrorism", the United States righteously pursues anything legally called a "U.S. person", which under strange American law can refer to any entity doing business in the land of the free, whether by having an American subsidiary, or being listed on the New York stock exchange, or using a U.S.-based server, or even by simply trading in dollars, which is something that no large international enterprise can avoid.

In 2014, France's leading bank, BNP-Paribas, agreed to pay a whopping fine of nearly nine billion dollars, basically for having used dollar transfers in deals with countries under U.S. sanctions. The transactions were perfectly legal under French law. But because they dealt in dollars, payments transited by way of the United States, where diligent computer experts could find the needle in the haystack. European banks are faced with the choice between prosecution, which entails all sorts of restrictions and punishments before a verdict is reached, or else, counseled by expensive U.S. corporate lawyers, and entering into the obscure "plea bargain" culture of the U.S. judicial system, unfamiliar to Europeans. Just like the poor wretch accused of robbing a convenience store, the lawyers urge the huge European enterprises to plea guilty in order to escape much worse consequences.

Alstom, a major multinational corporation whose railroad section produces France's high speed trains, is a jewel of French industry. In 2014, under pressure from U.S. accusations of corruption (probably bribes to officials in a few developing countries), Alstom sold off its electricity branch to General Electric.

The underlying accusation is that such alleged "corruption" by foreign firms causes U.S. firms to lose markets. That is possible, but there is no practical reciprocity here. A whole range of U.S. intelligence agencies, able to spy on everyone's private communications, are engaged in commercial espionage around the world. As an example, the Office of Foreign Assets Control, devoted to this task, operates with 200 employees on an annual budget of over $30 million. The comparable office in Paris employs five people.

This was the situation as of last October. The latest round of sanctions can only expose European banks and enterprises to even more severe consequences, especially concerning investments in the vital Nord Stream natural gas pipeline.

This bill is just the latest in a series of U.S. legislative measures tending to break down national legal sovereignty and create a globalized jurisdiction in which anyone can sue anyone else for anything, with ultimate investigative capacity and enforcement power held by the United States.

Wrecking the European Economy

Over a dozen European Banks (British, German, French, Dutch, Swiss) have run afoul of U.S. judicial moralizing, compared to only one U.S. bank: JP Morgan Chase.

The U.S. targets the European core countries, while its overwhelming influence in the northern rim – Poland, the Baltic States and Sweden – prevents the European Union from taking any measures (necessarily unanimous) contrary to U.S. interests.

By far the biggest catch in Uncle Sam's financial fishing expedition is Deutsche Bank. As Pierre Lellouche warned during the final hearing of the extraterritorial hearings last October, U.S. pursuits against Deutsche Bank risk bringing down the whole European banking system. Although it had already paid hundreds of millions of dollars to the State of New York, Deutsche Bank was faced with a "fine of 14 billion dollars whereas it is worth only five and a half. In other words, if this is carried out, we risk a domino effect, a major financial crisis in Europe."

In short, U.S. sanctions amount to a sword of Damocles threatening the economies of the country's main trading partners. This could be a Pyrrhic victory, or more simply, the blow that kills the goose that lays the golden eggs. But hurrah, America would be the winner in a field of ruins.

Former justice minister Elisabeth Guigou called the situation shocking, and noted that France had told the U.S. Embassy that the situation is " insupportable " and insisted that "we must be firm".

Jacques Myard said that "American law is being used to gain markets and eliminate competitors. We should not be naïve and wake up to what is happening."

This enquiry marked a step ahead in French awareness and resistance to a new form of "taxation without representation" exercised by the United States against its European satellites. They committee members all agreed that something must be done.

That was last October. In June, France held parliamentary elections. The commission chairman, Pierre Lellouche (Republican), the rapporteur Karine Berger (Socialist), Elisabeth Guigou (a leading Socialist) and Jacques Myard (Republican) all lost their seats to inexperienced newcomers recruited into President Emmanuel Macron's République en marche party. The newcomers are having a hard time finding their way in parliamentary life and have no political memory, for instance of the Rapport on Extraterritoriality.

As for Macron, as minister of economics, in 2014 he went against earlier government rulings by approving the GE purchase of Alstom. He does not appear eager to do anything to anger the United States.

However, there are some things that are so blatantly unfair that they cannot go on forever.

exiled off mainstreet > , July 29, 2017 at 4:40 am GMT

It looks like the rest of the world is going to have to bring down the economic yankee imperium or be destroyed themselves.

Randal > , July 29, 2017 at 9:01 am GMT

there are some things that are so blatantly unfair that they cannot go on forever.

LOL! Naïve, I think. As long as European countries (and the UK) are prepared to carry on acting as Washington's bitches, Washington will go on treating them as such.

The political, media and business elites need to be thoroughly cleansed of US apologists. That won't be easy, especially when Europe and the UK are in the grip of an ideologically anti-nationalist culture that is essentially treasonous and utterly lacking in national self-respect.

Ending NATO and suppressing the US-backed anti-Russian propaganda that keeps Europe and the UK subordinate would be the bare minimum first steps, along with cooperating with China and Russia to promote and use financial systems independent of the dollar.

or even by simply trading in dollars, which is something that no large international enterprise can avoid

The countries that are regularly targeted for US bullying are building structures that avoid vulnerability. European countries and the UK need to join with them in doing so (though it's unlikely they will be trusted very far given their track records of collaboration with Washington).

Also companies that decline to deal in the US market should be protected and supported, on national security grounds. It should be straightforwardly illegal in all sovereign countries for the US to try to impose its laws on any company merely for dealing in dollars, and the US should be held directly responsible when its courts seek to do so. US extraterritoriality has always been a gross intrusion into and threat to national sovereignty.

In 2014, France's leading bank, BNP-Paribas, agreed to pay a whopping fine of nearly nine billion dollars, basically for having used dollar transfers in deals with countries under U.S. sanctions.

Ideally this kind of extortion will be to some extent counterbalanced by retaliatory extractions from US business assets such as Google and Facebook.

entering into the obscure "plea bargain" culture of the U.S. judicial system, unfamiliar to Europeans. Just like the poor wretch accused of robbing a convenience store, the lawyers urge the huge European enterprises to plea guilty in order to escape much worse consequences

The US plea bargain system is a disgrace to any kind of concept of justice and basically means that no US confessions or guilty pleas can be regarded as meaningful, and nor should any sovereign country agree to extradition of its own citizens to the US. It is basically a system of organised blackmail, coerced confessions and corruption of witnesses.

El Dato > , July 29, 2017 at 9:24 am GMT

Well, Europe could consider all of these payouts to the US as "reparations for Nazi atrocities". This will make it go down easier, after all who wouldn't want to enslave himself to Yankees to repair Nazi atrocities?

Meanwhile, self-flaggelation goes on

Anonymous, July 29, 2017 at 1:11 pm GMT

Western European allies?

Nice choice of words, but fiction-supporting. Under-surerainty would be a better fit.

[Jul 28, 2017] The new sanctions expose that the US political establishment, spearheaded by the intelligence agencies is opposed to any shift away from the anti-Russia policy developed under the Obama administration.

Notable quotes:
"... The near-unanimous vote in both houses of Congress (all "no" votes in the House were from Republicans) testifies to the degree to which the CIA, NSA and other spy agencies directly control the institutions of the state and the personnel that compose them."*** ..."
"... By far the new U.S. bill place the most distressing question mark on the pipeline to northern Europe known as Nord Stream II. Five of Europe's biggest energy companies are all signed on to partner Gazprom in pumping gas westwards. ..."
"... "The Europeans intensely dislike U.S. extraterritoriality, and this will widen the breach between the EU and U.S.," Sir Lyne says. "For the Russians, that is a silver lining." ..."
"... All the Europeans need do is tell Uncle Sam to go fuck himself with his sanctions That will pull the rug out from under the American psychos behind the rabid sanction lunacy ..."
"... American politicians are also under the bizarre delusion that they can replace Russia's piped gas with LNG exports. This delusion is something else. America imports natural gas! It would have to take a major consumption hit, thereby driving up prices since demand will remain, to supply the EU with 150+ billion cubic meters of gas per year that currently comes from Russia. The USA consumed about 780 bcm of gas in 2016. It does not have a spare 150 bcm to sell. ..."
"... As I alluded yesterday, the USA has staked out a position from which it cannot back away, one which is of surpassing stupidity, because it has accustomed itself to being obeyed and fancies itself such a clever manipulator that it will always get its way. It is critical now that Europe actually stand together and speak with one voice; otherwise, America will begin probing for lack of resolve and unlimbering its divide-and-conquer game. ..."
"... It will also be pretty funny if Russia struggled and pleaded and accepted all manner of small-minded insults just to get into the World Trade Organization, only to see it collapse only a few years later. Because I'm pretty sure what America is trying to pull off here is in gross violation of WTO rules as well. ..."
Jul 28, 2017 | marknesop.wordpress.com

Northern Star , July 26, 2017 at 9:32 am

http://www.wsws.org/en/articles/2017/07/26/pers-j26.html

"The new sanctions expose the essential issues behind the "election hacking" campaign of the US media and political establishment, spearheaded by the intelligence agencies that are opposed to any shift away from the anti-Russia policy developed under the Obama administration.

**** The near-unanimous vote in both houses of Congress (all "no" votes in the House were from Republicans) testifies to the degree to which the CIA, NSA and other spy agencies directly control the institutions of the state and the personnel that compose them."***

Northern Star , July 26, 2017 at 9:53 am
http://www.newsweek.com/how-do-sanctions-work-new-us-bill-targets-russia-and-europe-nervous-642136

"One key question now is how Europe will react," Sir Lyne says. "Over Ukraine, the US and EU marched in step. That is not the case now; and the new bill has the potential to make Europe pay a much higher price than the US."

The EU has never been more dependent on Russian gas, according to Bloomberg, as Russia's state-run gas monopoly Gazprom now pumps over a third (34 percent) of Russia's gas. At present, Gazprom has put the kibosh on one pipeline to the EU, known as South Stream but agreed one that will bring gas on the EU's borders, to Turkey.

By far the new U.S. bill place the most distressing question mark on the pipeline to northern Europe known as Nord Stream II. Five of Europe's biggest energy companies are all signed on to partner Gazprom in pumping gas westwards.

Anglo-Dutch group Royal Dutch Shell, Austria's OMV, France's Engie and Germany's Uniper and Wintershall have agreed to work with Gazprom on the pipeline, collectively covering around half of the nearly $11 billion cost.

The European Commission President Jean Claude-Juncker warned Wednesday that Brussels needs to act "within days" if the U.S. does provide Europe with reassurance that the sanctions will not jeopardize EU interests. A U.S. official, speaking on the condition of anonymity told European news site EUobserver, that the European companies would likely not be punished by the U.S. as part of the sanctions but called the situation a "risk" regardless.

"The Europeans intensely dislike U.S. extraterritoriality, and this will widen the breach between the EU and U.S.," Sir Lyne says. "For the Russians, that is a silver lining."

All the europeans need do is tell Uncle Sam to go fuck himself with his sanctions That will pull the rug out from under the American psychos behind the rabid sanction lunacy

marknesop , July 26, 2017 at 6:31 pm
All the Europeans need do is tell Uncle Sam to go fuck himself with his sanctions That will pull the rug out from under the American psychos behind the rabid sanction lunacy

Of course that is not going to happen, at least not publicly – there will be no outward sign of European rebellion, because that would be 'playing into Putin's hands', and the European elite still loathes Putin enough to not want to be seen doing that. At the same time, Uncle Sam does not want to back down, and an arrangement – even secret – that America would not apply the sanctions to European companies would completely nullify their effect. European companies would simply ignore them and carry on with their plans. So the possibility they might be invoked has to stay, with all the attendant fury that is likely to cause. Juicy as a mango, I think. Official America has been a bully for so long that it's the only problem-solving approach it remembers.

The question that keeps nagging at the corner of my mind, though, is "What if the USA were successful at stopping the construction of Nord Stream II and Russia ceased transit through Ukraine anyway?" After all, this whole effort is focused on forcing Russia to continue transiting a big part of Europe's gas supplies through Ukraine, both to keep Ukraine viable by forcing Russia to engage with it despite its objectionable ideological government, and to keep Ukraine as a bargaining chip to make Russia appear to be an unreliable supplier.

Washington's assumption is that Russia will continue to transit gas through Ukraine if its alternatives are removed – after all, it's just a big gas station, and it can't live without its gas sales to Europe. But what if, once again, Washington guessed wrong? If I were running Russia – let's pretend, because I'm not – I would orchestrate a series of 'rebel' sabotage attacks on Naftogaz's pipeline network, blowing up substantial parts of it, and then use that as a reason to cease transit of gas through the line: it's just not safe. I would then maximize transit through existing pipelines except Ukraine, perhaps accelerating the completion of Turkish Stream, and publicly and loudly blame any shortfall on American meddling – if Nord Stream had been twinned, you wouldn't have this problem. If it were managed correctly and everything went according to plan, I think it would resonate.

Also, Russia has reduced its dependence on energy exports. It might be worth it to allow a scenario in which Washington got the opportunity to make up for Russian shortfalls, because it would be a complete failure – the export capability is just not there, and if they redoubled their efforts they would lose money like crazy because they could not do it for Russia's prices. Either they would flop at the delivery end, or the Europeans would squeal like pigs because their gas rates went out of sight, or Uncle Sam would take a bath on American exports. Those are the only possible scenarios, it should be emphasized.

kirill , July 26, 2017 at 7:01 pm
We have clear evidence that the politicians in the USA do not have a grip on Russia's economy and exports dependence. By 2019 Russia will have a massive gas pipeline to China. Gas for this pipeline has to come from somewhere and filling it up with Banderastan transit gas would be a good start to put the USA and its EU colony in its place. According to the most recent Awara Group report, the fraction of oil and gas industry in Russia is down to 8% of GDP. Not only is Russia not dependent on oil and gas for its GDP, it will lose nothing by shifting supply away from the EU.

American politicians are also under the bizarre delusion that they can replace Russia's piped gas with LNG exports. This delusion is something else. America imports natural gas! It would have to take a major consumption hit, thereby driving up prices since demand will remain, to supply the EU with 150+ billion cubic meters of gas per year that currently comes from Russia. The USA consumed about 780 bcm of gas in 2016. It does not have a spare 150 bcm to sell.

Northern Star , July 27, 2017 at 11:20 am
http://www.wsws.org/en/articles/2017/07/27/euro-j27.html

"The European powers reacted sharply yesterday to the US House of Representatives' passage of a bill imposing sanctions on Russia, Iran and North Korea, indicating that it was unacceptable to European interests and that the European Union (EU) was preparing retaliatory measures."

"Angry commentary over the sanctions bill in the German press underscore that influential forces in the German ruling class see the sanctions bill as yet further evidence of hostile US intent towards Germany and Europe.
"What is particularly dangerous is that supporters of Russia sanctions in Washington are not only trying to put Putin and Trump in the same bag, but also helping the US economy against foreign competition," wrote the Sueddeutsche Zeitung. Under the bill, the daily added, "Europeans would be forced to burn less Russian natural gas and more American liquefied natural gas. This is an unfriendly act, especially against Germany."
The Frankfurter Allgemeine Zeitung wrote that, "with all due respect for the Senate and its ambition to tie President Donald Trump's hands on Russia policy, the draft law is unacceptable from a European perspective. First, it breaks the diplomatic alliance between Europe and the United States in deciding on sanctions against Russia. The argument that America is promoting Europe's energy security is also quite insolent. That is Europe's responsibility. This is how you lose friends."

The question that is emerging is whether the US-EU military rivalry and bitter trade conflicts will now coalesce and escalate into a catastrophic breakdown in US-EU relations!in the form of a trade war that would bring the world economy to its knees, or of outright military conflict."

Hmmm .So the RWETA is born.. Russia &Western EuropeTrade Allliance

marknesop , July 27, 2017 at 5:37 pm
Why make it more complicated than it is? The French are in the lead for once – such sanctions are a violation of international law. Consequently no other nations are obligated to abide by them. If America levied a massive fine against BASF Wintershall, and that company simply ignored it, what would America do? Start booting out German companies in the USA? Melt BMW's and pour them down the drains in the street?

As I alluded yesterday, the USA has staked out a position from which it cannot back away, one which is of surpassing stupidity, because it has accustomed itself to being obeyed and fancies itself such a clever manipulator that it will always get its way. It is critical now that Europe actually stand together and speak with one voice; otherwise, America will begin probing for lack of resolve and unlimbering its divide-and-conquer game.

The really funny part in this, from my viewpoint, is the way the Europeans blame Trump and his presidency. Granted, he did frame the 'America first' policy, but that's just a convenient handle for the angry Europeans to grab. Trump entered office with the declared intention of mending the damaged relationship with Russia, and it was the Democrats who created an hysterical firestorm of accusation that Russia had greased Trump's way into office. It has been ideologues outside Trump's circle who crafted the sanctions legislation with a view to preventing him from lifting the sanctions under his own recognizance.

It will also be pretty funny if Russia struggled and pleaded and accepted all manner of small-minded insults just to get into the World Trade Organization, only to see it collapse only a few years later. Because I'm pretty sure what America is trying to pull off here is in gross violation of WTO rules as well.

[Jul 23, 2017] Russia lost $26 billion on oil and gas exports

Notable quotes:
"... An increase in Libyan output, together with a surge in US production and signs of recovery in Nigeria, may undercut Opec's strategy to re-balance the market and boost prices. ..."
"... The US frackers (along with all other high-cost producers around the globe) will go bust before the end of the decade. ..."
"... It is garbage articles. Only trading oil shares on stock market is zero sum game so when Mr Buffet makes $1 million many others lost a little bit each to the tune of $1 million. But country producing oil and exporting is not stock market. It is life and life is not zero-sum game. If oil companies in one oil producing country lost 10-20-30 billion it does not mean that oil companies in other oil producing country gained 10-20-30 billion. Glenn, this is so basic. ..."
"... Let the Saudis, the Russians and the cheap money wallstreet companies shoot out their battle – when the first topples (perhaps SA running out of money first, Venezuala soon goes bottom-up) prices will be north of 70$ again. ..."
"... Northsea-oil is another candidate for going bottom-up, the same with old giant fields like chinese super fields where they stopped injecting at 60$. Together with a healthy 1.4 mb demand growth there will be times when even a wide deveoloped Permian can't sustain all demands at 40-50$. ..."
"... Financing in the oil industry will take care of it. If loans and investments dry up as lenders and investors find better deals to make, there will be less drilling. It's the oil industry itself to blame for low prices. ..."
Jul 23, 2017 | peakoilbarrel.com

Glenn E Stehle says: 07/18/2017 at 7:05 pm

Ves,

So you think Putin is happy about this?

Russia lost $26 billion on oil and gas exports
http://www.hellenicshippingnews.com/russia-lost-26-billion-on-oil-and-gas-exports/

Russia is making less money on oil and gas exports, according to the data published today by the Federal Customs Service. In 2016, the revenues from oil and gas exports declined by 17.7% (compared to 2015) and amounted to $73.676 billion. Gazprom's revenues from gas exports declined by 25% and amounted to $31.28 billion.

Or this?

Saudis, Russia say oil supply cut being extended to next March
https://www.irishtimes.com/business/energy-and-resources/saudis-russia-say-oil-supply-cut-being-extended-to-next-march-1.3083423

While output curbs introduced at the start of the year are working, global inventories aren't yet at the level targeted by Opec and its allies, Saudi energy minister Khalid Al-Falih said Monday in Beijing alongside his Russian counterpart, Alexander Novak. The ministers agreed the deal should be extended through the first quarter of 2018 at the same volume of reductions, they said .

An increase in Libyan output, together with a surge in US production and signs of recovery in Nigeria, may undercut Opec's strategy to re-balance the market and boost prices.

Or this?

Oil Prices Ease on Signs of Steady Output from Some Producers
http://www.rigzone.com/news/oil_gas/a/151042/Oil_Prices_Ease_on_Signs_of_Steady_Output_from_Some_Producers?utm_source=DailyNewsletter&utm_medium=email&utm_term=2017-07-18&utm_content=&utm_campaign=industry_headlines_1

Oil prices were about 1 percent lower on Monday as investors continued to await strong indications that an OPEC-led effort to drain a glut was proving effective .

U.S. shale oil production was forecast to rise for the eighth consecutive month, climbing 112,000 barrels per day (bpd) to 5.585 million bpd in August .

Oil prices are less than half their mid-2014 level because of a persistent glut, even after the Organization of the Petroleum Exporting Countries with Russia and other non-OPEC producers cut supplies since January.

Or this?

US Shale Oil Output Seen Up for Eighth Month at 5.6 Mln bpd -EIA
http://www.rigzone.com/news/oil_gas/a/151045/US_Shale_Oil_Output_Seen_Up_for_Eighth_Month_at_56_Mln_bpd_EIA?utm_source=DailyNewsletter&utm_medium=email&utm_term=2017-07-18&utm_content=&utm_campaign=Production_1

U.S. shale oil production is forecast to rise for the eighth consecutive month, climbing 112,000 barrels per day (bpd) to 5.585 million bpd in August, the U.S. Energy Department said in a report on Monday.

The increase comes amid market concerns that rising shale output will dampen the Organization of the Petroleum Exporting Countries' efforts to curb a global supply glut.

The U.S. shale production level would be the highest since record-keeping began in 2007, according to the EIA's monthly drilling productivity report.

Stavros H says: 07/22/2017 at 3:34 pm
The US frackers (along with all other high-cost producers around the globe) will go bust before the end of the decade.
Glenn E Stehle says: 07/18/2017 at 7:40 pm

Ves says: 07/18/2017 at 10:46 pm
Glenn,

It is garbage articles. Only trading oil shares on stock market is zero sum game so when Mr Buffet makes $1 million many others lost a little bit each to the tune of $1 million. But country producing oil and exporting is not stock market. It is life and life is not zero-sum game. If oil companies in one oil producing country lost 10-20-30 billion it does not mean that oil companies in other oil producing country gained 10-20-30 billion. Glenn, this is so basic.

Look this way, very simple way, if you and your neighbour are earning oil royalties on your Texas land in US$ with exactly same interest and he has to live in Texas (and has to pay living expense in $US) and you live in Mexico (paying expenses in pesos) it is not the same. For you "It's morning in Mexico" but for your Texas neighbour is so so.

Glenn E Stehle says: 07/19/2017 at 6:35 am
Ves,

Revenue = number of units sold x price per unit

A lease that produces 12,000 BO per year at $100/BO generates $1.2 million in revenue.

A lease that produces 120,000 BO per year at $50/BO generates $6 million in revenue.

Most people consider $6 million in revenue to be better than $1.2 million.

Eulenspiegel says: 07/19/2017 at 8:30 am
It depends on your costs whats the best – If you have 49$ costs, the first least will still generate 612.000$ profit, the second only 120.000$ despite pumping the 10 fold amount.

If you have only 1 piece of land and can wait(it's your land, and you have the money), the first option is the best – if you are a shale company with 1 zillion in debt, the second option is the best to dish out all your assets to hit your payment rates.

Someone here described at a rule of a thumb you should earn the 3 fold price of drilling costs to make a good fortune since you have additional costs – so waiting a bit before calling for the fracking pump can pay out here.

Let the Saudis, the Russians and the cheap money wallstreet companies shoot out their battle – when the first topples (perhaps SA running out of money first, Venezuala soon goes bottom-up) prices will be north of 70$ again.

Northsea-oil is another candidate for going bottom-up, the same with old giant fields like chinese super fields where they stopped injecting at 60$. Together with a healthy 1.4 mb demand growth there will be times when even a wide deveoloped Permian can't sustain all demands at 40-50$.

Glenn E Stehle says: 07/19/2017 at 8:51 am
Eulenspiegel said:

Together with a healthy 1.4 mb demand growth there will be times when even a wide developed Permian can't sustain all demands at 40-50$.

I sure hope you're right, and that the competitors "go bottom-up," or at least blink, sooner than later.

This is from Pioneer Resources' June investor presentation.

Eulenspiegel says: 07/20/2017 at 3:50 am
Why only 2.31$ productions cost for permian horizontals, I think the pipelines are the same as for the verticals direct in the spot beneath?

All other shales have higher production costs, too – which doesn't make the thing better at the momentary depressed oil prices.

Looks like they have big red numbers in Eagle Ford even at top locations.

Boomer II says: 07/19/2017 at 9:09 am
But if the total BO from the lease is the same whether it comes out slowly or quickly, then getting the oil out quickly at a low price is not as good as getting the oil out slowly at a higher price.

Your lifetime return on your lease would be the most important number.

Glenn E Stehle says: 07/19/2017 at 9:28 am
BoomerII,

Well that certainly is the conclusion that the Pure and the Humble (aka John D. Rockefeller) came to in the 1930s after the discovery of the East Texas Field.

But just exactly how do you propose that those "higher prices" be achieved in a competitive, free market economy?

Or do you advocate for the re-cartelization of the market place for oil, the way it was between 1936 and the 1970?

Boomer II says: 07/19/2017 at 10:17 am
Financing in the oil industry will take care of it. If loans and investments dry up as lenders and investors find better deals to make, there will be less drilling. It's the oil industry itself to blame for low prices.
Glenn E Stehle says: 07/19/2017 at 11:03 am
Boomer II,

That's how the business cycle works in a competitive, free-market economy. The down-cycle is unkind to many, but some make it through and go on to fight another day.

Do you prefer a system where the government picks the winners and losers?

Boomer II says: 07/19/2017 at 11:29 am
Between depletion and increased production costs and a temporary glut of oil, the market is making oil and gas investments less attractive.

The government IS stepping in, to the industry's detriment, by selling more leases right now and encouraging what might be overproduction at the moment.

If market conditions hasten the decline of gas and oil, I won't be sorry because I think we need alternatives anyway.

Glenn E Stehle says: 07/19/2017 at 12:07 pm
Boomer II,

Why do you believe the "alternatives" will necessarily make it through the down-cycle?

They may be some of the first to "go bottom-up," especially as the subsidies for wind and solar begin to be phased out in the next few years.

texas tea says: 07/19/2017 at 12:16 pm
we could always make Mike president That should be good for a couple of hundred $$$ increase per barrel
Boomer II says: 07/19/2017 at 12:59 pm
Countries that don't want to be dependent on fossil fuel imports have an incentive to find alternatives. Even if they pay a bit more for them (which doesn't appear will be the case), renewables offer them more energy independence. If that is America's goal, it is likely to be other countries' goal as well.

Alternative energy sources also provide an economic advantage for some countries because they can become energy players even without their own fossil fuels.

Think of alternative energy the way you do military preparativeness. There is value to countries which taxpayers and governments will support even if there is no direct financial benefit. However money spent for alternative energy WILL have more economic benefit than military spending.

Ves says: 07/19/2017 at 11:23 am
"A lease that produces 12,000 BO per year at $100/BO generates $1.2 million in revenue.

A lease that produces 120,000 BO per year at $50/BO generates $6 million in revenue."

Glenn,

The only problem is that FEW 120.000 BO cannot pay MANY 12,000 BO. So, picking 120.000 BO wells is losing game in long term. It is like a stock picking vs indexing in investing. Indexing always wins. Shale carpet drilling is like trying to find that one 120.000 BO well that will pay for all losers that are 12,000 BO. Losing game in the long term...

[Jul 07, 2017] The Power of Siberia gas pipeline, the first to connect Russia and China, will start pumping in December 2019, Gazprom said on Tuesday

Jul 07, 2017 | marknesop.wordpress.com
et Al , July 7, 2017 at 8:30 am
Oh, looky here! De Bong didn't feel the need to do any current research:

July 6

Financial Crimes: Gazprom confident of $400bn Chinese gas supply
https://www.ft.com/content/623c7396-60cc-11e7-91a7-502f7ee26895

State-owned gas monopoly ahead of schedule on politically important Siberian pipeline

The Power of Siberia gas pipeline, the first to connect Russia and China, will start pumping in December 2019, Gazprom said on Tuesday, paving the way for a 30-year supply agreement of more than 1.15tn cubic metres of gas for the Kremlin-controlled export monopoly

Mr Miller's affirmation is important. The project, which will cost Gazprom more than $55bn just to build the necessary infrastructure to get the gas flowing, is one of the most critical investments for Russia's energy sector, which has targeted a long-term strategic supply link with China to match its market penetration in Europe. ..

Power of Siberia is expected to run significantly below capacity in its first few years of operation, as China instead runs down its domestic gas reserves. The 30-year supply agreement is set to kick in around 2025 .
####

Plenty more at the link.

[Jul 07, 2017] Can quatar expand its natural gas export volumes?

Jul 07, 2017 | www.moonofalabama.org

karlof1 | Jul 5, 2017 10:04:01 PM | 37

Here's last year's NatGas industrial review, so you can determine just how sane Qatar's move is. The link is to a modestly sized pdf file, http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwit-fbqxPPUAhVSxmMKHRY1CyAQFggiMAA&url=http%3A%2F%2Fwww.igu.org%2Fdownload%2Ffile%2Ffid%2F2123&usg=AFQjCNHNu-nmLpatVthD04g0UWtOuREDMw

The report's loaded with info. Production can certainly be increased, but it's all the other infrastructure that's required for the market to expand, particularly regasification terminals.

somebody | Jul 5, 2017 5:33:36 PM | 18

By the way, there is a LNG price war between Qatar and the United States .
Anonymous | Jul 5, 2017 6:14:36 PM | 22
The Saudis tried to make a public IPO of Aramco a while back. This has fizzled, probably in recognition of the fact that Saudi is almost running on empty. One reason behind the Qatar lunacy might be a wish to take over Qatar's resources to keep Saudi solvent for a while at least.
mauisurfer | Jul 5, 2017 7:33:04 PM | 30
interview with Chas Freeman last week: Qatar Crisis Could Lead to War: Veteran US Diplomat

if you don't know who Chas is, please wiki was ambassador to Saudi, was Nixon's interpreter in China, that's right, he speaks mandarin and arabic not just knowledgeable, also very funny remember when AIPAC vetoed his appointment by Obama?

https://lobelog.com/qatar-crisis-could-lead-to-war-veteran-us-diplomat/

more Chas here: http://chasfreeman.net/category/speeches/

Grieved | Jul 5, 2017 9:26:42 PM | 35
@18 somebody

Yes, that's exactly how that Reuters story reads to me too. The prime target is the US. Extraordinarily powerful move by Qatar, using a weapon that it knows and owns completely and in massive scale, and with an understanding of the damage it can do to its enemies. Asymmetrical warfare indeed. Priceless.

~~

I'm really hoping that over the years, as Qatar rubs shoulders with the multi-polar world, it will reform itself to renounce and atone for its former support of terrorism. As I watch its moves in this situation I'm struck with a certain admiration. It would be nice to be able to root for it someday as one of the good guys.

Noirette | Jul 6, 2017 1:48:27 PM | 50
Unless the Saudis can reconfigure their economy and train their populous to do actual work, their kingdom will sink ..
karlof1 at 1

This is impossible. Laguerre at 10. > see also response from karlof1 at 20.

The curse of black gold + a rentier economy coupled with an authoritarian repressive State that enslaves the 'people.' The two are often soldered: dominating class capts the profits and co-opts slave labor, and pays off citizens with 'stipends.' Escaping or changing such a template is imho incredibly difficult or impossible in the case of KSA.

The rentier class, aka Royals and hangers-on is several tens of thousands of ppl, not detailed on wiki. (Comp. with US not the 1%, but the 20%..) In fact it is one of the problems of such arrangements, some gang of 'hangers on' has to be appeased and maintained, they have quite some power. Because the 'authoritarian' schema deploys in a clear top-down, to down further, a fixed ladder - way, and once some lower layer is stiffed, objections and obstructions may fly and richochet to the top. For the system to endure, these HAVE to be appeased.

A power sharing scheme like this also mandates that women are kept from acting in any way. The easiest and cheapest way to control half the population, plus all children, ask the MB, the Taliban, KSA.

https://www.bloomberg.com/news/articles/2016-09-26/saudi-arabia-cancels-bonus-payment-for-state-employees-spa-says

http://www.bbc.com/news/world-middle-east-39683592 (reverses pay cuts)

The crazed moves of the new Prince are vain attempts to escape the self-constructed trap. Floundering, flailing, about, considering that killing others, war, (e.g. Yemen), engaging in aggro (Qatar) might help - as that might please the USA, who encourages all aggro and sells arms, etc. Won't end well for KSA for sure all Internationals are wondering who will grab what when collapse it is.

[Jul 04, 2017] Why Ukranian economics now is flirting with disaster and why South Stream pipeline was derailed

fpif.org

Try to put aside, for the moment, the insufferable arrogance of American meddling in Europe's energy market, with a view to restricting its choice while – laughably – pretending it is broadening European energy options.

The readers and commenters of this blog will be well aware, since it has been a topic of discussion for years here, that a critical underpinning of the western plan to seize Ukraine and wrest it into the western orbit was the premise that Russia would be forced by simple momentum to go along with it. As long as events continued to unfold too quickly to get ahead of, Russia would have to help supply the sinews of its own destruction. And a big part of that was the assumption that Russia would help to finance Ukraine's transition to a powerful western fulcrum upon which to apply leverage against it, through continued trade with Ukraine and continued transit of Europe's energy supply through Ukraine's pipeline system.

But Russia slapped a trade embargo on most Ukrainian goods, and rescinded its tariff-free status as it became clear Brussels planned to use it to stovepipe European trade goods into the Russian market, through Ukraine – thus crushing domestic industries which would not be able to compete on economically-favorable terms. The armchair strategists nearly shit a brick when construction of the South Stream pipeline commenced, bypassing Ukraine and depriving it of about $2 billion annually in transit fees. But pressure ultimately forced Bulgaria to throw a wrench into the works, and the pipeline plans were shelved, to much victory dancing in the west. There was not quite as much happy-dancing in Bulgaria , but they were only ever a pawn anyway.

Sidebar for a moment, here; while the $2 Billion annually in transit fees is extremely important, Ukraine's pre-crisis GDP was $163 Billion. The funds realized for transit fees are important because (a) Russia has to pay them and (b) the west will have to come up with the equivalent in aid if Ukraine loses out on them. But the real value intrinsic to Ukraine as a transit country is its physical reality as an interface for Russian gas transit to Europe – what is a bridge can be easily turned into a wall. Any time Washington thinks Russia needs some more shit on its face, Ukraine can be prodded to announce a doubling of its transit fees, or to kick off some other dispute which the popular press will adroitly spin to make Russia appear to be an unreliable supplier. Therefore, it is essential to western strategy that significant amounts of Russian gas continue to transit Ukraine. Sufficiently so that Europe continues to evolve ever-more-desperate contingency plans in order to keep receiving gas through the country which was known to have provoked the previous shutoff of European supplies by siphoning Europe-bound gas for its own use. That's despite the assurances of Germany and western partners of Gazprom in the Nord Stream line that it will mean cheaper gas prices for Europe.

[Jun 27, 2017] The USA is sucessfully sabotaging Russian and try to secure its own shipping LNG to europe while Russia do not have alternative consumers comparable to EU, althout China and India shipments will grow dramatically

Notable quotes:
"... icebreaking LNG Carrier ..."
"... Yamal is projected to double Russia's share of the growing global LNG market by the time it reaches full capacity of 16.5m tonnes a year - equivalent to more than 80 per cent of China's annual demand - by 2021. Construction is three-quarters complete and production from the first phase of the project is due to commence by the end of this year. ..."
"... More than 95 per cent of Yamal's expected output has already been sold through 15 to 20 year contracts, with customers mostly in Asia and Europe. ..."
Jun 27, 2017 | marknesop.wordpress.com
Northern Star , June 23, 2017 at 11:55 am
https://www.yahoo.com/news/putin-launches-deep-water-phase-turkstream-gas-pipeline-143410466.html

One of the best comment people on Yahoo:

"oldgeekMA 2 hours ago

Truth is Russia has been looking for an excuse to get out of the business of Shipping Natural Gas to the West and the South, altogether and these US Sanctions and EU Complaints about Gazprom Pipeline Construction, may just be the out they have been looking for. In Jan 2016, Russia completed 7 Massive High-Pressure Gas Pipelines, 2 to India and 5 to China. The ones to India make 4 total Gas Lines to India, but the 5 to China are the first time China, has had access to Russian Natural Gas. The contracts India and China signed with Gazprom are 50 years, and the price of NG starts at more than double the highest rate Gazprom charges in Europe, the icing on the cake however is that the currency is not US Paper Promissory Notes(Petro Dollars), but Gold Bullion. At full capacity those pipelines can use every single NG resource Gazprom, has at the present time, and all future NG resources. So, Gazprom would be foolish not to want to cut all off its Western and Southern pipelines off, and divert Maximum Flow East. In addition to these NG Pipelines, there are Crude Oil and Diesel pipelines under construction, going to China and India – Completion date scheduled for between November 2017 and January 2018. Chinese and Indian Construction Crews completed their internal distribution pipeline networks in 2016, and have 7 Oil Refineries in various stages of completion. -– All American III Percenter and Combat Disabled US Veteran"

Now..remind me what was this stuff about 'Murica shipping LNG to europe???
LOL!!!!

https://ads.pubmatic.com/AdServer/js/showad.js#PIX&kdntuid=1&p=156204

marknesop , June 24, 2017 at 5:27 pm
That would indeed be delightful if there were even the whiff of truth about it; but, unfortunately, there is not. Europe is still Russia's most important gas market by far. Numbers on the Russia-China gas deal are hard to come by and reporters who quote the price China will pay are just guessing because nobody has officially disclosed that figure and will not; it is strictly confidential.

However, the China-vs-EU figures are not even close; starting next year, Russia will export 30-38 BcM annually to China, and that might go as high as double as the agreement evolves. So, say 65 BcM annually, in a couple of years. That's still far less than half what Gazprom exports annually to Europe – 178.3 BcM in 2016, a significant jump over the previous year's 158.6 BcM.

Moreover, nearly all the increases in the past decade have been to imports by western Europe. Despite all the preaching in the media, the only countries which seem to be seriously trying to wean themselves off of Russian gas – with little to limited success, it must be said – are eastern European countries. One of the biggest yappers in the west is the UK but the UK went from zero imports of Russian gas in 2003 to the fourth-biggest European importer in 2013 .

That little quick-reference pocket guide is actually chock-full of useful facts which you can whip out and quote whenever some pea-brained bucket-mouthed know-nothing is trying to blizzard you with blue-sky bullshit. Here's a few:

1. All the blather and angst about reducing Europe's dependency on Russian gas imports conveniently ignores one buzzing fly in the ointment – long-term contracts. Of 178.6 BcM imported by Europe in 2013, 166 BcM of it was under 30-year contracts. By far the most of it. And you know what would happen if the EU broke a contract in order to reduce its imports, even if it could practically do so under conditions in which domestic sources of supply are rapidly drying up, which it can't. Also, contract supplies are by definition sanctions-exempt.

2. Home-grown Shale gas is not going to ride to the rescue. Even if Europe could tap supplies which are not sour with so much nitrogen that you can't even burn it, in order to reach shale gas supplies of only 28 BcM annually Europe would have to drill 800-1000 new wells every year for 10 years. Let's see that spun as fiscally viable, or sensible in any way, shape or form.

3. Blabber about the Southern Gas Corridor was always nothing more than that – supplies from Azerbaijan to Europe were never expected to total more than 30 BcM, about what Russia expects to export to China starting in 2018, and it would have taken until 2030 to reach that capacity.

4. LNG actually holds the best promise of undercutting Russian supply, and Europe's regassification terminals actually could handle more than the combined total of Russian imports now; 200 BcM. But LNG supplies to Europe depend entirely on whether they can be profitable, and all current objective studies find that Russia can keep LNG away as long as it likes, simply by consistently pricing its pipeline supplies lower than LNG. Given what it would cost Uncle Sam to get his supplies to market, Gazprom can still easily do that and turn a handsome profit.

https://ads.pubmatic.com/AdServer/js/showad.js#PIX&kdntuid=1&p=156204

Cortes , June 23, 2017 at 1:41 pm
Japanese need to diversify energy imports to benefit RF?

http://journal-neo.org/2017/06/22/japan-regards-russia-as-a-reliable-hydrocarbons-exporter/

et Al , June 24, 2017 at 11:25 am
I thought there was a plan to pipeline NG from Nakhoda to Japan? What happened to that, or was it simply to be an LNG terminal but got shifted?
marknesop , June 24, 2017 at 5:43 pm
I'm glad you brought that up; quite apart from the very interesting information contained in the article itself, it is a springboard to a larger discussion – is Russia equally committed to reducing its dependency on European pipelines as the Europeans are? Some say yes: Russia's $27 Billion icebreaking LNG Carrier project is an eye-opener which has been more or less entirely left out of energy discussions. And its target market is Asia .

Yamal is projected to double Russia's share of the growing global LNG market by the time it reaches full capacity of 16.5m tonnes a year - equivalent to more than 80 per cent of China's annual demand - by 2021. Construction is three-quarters complete and production from the first phase of the project is due to commence by the end of this year.

More than 95 per cent of Yamal's expected output has already been sold through 15 to 20 year contracts, with customers mostly in Asia and Europe.

et Al , June 25, 2017 at 8:04 am
That's hardcore! Thanks Mark. So the Chinese stepped in to take up the slack created by US sanctions against Timchenko's Novatek part of the project. Another US epic fail.

It's curious that the West's interpretation of 'globalization' hasn't turned out as expected. They saw it as western globo-corporations buying in around the world, but globalization has naturally progressed as 'multi-polarization' of global power, away from the US & the West's dominance. The Chinese stepping in is a perfect example. It shows that Russia has real options which it is building and if needs be, at some point in the future, tell the 'No thanks!'.

[Jun 25, 2017] Capturing world markets for US LNG exporters is a major driver of US policy

Notable quotes:
"... The U.S. is on track to produce 10 million barrels of oil per day on average next year, according to a forecast from the Energy Information Administration -- a milestone that would shatter a record set in 1970. ..."
"... Although "dominance" may be hyperbole in that context as well -- given totals that exporters such as Qatar are achieving -- capturing world markets for US LNG exporters is a major driver of US policy. Ukraine, the nonsense about Russian interference in US elections, and the new Senate sanctions against European companies working with Russia on the Baltic Sea pipeline are three cases in point. ..."
Jun 25, 2017 | www.moonofalabama.org
likklemore | Jun 25, 2017 4:57:18 PM | 48

It's All About Oil and Gas and here is Trump a -twittering:

Bloomberg: Trump to Call for U.S. 'Dominance' in Global Energy Production

Link

Trump is set to deliver a speech at the Energy Department on Thursday focused almost entirely on energy exports -- describing how the foreign sale of U.S. natural gas, oil and coal helps strengthen the country's influence globally, bolster international alliances, and help stabilize global markets. Energy Secretary Rick Perry may touch on similar themes when he speaks Tuesday with analysts and executives at the U.S. Energy Information Administration conference in Washington.[..]

Ironically, some of Trump's policies could exacerbate the market challenges facing oil, gas and coal, by spurring more domestic production at a time when a supply glut is already suppressing prices.

The U.S. is on track to produce 10 million barrels of oil per day on average next year, according to a forecast from the Energy Information Administration -- a milestone that would shatter a record set in 1970.

'Dominance' Sought

Trump's theme of "energy dominance" marks an evolution. For years, the catch phrase of choice has been "energy independence," as politicians and industry officials sought to highlight how a new era of abundance was helping the U.S. wean itself from foreign sources of oil and natural gas.

That was in turn a dramatic change from the 1970s, when former President Jimmy Carter turned down the White House thermostats and used a televised address in February 1977 to urge consumers to conserve energy amid a permanent "shortage." After that, federal energy policy became rooted in the view that oil and gas were in short supply.[.]

"Trump is reorienting our national rhetoric toward 'dominance,'" said Kevin Book, analyst with ClearView Energy Partners LLC. "Captives crave independence; competitors strive to dominate. It's a shift from getting by to getting ahead."

~ ~ ~ ~ ~
Reminds of the old song – "Dream, dream, dream"

Forecast is 10 million bbls per day 2018 and we are proposing dominance in global energy production!! What a twit.

Are the bf Saudis not afraid? Iran, Russia?

somebody | Jun 25, 2017 5:21:44 PM | 49
48) Yep, it is funny. According to above quoted US Energy Information administration the US consumed 19.68 million barrels of petroleum products per day in 2016.
Berry Friesen | Jun 25, 2017 6:27:06 PM | 51

48 & 49:

Mainly the reference to "dominance" applies to liquefied natural gas. Comparing LNG exports during the first 3 months of 2015 with the first 3 months of 2017 shows an increase by a factor of 30.

Although "dominance" may be hyperbole in that context as well -- given totals that exporters such as Qatar are achieving -- capturing world markets for US LNG exporters is a major driver of US policy. Ukraine, the nonsense about Russian interference in US elections, and the new Senate sanctions against European companies working with Russia on the Baltic Sea pipeline are three cases in point.

likklemore | Jun 25, 2017 7:06:09 PM | 53

Thank you somebody @ 49 for the added input.

@ 51 Berry Friesen

Mainly the reference to "dominance" applies to liquified natural gas. Comparing LNG exports during the first 3 months of 2015 with the first 3 months of 2017 shows an increase by a factor of 30.

.[capturing] world markets for US LNG exporters is a major driver of US policy.

My comment was it's on someone's wish list and dreaming on.

Do you have any idea the cost to set up LNG terminals and cost to transport from US to global - for starters, to compete with Russia, Iran, Qatar and others in the EU and Asian markets?

Pricing a factor: It's gone cold. The oil price crash has eliminated the discount U.S. LNG has to world prices

jfl | Jun 25, 2017 8:03:55 PM | 54

@53 lm

from your bloomberg link ...

Now spot LNG in Asia has fallen to just $5.95, while Pertamina would pay $6.86 for its U.S. LNG even before shipping it halfway across the world.
geostrategy ... if ya gotta ask how much it costs, you can't afford it.

Brad | Jun 25, 2017 8:33:14 PM | 55

@53
http://www.thenational.ae/business/energy/qatar-lifts-development-moratorium-on-worlds-biggest-gas-field

somebody | Jun 25, 2017 9:47:57 PM | 58

53 add Germany and Austria

Austrian Federal Chancellor Christian Kern (SPÖ) and German Foreign Minister Sigmar Gabriel (SPD) commented as follows today (15 June) on the approval by the United States Senate of legislation regarding sanctions against Russia:

...

It is in the common interest of the EU and the US to take resolute and unified action with a view to resolving the conflict in Ukraine.

We cannot, however, accept the threat of illegal extraterritorial sanctions being imposed on European companies that are participating in efforts to expand Europe's energy supply network!

The draft bill of the US is surprisingly candid about what is actually at stake, namely selling American liquefied natural gas and ending the supply of Russian natural gas to the European market. The bill aims to protect US jobs in the natural gas and petroleum industries.

Political sanctions should not in any way be tied to economic interests. Threatening to impose penalties on companies in Germany, Austria and other European countries with regard to their business in the United States if they participate in, or fund, natural gas projects involving Russia, such as Nord Stream 2, impacts European-American relations in a new and very negative way. This is about the competitiveness of our energy-intensive industries, and about thousands of jobs. We therefore strongly support the efforts of the US Department of State to amend this draft bill.

[Jun 25, 2017] The story about about the legendary Qatari pipeline is probably British fake

Notable quotes:
"... A pipeline through Syria would have been a great boost to national economy for a number of years & could raise a port of the country to one of global importance, just at a time that Turkey started turning the spigot of Euphrates off ..."
"... Consider that Qatar would have been a captive ally for Syria, a commodity rather in short supply for that country. The best part of it is, perhaps, that Syria presumably had a natural aversion to the transit fees. ..."
"... There is another interesting story in this regard, which is to do with (at least) three rounds of exploration for gas in Saudi Arabia, all failed, and the special need for gas to service its petrochemical industry. If memory serves, the reason is they want to upgrade the heavy crude portion of their production, which has steadily been growing, and which the Saudis might have to sell as bunker oil at great discount, if they fail to find gas. ..."
"... the Qataris were told in no uncertain terms that their gas 'had to remain in the peninsula' (Arabian subcontinent) for consumption, to serve the oil sector. ..."
"... If this is right (honestly, I do not know), it might explain quite a bit about the rivalries of the extremist Moslem clergy, and their activities both within the Moslem world and abroad, why not, even developments in Europe & the States. ..."
Jun 25, 2017 | www.moonofalabama.org

atVec | Jun 23, 2017 10:14:39 PM 52

|Jen@31 writes about the legendary Qatari pipeline. That story made its appearance early in the conflict, and if anybody knows its origin, I would be keen to be let know.
That story goes that Assad would not let Qatar have its pipeline because, presumably, Russians wanted to retain their stranglehold on European gas supplies.

The subtext is that those Russians must be very hard task masters and Assad, the lowliest of low lives, a terrified thug. And when the troubles started, Assad did not go back to the Qataris to discuss the matter over.

Sorry, I cannot square that.

A pipeline through Syria would have been a great boost to national economy for a number of years & could raise a port of the country to one of global importance, just at a time that Turkey started turning the spigot of Euphrates off (this is a sense I have, do not know if it is right) & a protracted drought and economic hardship all hit the country at the same time.

Consider that Qatar would have been a captive ally for Syria, a commodity rather in short supply for that country. The best part of it is, perhaps, that Syria presumably had a natural aversion to the transit fees.

There is another interesting story in this regard, which is to do with (at least) three rounds of exploration for gas in Saudi Arabia, all failed, and the special need for gas to service its petrochemical industry. If memory serves, the reason is they want to upgrade the heavy crude portion of their production, which has steadily been growing, and which the Saudis might have to sell as bunker oil at great discount, if they fail to find gas.

The story was run in the English papers of the Gulf circa 2012, whereby the Qataris were told in no uncertain terms that their gas 'had to remain in the peninsula' (Arabian subcontinent) for consumption, to serve the oil sector.

Once I chanced on an article on the educational proclivities of the thousands of the Saudi princes. Any guess? Yes, a good portion of them goes in for religious studies! Somehow I do not think they aspire to be lowly priests; but if not, where might they wish to have their sees? What if the other principalities of the Gulf have nobilities with similar outlooks & hopes?

If this is right (honestly, I do not know), it might explain quite a bit about the rivalries of the extremist Moslem clergy, and their activities both within the Moslem world and abroad, why not, even developments in Europe & the States.

Regards, Vec.

Lozion | Jun 23, 2017 10:24:34 PM | 53

@36 & @31 I think you are both right. The Pipelinistan angle is a major part of this feud.

A probable change of heart from Qatar who has seen the light that no regime change will happen in Syria therefore making a Fars --> Iraq --> Syria -> Lebanon LNG pipeline a realistic endeavor is causing panic in KSA/US/IS who are trying to pressure Qatar to back-off from any deals with Iran..

If Turkey is firm on protecting Qatar then the ultimatum will come to pass and be null and void..

Don Bass | Jun 24, 2017 1:34:34 AM | 57

@ Vic

Y'know, when I read a comment such as yours: "~ I don't reckon its got anything to do with a pipeline ~" I immediately think of that old trope: Better to remain silent and be thought a fool, than to open ones mouth and remove all doubts"

Vic: instead of visiting here to blatantly display your ignorance, how about more usefully spending that typing time to research the topic, hmmm?

The Imperial drive to crush Syria has been in play since the early 1980s, when Assad senior was in power.

Here's a link: http://www.globalresearch.ca/1983-cia-document-reveals-plan-to-destroy-syria-foreshadows-current-crisis/5577785

And another http://www.washingtonsblog.com/2014/07/57-years-ago-u-s-britain-approved-use-islamic-extremists-topple-syrian-government.html

And another http://www.newyorker.com/magazine/2007/03/05/the-redirection

And here's your bonus link, cause I'm feeling the karma burst of sharing http://humansarefree.com/2014/09/exposing-covert-origins-of-isis.html

Now, go and do your homework: you may be able to raise your F to a C, for a pass grade, once you've done some actual reading on the topic.

[Jun 24, 2017] The Saudi-Qatar spat - the reconciliation offer to be refused>. Qater will move closer to Turkey

Highly recommended!
Notable quotes:
"... "In my view this is a deep power struggle between Qatar and Saudi Arabia that has little to do with stated reasons regarding Muslim Brotherhood and Iran. The action to isolate Qatar was clearly instigated during US President Trump's recent visit in Riyadh where he pushed the unfortunate idea of a Saudi-led "Arab NATO" to oppose Iranian influence in the region. ..."
"... Moreover, Qatar was acting increasingly independent of the heavy Wahhabite hand of Saudi Arabia and threatening Saudi domination over the Gulf States. Kuwait, Oman, as well as non-Gulf Turkey were coming closer to Qatar and even Pakistan now may think twice about joining a Saudi-led "Arab NATO". Bin Salman has proven a disaster as a defense strategist, as proven in the Yemen debacle. ..."
"... Kuwait and Oman are urgently trying to get Saudi to backdown on this, but that is unlikely as behind Saudi Arabia stands the US and promises of tens of billions of dollars in US arms. ..."
"... This foolish US move to use their proxy, in this case Riyadh, to discipline those not "behaving" according to Washington wishes, could well be the turning point, the point of collapse of US remaining influence in the entire Middle East in the next several years." ..."
"... KSA could not have taken this course of action all by itself. Someone somewhere must be egging them on. But who? The US seems to have no interest in a Saudi-Qatari conflict. Israel might, but only if said conflict is resolved in Saudi favor. ..."
"... I am therefore coming to the conclusion that there is no longer clear leadership of US policy and there are different factions within the US government. The white house and CIA are supporting the Saudis while the Pentagon supports Qatar. This is just a hunch, but it seems like it could make sense. Perhaps this is what happens when a government is in a state of decompensation. ..."
"... It is mind boggling that a fundamental reshaping of the Middle East was most likely put in motion by Trump completely oblivious of what he was doing shooting from the hip on his Saudi trip. ..."
"... Outside of an outright invasion of Qatar by Saudi Arabia, it is hard to see this as a once in a life time geopolitical gift to Russia, Iran, Turkey, Syria, and Iran. ..."
"... Now when July 3 comes and goes, Saudi Arabia will look completely impotent in the eyes of the countries in the region. ..."
"... Gaddafi's speech to the Arab League in Syria 2008 was so prescient ..."
"... "We [the Arabs] are the enemies of one another I'm sad to say, we deceive one another, we gloat at the misfortune of one another, and we conspire against one another, and an Arab's enemy is another Arab's friend. ..."
"... I quite like the WWI parallel. Trump as Kaiser Wilhelm? There certainly are some striking similarities in character. ..."
"... "...gifted, with a quick understanding, sometimes brilliant, with a taste for the modern,-technology, industry, science -- but at the same time superficial, hasty, restless, unable to relax, without any deeper level of seriousness, without any desire for hard work or drive to see things through to the end, without any sense of sobriety, for balance and boundaries, or even for reality and real problems, uncontrollable and scarcely capable of learning from experience, desperate for applause and success, -- as Bismarck said early on in his life, he wanted every day to be his birthday-romantic, sentimental and theatrical, unsure and arrogant, with an immeasurably exaggerated self-confidence and desire to show off, a juvenile cadet, who never took the tone of the officers' mess out of his voice, and brashly wanted to play the part of the supreme warlord, full of panicky fear of a monotonous life without any diversions, and yet aimless, pathological in his hatred against his English mother." ..."
"... It also stands to reason if you simply consider Saudi's importance regionally: A lot is made of Iran's threat to Saudi influence, but Turkey - thanks in part to considerable investment by Qatar currently while investment from elsewhere has reduced massively -- is also very threatening to Saudi's influence, especially on the religious front. ..."
"... Iran representing Shia interests in the region and Turkey representing Sunni interests is not a difficult future to imagine. It would of course grate with Saudi Arabia given that it had poured vast amounts of money into the Turkish economy and the diyanet. ..."
"... Hassan Nasrallah has given his annual International Al-Quds Day speech with plenty of fire aimed at the usual suspects. The Daily Star reports: 'Nasrallah accused Saudi Arabia of "paving way for Israel" in the region. ..."
"... Actually, I hope for many more benefits will show up from this quarrel than improved profits for Iranian produce growers. It is worthwhile to observe that Dubai, a component emirate of UAE, has gigantic economic links with Iran, which must be tolerated by overlords from Abu Dhabi: they had to bail out their cousins after real estate collapse, so they have big money stake in Dubai being prosperous. Potentially, Dubai and especially the hapless vegetable and dairy producers in KSA can lose a bundle (the latter had to invest a lot in farms for Qatari market, it is not like letting cows graze on abundant grasslands plus planting cucumbers and waiting for the rain to water them). Aljazeera and Muslim Brotherhood are more irritating to KSA and UAE than an occasional polite missive to Iran. ..."
"... Qatar opened the Middle East's first centre for clearing transactions in the Chinese yuan on Tuesday, saying it would boost trade and investment between China and Gulf Arab economies. ..."
"... The only hope for Saudi Arabia is to re-denominate oil sales in multiple currencies such as the WTO drawing rights, of course based on another formula, perhaps based on the countries that purchase the most oil. This would be the only way for the royalty to gain longevity as rulers of the country. Any other scenario spells disaster. ..."
Jun 23, 2017 | www.moonofalabama.org
Pft | Jun 23, 2017 8:43:28 PM | 45
William Engdahls views. "In my view this is a deep power struggle between Qatar and Saudi Arabia that has little to do with stated reasons regarding Muslim Brotherhood and Iran. The action to isolate Qatar was clearly instigated during US President Trump's recent visit in Riyadh where he pushed the unfortunate idea of a Saudi-led "Arab NATO" to oppose Iranian influence in the region.

The Saudi move, clearly instigated by Prince Bin Salman, Minister of Defense, was not about going against terrorism. If it were about terrorism, bin Salman would have to arrest himself and most of his Saudi cabinet as one of the largest financiers of terrorism in the world, and shut all Saudi-financed madrasses around the world, from Pakistan to Bosnia-Herzgovina to Kosovo. Another factor according to informed sources in Holland is that Washington wanted to punish Qatar for seeking natural gas sales with China priced not in US dollars but in Renminbi. That apparently alarmed Washington, as Qatar is the world's largest LNG exporter and most to Asia.

Moreover, Qatar was acting increasingly independent of the heavy Wahhabite hand of Saudi Arabia and threatening Saudi domination over the Gulf States. Kuwait, Oman, as well as non-Gulf Turkey were coming closer to Qatar and even Pakistan now may think twice about joining a Saudi-led "Arab NATO". Bin Salman has proven a disaster as a defense strategist, as proven in the Yemen debacle.

As to the future, it appears that Qatar is not about to rollover and surrender in face of Saudi actions. Already Sheikh Tamim bin Hamad al-Thani is moving to establish closer ties with Iran, with Turkey that might include Turkish military support, and most recently with Russia.

Kuwait and Oman are urgently trying to get Saudi to backdown on this, but that is unlikely as behind Saudi Arabia stands the US and promises of tens of billions of dollars in US arms.

This foolish US move to use their proxy, in this case Riyadh, to discipline those not "behaving" according to Washington wishes, could well be the turning point, the point of collapse of US remaining influence in the entire Middle East in the next several years."

lysander | Jun 23, 2017 7:43:17 PM | 42
KSA could not have taken this course of action all by itself. Someone somewhere must be egging them on. But who? The US seems to have no interest in a Saudi-Qatari conflict. Israel might, but only if said conflict is resolved in Saudi favor.

I am therefore coming to the conclusion that there is no longer clear leadership of US policy and there are different factions within the US government. The white house and CIA are supporting the Saudis while the Pentagon supports Qatar. This is just a hunch, but it seems like it could make sense. Perhaps this is what happens when a government is in a state of decompensation.

R Winner | Jun 23, 2017 1:41:04 PM | 4

It is mind boggling that a fundamental reshaping of the Middle East was most likely put in motion by Trump completely oblivious of what he was doing shooting from the hip on his Saudi trip.

Outside of an outright invasion of Qatar by Saudi Arabia, it is hard to see this as a once in a life time geopolitical gift to Russia, Iran, Turkey, Syria, and Iran.

Juggs | Jun 23, 2017 2:24:33 PM | 9
Now when July 3 comes and goes, Saudi Arabia will look completely impotent in the eyes of the countries in the region.

I wonder if there is some sort of interest between Russia, Turkey, Qatar, and Iran on a coup in Saudi Arabia. I can't imagine it would be that difficult. I know it is not Putin's policy to play these types of games like the US Regime, but one has to assume that people are just fucking done with the clowns running Saudi Arabia.

harrylaw | Jun 23, 2017 2:36:39 PM | 10
Gaddafi's speech to the Arab League in Syria 2008 was so prescient..

"We [the Arabs] are the enemies of one another I'm sad to say, we deceive one another, we gloat at the misfortune of one another, and we conspire against one another, and an Arab's enemy is another Arab's friend.

Along comes a foreign power, occupies an Arab country [Iraq] and hangs its President,and we all sit on the sidelines laughing. Any one of you might be next, yes.

https://www.youtube.com/watch?v=VZZvPlGCt_8

okie farmer | Jun 23, 2017 2:37:39 PM | 11
https://www.theguardian.com/world/2017/jun/23/close-al-jazeera-saudi-arabia-issues-qatar-with-13-demands-to-end-blockade
Qatar given 10 days to meet 13 sweeping demands by Saudi Arabia
Gulf dispute deepens as allies issue ultimatum for ending blockade that includes closing al-Jazeera and cutting back ties with Iran
Juggs | Jun 23, 2017 2:41:55 PM | 13
Peter AU "Is Qatar, like Turkey, already heading for a multi-polar world? For 25 years, the US was the only game in town, but with Russia's move into Syria there are now options."

Hard to see the world heading in that direction:

I wonder if Qatar is already in talks with China about joining the Silk Road Initiative now that it is openly moving into the Russia and Iran sphere.

karlof1 | Jun 23, 2017 3:06:36 PM | 16
Juggs 13--

"I wonder if Qatar is already in talks with China about joining the Silk Road Initiative..."

You'll find the answer's yes as Pepe explains, https://sputniknews.com/columnists/201706161054701807-west-cannot-smell-what-eurasia-cooking/ and http://www.atimes.com/article/blood-tracks-new-silk-roads/

dh | Jun 23, 2017 3:20:35 PM | 19
@17 The best is yet to come. There's a chance Netanyahu will fly into Riyadh to tell everybody what to do. I'm sure he wants what's best for the region.
L'Akratique | Jun 23, 2017 3:29:54 PM | 20
I quite like the WWI parallel. Trump as Kaiser Wilhelm? There certainly are some striking similarities in character.

Quote from Thomas Nipperdey:

"...gifted, with a quick understanding, sometimes brilliant, with a taste for the modern,-technology, industry, science -- but at the same time superficial, hasty, restless, unable to relax, without any deeper level of seriousness, without any desire for hard work or drive to see things through to the end, without any sense of sobriety, for balance and boundaries, or even for reality and real problems, uncontrollable and scarcely capable of learning from experience, desperate for applause and success, -- as Bismarck said early on in his life, he wanted every day to be his birthday-romantic, sentimental and theatrical, unsure and arrogant, with an immeasurably exaggerated self-confidence and desire to show off, a juvenile cadet, who never took the tone of the officers' mess out of his voice, and brashly wanted to play the part of the supreme warlord, full of panicky fear of a monotonous life without any diversions, and yet aimless, pathological in his hatred against his English mother."

cankles | Jun 23, 2017 4:05:49 PM | 25
@Laguerre #23
I have difficulty in seeing a relationship with the Silk Road Initiative, other than that Qatar exports a lot of LNG to China.

China Eyes Qatar in its Quest to Build a New Silk Road

Last month at the China-Arab Cooperation Forum in Doha, Chinese Foreign Minister Wang Yi postulated that Qatar should take part in the realization of China's Silk Road Initiatives.
Laguerre | Jun 23, 2017 4:42:05 PM | 27
@cankles | Jun 23, 2017 4:05:49 PM | 25

Yeah, you're right. I hadn't looked into the question sufficiently. Of course the Chinese are looking for more external finance for the project. They don't want to be the only ones who pay. Fat chance, though. The Qataris have been in austerity since the decline in the oil price. Someone I know who works in the Qatar Museum has seen all her colleagues let go. And now the crisis with Saudi.

The Qataris may even have signed contracts with China. But if you know anything about the Gulf, there's a wide gap between signing a contract, and actually getting paid. It depends upon how the prince concerned feels about the project when the question of payment comes up. A company I worked for in the 80s took two years to get payment, even though they were experts in Gulfi relations.

AtaBrit | Jun 23, 2017 4:51:40 PM | 28
Great piece.

The issue of the threat regarding the Turkish base didn't surprise me much, though. I think it's clear that if MB is the target, then of course Turkey has to become a target, and Qatar - Turkey ties have to be broken. It stands to reason.

It also stands to reason if you simply consider Saudi's importance regionally: A lot is made of Iran's threat to Saudi influence, but Turkey - thanks in part to considerable investment by Qatar currently while investment from elsewhere has reduced massively -- is also very threatening to Saudi's influence, especially on the religious front.

Iran representing Shia interests in the region and Turkey representing Sunni interests is not a difficult future to imagine. It would of course grate with Saudi Arabia given that it had poured vast amounts of money into the Turkish economy and the diyanet.

On a slightly different note there's a scandal going on in western Turkey, in Duzce, at the moment because the local authority has unveiled a statue of Rabia - the four fingered Muslim Brotherhood salute! :-)

Mina | Jun 23, 2017 5:09:45 PM | 29
http://english.ahram.org.eg/NewsContent/2/8/271450/World/Region/UN-blames-warring-sides-for-Yemens-cholera-catastr.aspx
let's blame underfed guys in skirts for fun
karlof1 | Jun 23, 2017 5:16:47 PM | 30
Hassan Nasrallah has given his annual International Al-Quds Day speech with plenty of fire aimed at the usual suspects. The Daily Star reports: 'Nasrallah accused Saudi Arabia of "paving way for Israel" in the region.

'"It's unfortunate that Saudi Arabia is the head of terrorism and today it's holding its neighbors accountable for supporting terrorism," Nasrallah said, hinting to the recent economic sanctions against Qatar.' https://www.dailystar.com.lb/News/Lebanon-News/2017/Jun-23/410688-nasrallah-says-regional-conflicts-seek-to-serve-israel-interest.ashx

Al-Manar provides this report, http://english.almanar.com.lb/292250

Unfortunately, I cannot locate an English language transcript, although one might become available eventually as is usually the case.

Piotr Berman | Jun 23, 2017 6:42:14 PM | 36
Piotr Berman

Aljazeera evil? Are you joking? ....

@Anon | Jun 23, 2017 3:47:56 PM | 24

You did not address the argument I made, namely, that Aljazeera editors apparently belong to "Muslims, who immediately set out to support it [Darwinian theory of evolution] unaware of the blasphemy and error in it." These guys pretend to be nice Wahhabis, dressing in dishdashas, their womenfolks in abayas, but in fact they spread heretical and blasphemous doctrines. However, I am more of a Khazar than a Wahhabi and I do not treat this argument seriously.

It is the fact that compared to other government supported TV/online venues, say RT or PressTV, Aljazeera is well written and edited, has plenty of valuable material, etc. It is a worthwhile place to check when you want to get a composite picture on some issues. And it irritates KSA potentates in a myriad of ways, precisely because it targets "politically engaged Muslim".

It is a good example that pluralism has inherent positive aspects, devils that quarrel are better than "One Ring to rule them all, One Ring to find them, One Ring to bring them all, and in the darkness bind them."

====

Actually, I hope for many more benefits will show up from this quarrel than improved profits for Iranian produce growers. It is worthwhile to observe that Dubai, a component emirate of UAE, has gigantic economic links with Iran, which must be tolerated by overlords from Abu Dhabi: they had to bail out their cousins after real estate collapse, so they have big money stake in Dubai being prosperous. Potentially, Dubai and especially the hapless vegetable and dairy producers in KSA can lose a bundle (the latter had to invest a lot in farms for Qatari market, it is not like letting cows graze on abundant grasslands plus planting cucumbers and waiting for the rain to water them). Aljazeera and Muslim Brotherhood are more irritating to KSA and UAE than an occasional polite missive to Iran.

One pattern in Syrian civil war were persistent and bloody feuds between jihadists that formed roughly four groups:

  1. "salafi", presumably funded by KSA,
  2. "brothers", presumably funded by Qatar and Turkey,
  3. al-Qaeda/al-Nusra/something new that was forcing the first two groups to surrender some weapons (and money?),
  4. and ISIS that had more complex sources (or more hidden).

Medium term strategy of Syrian government and allies for the near future is to "de-escalate" in the western part of the country and finish off ISIS, partitioning hitherto ISIS territories in some satisfactory way, while maintaining some type of truce with the Kurds. Then finish off the jihadists, except those most directly protected by Turkey. Finally, take care of the Kurds. Some sufficiently safe federalism can be part of the solution, but nothing that would lead to enclaves with their own military forces and their own foreign policy, like Iraqi Kurdistan.

That requires the opposing parties to exhibit somewhat suicidal behavior. A big time official feud between "brothers" and "salafi + Kurds" (a pair that shares some funding but with scant mutual affection" can help a lot. Most of all, a big time feud between Turkey and KSA can stabilize the situation in which jihadists from Idlib and northern Hama observe a truce/de-escalation, while their colleagues from south Syria get clobbered, and definitely will induce them to refrain from attacking Syrian government while it is busy against ISIS. After Erdogan was prevented from marching onto Raqqa, he has two options: "Sunnistan" in eastern Syria under domination of YPG or a much smaller YPG dominated territory that can be subsequently digested. Option one is a true nightmare for Erdogan, more than a mere paranoia. However, Erdogan is also "pan-Sunni" Islamist, so he could be tempted to backstab infidels from Damascus, as he was doing before. An open feud with Sunnistan sponsors should help him to choose.

likklemore | Jun 23, 2017 6:49:14 PM | 37
Cankles @ 25 Is that really you? If so, you should know -

Look behind the curtain. This has to do with maintaining the price of oil in US$.

Qatar launches first Chinese yuan clearing hub in Middle East .

Qatar opened the Middle East's first centre for clearing transactions in the Chinese yuan on Tuesday, saying it would boost trade and investment between China and Gulf Arab economies.

"The launch of the region's first renminbi clearing center in Doha creates the necessary platform to realise the full potential of Qatar and the region's trade relationship with China," Qatar's central bank governor Sheikh Abdullah bin Saud al-Thani said at a ceremony.

"It will facilitate greater cross-border renminbi investment and financing business, and promote greater trade and economic links between China and the region, paving the way for better financial cooperation and enhancing the pre-eminence of Qatar as a financial hub in MENA (Middle East and North Africa)."
Industrial and Commercial Bank of China's (ICBC) Doha branch is the clearing bank for the centre, which intends to serve companies from around the Middle East.

A clearing bank can handle all parts of a currency transaction from when a commitment is made until it is settled, reducing costs and time taken for trading.

The centre "will improve the ease of transactions between companies in the region and China by allowing them to settle their trade directly in renminbi, drawing increased trade through Qatar and boosting bilateral and economic collaboration between Qatar and China," said ICBC chairman Jiang Jianqing.

At present, Qatar and the Gulf's other wealthy oil and gas exporters use the U.S. dollar much more than the yuan. Most of their currencies are pegged to the dollar, and most of their huge foreign currency reserves are denominated in dollars.

Laguerre @27

Date of article April 24, 2017

In April 2015, Qatar opened Qatar Renminbi Centre (QRC), the region's first clearing centre for the Chinese currency. This allows for trades priced in RMB to be cleared locally in Qatar rather than in other centres such as Shanghai or Hong Kong.ICBC has since become the designated clearance bank servicing the QRC, which has handled more than 350bn yuan ($52.6bn) since its inception.
http://emerge85.io/blog/the-middle-kingdoms-big-four-and-the-gulf

~ ~ ~ ~
Trending and not very far to seeing what is now held under the table. Oil will also be priced in RMB because KSA, to maintain their share of exports to China, will need to get on board. For now, it's been reaffirmed, SA does the whipping and USA protects the Royals.

rawdawgbugfalo | Jun 23, 2017 6:54:19 PM | 38
Well said, I still think this is all dreamlike. Having natural gas and sharing it with Iran is a mf.

Qatar: Is it about Trump, Israel or Nascent Influence? http://wsenmw.blogspot.com/2017/06/qatar-is-it-about-trump-israel-or.html

Piotr Berman | Jun 23, 2017 7:34:43 PM | 40
About Sunni-Shia split. My impression is that this is mostly KSA + UAE obsession. For example, there is a substantial Shia minority in Pakistan, but the dominant thinking among the Sunnis seems to be "Muslim solidarity". There is a minority that is virulently anti-Shia, but they are politically isolated and despised exactly on the account of breaking that solidarity. After all, Pakistan forms the boundary of the Umma with non-Muslim India. I base that opinion on comments in online Pakistani newspapers, and what I have heard from an acquaintance who was a religiously conservative Sunni Pakistani. To him, the attack on Yemen by KSA was wrong "because they are Muslim". So even if Pakistan is to a certain extend in Saudi pocket, and its deep state has an extremist Sunni component, overt siding against "fellow Muslim" is out of the question.

Egypt is another case. One can find rather isolated anti-Shia outbursts, like writings of some fossils in Al-Azhar (who are responsible for the state religion), but the government steers away from that, and in spite of hefty subsidies, it joined Yemen war only symbolically and for a very short time (unlike Sudan that really needs the cash for its mercenaries). As you move further away from the Persian Gulf, the indifference to the "split" increases. As far as Qatar and Aljazeera are concerned, probably no one detests them more than Egyptian elite, as they were valiantly fighting Muslim Brotherhood for the sake of progress with some occasional large massacres (killing several hundreds of protesters, issuing hundreds of death penalties to participants in a single protest, in absentia! incredible idiocy+cruelty). That explains why al-Sisi joined KSA against Qatar.

However, the civil war in Libya that embroils Egypt is a classic case of unexpected alliances. Egypt with a help from Russia, KSA and UAE supports the "eastern government" that bases legitimacy on democratic parliament re-assembled in Tobruq on Egyptian border, and dominated by military strongman Haftar. The latter has the best chance of all people to become a military strongman of all Libya, but apparently has meager popularity and thus, too few troops. He patched that problem by an alliance with a Salafi group that had a numerous militia, currently partitioned into smaller units and incorporated into Haftar's brigades. Even with that, his progress on the ground is very, very gradual. Against him is the government in Tripolis, legitimized by a more fresh parliament and UN/EU, plus a military force that includes several militias. Part of the parliamentary support stems from Muslim Brotherhood, and some part of military support comes from Salafi militias. There are also aspects of a "war of all against all", seems that Saharan tribes collected a lot of fresh blood feuds.

Thus Qatari+Turkish support for Tripoli government is aligned with EU, and Egyptian support for Tobruq government is aligned with Russia and KSA.

Dusty | Jun 23, 2017 7:38:26 PM | 41
I thought I might just throw this out there and see what sticks. US policy is based on power and control. Saudi Arabia has been a good ally but it does not serve use policy or strategic goals any longer. Not really. I think the grand prize for destabilizing the middle east is Saudi Arabia. It would be the only way to truly control the development of other nations or more specifically, to control their rivalries and save the the US from complete economic breakdown. The Saudi's are being plumbed by the best of them, telling them they are you friends, we have your back and so long as Saudi Arabia loses more money and keeps lossing money in needless wars etc.

The only hope for Saudi Arabia is to re-denominate oil sales in multiple currencies such as the WTO drawing rights, of course based on another formula, perhaps based on the countries that purchase the most oil. This would be the only way for the royalty to gain longevity as rulers of the country. Any other scenario spells disaster. Of course, it would be a rough go for them for a while, but in the end, a slight change in outlook and the unfair advantage given to the US would go a long way, economically to stabilizing large blocks of countries. They also could of course change their outlook on the world, but that is certainly a difficult challenge. If the Muslim world came together based on their similarities, they could be a very powerful block.

The US no longer has the financial velocity it once maintained and this is much more due to insane ideas about being a hegemon. I never thought revolution would be possible in the US, but it is coming and it won't take much. The country does not appear to have intelligence peddle back a number of policies, drunk on its own poison, it makes capitalism look disgusting. A new business model is needed, one that developes mutual trade based on respect from within the exchange itself. Saudi Arabia needs to cultivate multi-channel support for its biggest resource so that when the returns are no longer there, they will have also developed multiple avenues to prosperity. Just a thought.

[Jun 20, 2017] The US intervention in EU gas market is even more pathetic than it seems

No LNG carriers are currently registered under the US flag, and if the USA plans to be a serious exporter it is going to need about 100 new LNG carriers over the next 30 years, something which is frankly not practically achievable considering it takes about 2 years to build one, at a cost of about $200 Million apiece". Of course, miracles can be made to happen if you pour enough money into them.
Jun 20, 2017 | marknesop.wordpress.com
et Al , June 16, 2017 at 1:30 am
The US's intervention is even more pathetic than it seems.

This is not a stand alone anti-Russia bill which would signal strength from the US, but an adjunct to the anti-I-ran sanctions bill that continues to seek to punish I-ran in the vague hope that it will pull the plug on the cast-iron nuclear deal it has signed with international partners. The irony there is that I-ran Air is recapitalizing with both Airbus & Boeing (also ATR), 100 odd a piece, not to mention other significant investment opportunities for western firms.

They're quite the Gordian Tits!

Not only is there the potential of the Levianthan gas field off Cyprus/Israel/whatever, brutal dictator Azeri gas will also be arriving in (larger, but not gigantic) quantities. Not to mention that significant buyers of LNG, like the UK, have it come straight from Qatar. Is the US prepared to sell LNG at a discount compared to Qatar that has strategic agreements and its own fundamental interests to be protected by the Western (European) states as well?

So if this plan seems to damage not only the USA's allies but the USA itself, then what is its purpose? Stick it to Trump. Mire any plans to re-balance relations with Russia almost at any cost . It's a no brainer for Democrats as they neither hold a majority in the House or the Senate, and there seem to be enough dog whistle Republicans willing to go along with it, including those with mental problems like John 'Insane' McCaine. Ukraine is almost peripheral except as a convenient tool. It think the US accepts they've screwed the pooch on the Ukraine so its only value is to be used as a festering sore on Russia's frontier. Kiev mops up the completely free public political support whilst it is being kicked in the bollox by the same people.

[Jun 17, 2017] We will probably never find out what truly was discussed between Trump, the Saudis and the Israelis, but there is little doubt that the recent Saudi move against Qatar is the direct results of these negotiations by The Saker

Notable quotes:
"... Besides, was there ever a time with the Trump Administration's policies in the Middle-East made any logical sense at all? During the election campaign they were, shall we say, 50/50 (excellent on ISIS, plain stupid about Iran). But ever since the January coup against Flynn and Trump's surrender to the Neocons all we have seen in one form of delusional stupidity after another. ..."
"... I see this latest crisis as yet another desperate attempt by the Three Rogue States to prove that they are still the biggest and baddest guys on the block and, just like the previous ones, I think that it will fail. For example, I just don't see the Qataris shutting down al-Jazeera, one of their most powerful "weapons". ..."
"... The Three Rogue States have the same problem: their military capability to threaten, bully or punish is rapidly eroding and fewer and fewer countries out there fear them. ..."
"... I will end this column by comparing what Presidents Putin and Trump are doing these days as I find this comparison highly symbolic of the new era we are living in: Trump, after bombing a few "technicals" (4×4 trucks with a machine gun) and trucks in Syria, the proceeded to tweet that Comey was a liar and a leaker. As for Putin, he participated the latest meeting of the Shanghai Cooperation Organization (SCO) which welcomed both Pakistan and India as full members. The SCO now represents over half of all the people living on our planet and one quarter of the world's GDP . You can think of it as the "other G8", or the "G8 that matters". ..."
"... the semi-official strategy of the Russian Foreign Ministry which is to "turn enemies into neutrals, neutrals into friends, friends into allies" ..."
"... The West simply has no diplomacy any more, only the airforce and the bombs. Diplomacy has always been a highly rational means of achieving your own goals, where military should only be its extension tool, not a complete substitute. The Western MIC has made the Western countries forget this. ..."
"... I don't think "because Trump said so" can be regarded as credible evidence of anything. Even his own most die-hard supporters rarely bother pretending his word is worth anything (they just claim when he lies that it's a cunning subterfuge based upon some complex strategerising). ..."
"... the jury is still out on whether Trump actively and consciously "greenlit" the Saudi move to its full extent, or whether he just didn't understand what the implications would be of his toadying to Riyadh. ..."
"... This is still just a political crisis, and given the stakes for both sides it must be most likely that it will remain such, and a resolution will ultimately be found that involves the Qataris conceding enough for the Saudis to claim victory. ..."
"... But given that neither side can afford to be seen to lose completely, it only needs one side to be a bit too obdurate or a bit too greedy, and the crisis could move beyond the merely political. In that case we would see perhaps an attempted coup or uprising in Qatar, an occupation by the Saudis with US complicity, or perhaps Turkish or even Iranian troops guaranteeing Qatar against those events, which would mean genuinely significant shifts in Qatar's strategic position. ..."
"... if Turkey formally "guarantees Qatar's independence" I'm going to start getting WW1 flashbacks, and seeing the ME as the new Balkans ..."
"... The analogy is perhaps tenuous, but this affair reminds me slightly of Austria-Hungary's demands on Serbia in 1914. Didn't that end well? ..."
"... How significant is the Shanghai Cooperation Organization? Just joining an organisation doesn't reveal its impact. Pakistan and India will never get along. I acknowledge Russia has good leadership. Though, what happens when Putin retires? China is strong, but much rests on the future leadership of China. ..."
"... You are ever so wrong to call these God-fearing states "Rogue States"! Please, call them The Axis of Kindness. They specialize in dropping beautiful, democratic, humanitarian bombs. ..."
"... In perhaps 2015, when Lavrov was constantly in the Middle East, I remember a report, perhaps in Russian on a meeting in Qatar with Khalid bin Mohammad al-Attiyah. Lavrov had promised Qatar a pipeline to be built through Syria in exchange for a $10 Bn investment in the RDIF, which has indeed happened. (Although, so has a similar KSA deal). At this time, presumably, success in Syria and investment mattered more than Gazprom's commercial interest. It could be that Qatar has cut off support for Syrian ISIS and Hamas. ISIS seems to be fading fast. The pipeline was to be Qatar's not the Iran-Russia-Turkey scheme to which Qatar has also been invited. ..."
"... There have been other discussions about a Qatar, Iranian pipeline operated by Russia which makes more sense for Russia but is less of a bribe. Qatar Investment Authority funded Glencore to buy 19.5% of Rosneft this year. Sechin is pushing Putin to allow Rosneft to build and operate gas pipelines so Russia takes a stake in the Qatari pipeline through Rosneft rather than Gazprom? ..."
"... In a nutshell, the situation of Qatar appears to be a symptom of the struggle between the political Islam and the hereditary/religious Islam, in which Qatar plays a part of the more progressive, and potentially more dangerous in the long run, political Islam . ..."
"... Therefore, the Muslim lands of ME have added yet another schism to an already rich list, to the delight of Israel. Finally, it is simply sad how uninformed and bumbling the American version of Lawrence of Arabia, the saber dancer Donald Trump, is in all this, completely out of his depth. ..."
"... Trump's attack on Syria was either a blunder, or just political show. The last possibility to me seems the most probable. Making Iran the threat to the ME might be meant to give Saudi Arabia the leading position in the ME, just as abandoning NATO by the USA may be meant to deliver the USA from the burden, imagined, to defend Europe against Russia. I still wonder if Trump is far more cunning than his enemies think he is. ..."
"... As Russia had no intention of giving up Sebastopol, the USA will not give up Qatar. There is no business like show business. ..."
"... The Israelis and Saudis have been in a defacto anti-Shiite alliance for years against Lebanon, Iraq, Syria, and Iran. I keep waiting for evidence of discontent among the Muslim masses over this the Custodian of the Two Holy Mosques allied with Israel against other Muslim countries that now includes Qatar. ..."
"... But no evidence of discontent. Perhaps this is due to the Wahhabi fundamentalists concluding that Muslim apostates like the Shiites are worse than Jews and Crusaders. Déjà vu the deadly European Thirty Years' War (1618 to 1648) between Catholics and Protestants all over again. ..."
"... The article is correct when stating Iran is the target. ..."
"... Anyway, the Saud family will last as long as the petrodollar enables them to bribe their own people (and having young, male, single, radicalized potential troublemakers-of whom the numbers are increasing-make trouble outside the borders rather than within the Kingdom) and CENTCOM allows them to keep the Shi'a in the Eastern Provinces in check. Once one or both of those factors go away, hell breaks loose in Riyadh. Unfortunately, contrary to what many Western liberals say, what will likely to replace the Saud family in the event of a revolution is probably going to be far worse than what exists today, if public opinion polls in the Kingdom and zakat donations from private donors in Saudi Arabia to jihadist groups are a barometer. ..."
"... On the Thirty Year's War: very astute analogy, one that I agree with to an extent. However, a big difference is that the Sunni drastically outnumber the Shi'a in a way that the Protestants didn't the Catholics, around 7 to 1. That is what makes Beltway overestimation of Iranian capabilities so ludicrous. ..."
"... Saudi Arabia and Israel spend a *lot* of money to keep the Beltway view of the world akin to what they want. Gulf money permeates our think tanks, both on the Left and the Right: and if Trump had an iota of intelligence last year, he would have hammered home the Clinton Foundation's connection to shady Gulfie donors when she paraded her feminism. ..."
"... I think both the Left and Right give Trump way too much credit. He's neither a Russian controlled, closet white supremacist dictator in the making, nor a new Marius, heroically despised by the Establishment, who actually wants to keep his promises to those who voted him into power. Trump is exactly what he appears to be: the American Berlusconi, a corrupt billionaire mogul who just makes it up as he goes along. No more, no less. ..."
"... The common people of the United States, like the same class of people in every other country, mean well, but they are ill-informed. Floundering about in their ignorance, they are tricked and robbed by those who have the inside information and who therefore know how to take advantage of every turn wheel of fortune. ..."
Jun 11, 2017 | www.unz.com

First, a quick who's who

We will probably never find out what truly was discussed between Trump, the Saudis and the Israelis, but there is little doubt that the recent Saudi move against Qatar is the direct results of these negotiations. How do I know that? Because Trump himself said so -- As I mentioned in a recent column, Trump's catastrophic submission to the Neocons and their policies have left him stuck with the KSA and Israel , another two rogue states whose power and, frankly, mental sanity, are dwindling away by the minute.

While the KSA and Qatar have had their differences and problems in the past, this time around the magnitude of the crisis is much bigger than anything the past. This is a tentative and necessarily rough outline of who is supporting whom:

Supporting the Saudis ( according to Wikipedia ) Supporting Qatar (according to me)
United Arab Emirates , Bahrain , Egypt , Maldives , Yemen (they mean the pro-Saudi regime in exile), Mauritania , Comoros , Libya (Tobruk government), Jordan , Chad , Djibouti , Senegal , United States , Gabon. Turkey , Germany , Iran.

Questions, many questions

The situation is very fluid and all this might change soon, but do you notice something weird in the list above? Turkey and Germany are supporting Qatar even though the US is supporting the KSA. That's two major NATO member states taking a position against the USA.

Next, look at the list supporting the Saudis: except for the USA and Egypt they are all militarily irrelevant (and the Egyptians won't get militarily involved anyway). Not so for those opposing the Saudis, especially not Iran and Turkey. So if money is on the side of the Saudis, firepower is on the side of Qatar here.

Then, Gabon? Senegal? Since when are those two involved in Persian Gulf politics? Why are they taking sides in this faraway conflict? A quick look at the 10 conditions the Saudis demand that the Qataris fullfil does not help us understand their involvement either

... ... ...

More interestingly, why is ISRAEL not listed as a country supporting the KSA?

As always, the Israelis themselves are much more honest about their role in all this. Well, maybe they don't quite say "we done it" but they write articles like " Five reasons why Israel should care about the Qatar crisis " which lists all the reasons why the Israelis are delighted:

That kind of honesty is quite refreshing, even if it is primarily for internal, Israeli, consumption. Quick check with a Palestinian source – yup, the Israelis are backing the KSA. This is hardly surprising, no matter how hard the western corporate media tries to not notice this.

What about the USA? Do they really benefit from this crisis?

The USA has what might possibly the largest USAF base worldwide in Qatar, the Al Udeid Air Base . Furthermore, the forward headquarters of United StatesCENTCOM are also located in Qatar. To say that these are crucial US infrastructures is an understatement – one could argue that these are the most important US military facilities anywhere in the world outside the United States. Thus one would logically conclude that the very last thing the US would want is any type of crisis or even tensions anywhere near such vital facilities yet it quite clear that the Saudis and the Americans are acting in unison against Qatar. This makes no sense, right? Correct. But now that the US has embarked on a futile policy of military escalation in Syria it should come as no surprise that the two main US allies in the region are doing the same thing.

Besides, was there ever a time with the Trump Administration's policies in the Middle-East made any logical sense at all? During the election campaign they were, shall we say, 50/50 (excellent on ISIS, plain stupid about Iran). But ever since the January coup against Flynn and Trump's surrender to the Neocons all we have seen in one form of delusional stupidity after another.

Objectively, the crisis around Qatar is not good at all for the USA.

... ... ...

What about Russia in all that?

The Russians and the Qataris have butted heads many times over, especially over Syria and Libya where Qatar played an extremely toxic role in being the prime financiers of various takfiri terrorist groups. Furthermore, Qatar is Russia's number one competitor in many LNG (liquefied natural gas) markets. There were also other crises between the two countries, including what appears to be a Russian assassination of the Chechen terrorist Leader Zelimkhan Yandarbiyev and the subsequent torture and trial of two Russian Embassy employees accused of being involved in the assassination (they were sentenced to life in prison and eventually sent back to Russia). Still, the Russians and the Qataris are eminently pragmatic peoples and the two countries mostly maintained a cordial, if careful, relationship which even included some joint economic ventures.

It is highly unlikely that Russia will intervene directly in this crisis unless, of course, Iran is directly attacked. The good news is that such a direct attack on Iran is unlikely as none of the Three Rogue States really have any stomach to take on Iran (and Hezbollah). What Russia will do is use her soft power, political and economic , to slowly try to reel Qatar into the Russian orbit according to the semi-official strategy of the Russian Foreign Ministry which is to " turn enemies into neutrals, neutrals into friends, friends into allies ". Just like with Turkey, the Russians will gladly help, especially since they know that this help will buy them some very precious influence in the region.

Iran, the real target of it all

The Iranians are now openly saying that the recent terrorist attack in Tehran was ordered by Saudi Arabia . Technically speaking, that means that Iran is now at war . In reality, of course, as the real local superpower, Iran is acting with calm and restraint : the Iranians fully understand that this latest terrorist attack is a sign of weakness, if not desperation, and that the best reaction to it is to act the same way the Russians reacted to the bombings in Saint Petersburg: stay focused, calm and determined. Just like the Russians, the Iranians have now also offered to send food to Qatar, but it is unlikely that they will intervene militarily unless the Saudis really go crazy. Besides, with Turkish forces soon deployed in Qatar , the Iranians have no real need for any displays of military might. I would argue that the simple fact that neither the USA nor Israel have dared to directly attack Iran since 1988 (since shooting down by the US Navy of the Iran Air Flight 655 Airbus ) is the best proof of the real Iranian military power.

... ... ..

...As for the Qataris, they have already clearly indicated that they are unwilling to surrender and that they will fight . The Saudis have already taken the outrageous decision to impose a blockade of a fellow Muslim country during the holy month of Ramadan. Will they really now further escalate and commit an act of aggression against a fellow Muslim country during that month? They might, but it is hard to believe that even they could be that ignorant of the Muslim public opinion. But if they don't, then their operation will lose a lot of momentum while the Qataris will be given time to prepare politically, economically, socially and militarily. Qatar might be small, and the Qataris themselves not very numerous, but their immense pockets allow them to quickly line up any amount of suppliers and contractors willing to help them out. This is case where the famous "market forces" will act to Qatar's advantage.

The Qatari Foreign Minister is expected in Moscow on Saturday and it is pretty obvious what the talks will be about: while Russia will not put all her political weight to support the Qataris, the Kremlin might accept becoming a mediator between the KSA and Qatar. If that happens, that would be the ultimate irony: the main outcome of the Saudi-Israeli-US operation will make Russia an even more influential player in the region. As for Qatar itself, the outcome of this crisis will probably articulate itself along Nietzschean lines: " That which does not kill us, makes us stronger ."

Conclusion

I see this latest crisis as yet another desperate attempt by the Three Rogue States to prove that they are still the biggest and baddest guys on the block and, just like the previous ones, I think that it will fail. For example, I just don't see the Qataris shutting down al-Jazeera, one of their most powerful "weapons". Nor do I see them breaking all diplomatic relations with Iran as those two states are joined at the hip by the immense South Pars gas condensate field . The immense wealth of the Qataris also means that they have very powerful supporters worldwide who right now, as I write these lines, are probably on the phone making calls to very influential people and indicating to them in no unclear terms that Qatar is not to be messed with.

If anything this crisis will only serve to push Qatar further into the warm embrace of other countries, including Russia and Iran, and it will further weaken the Saudis.

The Three Rogue States have the same problem: their military capability to threaten, bully or punish is rapidly eroding and fewer and fewer countries out there fear them. Their biggest mistake is that instead of trying to adapt their policies to this new reality, they always chose to double-down over and over again even though they fail each time, making them look even weaker and their initial predicament even worse. This is a very dangerous downward spiral and yet the Three Rogue States seem unable to devise any other policy.

I will end this column by comparing what Presidents Putin and Trump are doing these days as I find this comparison highly symbolic of the new era we are living in: Trump, after bombing a few "technicals" (4×4 trucks with a machine gun) and trucks in Syria, the proceeded to tweet that Comey was a liar and a leaker. As for Putin, he participated the latest meeting of the Shanghai Cooperation Organization (SCO) which welcomed both Pakistan and India as full members. The SCO now represents over half of all the people living on our planet and one quarter of the world's GDP . You can think of it as the "other G8", or the "G8 that matters".

I submit that this quick comparison of agenda really says I all.

UPDATE1 : Secretary of State Rex Tillerson is now telling the Saudis to 'cool it' . The Saudi-Israeli plan is beginning to collapse.

Kiza June 10, 2017 at 6:42 am GMT

The real Qatari 'crime' was to refuse, on purely pragmatic reasons, to join into the massive anti-Iranian campaign imposed on the region by Saudi Arabia and Israel.

This is why it is worth reading this good article. I suspected this to be the reason from the start of the crisis: Qatar has been an active supporter of ME terrorism (including ISIS) just like KSA, US, Israel, UAE and Turkey. But they were never as anti-Iranian as the other members of this Coalition of the Lovers of Terrorism.

Also, I liked this sentence on the diplomatic skill forgotten in the West:

the semi-official strategy of the Russian Foreign Ministry which is to "turn enemies into neutrals, neutrals into friends, friends into allies"

The West simply has no diplomacy any more, only the airforce and the bombs. Diplomacy has always been a highly rational means of achieving your own goals, where military should only be its extension tool, not a complete substitute. The Western MIC has made the Western countries forget this.

Randal June 10, 2017 at 11:46 am GMT

there is little doubt that the recent Saudi move against Qatar is the direct results of these negotiations. How do I know that? Because Trump himself said so!

I don't think "because Trump said so" can be regarded as credible evidence of anything. Even his own most die-hard supporters rarely bother pretending his word is worth anything (they just claim when he lies that it's a cunning subterfuge based upon some complex strategerising).

As far as I can see the jury is still out on whether Trump actively and consciously "greenlit" the Saudi move to its full extent, or whether he just didn't understand what the implications would be of his toadying to Riyadh. Perhaps he really is so profoundly ignorant that he really believes what his words imply: that the Qataris sponsor terrorism (they do) but the Saudis (and his own regime) don't, remarkable as that would be in a national leader.

As for the Qataris, they have already clearly indicated that they are unwilling to surrender and that they will fight.

This is still just a political crisis, and given the stakes for both sides it must be most likely that it will remain such, and a resolution will ultimately be found that involves the Qataris conceding enough for the Saudis to claim victory.

But given that neither side can afford to be seen to lose completely, it only needs one side to be a bit too obdurate or a bit too greedy, and the crisis could move beyond the merely political. In that case we would see perhaps an attempted coup or uprising in Qatar, an occupation by the Saudis with US complicity, or perhaps Turkish or even Iranian troops guaranteeing Qatar against those events, which would mean genuinely significant shifts in Qatar's strategic position. The odds are against that, because all parties have too much at stake to lightly go far down those roads, but such crises can spiral out of control. And on the way we could see all kinds of destructive economic warfare, lawfare, and hardball pressurising, together with lots of hanging out of each side's dirty laundry by the other.

Popcorn time. But if Turkey formally "guarantees Qatar's independence" I'm going to start getting WW1 flashbacks, and seeing the ME as the new Balkans

  1. UPDATE1: Secretary of State Rex Tillerson is now telling the Saudis to 'cool it'. The Saudi-Israeli plan is beginning to collapse.
  2. UPDATE2: Trump promptly undermines Tillerson's position ( Tillerson Scrambles to Undo Trump's Qatar Blunder )
dearieme June 10, 2017 at 12:20 pm GMT

The analogy is perhaps tenuous, but this affair reminds me slightly of Austria-Hungary's demands on Serbia in 1914. Didn't that end well?

Weaver June 10, 2017 at 12:41 pm GMT

How significant is the Shanghai Cooperation Organization? Just joining an organisation doesn't reveal its impact. Pakistan and India will never get along. I acknowledge Russia has good leadership. Though, what happens when Putin retires? China is strong, but much rests on the future leadership of China.

The US isn't exactly in competition with China, because the US doesn't want to grow stronger. The US wants to help Israel expand. And the US wants to help enrich defence contractors and expand pork spending. So, the US and China have two very different goals. Also, the US and Europe are dedicated to undermining their European populations.

So, while China and Russia pursue power, the US has very different objectives.

Thales the Milesian June 10, 2017 at 3:08 pm GMT

Saker:

You are ever so wrong to call these God-fearing states "Rogue States"! Please, call them The Axis of Kindness. They specialize in dropping beautiful, democratic, humanitarian bombs.

The Scalpel Website June 10, 2017 at 7:55 pm GMT

@Weaver "The US isn't exactly in competition with China, because the US doesn't want to grow stronger. The US wants to help Israel expand. And the US wants to help enrich defence contractors and expand pork spending."

ROFL!!!! Great writing. Funny, but so much truth there

Philip Owen June 10, 2017 at 11:13 pm GMT

In perhaps 2015, when Lavrov was constantly in the Middle East, I remember a report, perhaps in Russian on a meeting in Qatar with Khalid bin Mohammad al-Attiyah. Lavrov had promised Qatar a pipeline to be built through Syria in exchange for a $10 Bn investment in the RDIF, which has indeed happened. (Although, so has a similar KSA deal). At this time, presumably, success in Syria and investment mattered more than Gazprom's commercial interest. It could be that Qatar has cut off support for Syrian ISIS and Hamas. ISIS seems to be fading fast. The pipeline was to be Qatar's not the Iran-Russia-Turkey scheme to which Qatar has also been invited.

I was monitoring so much Russian media at the time (hundreds of stories a day and this was not relevant to my task) I can't place it exactly but it was very memorable because of the reversals involved and the mass of implications. How did they reconcile interests. There have been other discussions about a Qatar, Iranian pipeline operated by Russia which makes more sense for Russia but is less of a bribe. Qatar Investment Authority funded Glencore to buy 19.5% of Rosneft this year. Sechin is pushing Putin to allow Rosneft to build and operate gas pipelines so Russia takes a stake in the Qatari pipeline through Rosneft rather than Gazprom?

Kiza June 11, 2017 at 4:17 am GMT

If you are interested in another objective view of the Qatari situation here is an article by Oliver Miles in the London Review of Books: https://www.lrb.co.uk/blog/2017/06/08/oliver-miles/whats-behind-the-saudi-blockade-of-qatar/ .

It is very interesting that even Al ash-Shaikh has denounced Qatar because of its insubordination to Saudi commands and interests.

In a nutshell, the situation of Qatar appears to be a symptom of the struggle between the political Islam and the hereditary/religious Islam, in which Qatar plays a part of the more progressive, and potentially more dangerous in the long run, political Islam .

Therefore, the Muslim lands of ME have added yet another schism to an already rich list, to the delight of Israel. Finally, it is simply sad how uninformed and bumbling the American version of Lawrence of Arabia, the saber dancer Donald Trump, is in all this, completely out of his depth.

jilles dykstra June 11, 2017 at 6:57 am GMT

Trump's attack on Syria was either a blunder, or just political show. The last possibility to me seems the most probable. Making Iran the threat to the ME might be meant to give Saudi Arabia the leading position in the ME, just as abandoning NATO by the USA may be meant to deliver the USA from the burden, imagined, to defend Europe against Russia. I still wonder if Trump is far more cunning than his enemies think he is.

jilles dykstra June 11, 2017 at 7:00 am GMT

@Kiza

As Russia had no intention of giving up Sebastopol, the USA will not give up Qatar. There is no business like show business.

Talha June 11, 2017 at 9:56 am GMT

@anon Let's look at the numbers again from an angle that makes more sense:

Israeli expansion (relative to its size): 2500/8522 = 29%
Indonesian expansion (relative to size): 130,000/735,358 = 18%
Moroccan expansion (relative to size – keeping in mind it only occupies 2/3 of Western Sahara):
68,660/274,460 = 25%
Russian expansion (relative to size): 14,000/6,592,800 = <1%

Nice try. Peace.

The Alarmist June 11, 2017 at 10:05 am GMT

"The SCO now represents over half of all the people living on our planet and one quarter of the world's GDP. You can think of it as the "other G8", or the "G8 that matters"."

Very clever! Unfortunately the other G8 will only matter around 2040 or so, when the last of the West as we know it is finally subsumed into the Great Caliphate, at which point it will then turn on the other half of the planet.

TheJester June 11, 2017 at 10:57 am GMT

Nothing new. The Israelis and Saudis have been in a defacto anti-Shiite alliance for years against Lebanon, Iraq, Syria, and Iran. I keep waiting for evidence of discontent among the Muslim masses over this the Custodian of the Two Holy Mosques allied with Israel against other Muslim countries that now includes Qatar.

But no evidence of discontent. Perhaps this is due to the Wahhabi fundamentalists concluding that Muslim apostates like the Shiites are worse than Jews and Crusaders. Déjà vu the deadly European Thirty Years' War (1618 to 1648) between Catholics and Protestants all over again.

mcohen June 11, 2017 at 11:43 am GMT

@Philip Owen Thanks for that .2015.a lot has happened including the opening up of gas reserves on the Mediterranean. both turkey and Qatar have us airbases so that is leverage. regardless it Is one thing building a pipeline and another keeping it secure. Qatar has been trying to build up leverage on Israel via the Palestinians but that has come to and end with trumps push for peace. ideally peace does not suit qatars plans so gaza could explode soon. hence qatars flirtation with iran hoping to stir up trouble in s.lebanon via hezb. Al thani ran from Syria. maybe they can send him to s.lebanon for some character building

Agent76 June 11, 2017 at 1:14 pm GMT

The article is correct when stating Iran is the target.

Sep 11, 2011 General Wesley Clark: Wars Were Planned – Seven Countries In Five Years

"This is a memo that describes how we're going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran." I said, "Is it classified?" He said, "Yes, sir." I said, "Well, don't show it to me." And I saw him a year or so ago, and I said, "You remember that?" He said, "Sir, I didn't show you that memo! I didn't show it to you!"

nebulafox June 11, 2017 at 1:36 pm GMT

@TheJester

The Saud family has managed to make themselves even more unpopular (if that were even possible) on what we might term "Arab Street" due to their relatively newfound comfort with the Israelis, of course, but nobody can deny that it is smart politics. Saudi Arabia isn't Egypt, they've got plenty of money to ease the unemployment problem. For all its flaws, its nowhere near "pseudo-failed state" status like so many other Arab countries, despite the demographic and social pressures.

Anyway, the Saud family will last as long as the petrodollar enables them to bribe their own people (and having young, male, single, radicalized potential troublemakers-of whom the numbers are increasing-make trouble outside the borders rather than within the Kingdom) and CENTCOM allows them to keep the Shi'a in the Eastern Provinces in check. Once one or both of those factors go away, hell breaks loose in Riyadh. Unfortunately, contrary to what many Western liberals say, what will likely to replace the Saud family in the event of a revolution is probably going to be far worse than what exists today, if public opinion polls in the Kingdom and zakat donations from private donors in Saudi Arabia to jihadist groups are a barometer.

On the Thirty Year's War: very astute analogy, one that I agree with to an extent. However, a big difference is that the Sunni drastically outnumber the Shi'a in a way that the Protestants didn't the Catholics, around 7 to 1. That is what makes Beltway overestimation of Iranian capabilities so ludicrous.

(IMO: the Shi'a have shrines and their own version of saints, both of which are considered heathenish by Wahhabists. They also have an organized structure. To become a mullah in Shi'a Islam, you have to train for decades, rigorous education in philosophy, logic, astronomy, et all, much like a rigorous classical education was required for Catholic orders -- not at all like modern Sunni Islam where any random guy can declare a fatwa. So they are akin to the Catholics in all this, whereas the Sunni are the Protestants. Not a perfect analogy, but makes the most sense for Westerners.)

Seamus Padraig June 11, 2017 at 1:44 pm GMT

The Zionist Entity and the Wahhabist Entity. With friends like these

nebulafox June 11, 2017 at 1:48 pm GMT

@jilles dykstra Saudi Arabia and Israel spend a *lot* of money to keep the Beltway view of the world akin to what they want. Gulf money permeates our think tanks, both on the Left and the Right: and if Trump had an iota of intelligence last year, he would have hammered home the Clinton Foundation's connection to shady Gulfie donors when she paraded her feminism.

>I still wonder if Trump is far more cunning than his enemies think he is.

I think both the Left and Right give Trump way too much credit. He's neither a Russian controlled, closet white supremacist dictator in the making, nor a new Marius, heroically despised by the Establishment, who actually wants to keep his promises to those who voted him into power. Trump is exactly what he appears to be: the American Berlusconi, a corrupt billionaire mogul who just makes it up as he goes along. No more, no less. The secret to Trump is that there is no secret. And right now, unfortunately for his base, he happens to be surrounded by Republican people who haven't learned a thing from the Bush debacle and the last few decades in general, policy-wise. Get ready for pure McConnell fantasies for the next few years.

He's not un-clever in his own way when it comes to manipulating the media and public ratings, but he just clearly does not know a lot about actual policy-making. Trump is at his best when the Establishment wisdom is very clearly in the wrong, yet they can't figure it out due to their own social bubble and worldview. In that case, Trump calls them out, as he regularly did last year. But it isn't because Trump has a plausible alternative to offer, it is more a gut reaction in the instant of the moment that he forgets a few minutes later.

Anonymous June 11, 2017 at 1:57 pm GMT

@jilles dykstra Trump-cunning?

Give me a break. It is obvious that the Syria attack and also the Moab Afganistan bomb was purely a show of force to pressure Xi into taking out N Korea.

This is so sloppy and ham handed it is criminal. Trump is not negotiating with another CEO where that kind of leverage works. He is negotiating with world leaders who aren't going to be pushed off because of a few missle strikes.

This just showed Xi that Trump is an amateur.

And yeah, letting Saudi Arabia have free reign over the Middle East? Nothing could go wrong there right?

Anonymous June 11, 2017 at 2:12 pm GMT

Is it known when the President first learned that there were major US bases in Qatar? Not the #30 Anonymous – just for accuracy not as implied criticism.

Che Guava June 11, 2017 at 2:29 pm GMT

@Carlton Meyer Agree, but would say better before good. and Iran is better than any Arab state, excepting embattled Syria and Lebanon.

It is strange to me how the Qataris are to be in this situation, maybe just because it is a very small polity, essentially just a takeover bid.

jacques sheete June 11, 2017 at 2:33 pm GMT

@Kiza Then there's something called "secret diplomacy."

The common people of the United States, like the same class of people in every other country, mean well, but they are ill-informed. Floundering about in their ignorance, they are tricked and robbed by those who have the inside information and who therefore know how to take advantage of every turn wheel of fortune.

The people voted for Roosevelt be cause he talked of "trust-busting" at the same time that he was sanctioning the purchase of the Tennessee Coal and Iron Company by the Steel Trust. They supported Wilson "because he kept us out of war" at the same time that Wilson was making preparations to enter the war.

The rulers can negotiate "secret treaties" at home and abroad. The people, knowing nothing of either the theory or the practice of secret diplomacy, commit all sorts of follies for which they themselves must later foot the bill.

- R. F. PETTIGREW, TRIUMPHANT PLUTOCRACY, The Story ofAmerican Public Life from 1870 to 1920.

https://archive.org/stream/triumphantpluto00pettrich/triumphantpluto00pettrich_djvu.txt

The wonder is that the* hoi polloi trust the hoi oligoi at all. Perhaps it's because today we are generally misinformed rather than merely uninformed.

*Note to any lurking snarkmeisters. I realize that the words "the" and "hoi" are technically redundant, but I am entering the borrowed phrases in accepted English.

survey-of-disinfo June 11, 2017 at 2:41 pm GMT

@The Alarmist

[Europe becomes a "Khalifate"] at which point it will then turn on the other half of the planet.

It is not clear if the quoted contributer is uneducated, misinformed, or merely channeling historic Western insistence on lording over the rest of planet in guise of an insecure alarmist.

It is not news that Europe and the West (without any ideological basis in a Muslim Khalifate) have for the past few hundred years been treating both halves of the planet as their prey. Keep boo hoo hooing over those gates of Vienna episode but seriously how many HUNDREDS of millions of people have you lot killed in the past few hundred years? Let's get real. Enough of this bullshit.

Talha June 11, 2017 at 2:48 pm GMT

@anon And the fact remains that Israel is proportionally greedier for land than they are.

If a linebacker eats a whole five course meal of pot roast – it's not that amazing. If a five year old does it – it's a thing of astonishment.

You can also explain why Israel sells weapons to nations like Morocco and Indonesia.

Peace.

Ulfberth June 11, 2017 at 3:10 pm GMT

The countries who support Qatar are Iran and Russia only. Turkey has been in a swing state of being the US vassal, getting mad at it, flirting with Russia, etc
Germany is a joke.

jilles dykstra June 11, 2017 at 3:14 pm GMT

@Anonymous If you want to demonstrate that Trump is an amateur you must know what his objectives are, now, then afterwards you may be able to show that he failed.
At present there is doubt about what he really wants.

The analysis of prof Laslo Maracs, UVA, Amsterdam, of the Trump objectives is that Trump, and his rich friends, understand that going on with the Obama way will lead to their ruin, and the USA's.
Obama caused close economic cooperation between China en Russia.

In Khazakstan an enormous installation has been built, they call it a land port, where containers can be transferred from the Chinese railway system to the Russian.
Containers now can be transported from China to St Peterburgh in a few days.

The USA cannot subjugate the world militarily, politically and economically impossible.

Therefore Trump is at war with Deep State, those who still want the USA to militarily subjugate the world.
I still think that Trump's behavior can be explained by the mentioned analysis.

If Maracs is right, then it is greatest change in political course of the USA since Roosevelt in 1933 won the elections.
And of course a decisive change in world history.
Therefore the whole western world, and all countries dependent on the USA, such as Israel and Saudi Arabia, is in deep confusion.

jacques sheete June 11, 2017 at 3:46 pm GMT

@Talha Speaking of imperialist ( aggressive) expansion, "we" were warned against it time and again, but our lovely leadership has routinely ignored it.

I like this quote from the Republican anti-imperialist of a century ago.:

The American flag went up on Hawaii in dishonor; it came down in honor, and if it goes up again now it will go up in infamy and shame and this Government will join the robber nations of the world .

-R. F. Pettigrew, "Pettigrew's Speech". The Herald. Los Angeles. July 3, 1898 . p. 4.

The US would join the robber nations of the world? Ya think?

Ludwig Watzal Website June 11, 2017 at 4:13 pm GMT

"The Saker" is absolutely right about the characterization of the "Axis of Evil" that contains finally the right three rogue states: The US Empire, Israel, and Saudi Arabia. For sure, it's all about Iran but the time is over to attack this country, although the Israelis and the Saudis would love, it the US would do it. But even the Trump administration is not that stupid. To attack Iran would be the "stupidest thing I've ever heart", said the late Israeli Mossad chief Meir Dagen, when the two crazies in Tel Aviv, Netanyahu, and Barack, tried to convince or rather push the US into attacking Iran's nuclear installations, knowing that Iran is light years away from a nuclear device.

It speaks volumes that the US supports Saudi Arabia's open aggression and genocide in Yemen. But the failure shows that the Saudis are incapable of dealing with a bunch or Huthi rebels or just take Syria where they are just capable of financing foreign mercenaries and terrorist to overthrow an elected President. To rely on the Saudis is a lost cause.

That Russia wants to mediate in the created crisis and the Iranians and the Turks want to deliver goods, the later are even ready to send troops, is a good sign that this criminal endeavor of the three terror states, the US, Israel, and Saudi Arabia, is going to fail.

The Trump administration, however, is the first to blame because President Trump gave all the Muslim despots a free hand when he delivered his bizarre speech in Riadah and singled out Iran as the main "sponsor of Terrorism". After this grotesque performance, he visited the main terrorist state in the region, Israel. As long as the US is unconditionally loyal to Israel, they can't pursue their national interests. That such interests are identical or the relations between the two states are "unshakable" is just rhetoric. But that the US can't escape the deadly embrace shows whose interest the US political class is truly serving.

jacques sheete June 11, 2017 at 4:16 pm GMT

@jilles dykstra If you want to demonstrate that Trump is an amateur you must know what his objectives are, now, then afterwards you may be able to show that he failed.
At present there is doubt about what he really wants.

The analysis of prof Laslo Maracs, UVA, Amsterdam, of the Trump objectives is that Trump, and his rich friends, understand that going on with the Obama way will lead to their ruin, and the USA's. Obama caused close economic cooperation between China en Russia.

In Khazakstan an enormous installation has been built, they call it a land port, where containers can be transferred from the Chinese railway system to the Russian.
Containers now can be transported from China to St Peterburgh in a few days.

The USA cannot subjugate the world militarily, politically and economically impossible.

Therefore Trump is at war with Deep State, those who still want the USA to militarily subjugate the world. I still think that Trump's behavior can be explained by the mentioned analysis. If Maracs is right, then it is greatest change in political course of the USA since Roosevelt in 1933 won the elections. And of course a decisive change in world history. Therefore the whole western world, and all countries dependent on the USA, such as Israel and Saudi Arabia, is in deep confusion.

At present there is doubt about what he really wants.

I doubt that he knows beyond the license to strut around in our faces like the big cock of the dung heap.

Paradoxically, Trump's vast holdings make him extremely vulnerable. So, effectively, he's trapped unless he's prepared to lose much, and I highly doubt that he's into martyrdom in any form or degree.

Much about his running for office reminds me of Jesse Ventura's win in Minnesota back in '99.

I'm quite certain that Jesse put his money where his (also rather big) mouth was and ran for office, never expecting to win, but merely to use the bully pulpit to show the other money bags the middle finger. To his, and everyone else's shock, he won. Unfortunately, he was opposed by unopposable forces and though he did manage to push through some good legislation (!), it's all been undone. Jesse was a one term governor.

Anyway, it's: Hail, Humpty Trump! Sterquilinus has risen, again! Isn't he byoo-tiful? Cock-a-doodle- doo-doo!!!!!!

Yes, sumpin sitnks, but Hexen Hillary would've been MUCH worse Yuck!

Full disclosure.: I'm still a Ventura policy fan, though I could do without the pink boa!

[Jun 17, 2017] The draft bill of the new sactions for Russia is surprisingly candid about what is actually at stake, namely selling American liquified natural gas and ending the supply of Russian natural gas to the European markets

Jun 17, 2017 | www.moonofalabama.org

james | Jun 16, 2017 2:47:41 AM | 36

daily us press briefing thursday june 15th..

some interesting info on the sale of jets to qatar worth 12 billion and stuff like that..

and this

"QUESTION: Switching gears, Germany and Austria sharp – have sharply criticized the U.S. Senate today for moves aimed at advancing a new legislation packaging new sanctions against Russia, which tangentially deal with European countries as well. Austrian federal chancellor and German foreign ministry released a joint statement, and I wanted to read one line from it to get your response to this particular line: "The draft bill of the U.S. is surprisingly candid about what is actually at stake, namely selling American liquefied natural gas and ending the supply of Russian natural gas to the European markets."

MS NAUERT: Sorry, back up for a second? What did you say about the liquefied natural gas?

QUESTION: That the bill is trying to basically peddle U.S. LNG to the – to the European markets – markets instead of the Russian natural gas. The bill aims to protect U.S. jobs and the natural gas and petroleum industries. So what's your response to that?

MS NAUERT: Well, first, I'm not going to comment on anything that those nations said and their criticism of anything going on on Capitol Hill. We would see it – and we talked about this last week – we welcome the shipment of liquefied natural gas to Poland, to countries in that region, if that were to come – become available to them, because it helps give them another option, another option to get natural gas from other countries that are perhaps more stable or other countries that can perhaps provide a regular flow of natural gas.

Much of the natural gas in Poland, as I understand it, comes from Russia, and that can be inconsistent. Russia has the ability, as you well know, to turn off that natural gas, and that puts the Polish people in a very difficult situation. So the U.S. provided another option. A regular source of natural gas, especially in the winter months, we see as important for the United States and for our allies."

our allies... lol...

[Jun 17, 2017] Turkey is having its problems, but the Russian pipeline is moving along and managed by Russia; Syria, Iraq and Iranian gas could all become clients of the pipeline, generating significant revenue and jobs for Turkey as its hub

Notable quotes:
"... Although unlikely, it would be amusing if support for Qatar led to an improvement in the Iran/Turkey relationship. ..."
Jun 17, 2017 | www.moonofalabama.org

frances | Jun 17, 2017 7:44:31 PM

Although unlikely, it would be amusing if support for Qatar led to an improvement in the Iran/Turkey relationship.
Posted by: Hoarsewhisperer | Jun 17, 2017 3:00:24 PM | 34

I agree Turkey is having its problems, but the Russian pipeline is moving along and managed by Russia; Syria, Iraq and Iranian gas could all become clients of the pipeline, generating significant revenue and jobs for Turkey as its hub. Far better that Turkey looks to Russia with its sane international policies than to the the US's EU puppet.

virgile | Jun 17, 2017 11:04:12 AM | 32
Turkey has fallen in yet another trap set by the USA to weaken Erdogan. Turkey has no more 'neighbors' friends, no more European friends, little american sympathy, and now it is about to loose his rich Gulf friends.

Erdogan's foreign policy is close to total disaster. The AKP success came from the economical reforms stimulated by the EU promises of adhesion and to the smart and peaceful influence of Gulen in Turkey's institutions and foreign policy.

Now Gulen and his allies are enemies. Turkey has gradually become a rogue state controlled exclusively by a megalomaniac man blinded by religion and money.

After the Syria quagmire, the Qatar-Saudi conflict and its impact on Turkey's economy, may turn to be fatal to Erdogan ruling.

[Jun 16, 2017] New Russia Sanctions Are All About Forcing the EU to Buy Overpriced US Gas

Jun 16, 2017 | marknesop.wordpress.com

Any Darwin Awards fans out there? For those few who have never heard of them, the Darwin Awards celebrate those individuals who have rendered a significant service to mankind by taking themselves out of the global gene pool. In preparing to discuss today's subject, I am reminded of unfortunate 1999 award-winner 'James' from Missouri, who became so fixated upon his love interest that he tried to lop off his own head with a chainsaw to demonstrate his commitment to an outcome on his terms. Although he was ultimately unsuccessful on both counts, he did fatally injure himself, and died in hospital. Ashes to ashes; dust to dust.

My intent today is to demonstrate clear destructive similarities between the above emotional decision and the equally simpleminded decision of the US Senate to impose further economic sanctions on Russia, this time explicitly tying them to penalizing of European companies which do business with Russia – moreover, in a clear attempt to stop the latter from proceeding with the Nord Stream II gas pipeline project. This, in turn, is clearly an attempt by the USA to make Europe a captive market for its own energy products, in the form of shipborne LNG. Significantly, that goal is also finally becoming clear to Europe; or at least to the parts of it that matter, such as Germany (thanks for the tip, James!) Try to put aside, for the moment, the insufferable arrogance of American meddling in Europe's energy market, with a view to restricting its choice while – laughably – pretending it is broadening European energy options.

The readers and commenters of this blog will be well aware, since it has been a topic of discussion for years here, that a critical underpinning of the western plan to seize Ukraine and wrest it into the western orbit was the premise that Russia would be forced by simple momentum to go along with it. As long as events continued to unfold too quickly to get ahead of, Russia would have to help supply the sinews of its own destruction. And a big part of that was the assumption that Russia would help to finance Ukraine's transition to a powerful western fulcrum upon which to apply leverage against it, through continued trade with Ukraine and continued transit of Europe's energy supply through Ukraine's pipeline system. But Russia slapped a trade embargo on most Ukrainian goods, and rescinded its tariff-free status as it became clear Brussels planned to use it to stovepipe European trade goods into the Russian market, through Ukraine – thus crushing domestic industries which would not be able to compete on economically-favourable terms. The armchair strategists nearly shit a brick when construction of the South Stream pipeline commenced, bypassing Ukraine and depriving it of about $2 billion annually in transit fees. But pressure ultimately forced Bulgaria to throw a wrench into the works, and the pipeline plans were shelved, to much victory dancing in the west. There was not quite as much happy-dancing in Bulgaria , but they were only ever a pawn anyway.

Sidebar for a moment, here; while the $2 Billion annually in transit fees is extremely important, Ukraine's pre-crisis GDP was $163 Billion. The funds realized for transit fees are important because (a) Russia has to pay them and (b) the west will have to come up with the equivalent in aid if Ukraine loses out on them. But the real value intrinsic to Ukraine as a transit country is its physical reality as an interface for Russian gas transit to Europe – what is a bridge can be easily turned into a wall.

Any time Washington thinks Russia needs some more shit on its face, Ukraine can be prodded to announce a doubling of its transit fees, or to kick off some other dispute which the popular press will adroitly spin to make Russia appear to be an unreliable supplier. Therefore, it is essential to western strategy that significant amounts of Russian gas continue to transit Ukraine. Sufficiently so that Europe continues to evolve ever-more-desperate contingency plans in order to keep receiving gas through the country which was known to have provoked the previous shutoff of European supplies by siphoning Europe-bound gas for its own use. That's despite the assurances of Germany and western partners of Gazprom in the Nord Stream line that it will mean cheaper gas prices for Europe.

But we knew this was coming, didn't we? Yes, we did, because as recently as last month, Democratic senator Jean Shaheen, who sits on the Senate Foreign Affairs Subcommittee on European Affairs, announced that the United States was considering involving itself in the Nord Stream II pipeline project , with a view to killing it stone dead. The purpose, as already mentioned, is to make way for LNG cargoes to Europe, cutting Russia out of the business, on the assumption that without energy sales the Russian economy will crumble and the country will collapse. Destroying Russia remains Washington's overriding strategic objective.

So the stakes are high; high enough to provide context for Washington's bizarre and aggressive behavior, and for its continued ridiculous insistence that Russia tampered with the 2016 US presidential election. What are the chances Washington will succeed with its latest adventure in global bullying?

Not good, according to multiple sources. Let's take a look at how Platts views the prospects; Platts, a division of S&P Global , is headquartered in London and employs over 1,000 people in more than 15 offices worldwide. These include global business centers such as New York, Shanghai and Sao Paulo, and major energy centers such as Houston, Singapore and London, where Platts is based. Having hopefully established the firm's credentials as someone who knows what they are talking about in the energy business, let's see what Platts has to say about the potential American LNG market in Europe . Mmmm .the review is mixed. At the outset, Platts is admiring of Cheniere Energy's go-to-hell expansion. But a couple of things about that are cause to curb enthusiasm. One, only 8 American LNG cargoes had gone to Europe so far; that was as of April this year, when the report was released. Of those, 4 went to Spain, 3 to Portugal and 1 to Italy. Two, the Iberian Peninsula is acknowledged by Platts as not particularly significant in terms of gauging Europe's welcome of American LNG.

"Indeed, the fact that Portugal and Spain were the first European countries to import LNG from the US is telling The Iberian Peninsula is considered an "island market" with poor interconnection to the rest of Europe, so the delivery of US LNG into the region is not likely to be seen as a sign that it will take hold in the wider European market."

The same passage points out that Russia does not supply the Iberian Peninsula with pipeline gas, and so is unlikely to be very concerned about the impact of US LNG on that market.

Three, Cheniere's rapid expansion has come at a terrifying cost, and the company is currently – as of fall 2016 – overleveraged with approximately $20 Billion in long-term debt . It is unprofitable, with interest payments representing 60% of revenues, the living embodiment of 'bicycle economics'; the second you stop pedaling, you crash.

For what it's worth, few great business breakthroughs have occurred without risk, and while Cheniere is plunging ahead with what seems like recklessness, it could just as easily pay off with complete domination of the North American export market. That's a hell of a debt load, though; not much margin for bad news. That does expose a flaw in the American strategy, as well – wrestling control of the European supply market from Russia would be frighteningly expensive.

a little better than 3 Billion Cubic Feet (BcF) of natural gas, which is mostly methane. That equates to about .85 Billion Cubic Meters (BcM). But Europe uses about 400 BcM per year , assuming LNG could supply the whole European market, which is of course unrealistic. Especially considering the entire global LNG shipping fleet consists of about 410 vessels .

No LNG carriers are currently registered under the US flag, and if the USA plans to be a serious exporter it is going to need about 100 new LNG carriers over the next 30 years , something which is frankly not practically achievable considering it takes about 2 years to build one, at a cost of about $200 Million apiece . Of course, miracles can be made to happen if you pour enough money into them. But we've already somewhat nervously mentioned how much all this is costing – how does the likely return on investment shape up?

Well, what the fuck? Platts comes right out and says that Russia has the option of cutting its prices to ensure it undercuts LNG costs in order to keep its share of the European market!

"Russia clearly does have the option to undercut the US LNG price to ensure it keeps its share of its key European markets and could flood the market with cheap gas, maximizing revenues and cash flow at a time when producers worldwide are suffering from the impact of such low prices."

So, let me get this straight. All the attempts by the west, led as usual by Washington, to force energy prices down and keep them low actually benefit Russia by putting the USA in an unacceptable profit/loss loop so that it cannot afford to sell its LNG to Europe and still make money? That appears to be pretty much how it shakes out.

"Russia, thanks to the bearish oil price environment and an enhanced export strategy from Gazprom, increased its exports to Europe by 15% (through the Nord Stream, Yamal, and Brotherhood pipelines) to 118 Bcm, taking back its place as Europe's largest gas supplier in the process."

Wait! I think I see a solution. All the USA needs to do is apply its global leverage to make energy costs rise!

"But US LNG could face problems of its own – the current low prices are forcing ever growing numbers of US producers into bankruptcy. According to a recent report by Haynes and Boone, 90 gas and oil producers in the US and Canada have filed for bankruptcy between January 2015 and the start of August 2016."

Oh, hey; I just realized – if forcing energy prices back up were an option, how is that going to hamstring an opponent who was already able to undercut you at the lower price, and still turn a profit?

Platts closes out this dismal synopsis with the consolation prize that, while US LNG is less competitive with pipeline gas given narrow Henry Hub-NBP spreads, it is coming to Europe regardless. More of that old American can-do. It will have to be, though, on what is described as a short-run marginal cost basis. Would you feel comfortable with that forecast if you were carrying, say, $20 Billion in debt?

And it's not just Platts who sounds a warning; Forbes has a similar, if slightly more mocking outlook of the situation .

"Most of this is just political posturing and noise. The U.S. is not now and nor will it be in the near future a key resource for Europe's energy needs According to EIAs Annual Energy Outlook, published in April, the United States remains a net importer of fuels through 2040 in a low oil price scenario. In a high oil and gas price scenario, the United States becomes a net exporter of liquid fuels due to increased production by 2021. A lot can happen in seven years. By then, Exxon will likely be back to its deal with Rosneft in Russia's Arctic Circle."

As well, Forbes adds the interesting perspective that foreign sales of American gas will be a tough sell domestically if the pressure remains on the American leadership to achieve greater energy self-sufficiency and reduced dependence on foreign sources. This situation can only be exacerbated by a rise in anti-American sentiment around the world, and is likely to spike if energy prices rise. But if they stay low, American LNG exports won't make any money. If they go up, pipeline gas will undercut LNG prices and make it noncompetitive. Jeez, we just seem to be going around in circles. Say, did you notice that little item in there, in which the author mentions the only possible way the USA could compete with Russia in the natural gas market in Europe would be if it had national rights to substantial supplies of gas abroad? Did that give your memory a little tickle, and make you think of Burisma Holdings, and Hunter Biden ?

The Brookings Institute, for God's sake, warned that US LNG could not compete price-wise before the first LNG cargo ever left the USA. Given its sympathies, it seems probable it was intended as a sobering restraint meant to keep the United States from doing something stupid that might expose it to failure and even ruin; it is much less likely to have been an endorsement of Russia's global business practices.

As so often happens, an unhealthy fixation on taking down a largely imagined enemy results in increased risk-taking and a totally unrealistic appraisal of the likelihood of success – it becomes worth doing simply to be doing something. The costs in this instance have included the alienation and infuriating of Germany, the European Union's anchor economy, and angry murmurs from the Gulf States that Washington negotiated production cuts simply to make its own product more competitive. All for nothing, as it happens, because a nation with surplus swing production can always undercut your price, and the nation with the world's lowest production costs should be last on your list of "People I Want To Start A Price War With".

If you were opposed to official Washington's swaggering, bullying modus operandi , this whole unfolding of events probably seems pretty delicious to you. But I've saved the most delicious for last – Trump dares not make any effort to overrule the Senate vote, or get it reframed, because of the successful media campaign to portray him as Putin's secret agent. Any effort to mollify Germany's fury will be seized upon by the reality-challenged Democrats as an opportunity to further discredit the Trump government, by making it appear to be negotiating in Russia's behalf.

You couldn't make it up. PaulR , June 15, 2017 at 5:29 pm

One should never underestimate peoples` willingness to spend vast sums of money on worthless projects. Witness the Canadian government's recent announcement of its plans to increase defense spending by 70%.

When the dust finally settles, the Chinese will end up on top.

marknesop , June 15, 2017 at 5:47 pm
I think you're probably right about that. And if it turns out to be the case, British Columbia will turn out to be the most progressive province in Canada, with its large numbers of Chinese citizens and its Chines-language television stations. At bottom I am mostly a peaceful guy and I don't really care very much who rules the world so long as it doesn't impact my lifestyle.

Once I would have argued strongly for American global leadership, based on a perception that it offered the best chance for prosperity and enlightenment for everyone, but events since have changed my view. Now I think other countries should be left alone in terms of interference, helped where you can lend a hand, and global leadership is an unrealistic aspiration for any country led by humans, since human nature tends to favour self-interest.

I don't know what the Liberals think they are doing, pushing what is essentially an unachievable Conservative platform where defense is concerned. To what end? So we can interfere more effectively on the USA's behalf? We have a good military. There's nothing wrong with keeping it up to date and well-supplied and trained. But a 70% increase is impractical and is only likely to incur the wrath of the non-military portion of the electorate, since the money has to come from somewhere.

PaulR , June 15, 2017 at 5:38 pm
I hadn't been aware of the connection between the sanctions and LNG, so thanks for pointing that out.

Meanwhile, I read this:

'Germany and Austria on Thursday sharply criticized the U.S. Senate's plan to add sanctions on Russia, describing it as an illegal attempt to boost U.S. gas exports and interfere in Europe's energy market. [ ]

"We cannot accept a threat of extraterritorial sanctions, illegal under international law, against European companies that participate in developing European energy supplies," [German Foreign Minister Sigmar Gabriel and Austrian Chancellor Christian Kern said in a joint statement]. "Europe's energy supply is Europe's business, not that of the United States of America."'

https://www.the-american-interest.com/2017/06/15/the-us-is-exposing-europes-divide-on-nord-stream-2/

marknesop , June 15, 2017 at 5:58 pm
After all, many other European leaders have publicly clamored for U.S. LNG imports as a way to ease their dependence on Gazprom.

Who? The Baltics? Thanks for that. It's mostly a rehash of the other article, but it does include some interesting insights, and it has a little more credibility than ZeroHedge, although there's little in that with which I can find fault and its breaking news is usually accurate.

That the EU's energy policies are completely outside the USA's remit is correct, but it's a surprise to hear someone of Gabriel's stature actually say it. It seems the USA has decided that forcing Germany to abandon its support for the project is worth trying. That will turn out to be a disastrous mistake, because the business community in Germany contains some of America's staunchest supporters, while anti-Americanism among the German population – especially its youth – is a growing problem. This will do nothing to help it, and it most certainly is not going to persuade Germany to order American LNG.

I urge you to digest the Platts Report in detail, at your leisure – it's illuminating, and I'm sure you will note that Russia's LNG export capability is already far, far ahead of the USA's. So even if pipeline gas proved only competitive with LNG, why would anyone depend on supplies which have to cross the ocean rather than supplies that can come from Kaliningrad?

PaulR , June 15, 2017 at 7:12 pm
As if on cue, Evgeniia Chirikova denounces North Stream II in The Guardian: https://www.theguardian.com/world/2017/jun/14/gas-pipeline-nord-stream-2-funnel-billions-putin-bypass-sanctions
ucgsblog , June 15, 2017 at 7:23 pm
She's funny: "How can you shout about the transition to renewable, environmentally safe energy and at the same time make plans to increase gas flows into Europe?"

Uhh, Zhenichka, Russia is part of Europe, you can shout about it if you are increasing your energy dependence on both, and if one pipeline is simply replacing another. That's how. That was easy.

"Five European companies are involved but for some mysterious reason, 100% of the shares belong to Gazprom."

Because GazProm is paying $$$ for it. Zhenichka, in a Capitalist Society, those who pay for the shares, get the shares. Did I solve that mystery for you?

marknesop , June 15, 2017 at 10:23 pm
"Five European companies are involved but for some mysterious reason, 100% of the shares belong to Gazprom."

There is nothing mysterious about it; in fact, it is typical Guardian dishonesty. The Nord Stream II Project originally included minority shareholders as shown here . Then Poland introduced its anti-monopoly action and announced the pipeline could not be built. The partners dropped out, and left Gazprom to take the heat alone. When Poland failed in its bid to stop the project and it became clear the EU was all out of arrows – having never had a defensible legal basis – the partners hopped back on, but as investors only. I daresay they stand to make a good return on their investment even without being shareholders. Meanwhile, American meddling is only likely to make Europeans grateful attempts to stop the pipeline failed. I would not like to see their reaction if it ever became clear their governments had committed them to paying higher gas prices just to spite Russia, particularly in view of the USA's limited ability to provide reliable and constant supply.

The Guardian is just being a good American footsoldier, and trying to throw mud in the works for Uncle Sam.

yalensis , June 16, 2017 at 3:37 am
Chirikova works for the Estonian government now.
ucgsblog , June 15, 2017 at 7:16 pm
Beautiful article, and great timing Mark! I love it. This was one of the dumbest bills ever passed. It aimed at Russia, but it's just a take down of Germany. Reminds me of a recent Russian joke:

Obama: "America is mighty! Because of us, Russia's Economy is in ruins!"
Poroshenko: "not Russia's, sir. Ukraine's."
Obama: "Who gives a shit! It's in ruins!"

Also, here's what I'm wondering – can't Russia deliver it by truck or train? Won't that still be less expensive than delivering it by ship?

Jen , June 15, 2017 at 8:39 pm
Nordstream 2 is primarily a gas pipeline project under the Baltic Sea.

The main attraction of Nordstream 2 is it avoids transit through countries where tolls and transit fees would have to be paid, whether through land-based pipes, truck or train, and all these expenses added to the eventual cost that would be paid by the end consumer (ie the general public). Plus trucks and trains can be held up or subjected to attacks and gas in land-based pipelines can be siphoned off and diverted as was being done when the gas was passing through Ukraine originally. No such problems if the gas were being delivered through underwater pipelines though we can be sure that Swedish naval submarines (how many of those are there – one?) will be watching them very closely for phantom Russian subs.

marknesop , June 15, 2017 at 10:28 pm

I thought you were talking about LNG, from Kaliningrad. And if so, yes; it certainly could be transported by train, and probably would be.
Jen , June 16, 2017 at 5:46 am
Ah, I thought UCGS' original comment referred to your original post, not the one you sent at 5:58 pm yesterday.

Wouldn't transporting LNG by underground pipeline under its own pressure be a less risky and cheaper option than sending it by train? Trains carrying LNG can only carry so much and have to be specially adapted to transporting it. Plus they share rail networks with other trains so there are issues like how saturated the rail networks supporting LNG rail traffic, other cargo traffic and passenger traffic become, and the pressure this puts on drivers and maintenance of railway tracks, and building more rail lines in and through areas where pipelines could be laid down instead.

marknesop , June 16, 2017 at 8:56 am
It's possible; I'm afraid I don't know enough about it. It seems that when they speak of an LNG 'train', it refers to the liquefaction and purification facility , not a transport vehicle. In order to transport LNG it must be liquefied, which implies freezing it to below -161C. Naturally it must be maintained at a temperature which guarantees its stability as a liquid, until it is appropriate to return it to its gaseous form for use in that form. That's the purpose of the huge container vessels on an LNG tanker – you have to get it cold and then keep it cold.

I just don't know how you would do that in a pipeline. And obviously it would be wildly impractical for a train, I don't know what the hell I thought I was talking about. It could be done, but why? You'd need a hundred miles of teeny little flatcar-sized container vessels to equal what you can transport in an LNG carrier.

Your pipeline would have to originate at an LNG 'train' and terminate at another, somewhere else, so that the liquefaction/gasification process could be practically carried out, much as current NG pipelines use pumping stations. But you would also have to keep the LNG below -160C all the time it was in the pipeline. That's probably physically possible, too, if expense is no consideration, but it seems terribly impractical when NG already goes by pipeline safely at a fraction of what it would cost to transport LNG the same way.

Jen , June 16, 2017 at 2:30 pm
Ah, I see now of course you wouldn't need to transport NG in liquid form under 160C through pipelines. To transport it by ship or train though, it must be in liquefied form, presumably because as a liquid NG can be measured and quantified, and then exporters can work out how much they can charge for producing and transporting LNG. Not to mention of course that transporting commodities in gaseous form by train and ship is harder and riskier than transporting them as liquids.
marknesop , June 16, 2017 at 3:38 pm
As well, it needs to be liquefied in order to be compressed, to get the volumes you are looking for . One of those container vessels full of uncompressed NG wouldn't be much more than a good-sized European town would need for its barbecues.

LNG achieves a higher reduction in volume than compressed natural gas (CNG) so that the (volumetric) energy density of LNG is 2.4 times greater than that of CNG or 60 percent that of diesel fuel. This makes LNG cost efficient to transport over long distances where pipelines do not exist. Specially designed cryogenic sea vessels (LNG carriers) or cryogenic road tankers are used for its transport. LNG is principally used for transporting natural gas to markets, where it is regasified and distributed as pipeline natural gas.

That does highlight, as well, that if you can use road tankers there really is no reason you could not use trains. But anywhere it is practical to use trains or road transport, you would be asking yourself, "why can't I use a pipeline here?"

et Al , June 16, 2017 at 1:30 am
The US's intervention is even more pathetic than it seems.

This is not a stand alone anti-Russia bill which would signal strength from the US, but an adjunct to the anti-I-ran sanctions bill that continues to seek to punish I-ran in the vague hope that it will pull the plug on the cast-iron nuclear deal it has signed with international partners. The irony there is that I-ran Air is recapitalizing with both Airbus & Boeing (also ATR), 100 odd a piece, not to mention other significant investment opportunities for western firms.

They're quite the Gordian Tits!

Not only is there the potential of the Levianthan gas field off Cyprus/Israel/whatever, brutal dictator Azeri gas will also be arriving in (larger, but not gigantic) quantities. Not to mention that significant buyers of LNG, like the UK, have it come straight from Qatar. Is the US prepared to sell LNG at a discount compared to Qatar that has strategic agreements and its own fundamental interests to be protected by the Western (European) states as well?

So if this plan seems to damage not only the USA's allies but the USA itself, then what is its purpose? Stick it to Trump. Mire any plans to re-balance relations with Russia almost at any cost . It's a no brainer for Democrats as they neither hold a majority in the House or the Senate, and there seem to be enough dog whistle Republicans willing to go along with it, including those with mental problems like John 'Insane' McCaine. Ukraine is almost peripheral except as a convenient tool. It think the US accepts they've screwed the pooch on the Ukraine so its only value is to be used as a festering sore on Russia's frontier. Kiev mops up the completely free public political support whilst it is being kicked in the bollox by the same people.

Lyttenburgh , June 16, 2017 at 9:03 am
Whoop-whoop! A new article so soon!

"Try to put aside, for the moment, the insufferable arrogance of American meddling in Europe's energy market, with a view to restricting its choice while – laughably – pretending it is broadening European energy options."

"Invisible Hand of the Market" [nod, nod].

"And a big part of that was the assumption that Russia would help to finance Ukraine's transition to a powerful western fulcrum "

At first I read it as "western furuncle". That's what it became in the end.

First Rule of the Ukraine: "Every Peremoga turns into Zrada".Want to hear about yet another zrada ? Russia (okay – Mikhail Friedman) bought a German firm Rheinisch-Westfälisches Elektrizitätswerk (RWE) for $5.72 blns in 2015 . Why it's important? Well, because this firm carries out the reverse gas transition to the Ukraine, thus ensuring its [ha-ha, sorry, sorry!] "Energy Independence" which was officially proclaimed in the same 2015 A.D.

"No LNG carriers are currently registered under the US flag, and if the USA plans to be a serious exporter it is going to need about 100 new LNG carriers over the next 30 years, something which is frankly not practically achievable considering it takes about 2 years to build one, at a cost of about $200 Million apiece". Of course, miracles can be made to happen if you pour enough money into them.

Something-something-something Elon Musk something-something Super-technologies something-something-something Innovations! Progress!

And usual stuff, said by the people who believe that the Free Market will "Get the Things Straight" without governmental meddling. Like, Musk will invent cheap multi-use drone-rackets which will deliver gas to the clients across the Ocean. Why not?! They believe in all kinds of stupid stuff already!

The article is fresh breeze of actual facts and hard data – not your usual hurr-durring opinion pieces, passed as "analytics" by the esteemed think-tankers.

P.S. Mark, do you have the same e-mail address?

marknesop , June 16, 2017 at 1:19 pm
Thanks very much, NS!! I read a book some time ago which used newspaper and wire reports of the various times to thoroughly debunk most of the incidents of ships and aircraft 'disappearing without a trace' in the Bermuda Triangle. In incidents which resulted in total losses of the crew, the author also offered reasonable explanations for what likely happened. I have sailed through it many times myself and observed nothing untoward, although that does not mean much considering the amount of marine traffic which routinely does the same without incident.

Owners of LNG Carriers likewise play up how safe they are, and to the best of my knowledge there has never been a serious accident. However, on the scale of supply the USA is suggesting it wishes to achieve for itself, there could be no days taken off for bad weather, and carriers would have to transit the North Atlantic in winter – which is not generally a fun place to be. Most of my concern with the shipped method is its inherent unreliability compared with pipeline gas.

Northern Star , June 16, 2017 at 12:31 pm
"But Gazprom could block a lot of those cargoes by stepping up export volumes and selling them at prices below what can be achieved by U.S. LNG. Gazprom can export pipeline gas to Europe for $3.50 per million Btu (MMBtu) while American LNG would need prices of $4 to $5/MMbtu. Currently, Gazprom sells gas to Europe at a price of about $5.80/MMBtu on average, but could lower the price to beat U.S. LNG"

I do not see how the USA could begin to economically prevail over the Russians in a
"gas' war..given the above numbers.

"Of course, viewed another way, the growing U.S. export capacity – the mere existence of a competing source of supply – should push down the price that Gazprom is able to charge, a victory for Europe and a blow to Gazprom. Without U.S. LNG, its proponents argue, Russia would not be forced to accept lower prices. "It's the start of the price war between U.S. LNG and pipeline gas," said Thierry Bros, an analyst at Société Générale, according to the WSJ."

Moreover doesn't keeping a lid (cap) on what the Russians can charge for Gazprom gas ipso facto prevent the Americans from competitively pricing their LNG product..particularly in view of the first quote????
Either I'm a little dense today,or the American strategy here makes no sense whasoever.!!!!

http://oilprice.com/Energy/Energy-General/US-To-Undermine-Russias-Gas-Monopoly-In-Europe.html

marknesop , June 16, 2017 at 1:51 pm
The latter – the American strategy makes no sense, and its proponents are so high on can-do that you might have to shoot them to get them down. The USA cannot supply either the volume or the consistency of supply to snatch the gas market from Russia, and that must be evident to all but the crazy. As usual, Washington just hopes to get itself into the mix so it will have a seat at the table, because it cannot bear being left out of things and has long been of the opinion that America makes its own reality. Once again, if America owned or controlled substantial gas reserves on the continent and it were practical for the USA to run its own pipeline to Europe, it might be in with a chance if it had sufficient supply, and it is attempts to do that that we should be watching out for. There was speculation much earlier that control of substantial gas holdings was exactly what Burisma Holdings and Hunter Biden were up to in Ukraine, but gas extraction is not practical there right now and id assay results had been positive you can bet there would be a lot more American pressure to bring the war to a close.

On that note, I noticed over at Sputnik yesterday that Turchynov was pressuring Poroshenko to bag the ATO and turn it into a full-press military operation, which is just what recent reports said they did not dare to do in case the Ukrainian Army loses. The same report said Poroshenko is about to sign legislation which orders by decree that Donbas resume its place as part of Ukraine. If they say "Pound sand up your ass" as we know they will, Poroshenko may have little alternative to throwing everything he has at them. Of course, I can't find it now; I knew I should have drawn attention to it when I saw it.

I'm sure Russia is watching carefully.

Northern Star , June 16, 2017 at 12:49 pm
I assume the (shipped) American LNG would have to be regasified at a european import terminal. Consulting page six at the link, is it not problematic to then transport the regasified lng product to its (receiving) nation destination. The whole scheme smacks of going around the well to get an expensive cup of water!!!!!
http://documents.jdsupra.com/c6c4403f-ad9f-4740-b184-9fc1f88550ab.pdf
marknesop , June 16, 2017 at 1:53 pm
The liquid LNG can only be unloaded at an LNG terminal, and so far as I am aware a feature of them is that they are connected to a gas hub, so that they can regasify the product directly into the system.
likbez says: June 16, 2017 at 9:05 pm
What I do not understand is why Russians can't increase natural gas consumption dramatically and need to export that much: is it so difficult to build several large chemical plants, increase usage in city transport as less polluting fuel to 100%, promote dual fuel private cars, etc.

In this case they can export saved oil instead using regular tankers which is much simpler then LNG.

I think the current suppression of oil prices by Wall Street (and the new US method of production using along with production of shale oil a parallel production stream of junk bonds which will never be repaid) can't last forever. "Break even" oil price for most shale wells is probably over $60 per barrel. If not $80.

Also without capital investment the annual decline of conventional fields is around 5% a year (most of those fields are really old). Which means approximately 5 million barrels per day are taken off the market automatically each year (no OPEC action is needed), if zero capital investment are done.

Of course Sechin is IMHO a corrupt player here, who cares mostly about his own pocketbook (and stupidly increased investment just before the crash, which later required bailout of the company by the government), but still Russian government has the means to enforce its will even on rogue players.

[Apr 22, 2017] The 'Russification' of Oil Exploration - The New York Times

Apr 22, 2017 | www.nytimes.com

MOSCOW - The American and European sanctions against the Russian oil industry have dashed, at least for now, the Western oil majors' ambitions to drill in the Arctic Ocean.

But drilling will continue all the same, Russian government and state oil company officials have been taking pains to point out, ever since the sanctions took effect over the summer.

"We will do it on our own," Igor I. Sechin, the president of Russia's state-controlled oil company, Rosneft, told journalists in October. "We'll continue drilling here next year and the years after that."

Rather than throw in the towel in the face of Western sanctions intended to halt Russia's Arctic oil ambitions by stopping technology transfers, the Russians have responded with plans to "Russify" the technology to be deployed in the world's largest effort to date to extract oil from the thawing Arctic Ocean.

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The solution to tapping the Arctic, Yevgeny Primakov, a former prime minister, told a group of high officials in October, "is found first of all in our own industrial base."

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A major hurdle is already cleared: An Exxon-led joint venture discovered oil in the Russian sector of the Arctic Ocean in September, proving the region holds commercially viable volumes of oil.

Rosneft is already laying plans to drill without Western oil major cooperation. Along with Exxon, Eni of Italy and Statoil of Norway had joint ventures to work with Rosneft in the Kara, Laptev, and Chukchi seas above Russia.

After the September sanctions suspended those deals , Rosneft negotiated to rent from Gazprom four Russian ice-class drilling rigs for next season's exploration work, should Exxon still be sanction-barred from doing the work next summer.

Rosneft has also booked six rigs from North Atlantic Drilling, a unit of Seadrill of Norway, under contracts signed in July and grandfathered in under the sanctions.

The Russians are in early talks with the Chinese over sailing rigs from the South China Sea to the Arctic Ocean, industry executives say.

This spring as the threat of sanctions loomed, Rosneft bought the Russian and Venezuelan well-drilling business of Weatherford, adding to its in-house capabilities.

A further "Russification" of the industry seems inevitable. In October, President Vladimir V. Putin approved the creation of a state-owned oil services company, RBC, a Russian business newspaper reported. The intention is to duplicate, as well as possible, the services purveyed now by Halliburton, Baker Hughes and Schlumberger.

Certainly, some in the oil industry see the Russian official response as bluff, asserting Rosneft has neither the skills nor the capital to drill for oil in its 42 offshore licenses blocks. Under the joint ventures, the Western companies financed and managed the exploration work.

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The three companies, Exxon, Eni and Statoil, were to invest $20 billion in exploration, and the company has been mute on how it will replace that. Just this summer, Exxon paid $700 million to drill the Universitetskaya-1 well in the Kara Sea.

Russia, meanwhile, does not even manufacture subsea hardware like well heads. Rosneft's finances are restricted to 30-day loans under sanctions.

Yet the company and the Russian industry are already tooling up for just such an effort.

The sheer uncertainty of sanctions is pushing the Russian industry to turn inward. Russian companies, even those who prefer to work with U.S. oilfield equipment or services providers because the cost or quality is better, can never know when new sanctions might scuttle a deal.

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"The client looks at you and says 'I like you, I like your product, but you are not dependable,' " Alexis Rodzianko, the director of the American Chamber of Commerce in Russia said in an interview.

Russia now has a "hierarchy of procurement" placing domestic and Asian companies first, U.S. companies last.

"The consensus in Russia is this is not a one-off, short-term problem," Ildar Davletshin, an oil analyst at Renaissance Capital in Moscow, said in an interview, of the Russian effort to pivot to domestic and Asian suppliers.

"Nobody will just sit and wait" for sanctions to be lifted, he said.

Whether Russian technology can fill the gap left by Western oil majors as the country prepares for the extraordinary engineering challenge of oil drilling under the Arctic ice remains an unsettled question within the industry.

Russia brings Soviet legacy technologies, including the world's only fleet of nuclear icebreakers, awesome machines of immense power, with names like 50 Years of Victory and Yamal, which sail year-round in the Arctic Ocean.

"Let's not underestimate them," said one oil company executive who visited Exxon's West Alpha rig this summer, but could not speak publicly because of company policy. Russians are no strangers to the north, and the cold. "They are determined to do it. They might do it on their own."

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The Russian intention to do just that became clear out on the Arctic Ocean at the end of the short drilling window this summer.

Ice floes were already creeping down from the polar ice cap in tongues when the U.S. government announced Sept. 12 that Exxon was to halt all assistance to Rosneft by Sept. 26, in response to Russian military assistance to a rebel counteroffensive against the Ukrainian Army in late August.

The Exxon crew stopped drilling, though the well was only about 75 percent complete.

In an early indication of the Russians' intentions to go it alone after sanctions, Rosneft executives told Exxon they would not allow the West Alpha rig to leave Russian waters without finishing the well, according to the oil company executive familiar with events on the platform in September.

If Exxon withdrew American engineers, Rosneft would fly out a Russian replacement crew, putting the localization plan into immediate action, the executive said. Rosneft's press service contested this characterization of the company's position, calling it a "fiction."

In the end, Exxon obtained an extension on its waiver to the sanction from the U.S. Treasury Department, stretching the window for work with Rosneft in the Arctic until Oct. 10.

The Arctic Ocean, Mr. Sechin said later that month in the interview with Bloomberg News at the drilling site in the Kara Sea, is Russia's "Saudi Arabia" of oil, vast and pivotal to Russia's national interests.

Rosneft's website estimates the Kara Sea's reservoirs hold about 87 billion barrels of oil and the equivalent in natural gas , calling this more than the deposits of the Gulf of Mexico, the Brazilian shelf or the offshore potential north of Alaska and Canada.

After a daylong pause on Sept. 12 to Sept. 13, the Russian brinkmanship worked: The American crew continued drilling and about a week later, in mid-September, discovered a vast oil deposit, holding about 750 million barrels of oil. Mr. Sechin thanked Western partners for the find, and named the field Pobeda, or Victory.

[Apr 21, 2017] Despite Sanctions, Russia Finds Buyers for $11 Billion Stake in Rosneft - The New York Times

Apr 21, 2017 | www.nytimes.com

MOSCOW - The Russian government announced Wednesday that it will sell nearly 20 percent of its state oil company, Rosneft , to the Swiss commodity trading firm Glencore and the sovereign wealth fund of Qatar.

The deal defies expectations that no investor would dare buy a share in the Russian asset, given Western sanctions against the government of President Vladimir V. Putin.

But the emergence of foreign money suggests that investors are reassessing the sanctions after the election of Donald J. Trump, who has advocated warming ties with authorities in Moscow and is considering the chairman of Exxon Mobil, Rex W. Tillerson, as a candidate for secretary of state.

Mr. Tillerson criticized the sanctions as harmful for business after they halted an Exxon joint venture with Rosneft to drill for oil in the Kara Sea, in Russia 's sector of the Arctic Ocean.

The deal will bring Moscow $11.3 billion to help plug a widening budget deficit as Russia fights two wars, in Syria and Ukraine, and has struggled to meet pension payments and public-sector payrolls.

The agreement came as a surprise twist in the privatization of Rosneft. With an end-of-the-year deadline looming, no buyers had come forward for the 19.5 percent share in the world's largest publicly traded oil company, as measured by production and reserves. The apparent lack of bidders was a pessimistic sign for investor interest in Russia.

The Russian government had for most of the year planned to sell shares back to the majority state-owned company itself, which would hardly have qualified as a genuine privatization.

The United States decided in 2014 to impose sanctions on Rosneft and other Russian companies in response to Russia's intervention in the war in eastern Ukraine..

The sanctions limit long-term lending and transfer of American technology for drilling offshore and shale oil deposits.

The deal carries other risks as well. Both Glencore and the Qatari fund, the Qatar Investment Authority, have extensive investments in emerging markets. The Qatar fund is also an investor in Glencore.

The announced price valued Rosneft at $58 billion, slightly less than the company's stock market value at the close of trading in Moscow on Wednesday, of just under $59 billion.

Both the market price of shares and the sale price for the 19.5 percent stake announced Wednesday are a relative bargain, indicating the Russian government's eagerness to cut a deal to shore up its finances.

[Apr 12, 2017] Denmark seeks to change law on pipelines amid Nord Stream 2 divisions

Apr 12, 2017 | marknesop.wordpress.com

et Al , April 10, 2017 at 5:00 am

Euractiv with Neuters: Denmark seeks to change law on pipelines amid Nord Stream 2 divisions
http://www.euractiv.com/section/energy/news/denmark-seeks-to-change-law-on-pipelines-amid-nord-stream-2-divisions/

Denmark's government is proposing amending legislation to allow it to ban pipeline projects on the grounds of foreign and security policy, due to concerns raised by Russian efforts to build a disputed gas pipeline through Danish waters.

"We want to have the possibility to say yes or no from a perspective of security and foreign policy," the minister of energy and climate, Lars Christian Lilleholt, told Reuters, adding that it was currently only possible to veto such projects on the grounds of environmental concerns .

Denmark and Sweden earlier this year requested that the European Commission intervene in Nord Stream 2 before the two states agree on permits for the pipeline to pass through their waters. EU diplomats said there was little scope for either nation to block the plan.

The current regulatory framework does not allow Denmark to say "no" to the construction of transit pipelines in territorial waters on the basis of foreign policy considerations, the ministry said in a statement .

EU sources have said the Commission, sensing that there may ultimately be no legal basis to block approval of Nord Stream 2, is delaying it as long as possible .

Denmark's right-wing minority government would now negotiate with other parties to win support for the proposal.
####

' sensing that there may ultimately be no legal basis to block approval..' – Well that's quite a polishing of the EU turd when we know that the EU has no legal way to block the pipeline, sic the opinion of the EU's own Legal Service. How delicate the EU stuffed suits are that they cannot just admit it outright. Oh, but that would be a propaganda victory for Russia. They should be grateful because if they had blocked it, it would have been a very clear message that the EU's Rule of Law which it proudly pronounces around the world is barely a fig leaf that is dropped as the slightest political pressure. It's a joke already, but with a project as big as . as it has done with much political decisions

marknesop , April 10, 2017 at 5:56 am
While they're creating magic out of whole cloth, why not a law that anyone who discovers significant gas deposits anywhere must immediately hand them over to the EU for their exclusive use and disbursement? Or a law that orders massive new gas deposits be discovered in Denmark?
et Al , April 10, 2017 at 6:43 am
I suspect that the government is having a slow news day and as there is absolutely no consequence to Russophobia as it is essentially a free gift that keeps on giving when and wherever is needed, i.e. to distract from domestic politics.

The Whole G7 'How can we f/k up Russia further' conveniently segues with the improvement of Russia's economy and the continued failure of G7 sanctions against Russia. I'm not really sure what else they can do without shooting themselves in the foot.

There's already been some whinging that the West's actions have only further driven it in to China's arms, so WTF? I guess they have to come up with something that looks tough, but isn't. After all, they will need to put out a key statement signed by them all. IN short, 'This spade is far too small. Let's go and get another one!'.

[Apr 06, 2017] Russia quietly cutting oil output while looking at broader prospects

Notable quotes:
"... "Russia is reducing its oil production in stages, in accordance with the plans we worked out voluntarily with our production companies," ..."
"... "We anticipate complying with the figure outlined in the agreement by the end of April," ..."
"... "Undoubtedly, and this could be an even more important factor, is the situation on the market linked with the balance between supply and demand and the situation with regards to the development of the situation with oil reserves and oil product reserves in the OECD countries and the countries in the world as a whole," ..."
"... "And we will be following this closely; it will be important for us to know what's going to happen in April, the forecasts for May and June and the second half of next year," ..."
"... "Currently, we are producing about 17 percent of our total oil production in the Arctic. In 20 years, in accordance with our strategic plans, this share will increase to as much as 26 percent. But the figures for gas will be even more interesting to you. We currently produce 80 percent of our gas in the Arctic," ..."
"... "As far as energy independence is concerned I don't think this is anything new for the United States. It's unlikely that at any time it was ever US policy to increase its dependence on imported energy resources," ..."
"... "It's clear that we are all assessing the situation in a sober fashion, we understand that there will be a rise in the production of shale oil. Again I want to say that we need to look at the situation as a whole throughout the world," ..."
Apr 06, 2017 | www.rt.com
Moscow is fully complying with the deal to cap oil production, while accurately evaluating longer-term structural developments in the market, according to Russian Energy Minister Aleksandr Novak. In March, the country's producers reduced output by 200,000 barrels per day as the decrease in January and February was ahead of the original plans, according to the minister. 'Largest discovery' of oil off Scottish coast could raise chances of independence

"Russia is reducing its oil production in stages, in accordance with the plans we worked out voluntarily with our production companies," Novak said in an interview with CNBC at the International Artic Forum in Arkhangelsk on Thursday.

"We anticipate complying with the figure outlined in the agreement by the end of April," he said, stressing that the reduction target was 300,000 barrels per day.

According to Novak, overall supply and demand trends will be a major reason for Russia to support renewing the agreement at the end of May.

"Undoubtedly, and this could be an even more important factor, is the situation on the market linked with the balance between supply and demand and the situation with regards to the development of the situation with oil reserves and oil product reserves in the OECD countries and the countries in the world as a whole," said the energy minister.

"And we will be following this closely; it will be important for us to know what's going to happen in April, the forecasts for May and June and the second half of next year," he stressed.

The minister has also pointed to the importance of the Arctic region for Russia's energy strategy.

"Currently, we are producing about 17 percent of our total oil production in the Arctic. In 20 years, in accordance with our strategic plans, this share will increase to as much as 26 percent. But the figures for gas will be even more interesting to you. We currently produce 80 percent of our gas in the Arctic," he said, adding that new production was ongoing on the Arctic shelf.

The minister's comments followed the recent changes in US policy to increase the country's energy independence. There has been a resurgence in the activity of US shale producers that could lead to increased supply to the global market given a rebound in the oil price.

"As far as energy independence is concerned I don't think this is anything new for the United States. It's unlikely that at any time it was ever US policy to increase its dependence on imported energy resources," he said.

At the same time, the boost in shale oil production may reach up to 400,000 barrels a day this year, according to Novak.

"It's clear that we are all assessing the situation in a sober fashion, we understand that there will be a rise in the production of shale oil. Again I want to say that we need to look at the situation as a whole throughout the world," the energy minister concluded.

[Mar 03, 2017] Western Interests Aim To Flummox Russia

Mar 03, 2017 | www.unz.com
An article by Robert Berke in oilprice.com, which describes itself as "The No. 1 Source for Oil & Energy News," illustrates how interest groups control outcomes by how they shape policy choices.

Berke's article reveals how the US intends to maintain and extend its hegemony by breaking up the alliance between Russia, Iran, and China, and by oil privatizations that result in countries losing control over their sovereignty to private oil companies that work closely with the US government. As Trump has neutered his presidency by gratuitously accepting Gen. Flynn's resignation as National Security Advisor, this scheme is likely to be Trump's approach to "better relations" with Russia.

Berke reports that Henry Kissinger has sold President Trump on a scheme to use the removal of Russian sanctions to pry President Putin away from the Russian alliance with Iran and China. Should Putin fall for such a scheme, it would be a fatal strategic blunder from which Russia could not recover. Yet, Putin will be pressured to make this blunder.

One pressure on Putin comes from the Atlanticist Integrationists who have a material stake in their connections to the West and who want Russia to be integrated into the Western world. Another pressure comes from the affront that sanctions represent to Russians. Removing this insult has become important to Russians even though the sanctions do Russia no material harm.

We agree with President Putin that the sanctions are in fact a benefit to Russia as they have moved Russia in self-sufficient directions and toward developing relationships with China and Asia. Moreover, the West with its hegemonic impulses uses economic relationships for control purposes. Trade with China and Asia does not pose the same threat to Russian independence.

Berke says that part of the deal being offered to Putin is "increased access to the huge European energy market, restored western financial credit, access to Western technology, and a seat at the global decision-making table, all of which Russia badly needs and wants." Sweetening the honey trap is official recognization of "Crimea as part of Russia."

Russia might want all of this, but it is nonsense that Russia needs any of it.

Crimea is part of Russia, as it has been for 300 years, and no one can do anything about it. What would it mean if Mexico did not recognize that Texas and California were part of the US? Nothing.

Europe has scant alternatives to Russian energy.

Russia does not need Western technology. Indeed, its military technology is superior to that in the West.

And Russia most certainly does not need Western loans. Indeed, it would be an act of insanity to accept them.

It is a self-serving Western myth that Russia needs foreign loans. This myth is enshrined in neoliberal economics, which is a device for Western exploitation and control of other countries. Russia's most dangerous threat is the country's neoliberal economists.

The Russian central bank has convinced the Russian government that it would be inflationary to finance Russian development projects with the issuance of central bank credit. Foreign loans are essential, claims the central bank.

Someone needs to teach the Russian central bank basic economics before Russia is turned into another Western vassal. Here is the lesson: When central bank credit is used to finance development projects, the supply of rubles increases but so does output from the projects. Thus, goods and services rise with the supply of rubles. When Russia borrows foreign currencies from abroad, the money supply also increases, but so does the foreign debt. Russia does not spend the foreign currencies on the project but puts them into its foreign exchange reserves. The central bank issues the same amount of rubles to pay the project's bills as it would in the absence of the foreign loan. All the foreign loan does is to present Russia with an interest payment to a foreign creditor.

Foreign capital is not important to countries such as Russia and China. Both countries are perfectly capable of financing their own development. Indeed, China is the world's largest creditor nation. Foreign loans are only important to countries that lack the internal resources for development and have to purchase the business know-how, techlology, and resources abroad with foreign currencies that their exports are insufficient to bring in.

This is not the case with Russia, which has large endowments of resources and a trade surplus. China's development was given a boost by US corporations that moved their production for the US market offshore in order to pocket the difference in labor and regulatory costs.

Neoliberals argue that Russia needs privatization in order to cover its budget deficit. Russia's government debt is only 17 percent of Russian GDP. According to official measures, US federal debt is 104 percent of GDP, 6.1 times higher than in Russia. If US federal debt is measured in real corrected terms, US federal debt is 185 percent of US GDP. http://www.paulcraigroberts.org/2014/07/08/deteriorating-economic-outlook/

Clearly, if the massive debt of the US government is not a problem, the tiny debt of Russia is not a problem.

Berke's article is part of the effort to scam Russia by convincing the Russian government that its prosperity depends on unfavorable deals with the West. As Russia's neoliberal economists believe this, the scam has a chance of success.

Another delusion affecting the Russian government is the belief that privatization brings in capital. This delusion caused the Russian government to turn over 20 percent of its oil company to foreign ownership. The only thing Russia achieved by this strategic blunder was to deliver 20 percent of its oil profits into foreign hands. For a one-time payment, Russia gave away 20 percent of its oil profits in perpetuity.

To repeat outselves, the greatest threat that Russia faces is not sanctions but the incompetence of its neoliberal economists who have been throughly brainwashed to serve US interests.

Mao Cheng Ji , February 14, 2017 at 6:55 pm GMT \n

100 Words

When Russia borrows foreign currencies from abroad, the money supply also increases, but so does the foreign debt. Russia does not spend the foreign currencies on the project but puts them into its foreign exchange reserves. The central bank issues the same amount of rubles to pay the project's bills as it would in the absence of the foreign loan. All the foreign loan does is to present Russia with an interest payment to a foreign creditor.

Yes, correct. But this is an IMF rule, and Russia is an IMF member. To control its monetary policy it would have to get out.

Lyttenburgh , February 14, 2017 at 6:57 pm GMT \n
200 Words

Another pressure comes from the affront that sanctions represent to Russians. Removing this insult has become important to Russians even though the sanctions do Russia no material harm.

Oh dear, neolibs at their "finest"!

This "theory" is simply not true. If anything, Russians don't want the sanctions to be lifted, because this will also force us to scrap our counter-sanctions against the EU. The agro-business in Russia had been expanding by leaps and bounds for the last two years. This persistent myth that "the Russians" (who exactly, I wonder – 2-3% of the pro-Western urbanites in Moscow and St. Pete?) are desperate to have the sanctons lifted is a self-deception of the West, who IS desparate of the fact that the sanctions didn't work.

Russia's most dangerous threat is the country's neoliberal economists.

Yes! Ulyukayev is, probably, feeling lonely in his prison. I say – why not send Chubais, Siluanov and Nabiulina to cheer him up?

WorkingClass , February 14, 2017 at 7:59 pm GMT \n

Berke reports that Henry Kissinger has sold President Trump on a scheme to use the removal of Russian sanctions to pry President Putin away from the Russian alliance with Iran and China.

Kissinger, like Dick Cheney or George Soros, will probably never be completely dead.

SmoothieX12 , Website February 14, 2017 at 8:56 pm GMT \n
@WorkingClass

Berke reports that Henry Kissinger has sold President Trump on a scheme to use the removal of Russian sanctions to pry President Putin away from the Russian alliance with Iran and China.
Kissinger, like Dick Cheney or George Soros, will probably never be completely dead.

LOL! True. You forgot McCain, though.

SmoothieX12 , Website February 14, 2017 at 9:04 pm GMT \n
100 Words @Lyttenburgh

Another pressure comes from the affront that sanctions represent to Russians. Removing this insult has become important to Russians even though the sanctions do Russia no material harm.
Oh dear, neolibs at their "finest"!

This "theory" is simply not true. If anything, Russians don't want the sanctions to be lifted, because this will also force us to scrap our counter-sanctions against the EU. The agro-business in Russia had been expanding by leaps and bounds for the last two years. This persistent myth that "the Russians" (who exactly, I wonder - 2-3% of the pro-Western urbanites in Moscow and St. Pete?) are desperate to have the sanctons lifted is a self-deception of the West, who IS desparate of the fact that the sanctions didn't work.


Russia's most dangerous threat is the country's neoliberal economists.
Yes! Ulyukayev is, probably, feeling lonely in his prison. I say - why not send Chubais, Siluanov and Nabiulina to cheer him up? ;)

I say – why not send Chubais, Siluanov and Nabiulina to cheer him up?

Most of Russia's economic block has to be literally purged from their sinecures, some, indeed, have to be "re-educated" near Magadan or Tyumen, or Saransk. Too bad, two of these places are actually not too bad. Others deserved to be executed. Too bad this jackass Gaidar (actually no blood relation to Arkady whatsoever) died before he could be tried for crimes against humanity and genocide. Albeit, some say he died because of his consciousness couldn't take the burden. Looking at his swine face I, somehow, doubt it.

Priss Factor , February 14, 2017 at 10:38 pm GMT \n
100 Words

A silver-lining to this.

If the US continues to antagonize Russia, Russia will have to grow even more independent, nationalist, and sovereign.

At any rate, this issue cannot be addressed until we face that the fact that globalism is essentially Jewish Supremacism that fears gentile nationalism as a barrier to its penetration and domination.

This is not a US vs Russia issue. The real conflict is Jewish Globalism vs Russian nationalism and American nationalism. But since Jews control the media, they've spread the impression that it's about US vs Russia.

Same thing with this crap about 'white privilege'. It is a misleading concept to fool Americans into thinking that the main conflict is between 'privileged whites' and 'people of color'. It is really to hide the fact that Jewish power and privilege really rules the US. It is a means to hoodwink people from noticing that the real divide is between Jews and Gentiles, not between 'privileged whites' and 'non-white victims'. After all, too many whites lack privilege, and too many non-whites do very well in America.

Seamus Padraig , February 14, 2017 at 11:29 pm GMT \n
100 Words @SmoothieX12

I say – why not send Chubais, Siluanov and Nabiulina to cheer him up?
Most of Russia's economic block has to be literally purged from their sinecures, some, indeed, have to be "re-educated" near Magadan or Tyumen, or Saransk. Too bad, two of these places are actually not too bad. Others deserved to be executed. Too bad this jackass Gaidar (actually no blood relation to Arkady whatsoever) died before he could be tried for crimes against humanity and genocide. Albeit, some say he died because of his consciousness couldn't take the burden. Looking at his swine face I, somehow, doubt it.

I'm generally a big fan and admirer of Putin, but this is definitely one criticism of him that I have a lot of sympathy for. It is long past time for Putin to purge the neoliberals from the Kremlin and nationalize the Russian Central Bank. I cannot fathom why he hasn't done this already.

Seamus Padraig , February 14, 2017 at 11:34 pm GMT \n

Does PCR really think that Putin is stupid enough to fall for Kissinger's hair-brained scheme? I mean, give Putin a little bit of credit. He has so far completely outmaneuvered Washington on virtually ever subject. I'm sure he's clever enough to see through such a crude divide-and-rule strategy.

anonymous , February 15, 2017 at 4:17 am GMT \n
100 Words

The Russians can't be flummoxed, they aren't children. Russia and China border each other so they have a natural mutual interest in having their east-west areas be stable and safe, particularly when the US threatens both of them. This geography isn't going to change. Abandoning clients such as Syria and Iran would irreversibly damage the Russian brand as being unreliable therefore they'd find it impossible to attract any others in the future. They know this so it's unlikely they would be so rash as to snap at any bait dangled in front of them. And, as pointed out, the bait really isn't all that irresistible. It's always best to negotiate from a position of strength and they realize that. American policy deep thinkers are often fantasists who bank upon their chess opponents making hoped-for predictable moves. That doesn't happen in real life.

SmoothieX12 , Website February 15, 2017 at 2:29 pm GMT \n
400 Words @Seamus Padraig I'm generally a big fan and admirer of Putin, but this is definitely one criticism of him that I have a lot of sympathy for. It is long past time for Putin to purge the neoliberals from the Kremlin and nationalize the Russian Central Bank. I cannot fathom why he hasn't done this already.

I cannot fathom why he hasn't done this already.

Partially, because Putin himself is an economic liberal and, to a degree, monetarist, albeit less rigid than his economic block. The good choices he made often were opposite to his views. As he himself admitted that Russia's geopolitical vector changed with NATO's aggression against Yugoslavia–a strengthening of Russia has become an imperative. This comeback was impossible within the largely "Western" monetarist economic model. Russia's comeback happened not thanks but despite Putin's economic views, Putin adjusted his views in the process, his economic block didn't. But many of them still remain his friends, despite the fact that many of them are de facto fifth column and work against Russia, intentionally and other wise. Eventually Putin will be forced to get down from his fence and take the position of industrialists and siloviki. Putin's present for Medvedev's birthday was a good hint on where he is standing economically today and I am beginning to like that but still–I personally am not convinced yet. We'll see. In many respects Putin was lucky and specifically because of the namely Soviet military and industry captains still being around–people who, unlike Putin, knew exactly what constituted Russia's strength. Enough to mention late Evgeny Primakov. Let's not forget that despite Putin's meteoric rise through the top levels of Russia's state bureaucracy, including his tenure as a Director of FSB, Putin's background is not really military-industrial. He is a lawyer, even if uniformed (KGB) part of his career. I know for a fact that initially (early 2000s) he was overwhelmed with the complexity of Russia's military and industry. Enough to mention his creature Serdyukov who almost destroyed Command and Control structure of Russia's Armed Forces and main ideologue behind Russia's military "reform", late Vitaly Shlykov who might have been a great GRU spy (and economist by trade) but who never served a day in combat units. Thankfully, the "reforms" have been stopped and Russian Armed Forces are still dealing with the consequences. This whole clusterfvck was of Putin's own creation–hardly a good record on his resume. Hopefully, he learned.

Vlad , February 17, 2017 at 8:44 am GMT \n
100 Words @Seamus Padraig I'm generally a big fan and admirer of Putin, but this is definitely one criticism of him that I have a lot of sympathy for. It is long past time for Putin to purge the neoliberals from the Kremlin and nationalize the Russian Central Bank. I cannot fathom why he hasn't done this already.

He has not done it already because he just cannot let go of his dream to have it as he did in 2003, when Russia Germany and France together blocked legality of US war in Iraq. Putin still hopes for a good working relationship with major West European powers. Italy France and even Germany. He still hopes to draw them away from the US. However the obvious gains from Import substitution campaign make it apparent that Russia does benefit from sanctions, that Russia can get anything it wants in technology from the East rather than the West. So the break with Western orientation is in the making. Hopefully.

annamaria , February 17, 2017 at 3:50 pm GMT \n
100 Words

You forgot to mention the "moderate" jihadis, including the operatives from NATO, Israel, and US. (It seems that the Ukrainian "patriots" that have been bombing the civilians in East Ukraine, also include special "patriots" from the same unholy trinity: https://www.roguemoney.net/stories/2016/12/6/there-are-troops-jack-us-army-donbass ). There has been also a certain asymmetry in means: look at the map for the number and location of the US/NATO military bases. At least we can see that RF has been trying to avoid the hot phase of WWIII. http://russia-insider.com/sites/insider/files/NATO-vs-Russia640.jpg

annamaria , February 17, 2017 at 4:11 pm GMT \n
200 Words @Priss Factor A silver-lining to this.

If the US continues to antagonize Russia, Russia will have to grow even more independent, nationalist, and sovereign.

At any rate, this issue cannot be addressed until we face that the fact that globalism is essentially Jewish Supremacism that fears gentile nationalism as a barrier to its penetration and domination.

This is not a US vs Russia issue. The real conflict is Jewish Globalism vs Russian nationalism and American nationalism. But since Jews control the media, they've spread the impression that it's about US vs Russia.

Same thing with this crap about 'white privilege'. It is a misleading concept to fool Americans into thinking that the main conflict is between 'privileged whites' and 'people of color'. It is really to hide the fact that Jewish power and privilege really rules the US. It is a means to hoodwink people from noticing that the real divide is between Jews and Gentiles, not between 'privileged whites' and 'non-white victims'. After all, too many whites lack privilege, and too many non-whites do very well in America.

On the power and privilege that really rule the US:
"Sanctions – economic sanctions, as most of them are, can only stand and 'succeed', as long as countries, who oppose Washington's dictate remain bound into the western, dollar-based, fraudulent monetary scheme. The system is entirely privatized by a small Zionist-led elite. FED, Wall Street, Bank for International Settlement (BIS), are all private institutions, largely controlled by the Rothschild, Rockefeller, Morgan et al clans. They are also supported by the Breton Woods Organizations, IMF and World Bank, conveniently created under the Charter of the UN.
Few progressive economists understand how this debt-based pyramid scam is manipulating the entire western economic system. When in a just world, it should be just the contrary, the economy that shapes, designs and decides the functioning of the monetary system and policy.
Even Russia, with Atlantists still largely commanding the central bank and much of the financial system, isn't fully detached from the dollar dominion – yet."

http://thesaker.is/venezuela-washingtons-latest-defamation-to-bring-nato-to-south-america/

Anon , February 17, 2017 at 4:55 pm GMT \n
100 Words

"I cannot fathom why he hasn't done this (nationalize the "central bank) already".

I read about a rumor a few years ago that Putin has been warned that nationalizing the now private Russian central bank will bring absolutely dire consequences to both him and Russia. It is simply a step he cannot take.

How dire are the potential consequences? Consider that the refusal of the American government to reauthorize the private central bank in the US brought about the War of 1812. The Americans learned their lesson and quickly reauthorized the private bank after the war had ended.

Numerous attempts were made to assassinate President Andrew Jacksons specifically because of his refusal to reauthorize the private central bank.

JFK anyone?

Agent76 , February 17, 2017 at 6:07 pm GMT \n
100 Words

Here it is in audio form so you can just relax and just listen at your leisure.

*ALL WARS ARE BANKERS' WARS* By Michael Rivero https://youtu.be/WN0Y3HRiuxo

I know many people have a great deal of difficulty comprehending just how many wars are started for no other purpose than to force private central banks onto nations, so let me share a few examples, so that you understand why the US Government is mired in so many wars against so many foreign nations. There is ample precedent for this.

Priss Factor , February 17, 2017 at 7:31 pm GMT \n
1,000 Words

Here is proof that there is no real Leftist power anymore.

Voltaire once said, "To learn who rules over you, simply find out who you are not allowed to criticize."

If the Left really rules America, how come it is fair game to criticize, condemn, mock, and vilify Marx, Lenin, Trotsky, Stalin, Bakunin, Emma Goldman & anarchists, Castro, Che(even though he is revered by many, one's career isn't damaged by attacking him), Tito, Ceucescu, Mao, Ho Chi Minh, Gramsci, Eurgene Debs, Pete Seeger, Abbie Hoffman, Bill Ayers, and etc.

You can say whatever you want about such people. Some will agree, some will disagree, but you will not be fired, blacklisted, or destroyed.

If the Left really rules, why would this be?

Now, what would happen if you name the Jewish Capitalists as the real holders of power?
What would happen if you name the Jewish oligarchic corporatists who control most of media?
What would happen if you said Jews are prominent in the vice industry of gambling?
What would happen if you named the Jewish capitalists in music industry that made so much money by spreading garbage?
What would happen if you said Jewish warhawks were largely responsible for the disasters in Iraq, Libya, Syria, and Ukraine?
And what would happen if you were question the MLK mythology and cult?
What would happen if you were to make fun of homos and trannies?
Now, keep in mind that blacks and homos are favored by Jews as their main allies.
(Some say the US is not a pro-minority nation, but it's still permissible to criticize, impugn, and vilify Chinese, Iranians, Muslims, Mexicans, Hindus, and etc. Trump was hard on China, Iran, Muslims, and Mexicans, and he got some flak over it but not enough to destroy him. Now, imagine what would have happened if he'd said such things about blacks, Africa, homos, Jews, and Israel? American politics isn't necessarily pro-minority. If it is, it should favor Palestinian-Americans just as much as Jewish-Americans. Actually, since there are fewer Palestinian-Americans than Jewish-Americans, the US, being pro-minority, should favor Palestinians over Jews in America. In reality, it is AIPAC that draws all the politicians. America is about Pro-Power, and since Jews have the Power and since Jews are a minority, it creates the false impression that the US is a minority-supremacist nation. But WHICH minority? Jews would like for us think that all minorities are represented equally in the US, but do Eskimos, Hawaiians, Guatemalans, Vietnamese, and etc. have the kind of power & protection that the Jewish minority has? Do we see politicians and powerbrokers flock to such minorities for funds and favors?)

So, what does it about the real power in America? So many 'conservatives' say the Left controls America. But in fact, an American can badmouth all true bonafide leftist leaders and thinkers(everyone from Lenin to Sartre). However, if an American were to badmouth Sheldon Adelson as a sick demented Zionist capitalist oligarch who wants to nuke Iran, he would be blacklisted by the most of the media. (If one must criticize Adelson, it has to be in generic terms of him a top donor to the likes of Romney. One mustn't discuss his zealous and maniacal views rooted in Zionist-supremacism. You can criticize his money but not the mentality that determines the use of that money.) Isn't it rather amusing how the so-called Liberals denounce the GOP for being 'extreme' but overlook the main reason for such extremism? It's because the GOP relies on Zionist lunatics like Adelson who thinks Iran should be nuked to be taught a lesson. Even Liberal Media overlook this fact. Also, it's interesting that the Liberal Media are more outraged by Trump's peace offer to Russia than Trump's hawkish rhetoric toward Iran. I thought Liberals were the Doves.

We know why politics and media work like this. It's not about 'left' vs 'right' or 'liberal' vs 'conservative'. It is really about Jewish Globalist Dominance. Jews, neocon 'right' or globo-'left', hate Russia because its brand of white gentile nationalism is an obstacle to Jewish supremacist domination. Now, Current Russia is nice to Jews, and Jews can make all the money they want. But that isn't enough for Jews. Jews want total control of media, government, narrative, everything. If Jews say Russia must have homo parades and 'gay marriage', Russia better bend over because its saying NO means that it is defiant to the Jewish supremacist agenda of using homomania as proxy to undermine and destroy all gentile nationalism rooted in identity and moral righteousness.
Russia doesn't allow that, and that is what pisses off Jews. For Jews, the New Antisemitism is defined as denying them the supremacist 'right' to control other nations. Classic antisemitism used to mean denying Jews equal rights under the law. The New Antisemitism means Jews are denied the right to gain dominance over others and dictate terms.
So, that is why Jews hate any idea of good relations with Russia. But Jews don't mind Trump's irresponsible anti-Iran rhetoric since it serves Zionist interest. So, if Trump were to say, "We shouldn't go to war with Russia; we should be friends" and "We should get ready to bomb, destroy, and even nuke Iran", the 'liberal' media would be more alarmed by the Peace-with-Russia statement. Which groups controls the media? 'Liberals', really? Do Muslim 'liberals' agree with Jewish 'liberals'?

Anyway, we need to do away with the fiction that Left rules anything. They don't. We have Jewish Supremacist rule hiding behind the label of the 'Left'. But the US is a nation where it's totally permissible to attack real leftist ideas and leaders but suicidal if anyone dares to discuss the power of super-capitalist Jewish oligarchs. Some 'leftism'!

We need to discuss the power of the Glob.

annamaria , February 17, 2017 at 9:42 pm GMT \n
300 Words @Quartermaster Trump has not been neutered. Buchanan has the right on this and Flynn's actions.

Sorry, but Crimea is Ukraine. Russia is in serious economic decline and is rapidly burning through its reserves. Putin is almost down to the welfare fund from which pensions are paid, and only about a third of pensions are being paid now.

If Sanctions are of benefit to Russia, then the sanctions against Imperial Japan were just ducky and no war was fought.

Roberts is the next best thing to insane.

This is rich from a Ukrainian nationalist ruled by Groysman/Kagans.
First, figure out who is your saint, a collaborationist Bandera (Babiy Yar and such) or a triple-sitizenship Kolomojski (auto-da-fe of civilians in Odessa). If you still want to bring Holodomor to a discussion, then you need to be reminded that 80% of Ukrainian Cheka at that time were Jewish. If you still think that Russians are the root of all evil, then try to ask the US for more money for pensions, education, and healthcare – instead of weaponry. Here are the glorious results of the US-approved governance from Kiev: http://gnnliberia.com/2017/02/17/liberia-ahead-ukraine-index-economic-freedom-2017/ "Liberia, Chad, Afghanistan, Sudan and Angola are ahead of Ukraine. All these countries are in the group of repressed economies (49.9-40 scores). Ukraine's economy has contracted deeply and remains very fragile."

Here are your relationships with your neighbors on the other side – Poland and Romania:
"The right-winged conservative orientation of Warsaw makes it remember old Polish-Ukrainian arguments and scores, and claim its rights on the historically Polish lands of Western Ukraine" http://www.veteranstoday.com/2016/01/17/poland-will-begin-dividing-ukraine/
" the "Assembly of Bukovina Romanians" has recently applied to Petro Poroshenko demanding a territorial autonomy to the Chernivtsi region densely populated by Romanians. The "Assembly" motivated its demand with the Ukrainian president's abovementioned statement urging territorial autonomy for the Crimean Tatars." https://eadaily.com/en/news/2016/06/30/what-is-behind-romanias-activity-in-ukraine
And please read some history books about Crimea. Or at least Wikipedia:
"In 1783, Crimea was annexed by the Russian Empire. In 1954, the Crimean Oblast was transferred to the Ukrainian Soviet Socialist Republic by Nikita Khrushchev (a Soviet dictator). In 2014, a 96.77 percent of Crimeans voted for integration of the region into the Russian Federation with an 83.1 percent voter turnout." You see, the Crimeans do not like Nuland-Kagan and Pravyj Sector. Do you know why?

Astuteobservor II , February 17, 2017 at 9:56 pm GMT \n
100 Words @Seamus Padraig Does PCR really think that Putin is stupid enough to fall for Kissinger's hair-brained scheme? I mean, give Putin a little bit of credit. He has so far completely outmaneuvered Washington on virtually ever subject. I'm sure he's clever enough to see through such a crude divide-and-rule strategy.

well it depends. if putin is just out for himself, I can see him getting in bed with kissinger and co. if he is about russia, he would not. that is how I see it. it isn't about if putin is smart or stupid. just a choice and where his royalty lies.

Lyttenburgh , February 17, 2017 at 9:58 pm GMT \n
100 Words @Quartermaster Trump has not been neutered. Buchanan has the right on this and Flynn's actions.

Sorry, but Crimea is Ukraine. Russia is in serious economic decline and is rapidly burning through its reserves. Putin is almost down to the welfare fund from which pensions are paid, and only about a third of pensions are being paid now.

If Sanctions are of benefit to Russia, then the sanctions against Imperial Japan were just ducky and no war was fought.

Roberts is the next best thing to insane.

Sorry, but Crimea is Ukraine.

How so? #Krymnash

Russia is in serious economic decline and is rapidly burning through its reserves.

If by "decline" you mean "expects this year a modest growth as opposed to previous years" then you might be right.

I've been reading about Russia's imminent collapse and the annihilation of the economy since forever. Some no-names like you (or some Big Names with agenda) had been predicting it every year. Still didn't happen.

Putin is almost down to the welfare fund from which pensions are paid, and only about a third of pensions are being paid now.

Can I see a source for that?

If Sanctions are of benefit to Russia, then the sanctions against Imperial Japan were just ducky and no war was fought.

False equivalence.

P.S. Hey, Quart – how is Bezviz? Also – are you not cold here? Or are you one of the most racally pure Ukrs, currently residing in Ontario province (Canada), from whence you teach your less lucky raguls in Nizalezhnaya how to be more racially pure? Well, SUGS to be you!

bluedog , February 17, 2017 at 10:03 pm GMT \n
@Quartermaster Trump has not been neutered. Buchanan has the right on this and Flynn's actions.

Sorry, but Crimea is Ukraine. Russia is in serious economic decline and is rapidly burning through its reserves. Putin is almost down to the welfare fund from which pensions are paid, and only about a third of pensions are being paid now.

If Sanctions are of benefit to Russia, then the sanctions against Imperial Japan were just ducky and no war was fought.

Roberts is the next best thing to insane.

Do you have any links to verify this that Russia is down to bedrock,from everything I read and have read Russia's do pretty damn good, or is this just some more of your endless antiRussian propaganda,,

Philip Owen , February 17, 2017 at 10:54 pm GMT \n

The US needed huge amounts of British and French capital to develop. Russia has the same requirement otherwise it will be another Argentina.

annamaria , February 17, 2017 at 11:00 pm GMT \n
500 Words

A scandal of a EU member Poland: http://thesaker.is/zmiana-piskorski-and-the-case-for-polish-liberation/
Two days after he [Piskorski] publicly warned that US-NATO troops now have a mandate to suppress Polish dissent on the grounds of combatting "Russian hybrid war," he was snatched up by armed agents of Poland's Internal Security Agency while taking his children to school on May 18th, 2016. He was promptly imprisoned in Warsaw, where he remains with no formal charges to this day."

With the Poland's entry into EU, "Poland did not "regain" sovereignty, much less justice, but forfeited such to the Atlanticist project Poland has been de-industrialized, and thus deprived of the capacity to pursue independent and effective social and economic policies Now, with the deployment of thousands of US-NATO troops, tanks, and missile systems on its soil and the Polish government's relinquishment of jurisdiction over foreign armed forces on its territory, Poland is de facto under occupation. This occupation is not a mere taxation on Poland's national budget – it is an undeniable liquidation of sovereignty and inevitably turns the country into a direct target and battlefield in the US' provocative war on Russia."

" it's not the Russians who are going to occupy us now – they left here voluntarily 24 years ago. It's not the Russians that have ravaged Polish industry since 1989. It's not the Russians that have stifled Poles with usurious debt. Finally, it's not the Russians that are responsible for the fact that we have become the easternmost aircraft carrier of the United States anchored in Europe. We ourselves, who failed by allowing such traitors into power, are to blame for this."

More from a comment section: "Donald Tusk, who is now President of the European Council, whose grandfather, Josef Tusk, served in Hitler's Wehrmacht, has consistently demanded that the Kiev regime imposed by the US and EU deal with the Donbass people brutally, "as with terrorists". While the Polish special services were training the future participants of the Maidan operations and the ethnic cleansing of the Donbass, the Polish Ministry of Foreign Affairs made this official statement (02-02-2014): "We support the hard line taken by the Right Sector The radical actions of the Right Sector and other militant groups of demonstrators and the use of force by protesters are justified The Right Sector has taken full responsibility for all the acts of violence during the recent protests. This is an honest position, and we respect it. The politicians have failed at their peacekeeping function. This means that the only acceptable option is the radical actions of the Right Sector. There is no other alternative".

In short, the US has been the most active enabler of the neo-Nazi movement in Europe. Mrs. Clinton seemingly did not get a memo about who is "new Hitler."

Chuck Orloski , February 17, 2017 at 11:17 pm GMT \n
100 Words

Scranton calling Mssrs. Roberts and Hudson:

Do you happen to know anything about western financial giants' influence upon Russia's "Atlanticist Integrationists"?

It's low hanging fruit for me to take a pick, but I am thinking The Goldman Sachs Group is well ensconced among Russian "Atlanticist Integrationists."

You guys are top seeded pros at uncovering Deep State-banker secrets. In contrast, I drive school bus and I struggle to even balance the family Wells Fargo debit card!

However, since our US Congress has anointed a seasoned G.S.G. veteran, Steve Mnuchin, as the administration's Treasury Secretary, he has become my favorite "Person of Interest" who I suspect spouts a Ural Mountain-level say as to how "Atlanticist Integrationists" operate.

Speaking very respectfully, I hope my question does not get "flummoxed" into resource rich Siberia.

Thank you very much!

Bobzilla , February 17, 2017 at 11:46 pm GMT \n
@WorkingClass

Berke reports that Henry Kissinger has sold President Trump on a scheme to use the removal of Russian sanctions to pry President Putin away from the Russian alliance with Iran and China.
Kissinger, like Dick Cheney or George Soros, will probably never be completely dead.

Kissinger, like Dick Cheney or George Soros, will probably never be completely dead

.

Most likely the Spirit of Anti-Christ keeping them alive to do his bidding.

Bill Jones , February 18, 2017 at 12:39 am GMT \n
@Priss Factor Here is proof that there is no real Leftist power anymore.

Voltaire once said, "To learn who rules over you, simply find out who you are not allowed to criticize."

If the Left really rules America, how come it is fair game to criticize, condemn, mock, and vilify Marx, Lenin, Trotsky, Stalin, Bakunin, Emma Goldman & anarchists, Castro, Che(even though he is revered by many, one's career isn't damaged by attacking him), Tito, Ceucescu, Mao, Ho Chi Minh, Gramsci, Eurgene Debs, Pete Seeger, Abbie Hoffman, Bill Ayers, and etc.

You can say whatever you want about such people. Some will agree, some will disagree, but you will not be fired, blacklisted, or destroyed.

If the Left really rules, why would this be?

Now, what would happen if you name the Jewish Capitalists as the real holders of power?
What would happen if you name the Jewish oligarchic corporatists who control most of media?
What would happen if you said Jews are prominent in the vice industry of gambling?
What would happen if you named the Jewish capitalists in music industry that made so much money by spreading garbage?
What would happen if you said Jewish warhawks were largely responsible for the disasters in Iraq, Libya, Syria, and Ukraine?
And what would happen if you were question the MLK mythology and cult?
What would happen if you were to make fun of homos and trannies?
Now, keep in mind that blacks and homos are favored by Jews as their main allies.
(Some say the US is not a pro-minority nation, but it's still permissible to criticize, impugn, and vilify Chinese, Iranians, Muslims, Mexicans, Hindus, and etc. Trump was hard on China, Iran, Muslims, and Mexicans, and he got some flak over it but not enough to destroy him. Now, imagine what would have happened if he'd said such things about blacks, Africa, homos, Jews, and Israel? American politics isn't necessarily pro-minority. If it is, it should favor Palestinian-Americans just as much as Jewish-Americans. Actually, since there are fewer Palestinian-Americans than Jewish-Americans, the US, being pro-minority, should favor Palestinians over Jews in America. In reality, it is AIPAC that draws all the politicians. America is about Pro-Power, and since Jews have the Power and since Jews are a minority, it creates the false impression that the US is a minority-supremacist nation. But WHICH minority? Jews would like for us think that all minorities are represented equally in the US, but do Eskimos, Hawaiians, Guatemalans, Vietnamese, and etc. have the kind of power & protection that the Jewish minority has? Do we see politicians and powerbrokers flock to such minorities for funds and favors?)

So, what does it about the real power in America? So many 'conservatives' say the Left controls America. But in fact, an American can badmouth all true bonafide leftist leaders and thinkers(everyone from Lenin to Sartre). However, if an American were to badmouth Sheldon Adelson as a sick demented Zionist capitalist oligarch who wants to nuke Iran, he would be blacklisted by the most of the media. (If one must criticize Adelson, it has to be in generic terms of him a top donor to the likes of Romney. One mustn't discuss his zealous and maniacal views rooted in Zionist-supremacism. You can criticize his money but not the mentality that determines the use of that money.) Isn't it rather amusing how the so-called Liberals denounce the GOP for being 'extreme' but overlook the main reason for such extremism? It's because the GOP relies on Zionist lunatics like Adelson who thinks Iran should be nuked to be taught a lesson. Even Liberal Media overlook this fact. Also, it's interesting that the Liberal Media are more outraged by Trump's peace offer to Russia than Trump's hawkish rhetoric toward Iran. I thought Liberals were the Doves.

We know why politics and media work like this. It's not about 'left' vs 'right' or 'liberal' vs 'conservative'. It is really about Jewish Globalist Dominance. Jews, neocon 'right' or globo-'left', hate Russia because its brand of white gentile nationalism is an obstacle to Jewish supremacist domination. Now, Current Russia is nice to Jews, and Jews can make all the money they want. But that isn't enough for Jews. Jews want total control of media, government, narrative, everything. If Jews say Russia must have homo parades and 'gay marriage', Russia better bend over because its saying NO means that it is defiant to the Jewish supremacist agenda of using homomania as proxy to undermine and destroy all gentile nationalism rooted in identity and moral righteousness.
Russia doesn't allow that, and that is what pisses off Jews. For Jews, the New Antisemitism is defined as denying them the supremacist 'right' to control other nations. Classic antisemitism used to mean denying Jews equal rights under the law. The New Antisemitism means Jews are denied the right to gain dominance over others and dictate terms.
So, that is why Jews hate any idea of good relations with Russia. But Jews don't mind Trump's irresponsible anti-Iran rhetoric since it serves Zionist interest. So, if Trump were to say, "We shouldn't go to war with Russia; we should be friends" and "We should get ready to bomb, destroy, and even nuke Iran", the 'liberal' media would be more alarmed by the Peace-with-Russia statement. Which groups controls the media? 'Liberals', really? Do Muslim 'liberals' agree with Jewish 'liberals'?

Anyway, we need to do away with the fiction that Left rules anything. They don't. We have Jewish Supremacist rule hiding behind the label of the 'Left'. But the US is a nation where it's totally permissible to attack real leftist ideas and leaders but suicidal if anyone dares to discuss the power of super-capitalist Jewish oligarchs. Some 'leftism'!

We need to discuss the power of the Glob.

Thanks for the digest of hasbarist crap.

Useful to have it all in one place..

annamaria , February 18, 2017 at 1:03 am GMT \n
100 Words

War profiteers (both of a dishonest character) have found each other: http://www.zerohedge.com/news/2017-02-17/mccain-tells-europe-trump-administration-disarray http://www.zerohedge.com/news/2017-02-17/germany-issues-stark-warning-trump-stop-threatening-eu-favoring-russia
" Trump's administration was in "disarray," McCain told the Munich Security Conference, where earlier in the day Germany defense minister Ursula von der Leyen warned Trump to stop threatening the EU, abandoning Western values and seeking close ties with Russia, that the resignation of the new president's security adviser Michael Flynn over his contacts with Russia reflected deep problems in Washington."

What an amazing whoring performance for the war-manufacturers! And here is an interesting morsel of information about the belligerent Frau der Leyen: http://www.dw.com/en/stanford-accuses-von-der-leyen-of-misrepresentation/a-18775432
"Stanford university has said Ursula von der Leyen is misrepresenting her affiliation with the school. The German defense minister's academic career is already under scrutiny after accusations of plagiarism." No kidding. Some "Ursula von der Leyen' values" indeed.

Anonymous IX , February 18, 2017 at 2:42 am GMT \n
200 Words

I doubt we'll see little change from the Trump administration toward Russia.

From SOTT:

Predictable news coming out of Yemen: Saudi-backed "Southern Resistance" forces and Hadi loyalists, alongside al-Qaeda of the Arabian Peninsula (AQAP), launched a new offensive against the Houthis in western Yemen on Wednesday.

This is not the first time Saudi-backed (and by extension, Washington-backed) forces have teamed up with al-Qaeda in Yemen .

Yemen is quickly becoming the "spark that lights the powder keg". The conflict has already killed, maimed and displaced countless thousands (thanks to the stellar lack of reporting from trustworthy western news sources, we can only estimate the scale of Saudi/U.S. crimes in Yemen), but now it seems that elements of the Trump administration are keen on escalation, likely in hopes of giving Washington an excuse to carpet bomb Tehran.

Apparently, we feel satisfied fighting with our old allies, al-Qaeda and Saudis.

I had hoped for much better from Trump.

Kiza , February 18, 2017 at 4:23 am GMT \n
200 Words

I think that the authors may be underestimating Putin in his determination to keep Russia and the Russian economy independent. For example, I find this rumoured offer of "increased access to the huge European energy market" very funny, for at least two reasons:
1) US wants to sell hydrocarbons (LPG) to the European market at significantly higher prices than the Russian prices, and
2) the current dependence of EU countries on the Russian energy would have never happened if there were better alternatives.

In other words, any detente offer that the West would make to Russia would last, as usual, not even until the signature ink dries on the new cooperation agreements. Putin does not look to me like someone who suffers much from wishful thinking.

The Russian relationship with China is not a bed of roses, but it is not China which is increasing military activity all around Russia, it is the West. Also, so far China has shown no interest in regime-changing Russia and dividing it into pieces. Would you rather believe in the reform capability of an addict in violence or someone who does not need to reform? Would the West self-reform and sincerely renounce violence just by signing a new agreement with Russia?

The new faux detente will never happen, as long as Putin is alive.

Max Havelaar , February 18, 2017 at 8:22 pm GMT \n
200 Words

Trump is an ultra-zionist for Sheldon Adelson and prolongs & creates wars for the Goldman banking crimesyndicat.

The only one stopping Trump is Putin or Russia's missile defenses.

Indeed, Putin's main inside ennemy is Russia's central bank, or the Jewish oligarchs in Russia (Atlanticists). Also Russia needs to foster and encourage small&medium enterprises, that need cheap credit, to create competitive markets, where no prices are fixed and market shares change. These are most efficient resource users.

In the US, Wallstreet controlls government = fascism = the IG Farben- Auschwitz concentration camps to maximize profits. This is the direction for the US economy.

Meanwhile in the EU, the former Auschwitz owners IG Farben (Bayer(Monsanto), Hoechst, BASF) the EU chemical giants, who have patented all natures molecules, are in controll again over EU. Deutsche bank et allies is eating Greece, Italy, Spain's working classes, using AUSTERITY as their creed.

So what is new? Nothing, the supercorporate-fascist elites are the same families, who 's morality is unchanged in a 100 years.

Max Havelaar , February 18, 2017 at 8:38 pm GMT \n
@Quartermaster Trump has not been neutered. Buchanan has the right on this and Flynn's actions.

Sorry, but Crimea is Ukraine. Russia is in serious economic decline and is rapidly burning through its reserves. Putin is almost down to the welfare fund from which pensions are paid, and only about a third of pensions are being paid now.

If Sanctions are of benefit to Russia, then the sanctions against Imperial Japan were just ducky and no war was fought.

Roberts is the next best thing to insane.

Do you have any economic degree or are you a shouter?

Anon , February 20, 2017 at 4:28 am GMT \n
100 Words @Priss Factor Here is proof that there is no real Leftist power anymore.

Voltaire once said, "To learn who rules over you, simply find out who you are not allowed to criticize."

If the Left really rules America, how come it is fair game to criticize, condemn, mock, and vilify Marx, Lenin, Trotsky, Stalin, Bakunin, Emma Goldman & anarchists, Castro, Che(even though he is revered by many, one's career isn't damaged by attacking him), Tito, Ceucescu, Mao, Ho Chi Minh, Gramsci, Eurgene Debs, Pete Seeger, Abbie Hoffman, Bill Ayers, and etc.

You can say whatever you want about such people. Some will agree, some will disagree, but you will not be fired, blacklisted, or destroyed.

If the Left really rules, why would this be?

Now, what would happen if you name the Jewish Capitalists as the real holders of power?
What would happen if you name the Jewish oligarchic corporatists who control most of media?
What would happen if you said Jews are prominent in the vice industry of gambling?
What would happen if you named the Jewish capitalists in music industry that made so much money by spreading garbage?
What would happen if you said Jewish warhawks were largely responsible for the disasters in Iraq, Libya, Syria, and Ukraine?
And what would happen if you were question the MLK mythology and cult?
What would happen if you were to make fun of homos and trannies?
Now, keep in mind that blacks and homos are favored by Jews as their main allies.
(Some say the US is not a pro-minority nation, but it's still permissible to criticize, impugn, and vilify Chinese, Iranians, Muslims, Mexicans, Hindus, and etc. Trump was hard on China, Iran, Muslims, and Mexicans, and he got some flak over it but not enough to destroy him. Now, imagine what would have happened if he'd said such things about blacks, Africa, homos, Jews, and Israel? American politics isn't necessarily pro-minority. If it is, it should favor Palestinian-Americans just as much as Jewish-Americans. Actually, since there are fewer Palestinian-Americans than Jewish-Americans, the US, being pro-minority, should favor Palestinians over Jews in America. In reality, it is AIPAC that draws all the politicians. America is about Pro-Power, and since Jews have the Power and since Jews are a minority, it creates the false impression that the US is a minority-supremacist nation. But WHICH minority? Jews would like for us think that all minorities are represented equally in the US, but do Eskimos, Hawaiians, Guatemalans, Vietnamese, and etc. have the kind of power & protection that the Jewish minority has? Do we see politicians and powerbrokers flock to such minorities for funds and favors?)

So, what does it about the real power in America? So many 'conservatives' say the Left controls America. But in fact, an American can badmouth all true bonafide leftist leaders and thinkers(everyone from Lenin to Sartre). However, if an American were to badmouth Sheldon Adelson as a sick demented Zionist capitalist oligarch who wants to nuke Iran, he would be blacklisted by the most of the media. (If one must criticize Adelson, it has to be in generic terms of him a top donor to the likes of Romney. One mustn't discuss his zealous and maniacal views rooted in Zionist-supremacism. You can criticize his money but not the mentality that determines the use of that money.) Isn't it rather amusing how the so-called Liberals denounce the GOP for being 'extreme' but overlook the main reason for such extremism? It's because the GOP relies on Zionist lunatics like Adelson who thinks Iran should be nuked to be taught a lesson. Even Liberal Media overlook this fact. Also, it's interesting that the Liberal Media are more outraged by Trump's peace offer to Russia than Trump's hawkish rhetoric toward Iran. I thought Liberals were the Doves.

We know why politics and media work like this. It's not about 'left' vs 'right' or 'liberal' vs 'conservative'. It is really about Jewish Globalist Dominance. Jews, neocon 'right' or globo-'left', hate Russia because its brand of white gentile nationalism is an obstacle to Jewish supremacist domination. Now, Current Russia is nice to Jews, and Jews can make all the money they want. But that isn't enough for Jews. Jews want total control of media, government, narrative, everything. If Jews say Russia must have homo parades and 'gay marriage', Russia better bend over because its saying NO means that it is defiant to the Jewish supremacist agenda of using homomania as proxy to undermine and destroy all gentile nationalism rooted in identity and moral righteousness.
Russia doesn't allow that, and that is what pisses off Jews. For Jews, the New Antisemitism is defined as denying them the supremacist 'right' to control other nations. Classic antisemitism used to mean denying Jews equal rights under the law. The New Antisemitism means Jews are denied the right to gain dominance over others and dictate terms.
So, that is why Jews hate any idea of good relations with Russia. But Jews don't mind Trump's irresponsible anti-Iran rhetoric since it serves Zionist interest. So, if Trump were to say, "We shouldn't go to war with Russia; we should be friends" and "We should get ready to bomb, destroy, and even nuke Iran", the 'liberal' media would be more alarmed by the Peace-with-Russia statement. Which groups controls the media? 'Liberals', really? Do Muslim 'liberals' agree with Jewish 'liberals'?

Anyway, we need to do away with the fiction that Left rules anything. They don't. We have Jewish Supremacist rule hiding behind the label of the 'Left'. But the US is a nation where it's totally permissible to attack real leftist ideas and leaders but suicidal if anyone dares to discuss the power of super-capitalist Jewish oligarchs. Some 'leftism'!

We need to discuss the power of the Glob.

Voltaire once said, "To learn who rules over you, simply find out who you are not allowed to criticize."

No. Voltaire neither said that nor wrote that.

Kevin Alfred Strom wrote "To determine the true rulers of any society, all you must do is ask yourself this question: Who is it that I am not permitted to criticize?"

Someone paraphrased him and attributed the paraphrase to Voltaire.

NoseytheDuke , February 20, 2017 at 4:51 am GMT \n
100 Words @Max Havelaar Do you have any economic degree or are you a shouter?

Quartermaster is a hack comedian with only one tool in his toolkit, that of reversal. That everything he says is true only when one understands he means the opposite of what he says does it make sense but alas, not in a way that makes for good humour. Comedic tragedy indeed!

Sergey Krieger , February 20, 2017 at 12:20 pm GMT \n
100 Words @Seamus Padraig I'm generally a big fan and admirer of Putin, but this is definitely one criticism of him that I have a lot of sympathy for. It is long past time for Putin to purge the neoliberals from the Kremlin and nationalize the Russian Central Bank. I cannot fathom why he hasn't done this already.

I would really love to like Putin and I am trying but him protecting all those criminals and not reversing the history greatest heist of 90′s makes it impossible. While I am behind all his moves to restore Russian military and foreign policy, I am still waiting for more on home front. Note, not only the Bank must be nationalized. Everything, all industries, factories and other assets privatized by now must be returned to rightful owner. Public which over 70 years through great sacrifice built all of it.

Sergey Krieger , February 20, 2017 at 12:31 pm GMT \n
300 Words @SmoothieX12

I cannot fathom why he hasn't done this already.
Partially, because Putin himself is an economic liberal and, to a degree, monetarist, albeit less rigid than his economic block. The good choices he made often were opposite to his views. As he himself admitted that Russia's geopolitical vector changed with NATO's aggression against Yugoslavia--a strengthening of Russia has become an imperative. This comeback was impossible within the largely "Western" monetarist economic model. Russia's comeback happened not thanks but despite Putin's economic views, Putin adjusted his views in the process, his economic block didn't. But many of them still remain his friends, despite the fact that many of them are de facto fifth column and work against Russia, intentionally and other wise. Eventually Putin will be forced to get down from his fence and take the position of industrialists and siloviki. Putin's present for Medvedev's birthday was a good hint on where he is standing economically today and I am beginning to like that but still--I personally am not convinced yet. We'll see. In many respects Putin was lucky and specifically because of the namely Soviet military and industry captains still being around--people who, unlike Putin, knew exactly what constituted Russia's strength. Enough to mention late Evgeny Primakov. Let's not forget that despite Putin's meteoric rise through the top levels of Russia's state bureaucracy, including his tenure as a Director of FSB, Putin's background is not really military-industrial. He is a lawyer, even if uniformed (KGB) part of his career. I know for a fact that initially (early 2000s) he was overwhelmed with the complexity of Russia's military and industry. Enough to mention his creature Serdyukov who almost destroyed Command and Control structure of Russia's Armed Forces and main ideologue behind Russia's military "reform", late Vitaly Shlykov who might have been a great GRU spy (and economist by trade) but who never served a day in combat units. Thankfully, the "reforms" have been stopped and Russian Armed Forces are still dealing with the consequences. This whole clusterfvck was of Putin's own creation--hardly a good record on his resume. Hopefully, he learned.

Smoothie, you seem to have natural aversion towards lawyers
Albeit, the first Vladimir, I mean Lenin also was a lawyers by education still he was a rather quick study. Remember that military communism and Lenin after one year after Bolsheviks took power telling that state capitalism would be great step forward for Russia whcih obviously was backward and ruined by wars at the time and he proceeded with New Economic Policy and Lenin despite not being industry captain realized pretty well what constituted state power hence GOELRO plans and electrification of all Russia plans and so forth which was later turned by Stalin and his team into reality.
Now, Lenin was ideologically motivated and so is Putin. But he clearly has been trying to achieve different results by keeping same people around him and doing same things. Hopefully it is changing now, but it is so much wasted time when old Vladimir was always repeating that time is of essence and delay is like death knell. Putin imho is away too relax and even vain in some way, hence those shirtless pictures and those on the bike. And the way he walks a la "Я Московский озорной гуляка". As you said it looks like he is protecting those criminals who must be prosecuted and yes, many executed for what they caused.
I suspect in cases when it comes to economical development he is not picking right people for those jobs and it is his major responsibility to assign right people and delegate power properly, not to be forgotten to reverse what constitutes the history greatest heist and crime so called "privatization". Basically returning to more communal society minus Politburo.
There is a huge elephant in the room too. Russia demographic situation which I doubt can be addressed under current liberal order. all states which are in liberal state of affairs fail to basically procreate hence these waves of immigrants brought into all Western Nations. Russia cannot do it. It would be suicide which is what all Western countries are doing right now.

Boris N , February 20, 2017 at 8:58 pm GMT \n
100 Words

Russia does not need Western technology. Indeed, its military technology is superior to that in the West.

You write about Russia but have not done your homework. Russia is very dependent on Western technology and its entire high-tech industry depends on the import of Western machinery. Without such machinery many Russian factories, including military ones, would stall. Very important oil industry is particularly vulnerable.

Some home reading (sorry, they are in Russian, but one ought to know the language if one writes about the country).

http://www.fa.ru/fil/orel/science/Documents/ISA%2014644146.pdf

http://rusrand.ru/analytics/stanki-stanki-stanki

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[Feb 09, 2017] Why the USA target Russia for regime change? Is it because of an impending Seneca cliff in Saudi Arabia?

Feb 09, 2017 | peakoilbarrel.com
VK says: 02/06/2017 at 7:20 am
Why target Russia? Is it because of an impending Seneca cliff in Saudi Arabia? They were supposed to peak 10 years ago but water and nitrogen injections kept them afloat. Now?

https://www.lewrockwell.com/author/jack-perry/?ptype=article

"I've gotten a couple emails from people who have asked me what I think the "end game" is in regards to Russia. And, indeed, the government is going into extra innings with this whole Russia vilification project. This is worse than someone who has held on to a grudge for years. The government does that, too, but they haven't done it over ideology (as with Cuba) for quite some time now. What, then, is the motive?

The motive is perfectly clear: Oil. You see, Russia has already eclipsed Saudi Arabia as the world's biggest oil producer. This means the big Saudi oil fields are drying up. And the government knows that, but they can't tell us this because it'll create a panic. One would think this would motivate the United States to get cozier with Russia. However, what the United States government fears is that if we do that, Russia will twig to the motive for it, and realize it has the United States over a barrel. An oil barrel. At which point the price goes up. Not to mention extracting concessions in the global sphere of influence.

Thus, what the United States is playing at here is trying to install a different "regime" in Russia. That being, one that Vladimir Putin does not control or have any influence over. This is easier said than done and the United States knows this. But the stakes are quite a bit higher than controlling the dwindling oil supply in the Middle East. Russia is obviously in control of most of the world's remaining oil reserves. The United States needs a puppet regime in Russia to have access to that oil without paying the correct market price for it.

At some point, this gambit will fail. Russia is not the Middle East. A war with Russia cannot be won or cease-fired out of. Nor can a United States-backed "regime change" succeed over there. This is not the 1990s Russia of Boris Yeltsin. The United States, however, cannot come clean with the truth to the American people. The reason is because if the American people knew the truth, they'd never sleep nights anymore. The truth is this: Our entire economic system is based on petroleum and low-cost petroleum at that. But the actual nightmare is that our entire agricultural system is based on cheap oil."

George Kaplan says: 02/06/2017 at 2:50 pm
Saudi has had water injection for much longer than ten years on pretty well all it's fields and I don't think they are using nitrogen injection anywhere, there may be some small CO2 EOR projects though. Their production has been maintained by developing three old, heavy oil fields that were mostly dormant (Manifa, Khurais and Shaybah), by using a lot of in-fill drilling and intelligent wells (where water breakthrough can be controlled) on maturing fields and by extensively redeveloping offshore fields with new wellhead platforms and adding artificial lift.

I don't think their fields are anywhere near drying up; they may be hitting some limits in surface facilities – probably to do with water injection or treatment of produced water which means they have to continually choke back so as not to damage the reservoirs.

[Feb 06, 2017] Crazy propaganda from Fedbook, sorry Facebook about Russia oil transportation and discovery

Notable quotes:
"... US and EU sanctions only affect Russian offshore projects in the Arctic and development of Russia's tight oil. If sanctions are lifted, projects with foreign participation in these two areas will be able to produce meaningful quantities of oil not before 2025. But these volumes will not be sufficient to flood the market. ..."
"... Russia is participating in OPEC-non-OPEC supply cuts and certainly is not interested in flooding the market and exerting a downward pressure on prices. ..."
"... The only Russia's offshore Arctic project is Prirazlomnoye field developed by Gazpromneft without foreign participation (already producing oil). ..."
"... In general, even if there were no sanctions, Arctic projects would be developed relatively slowly, due to high costs and environmental issues. Russia's long-term energy program anticipates more or less meaningful volumes of oil production in the Arctic offshore only in the 2030s. ..."
"... Everything in that stuff you wrote is baloney. Russia's Black Sea exports go through Novorossysk and Tuapse. There isn't an oil pipeline going to Crimea. Furthermore, putting an oil loading port in Crimea is nutty (because the oil comes from the East and it makes much more sense to load as far to the East as possible). There used to be some oil loaded in Odessa, but that was never a big deal. ..."
"... Regarding the Exxon deal, that's also baloney. But I don't feel like trying to explain the basics to somebody who picks up information from Facebook. ..."
"... From all that I've read, I would conclude that a "flood of oil" out of Russia is about as likely as a "flood of new fracked oil from shales in the United States, not yet drilled." That is, it's rather low on the probability meter. ..."
"... Why target Russia? Is it because of an impending Seneca cliff in Saudi Arabia? They were supposed to peak 10 years ago but water and nitrogen injections kept them afloat. Now? ..."
"... Thus, what the United States is playing at here is trying to install a different "regime" in Russia. That being, one that Vladimir Putin does not control or have any influence over. This is easier said than done and the United States knows this. But the stakes are quite a bit higher than controlling the dwindling oil supply in the Middle East. Russia is obviously in control of most of the world's remaining oil reserves. The United States needs a puppet regime in Russia to have access to that oil without paying the correct market price for it. ..."
"... At some point, this gambit will fail. Russia is not the Middle East. A war with Russia cannot be won or cease-fired out of. Nor can a United States-backed "regime change" succeed over there. This is not the 1990s Russia of Boris Yeltsin. The United States, however, cannot come clean with the truth to the American people. The reason is because if the American people knew the truth, they'd never sleep nights anymore. The truth is this: Our entire economic system is based on petroleum and low-cost petroleum at that. But the actual nightmare is that our entire agricultural system is based on cheap oil." ..."
Feb 06, 2017 | peakoilbarrel.com
Boomer II says: 02/05/2017 at 3:59 pm
I saw this on Facebook. Can anyone respond?

"Exxon Mobil, under Rex Tillerson, brokered a deal with Russia in 2013 to lease over 60 million acres of Russian land to pump oil out of (which is five times as much land as they lease in the United States), but all that Russian oil would go through pipelines in the Ukraine, who heavily tax the proceeds, and Ukraine was applying for admission into NATO at the time.

Putin subsequently invaded Ukraine in 2014, secured the routes to export the oil tax-free by sea, and took control of the port where their Black Sea Naval Fleet is based, by taking the Crimean peninsula from Ukraine by force. This was Hitler style imperialism that broke every international law in the free world.
After Obama sanctioned Russia for the invasion, Exxon Mobil could only pump oil from approximately 3 of those 60+ million acres. But now Rex Tillerson is soon to be our Secretary of State, and as of today, there's information circulating that Donald Trump will likely unilaterally remove all sanctions against Russia in the coming days or weeks.

The Russian government's oil company, Rosneft, will make half a trillion (500 Billion) dollars from that much untapped oil, all pumped tax-free through Crimea, stolen from Ukraine, now owned by Russia. Putin may have subverted our government just for this deal to go through."
______

Now, a flood of oil on the market from Russia would likely keep US oil prices down, thus hurting US drillers right?

If one is conspiracy-minded, could that be part of the deal, too? Russia uses low oil prices to take down US oil production, and then tries assert itself as one of the countries left standing.

clueless says: 02/05/2017 at 4:53 pm
In about 1780, Catherine the Great and the Ottoman Empire agreed that the Crimea was a part of Russia. [Yes, there was conflict for years prior (as with any other piece of land in the world).] In 1954, in honor of the 300th Anniversary of the Republic of Ukraine being a part of Russia, Nikita Krushchev "gave" the governance of the Crimea to the Republic of Ukraine. It was not constitutional under the Russian constitution. The UN said nothing about it, nor any other international law body. Krushchev later trumped up an approval without even a quorum.

So the Republic of Ukraine seceded from Russia and took the Crimea with it. In the US, when states (republics) seceded [having been states for much less than 100 years, let alone over 300 years] the rest of the states killed as many people as they could until they "agreed to rejoin the union." People might not like it, but the vast majority of people living in the Crimea had ties to mother Russia, and they voted to go back to being governed by Russia. So, Putin accepted. And please, let's not get into an argument about the fairness of elections, unless your candidate wins.

So, what would we do if Obama gave South Carolina to Florida, and then Florida seceded. I guess that the rest of the states would just say "shucks, we lost South Carolina too." Especially if South Carolina had the only warm water port in the US [the Crimea has the only warm water port in Russia]. The rest of the ports are in the North Sea, etc. And, yes, that is a critical military point.

"This was Hitler style imperialism that broke every international law in the free world." That is a pathetic joke! Okay – let's let the US South secede again, since the Cival War broke every international law in the free world and was exactly the same as Hitler's imperialism.

AlexS says: 02/05/2017 at 6:12 pm
clueless, thanks for the answer.

Just one clarification: the ports in Crimea are not the only warm water ports in Russia.
Russia has several other ports in the Black Sea and Azov Sea.
Other ports are in the Baltic Sea, Arctic seas and the Pacific; not in the North Sea

clueless says: 02/06/2017 at 1:59 am
Perhaps I am wrong, but are those other ports large enough and deep enough for military use [which I failed to state clearly]? I beleive that Russia still operated their huge military port in the Crimea even after the Ukraine seceded and prior to Russia taking back the Crimea.
AlexS says: 02/06/2017 at 6:17 am
Sevastopol, the largest port in Crimea, was founded by Catherine the Great as Russia's main military port in the Black Sea.

It had special status when Crimea was part of the Soviet Ukraine, and also when Ukraine became independent. Russia had a long-term arrangement with Ukraine for using Sevastopol.

Russia also has a large military port in Novorossiisk (Russian part of Caucasus); but you are right, Sevastopol is deeper, bigger and more convenient.

Duncan Idaho says: 02/06/2017 at 9:18 am
Also, the Russian State originated in the Ukraine.
See https://en.wikipedia.org/wiki/Rurik_dynasty

Rurik set up rule in Novgorod, giving more provincial towns to his brothers. There is some ambiguity even in the Primary Chronicle about the specifics of the story, "hence their paradoxical statement 'the people of Novgorod are of Varangian stock, for formerly they were Slovenes.'" However, archaeological evidence such as "Frankish swords, a sword chape and a tortoiseshell brooch" in the area suggest that there was, in fact, a Scandinavian population during the tenth century at the latest.[3] The "Rurikid Dynasty DNA Project" of FamilyTreeDNA commercial genetic genealogy company reports that Y-DNA testing of the descendants of Rurikids suggests their non-Slavic origin.

Kiev was the Capital of Russia when Moscow was still a hunting camp

AlexS says: 02/05/2017 at 5:38 pm
Boomer II,

It's your choice to use Facebook as the main source of information on the oil and gas industry, but please don't repost this BS on the oil-dedicated thread.

Exxon Mobil didn't lease any land in Russia. It is the operator of the Sakhalin-1 project in Russia' Far East (very far from Ukraine); and oil produced from this project is exported by sea (Pacific ocean).

Exxon's JV with Rosneft has also found an oil field in Kara Sea (Russian Arctic), but this project was suspended due to the sanctions.

In the past Russia was exporting a small part of its oil by the "Druzhba" ("Friendship") pipeline through Ukraine and was paying normal transporation fee, not taxes.

Now all Russian oil is exported via Russian oil terminals near Novorossiisk (Black Sea) and Ust-Luga and Primorsk (on the Baltic Sea). New transporation routes include East-Siberia – Pacific Ocean (ESPO) oil pipeline linking Russian oil fields in Siberia with the ports on Pacific Ocean and with China's Daking; as well as oil terminals in the Arctic (Varandey).

If US sanctions on Russia are lifted, Rosneft and Exxon will be able to develop their joint project in the Artcic, but oil found there certainly is not worth "half a trillion (500 Billion) dollars', and cannot seriously change the global supply-demand balance.

clueless gave you a good answer on Crimea

BTW, 1) there is no oil terminal in Crimea;
2) Russian oil is taxed in Russia

Boomer II says: 02/05/2017 at 5:59 pm
"It's your choice to use Facebook as the main source of information on the oil and gas industry, but please don't repost this BS on the oil-dedicated thread."

I never use Facebook as a source of information on the oil and gas industry. The topic never comes up among my Facebook friends or my news sources on Facebook. When I want gas and oil info, I use Google to look at legitimate news sources from industry observers.

I just wanted some people's thoughts on that. Your reaction actually tells me a lot about how you think about it.

We've had quite a few discussions here about how politics, both domestic and international, shapes oil production, so I was just inquiring about any insight. I'm rather surprised that you are telling me not to even post a question on the subject. Touchy, maybe?

The relationship between Trump and Russia has triggered some questions, not just among Democrats, but also the GOP. And some people are wondering if there is some tie in about oil.

I just asked, that's all.

AlexS says: 02/05/2017 at 6:31 pm
"some people are wondering if there is some tie in about oil."

The only "tie in" is Exxon's frozen investments in the Pobeda (Victory) field in the Kara Sea. But that's no secret; you can find information on this project on Exxon's and Rosneft's websites and in international business media.

The Sakhalin-1 project is not covered by the sanctions and is being successfully developed.

Boomer II says: 02/05/2017 at 6:08 pm
And basically what I was asking is this? Will a flood of Russian oil affect US oil prices?

If you are playing US politics, do you want to put more foreign oil on the market?

AlexS says: 02/05/2017 at 6:23 pm
"Will a flood of Russian oil affect US oil prices?"

US and EU sanctions only affect Russian offshore projects in the Arctic and development of Russia's tight oil. If sanctions are lifted, projects with foreign participation in these two areas will be able to produce meaningful quantities of oil not before 2025. But these volumes will not be sufficient to flood the market.

Russia is participating in OPEC-non-OPEC supply cuts and certainly is not interested in flooding the market and exerting a downward pressure on prices.

Boomer II says: 02/05/2017 at 8:56 pm
So is it possible that the time frame is so far in the future that it's dead to Exxon even if the sanctions are lifted?
AlexS says: 02/06/2017 at 6:05 am
I think Exxon could re-enter the project if the sanctions are lifted. If sanctions are not lifted for several years, Rosneft will likely develop this field independently, but it would take more time as Rosneft lacks experience in offshore projects.

The only Russia's offshore Arctic project is Prirazlomnoye field developed by Gazpromneft without foreign participation (already producing oil).

In general, even if there were no sanctions, Arctic projects would be developed relatively slowly, due to high costs and environmental issues. Russia's long-term energy program anticipates more or less meaningful volumes of oil production in the Arctic offshore only in the 2030s.

Watcher says: 02/05/2017 at 5:53 pm
Politics aside, it's just factually inaccurate.

"Exxon Mobil, under Rex Tillerson, brokered a deal with Russia in 2013 to lease over 60 million acres of Russian land to pump oil out of (which is five times as much land as they lease in the United States), but all that Russian oil would go through pipelines in the Ukraine"

Almost all pipelines through Ukraine are nat gas. Not oil. There is some minor oil flow. "All" is just profoundly absurd.

Russia's oil output is going to Asia and northern Europe via Transneft lines to Poland and Belarus. Not through Ukraine. Haven't looked for where those Exxon leases are, but I'm pretty sure that's the Rosneft joint venture up around the Arctic.

Nowhere near Ukraine. This is all just completely wrong.

Boomer II says: 02/05/2017 at 6:10 pm
Ok. This response is much more helpful.

Now back to my question about prices. What happens when the sanctions are lifted?

Duncan Idaho says: 02/05/2017 at 6:45 pm
Why, sometimes I've believed as many as six impossible things before breakfast.
– Alice in Wonderland
Survivalist says: 02/06/2017 at 12:56 am
FedBook, er I mean Facebook, is a ghetto of sentimentality. I suggest deleting from it. I joined Facebook once for a very short time and the only thing I learnt from it was that most of my friends are idiots.
Fred Magyar says: 02/06/2017 at 2:01 pm
+10
Duncan Idaho says: 02/06/2017 at 3:06 pm
Also +10
One has to be an idiot to be on Facebook
Fernando Leanme says: 02/06/2017 at 9:36 am
Everything in that stuff you wrote is baloney. Russia's Black Sea exports go through Novorossysk and Tuapse. There isn't an oil pipeline going to Crimea. Furthermore, putting an oil loading port in Crimea is nutty (because the oil comes from the East and it makes much more sense to load as far to the East as possible). There used to be some oil loaded in Odessa, but that was never a big deal.

Regarding the Exxon deal, that's also baloney. But I don't feel like trying to explain the basics to somebody who picks up information from Facebook.

GreenPeople's Media says: 02/06/2017 at 1:14 am
From all that I've read, I would conclude that a "flood of oil" out of Russia is about as likely as a "flood of new fracked oil from shales in the United States, not yet drilled." That is, it's rather low on the probability meter.

Again from what I've read (numerous sources) the Russian oil fields are being extracted just about as heavily as they can be at this time, as are the Saudi fields, again relying on a number of different sources.

Without getting too "tinfoil-hatty" I'd say most of the stories about the global oil markets which promise big bursts of production from (heretofore undisclosed) big new oil fields are in the category of "fake news." These stories serve to boost U.S. consumer confidence and U.S. automobile and light truck sales, but contradict what people in the industry (such as Art Berman, Tadeusz Patzek et al.) are saying about future supply.

VK says: 02/06/2017 at 7:20 am
Why target Russia? Is it because of an impending Seneca cliff in Saudi Arabia? They were supposed to peak 10 years ago but water and nitrogen injections kept them afloat. Now?

https://www.lewrockwell.com/author/jack-perry/?ptype=article

"I've gotten a couple emails from people who have asked me what I think the "end game" is in regards to Russia. And, indeed, the government is going into extra innings with this whole Russia vilification project. This is worse than someone who has held on to a grudge for years. The government does that, too, but they haven't done it over ideology (as with Cuba) for quite some time now. What, then, is the motive?

The motive is perfectly clear: Oil. You see, Russia has already eclipsed Saudi Arabia as the world's biggest oil producer. This means the big Saudi oil fields are drying up. And the government knows that, but they can't tell us this because it'll create a panic. One would think this would motivate the United States to get cozier with Russia. However, what the United States government fears is that if we do that, Russia will twig to the motive for it, and realize it has the United States over a barrel. An oil barrel. At which point the price goes up. Not to mention extracting concessions in the global sphere of influence.

Thus, what the United States is playing at here is trying to install a different "regime" in Russia. That being, one that Vladimir Putin does not control or have any influence over. This is easier said than done and the United States knows this. But the stakes are quite a bit higher than controlling the dwindling oil supply in the Middle East. Russia is obviously in control of most of the world's remaining oil reserves. The United States needs a puppet regime in Russia to have access to that oil without paying the correct market price for it.

At some point, this gambit will fail. Russia is not the Middle East. A war with Russia cannot be won or cease-fired out of. Nor can a United States-backed "regime change" succeed over there. This is not the 1990s Russia of Boris Yeltsin. The United States, however, cannot come clean with the truth to the American people. The reason is because if the American people knew the truth, they'd never sleep nights anymore. The truth is this: Our entire economic system is based on petroleum and low-cost petroleum at that. But the actual nightmare is that our entire agricultural system is based on cheap oil."

George Kaplan says: 02/06/2017 at 2:50 pm
Saudi has had water injection for much longer than ten years on pretty well all it's fields and I don't think they are using nitrogen injection anywhere, there may be some small CO2 EOR projects though. Their production has been maintained by developing three old, heavy oil fields that were mostly dormant (Manifa, Khurais and Shaybah), by using a lot of in-fill drilling and intelligent wells (where water breakthrough can be controlled) on maturing fields and by extensively redeveloping offshore fields with new wellhead platforms and adding artificial lift. I don't think their fields are anywhere near drying up; they may be hitting some limits in surface facilities – probably to do with water injection or treatment of produced water which means they have to continually choke back so as not to damage the reservoirs.

[Jan 08, 2017] Russia oil output in 2016 increased more the two percents

Jan 08, 2017 | peakoilbarrel.com
AlexS says:

01/02/2017 at 8:31 pm
According to preliminary estimate by CDU TEK, statistical unit of Russia's Energy Ministry, the country's C+C production in December was 11.21 mb/d, flat month-on-month and close to post-Soviet record of 11.23 mb/d reached in October. Monthly-average output was more than 400 kb/d (3.7%) higher than in December 2015.

In 2016 in total, output reached 10.96 mb/d, up from 10.71 million in 2015 (+2.3%) and significantly higher that the energy ministry's initial guidance in the beginning of the year (10.75 mb/d).

Russia has pledged to cut output by 300 kb/d from October reference levels, but the energy ministry has said that the reduction would be gradual as production cannot be cut abruptly due to weather and technological conditions.
According to the ministry's guidance, output will be reduced by 50-100 kb/d in January. By the end of March it will be 200 kb/d less the October level; and the target of 10.947 mb/d will not be reached until April or May.

It is interesting that actual monthly-average output in October was 11.230 mb/d (using 7.33 barrels/ton conversion factor) rather than 11.247 mb/d stated by the Ministry as the reference level.

On my estimate based on ministry's guidance, production in 1st half of 2017 should average around 11.06 mb/d, 100 kb/d higher than the average 2016 level, although lower than in the last four months of the year.

OPEC and 11 non-OPEC countries agreed to cut output for a six-months period starting January 1st 2017, and nothing was said if and how this deal will be prolonged for the second half of the year. For 2017 as a whole, the Russian energy ministry is sticking to its oil production forecast of 548-551 million tons, or 11.01-11.07 mb/d, which implies higher output than the target of 10.947 mb/d in 2H2017. According to independent Russian experts, C+C production in 2017 may average 555 million tons, or 11.15 mb/d. According to a quote in Reuters, the IEA also expects Russian oil production to rise in the second half of the year: "While little information on the duration of production cuts has been made public, provisionally we assume that output will rise gradually again during the second half of 2017."
[ http://www.reuters.com/article/us-russia-oil-output-idUSKBN14M0AZ ].

Important to note, the energy ministry said that Russia's crude oil exports (that had increased by 4.8% in 2016), will rise again in 2017 despite output cuts.

Russian oil production: actual (2013-2016) and energy ministry's guidance for 1st half of 2017 (mb/d)

Watcher says: 01/03/2017 at 3:13 am
So, 300K bpd "cut".

Whose order isn't going to be filled?

Presumably the guy who was buying it with no customer because he has tanks to put it in and that's where it was to go. Maybe he's a collector of liquids and never intends to sell. He just has to do without.

AlexS says: 01/03/2017 at 10:23 am
Based on the energy ministry's guidance, the actual reduction in Russia'a output will be less than 300 kb/d, but it will still be a real cut, especially given that Russia was expected to increase oil production by 200-300 kb/d in 2017.

Two other non-OPEC countries where the cuts should be real are Oman and Kazakhstan, as they were also expected to increase output.

In most other non-OPEC countries, including Mexico and Azerbaijan, output reduction will simply match natural declines.

The table below is from the IEA OMR; the numbers include NGLs

Nathanael says: 01/05/2017 at 9:53 pm
"Presumably the guy who was buying it with no customer because he has tanks to put it in and that's where it was to go. Maybe he's a collector of liquids and never intends to sell. He just has to do without."

This is the most awesomely entertaining image of the week, thank you Watcher!

[Jan 03, 2017] On December 30, a Russian government outlet announced that American service companies are scheduled to work on the Arctic offshore platform Prirazlomnaja for three months

Jan 03, 2017 | economistsview.typepad.com

im1dc :

Will he or won't he?

"On December 30, a Russian government outlet announced that American service companies are scheduled to work on the Arctic offshore platform Prirazlomnaja for three months this summer – an activity which could potentially violate U.S. sanctions"

http://maritime-executive.com/article/does-gazprom-expect-post-sanctions-era-for-oil

"Gazprom's Plans May Anticipate End of Sanctions"

By MarEx...2017-01-02...20:33:13

"On December 30, a Russian government outlet announced that American service companies are scheduled to work on the Arctic offshore platform Prirazlomnaja for three months this summer – an activity which could potentially violate U.S. sanctions.

The maintenance period itself is unremarkable: parts of Prirazlomnaja's topsides date to 1984, and the offshore environment above the Arctic Circle is extraordinarily hard on equipment. However, it is not clear that an American firm could perform the work without a waiver from the U.S. Department of the Treasury. The platform is owned by Gazprom Neft, and to penalize Russia for the annexation of Crimea, the Treasury prohibits American firms from providing this firm (and others) with goods, services or technology for "exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil."

If these sanctions are still in place this summer, the unnamed American service companies could be liable for civil penalties. Recent enforcement actions have led to multimillion-dollar fines for the most egregious sanctions cases.

There is a possibility, however, that the sanctions might be lifted by the incoming Trump administration, which will enter office January 20. President-elect Trump's team says that he remains undecided on whether to lift the Ukraine sanctions program, and his appointee for Secretary of State, ExxonMobil CEO Rex Tillerson, has a close relationship with the Russian government due to projects that sanctions now prohibit: he received the Russian Order of Friendship in 2013 for collaboration with Rosneft on a major Arctic drilling program. Tillerson is a critic of sanctions in general, and his firm still has billions at stake in Russian joint ventures. Last year, the head of ExxonMobil's Russian operations said that the company stands ready to return once sanctions are lifted.

Senator Chris Murphy (D-Conn.), a member of the Foreign Relations Committee, recently told Politico that he considers Tillerson's nomination "as a clear sign of intent that Trump is going to remove sanctions." Procedurally, this would only require an executive order from the president – and American service companies could proceed to Prirazlomnaja as scheduled."

Reply Tuesday, January 03, 2017 at 11:00 AM

[Dec 11, 2016] XOM has long coveted the Siberian and sub-Arctic oil and Russia deeply needs our technology and capital to develop them

Dec 11, 2016 | www.nakedcapitalism.com
MikeRW , December 11, 2016 at 9:33 am

RE: Tillerman to State

XOM has long coveted the Siberian and sub-Arctic oil and Russia deeply needs our technology and capital to develop them. Remember, Russia is a petro state and their economy is highly dependent on hydrocarbons. Also, as one of the great kleptocracies the ruling class, driven by Putin, needs higher oil prices to continue to drive their personal wealth. A major reason Russia seized the Crimea is that there is a very large offshore natural gas reserve that the Ukraine was putting up for bid and it looked like Gazprom wouldn't get it. A new, major source of natural gas to W. Europe is a direct threat to Russia which uses natural gas for both economic gain and political leverage. As I recall when they were trying to exercise political power in Ukraine they shut down the pipe of gas to them. I do not believe it is an accident that the Glencore investment into Rosneft occurred once Trump won and the prospects for a change in US policy looked possible (probable?). Russia is heavily indebted and any increase in export revenues can only help them. There has been some appreciation in the Ruble since the election. [Though I would expect a cold winter in W. Europe to help them more in the short run than the time it will take to alter US policies.]

This probably means an end to the US participation in the multi-lateral agreement with Iran, which somewhat helps Russia as it keeps US dollars out and slows the development and export of Iran's oil. A modest potential bump up in oil prices. I would expect a loosening or end to the sanctions against Russia by Treasury pretty quickly.

One also has to wonder if the recent agreement by OPEC to cut production was influenced by Trump's win. It either is a signal by the Saudi's that they can influence oil prices in the short term, which in this case pushes them up. Though I suspect they will be cautious and keep them below say $80 per barrel for Brent to ensure that there isn't a resumption of fracking in the US. For all the bluster, fracking is expensive oil and the drop in drilling reflects economics and isn't a function of regulations.

Jim Haygood , December 11, 2016 at 12:14 pm

Best rationale I've seen for the Saudis' sudden willingness to cut and cut some more, is that $80 crude will bolster Aramco's valuation in the planned 2018 IPO.

Another factor in pulling off Aramco's epic IPO will be keeping the global economy out of recession and OECD stock prices bubbly.

Perhaps the Saudis could give us a hand with that last bit. Dow 22,942!

Brucie A. , December 11, 2016 at 11:38 am

The New Yorker: Rex Tillerson, from a Corporate Oil Sovereign to the State Department

The news that President-elect Donald Trump is expected to nominate Rex Tillerson, the chairman and chief executive of ExxonMobil, as his Secretary of State is astonishing on many levels. As an exercise of public diplomacy, it will certainly confirm the assumption of many people around the world that American power is best understood as a raw, neocolonial exercise in securing resources.

[Dec 11, 2016] The geopolitical aspect of oil and West attack on Russia

Notable quotes:
"... Libya and Venezuela peaked long ago. Russia is at her peak right now. Iran is very likely post peak. Iraq can increase production slightly but is very near her peak. Kazakhstan is at 1.75 million bpd and if they can manage to keep the toxic oil from Kashagan from corroding their pipes they may one day get to 2 million bpd. Big deal. ..."
"... The Ukraine crisis was provoked by NATO itself (see: EuroMaidan) and Russia reacted to it. NATO was long looking for an excuse as well as the right timing for imposing sanctions on Russia. ..."
Dec 11, 2016 | peakoilbarrel.com
Stavros H says: 12/10/2016 at 4:11 am
What Ron Patterson and the Peak Oil-ers in general fail to include in their calculations is the geopolitical aspect of oil, as well as Global Economics.

In order for us to understand what the imperatives are in dictating oil production levels, prices etc we should be at first able to distinguish between the different types of oil producers. To provide the most obvious contrasting example, let's take Russia & the USA. These two major oil producers are quite dissimilar to each other, if not outright opposites. For Russia – a much poorer country – oil production is *the* core industry, as well as the core export item which is vital for the country's success or failure. The US – a much wealthier country – despite its high production levels, is still a massive importer. This distinction makes a world of difference. For the US, the aim of oil production is to be maximized, so that imports can be minimized and also that oil exporters (such as Russia) can enjoy far less strategic or economic leverage. Hence, the expensive and risky gambit on shale oil and tar sands in North America. For Russia on the other hand, the goal is never to maximize production, their aim is to balance production levels with price levels so that the Russian economy can get the best results and the country the most leverage possible in the long-run. My point here is that when we make forecasts over future production we should always make the distinction between countries that are producers, yet importers and countries that are producers-exporters and rely to a high (or absolute) degree on oil revenues for their well-being. So, the first distinction we can make, is between oil-producing-exporters and oil-producing-importers. The first category would include: Russia, KSA, Iraq, Iran, Kuwait, UAE, Libya, Venezuela etc, while the 2nd would include the US, China, UK, India etc But another, even more important distinction is crucially important here. Some of the oil exporters are part and parcel of the US-EU (NATO) economic-military structure while others are not. The first category would include: KSA, Kuwait, UAE, Norway, Canada etc while the second category would include: Russia, Iraq*, Iran, Libya*, Venezuela, Kazakhstan etc

From the above, another clear conclusion arises. The US-EU Axis (NATO) has calculated that the oil exporters it doesn't already control must be attacked until a high degree of control over them can be imposed. This has taken the form of a direct military attack as in the cases of Libya and Iraq, or the form of Hybrid Warfare methods of sabotage and subversion against all the others.

Now, how does all this relate to actual production levels? My point here is this, the dominant US-EU Axis is very much interested in suppressing the levels of oil production (or conversely, the level of prices) from places such as Russia, Iran, Iraq etc whenever this is possible (for example, when the North Sea and North Slope were being developed, or when shale/tar sands came online more recently) In fact they have been doing exactly that for decades now (pressure on Yeltsin's Russia, sanctions on Saddam's Iraq, sanctions on Iran and now sanctions on Russia) As you can see, the sanctions carousel shifts between these 3 oil giants that NATO does not control.

This is the point I have been periodically making on this blog but nobody seems to be picking up on it. Yes, countries such as the US, Norway, UK, Indonesia etc have peaked to various degrees and can only maintain or increase production temporarily via massive capital expenditure and technological breakthroughs. While countries that have been victims of US-EU (NATO) hostility are merely trying to navigate out of the siege laid against them until they hold enough leverage to produce closer to their real potential.

So, for the umpteenth time, Russia, Iran, Iraq, Kazakhstan and very possibly Libya and Venezuela are nowhere near the peaks and will be growing producers in the coming decades. The only question is whether this will be done under their own terms, or under NATO's terms.

Ron Patterson says: 12/10/2016 at 1:44 pm
For the US, the aim of oil production is to be maximized, so that imports can be minimized and also that oil exporters (such as Russia) can enjoy far less strategic or economic leverage.

Baloney! The US government does not have an aim of oil production. The US government does not produce a single barrel of oil. Oil, in the USA, is produced by private and publicly owned companies. Their aim is to make money, nothing else.

Hence, the expensive and risky gambit on shale oil and tar sands in North America.

Again, that risky gambit was not made by the US government, it was made by private and publicly owned companies. They took that risky gambit because they thought they could make a fortune. Do you really believe they had Russia in mind when they decided to drill and frack that oil bearing shale? Do you really believe they did it because they wanted Russia to enjoy less economic leverage? I doubt that any of them really gave a shit about Russia's welfare.

The US sanctions against Russia was because of their takeover of Crimea and their invasion into Ukraine. It had nothing to do with trying to suppress their oil production. Ditto for the Iranian sanctions. Obama wanted to halt their development of nuclear weapons. Good God man, do you really believe those sanctions was about suppressing their oil production instead?

So, for the umpteenth time, Russia, Iran, Iraq, Kazakhstan and very possibly Libya and Venezuela are nowhere near the peaks and will be growing producers in the coming decades.

Libya and Venezuela peaked long ago. Russia is at her peak right now. Iran is very likely post peak. Iraq can increase production slightly but is very near her peak. Kazakhstan is at 1.75 million bpd and if they can manage to keep the toxic oil from Kashagan from corroding their pipes they may one day get to 2 million bpd. Big deal.

Stavros H says: 12/10/2016 at 7:13 pm
So you really believe that the USG has no way of influencing what the various American corporations do? There is no such thing as "free-market" in the abstract, the state is involved heavily every step of the way. Legislation, regulation, taxation, subsidies (or lack thereof) directions to financial institutions, bail-outs etc etc etc. I am not of course saying that the USG commands US corporations as would be the case under say a Stalinist system, but you can bet it can *influence* it. Several laws were passed around more than a decade ago in order to precisely encourage shale operations (Cheney was behind them) Secondly, I find it shocking that you deny the most obvious statement I made, namely that major oil importers struggle any which way they can to minimize oil imports, maximize own oil production (if they have any oil reserves that is) and also control the countries that do export oil. Just read what the CIA said about the Persian Gulf right after WWII. Control of oil-rich regions has been an absolute imperative for US FP since then. Astonishing that anyone that can doubt that. As for your claims about anti-Russian sanctions, again your ignorance about geopolitics is astonishing.

The Ukraine crisis was provoked by NATO itself (see: EuroMaidan) and Russia reacted to it. NATO was long looking for an excuse as well as the right timing for imposing sanctions on Russia. The Ukraine crisis, as well as rising oil production in North America provided a perfect opportunity for those sanctions to be imposed at the time they did, otherwise they would have looked pretty pathetic.

And notice what the sanctions were all about: a) no selling of oil equipment to RUS firms, b) no lending to RUS oil firms, c) no US-EU oil corporation can invest in RUS oil or cooperate with RUS oil companies. This, coupled with a crushed price was hoped that would discourage/impede the Russian oil industry. It's so eye-popping it hurts. BTW, I am not moralizing here, I am just presenting the facts as I see them, from the prism of RealPolitik.

As for your persistent belief that every country in the world has peaked in terms of oil production. How long do you have to be proven wrong until you admit it? I am sure that you thought that Iraq under Saddam had "peaked" or that during the early years of US occupation it had also peaked. But what do we see?

A war ravaged country being able to rapidly expand production. Imagine what the Iraqi oil production levels would be if the country enjoyed some relative piece and the global market called for it? My point here is that these countries are constrained by market as well as geopolitical factors, which you seem to completely ignore.

So, I hope that your blog is still around in the coming years, when all of Russia, Iran, Iraq, Libya, Venezuela & Kazakhstan boost oil production. Some of them will boost their production massively, others significantly. You will see.

Hickory says: 12/11/2016 at 12:07 am
I'm sure the world looks like you depict it, from where you look Stravos. But it doesn't look like that from here.

Russia has sanctions imposed on it for acting aggressive on its borders. I'm sure it feels uncomfortable to be surrounded, and not have a good port to the south for its navy. I truly believe that USA and the rest of the modern world were hoping Russia would join in a constructive and cooperative role after the Soviet breakup, but they have failed miserably so far. Still hope though.

And Iran has sanctions imposed because they have been an extremely aggressive theocracy that no one wants to have nukes- the sanctions imposed included China and Russia as sponsors. Also, it was to Russia advantage economically, to not have Iranian oil on the market.

China, Europe and USA do prefer to have Iranian oil on the market, but not at the cost of a theocracy (bizarre) with nucs.
More to say- but thats enough to chew on.

AlexS says: 12/11/2016 at 5:58 am
"Russia has sanctions imposed on it for acting aggressive on its borders"

What about >90% of Crimea's population voting for re-unification with Russia?

"extremely aggressive theocracy"

What about Saudi Arabia sponsoring terrorists all around the world? Is it a perfect modern democracy?

Stavros H says: 12/11/2016 at 6:01 am
I talk Real-Politik but you have again collapsed into the cheap hypocritical nonsense of the MSM and pseudo-experts. The mere suggestion that Iran has been "aggressive" is insulting to my intelligence. Iran can't be aggressive regardless of their inner desires. Iran can only hope to defend itself from the US & its allies and even that would have been impossible without Russian and Chinese support from behind the scenes. I don't see why you think that Russia & China going along with the West on imposing sanctions on Iran somehow proves that the excuse for them was truthful. No, Russia & China both make deals with the West all the time, in the hope that they can serve their own interests as best possible. If it means screwing Iran in some cases, then so be it. Every state is in this for its very own interests (no permanent allies, only permanent interests)

As for Russia. There wouldn't be a more catastrophic scenario imaginable for the West (especially Europe) if Russia ever managed or was allowed to enter the global marketplace in anything remotely resembling "fair terms". The reason why NATO is so obsessed with Russia is because that country possesses *all* the necessary elements (massive hydrocarbon reserves, nukes, metals, strategic location, geographic size) for a superpower, except of course the economic part. But, as NATO strategists are keenly aware, that can change, and if it does, then the Global Balance of Power changes radically and at the expense of NATO. This is why Russia is NATO's number one target and not say China, or India or anybody else. Most people have been fooled by thinking that power in international relations is all about the size of your GDP. While this may be true for most countries, it's definitely not true when it comes to Russia. If I were NATO I would be doing the same and more in order to bring Russia down.

[Dec 11, 2016] 12/09/2016 at 4:48 am

Dec 11, 2016 | peakoilbarrel.com
Rosneft sells 10% stake to Qataris and Glencore. That's a pretty big surprise to me at least.

https://www.bloomberg.com/news/articles/2016-12-07/glencore-qatar-fund-buy-russia-s-rosneft-stake-for-11-billion

(An article in the FT is better but behind a paywall – try the Google route if interested).

Chevron to cut budget another 20% in 2017. Much bigger than expected, again by me anyway.

http://www.reuters.com/article/us-chevron-outlook-idUSKBN13X01S

International rig counts are out – up five overall, mostly a bounce back to around September numbers from an unusually big dip in October, especially in the North Sea.

http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsintl

Also I took a look at some of the Bakken daily reports for this week, new permitting and completions announcements seem to have come to a stop – maybe the extra cold weather, or maybe someone on vacation and not completing the paperwork, or a sign of things to come?

Is this the news of an industry with a rosy glow of optimism following the OPEC announcements? Too early to feel the impact yet I guess.

[Oct 29, 2016] European Union on Friday lifted limits on Gazproms use of a link from its offshore Nord Stream pipeline to Germany

Notable quotes:
"... Hello …According to Reuters , the European Union on Friday lifted limits on Gazprom's use of a link from its offshore Nord Stream pipeline to Germany, allowing Russia to pump more gas to Europe and bypass its usual routes via Ukraine. ..."
Oct 29, 2016 | www.nakedcapitalism.com
abynormal October 28, 2016 at 7:48 pm

Hello …According to Reuters , the European Union on Friday lifted limits on Gazprom's use of a link from its offshore Nord Stream pipeline to Germany, allowing Russia to pump more gas to Europe and bypass its usual routes via Ukraine.

…soooooo they're going to begin rebuilding Syria

[Oct 25, 2016] The Next Ukraine

Notable quotes:
"... The Russian-Turkish plan to pipe Russian gas through Turkey and then on to Macedonia and thence into southern Europe has long been opposed by the West, which is seeking to block the Russians at every turn. Now the Western powers have found an effective way to stop it: by overthrowing the pro-Russian government of Macedonian Prime Minister Nikola Gruevski . ..."
"... Speaking of which: the government of President Petro Poroshenko is leading the country into complete financial insolvency and veritable martial law. ..."
"... which makes it a crime to criticize the Organization of Ukrainian Nationalists and the Ukrainian Insurgent Army (UPA) that fought on the side of the Germans during World War II. ..."
May 22, 2015 | Antiwar.com
The Russian-Turkish plan to pipe Russian gas through Turkey and then on to Macedonia and thence into southern Europe has long been opposed by the West, which is seeking to block the Russians at every turn. Now the Western powers have found an effective way to stop it: by overthrowing the pro-Russian government of Macedonian Prime Minister Nikola Gruevski.

The original plan was for the pipeline to go through Bulgaria, but Western pressure on the government there nixed that and so the alternative was to pipe the gas through Macedonia and Greece. With the Greeks uninterested in taking dictation from the EU – and relatively impervious, at the moment, to Western-sponsored regime change – the Macedonians were deemed to be the weak link in the pro-Russian chain. That was the cue for the perpetually aggrieved Albanians to play their historic role as the West's willing proxies.

After a long period of dormancy, suddenly the "National Liberation Army" (NLA) of separatist Albanians rose up, commandeering police stations in Kumanovo and a nearby village earlier this month. A 16-hour gun battle ensued, with 8 Macedonian police and 14 terrorists killed in the fighting. The NLA, which reportedly received vital assistance from Western powers during the 2001 insurgency, claimed responsibility for the attacks.

Simultaneously, the opposition Social Democratic Union party (SDSM) – formerly the ruling League of Communists under the Stalinist Tito regime – called for mass demonstrations over a series of recent government scandals. SDSM has lost the last three elections, deemed "fair" by the OCSE, with Gruevski's conservative VMRO-DPMNE (Internal Macedonian Revolutionary Organization – Democratic Party for Macedonian National Unity) enjoying a comfortable majority in parliament. But that doesn't matter to the "pro-democracy" regime-changers: SDSM leader Zoran Zaev declared "This will not be a protest where we gather, express discontent and go home. We will stay until Gruevski quits."

Sound familiar?

Macedonia has a long history of manipulation at the hands of the NATO powers, who nurtured the Muslim-Kosovar insurgency to impose their will on the components of the former Yugoslavia. As in Kosovo, the Albanians of Macedonia were willing pawns of the West, carrying out terrorist attacks on civilians in pursuit of their goal of a "Greater Albania."

During the 2001 Albanian insurgency, an outgrowth of the Kosovo war, the EU/US used the NLA as a battering ram against the Slavic authorities. The NLA was never an authentic indigenous force, but actually an arm of the US-armed-and-trained "Kosovo Liberation Army," which now rules over the gangster state of Kosovo, crime capital of Europe. A "peace accord," the Ohrid Agreement, was brokered by the West, which kept the NLA essentially intact, albeit formally "dissolved," while the Macedonian government was blackmailed into submission. I wrote about it at the time, here and here.

Follow that last link to read about the George Soros connection. Soros was originally a big booster of Macedonia, handing them a $25 million aid package and holding the country up as a model of multiculturalism. However, the Macedonians soon turned against him when he sided with the Albanians in their demands for government-subsidized Albanian-language universities and ethnic quotas for government jobs. When he told them to change the name of the country to "Slavomakejonija," they told him to take a walk. Soros, a longtime promoter of Albanian separatism – he played sugar daddy to a multitude of front groups that promoted the Kosovo war – is now getting his revenge.

Prime Minister Gruevski, for his part, charges that the sudden uptick in ethnic violence and political turmoil is the work of Western "NGOs" and intelligence agencies (or do I repeat myself?) with the latter playing a key role in releasing recordings of phone conversations incriminating several top government officials. A not-so-implausible scenario, given what happened in neighboring Ukraine.

Speaking of which: the government of President Petro Poroshenko is leading the country into complete financial insolvency and veritable martial law. Aid money from the West is going into the prosecution of the ongoing civil war, and the country has already defaulted on its huge debt in all but the formal sense. Opposition politicians and journalists are routinely murdered and their deaths reported as "suicides," while it is now illegal to describe the ongoing conflict with the eastern provinces as anything but a "Russian invasion." Journalists who contradict the official view are imprisoned: Ruslan Kotsaba, whose arrest I reported on in this space, is still being held, his "trial" a farce that no Western journalist has seen fit to report on. Kotsaba's "crime"? Making a video in which he denounced the war and called on his fellow Ukrainians to resist being conscripted into the military. Antiwar activists throughout the country have been rounded up and imprisoned. Any journalist connected to a Russian media outlet has been arrested.

Yes, these are the "European values" Ukraine is now putting into practice. Adding ignominy to outrage, a law was recently passed – in spite of this Reuters piece urging Poroshenko to veto it – which makes it a crime to criticize the Organization of Ukrainian Nationalists and the Ukrainian Insurgent Army (UPA) that fought on the side of the Germans during World War II. As Ha'aretz reports, a group of 40 historians from major Western academic institutions issued an open letter protesting this outrage:

"Not only would it be a crime to question the legitimacy of an organization (UPA) that slaughtered tens of thousands of Poles in one of the most heinous acts of ethnic cleansing in the history of Ukraine, but also it would exempt from criticism the OUN, one of the most extreme political groups in Western Ukraine between the wars, and one which collaborated with Nazi Germany at the outset of the Soviet invasion in 1941. It also took part in anti-Jewish pogroms in Ukraine and, in the case of the Melnyk faction, remained allied with the occupation regime throughout the war."

Ukraine is showing its true colors, which I identified last year, to the point where even the usually compliant Western media is forced to admit the truth.

[Sep 10, 2016] Oil and gas crunch pushes Russia closer to fiscal crisis

It is pretty interesting and educational to read such articles one year after they are published.
Notable quotes:
"... Russia is already in dire straits. The economy has contracted by 4.9pc over the past year and the downturn is certain to drag on as oil prices crumble after a tentative rally. Half of Russia's tax income comes from oil and gas. ..."
"... Core inflation is running at 16.7pc and real incomes have fallen by 8.4pc over the past year, a far deeper cut to living standards than occurred following the Lehman crisis. ..."
"... This man "forecasted" Russia's demise last year. He has to show that that forecast is still liable to happen ..."
"... What Colby said is palpably true. That is why we don't hear real news and instead we are bombarded with news about their "celebs" ..."
"... He should know. And certainly, Western media coverage of the Ukraine crisis demonstrated to many millions of people in the West that major Western media is almost all controlled by the US neocons. Anyone with half a brain can see that - but clearly not you. ..."
"... Russia is not interested in invading anyone. The US has tried to force Russia to invade Ukraine in an iraq style trap but it didn't work. So they had to invent an invasion, the first in living memory without a single satellite, video or photo image of any air campaign, heavy armour, uniformed soldiers, testimony from friends & family of servicemen they could pay to get a statement, not even a mobile photo of a Russian sitting on a tank. ..."
"... As the merkins tell us a devalued dollar is your problem.. the devalued rouble is the EUs problem! ..."
"... So the political sanctions are bankrupting Russia because they dared to challenge EU expansion. Result millions of poor Russians will start to flow West and the UK will have another flood of Eastern Europeans. But at least we showed them our politicians are tough. ..."
"... Spelling it out for Russia (or Britain) that would mean giving up Byzantine based ambitions and prospering through alliances with the Muslim Nation or Countries, including Turkey. In the short term such a move would quell internal dissent of the 11m immigrants in Russia, reduce unsustainable security expenditure with its central Asian neighbours, open and expand market for Russian goods in the Middle East, Far East and North Africa, and eventually form and provide a military-commercial -political alliance (like NATO) for the Muslim nations with Russia (with partner strength based upon what is mostly commercial placed on the table (see the gist in the Vienna Agreement between P5+1 and Iran). ..."
"... The formation of such an alliance would trump Russia's (or Britain's) opponents ambitions and bring prosperity. ..."
"... Propaganda. Laughable coming from the UK hack when the UK has un-payable debt and Russia has little external debt plus we have no Gold and Russia has probably 20,000 tonnes. NATO surrounds Russia yet they are the aggressors. ..."
"... In the end, Ambrose is too ideological to be credible on the issue. Sure, Russia has couple lean years ahead, but it will come out of this ordeal stronger, not weaker. There are already reports of mini boomlets gathering steam under the surface. ..."
Jul 23, 2015 | Telegraph

Russia is already in dire straits. The economy has contracted by 4.9pc over the past year and the downturn is certain to drag on as oil prices crumble after a tentative rally. Half of Russia's tax income comes from oil and gas.

Core inflation is running at 16.7pc and real incomes have fallen by 8.4pc over the past year, a far deeper cut to living standards than occurred following the Lehman crisis. This time there is no recovery in sight as Western sanctions remain in place and US shale production limits any rebound in global oil prices.

"We've seen the full impact of the crisis in the second quarter. It is now hitting light industry and manufacturing," said Dmitri Petrov from Nomura.

"Russia is going to be in a very difficult fiscal situation by 2017," said Lubomir Mitov from Unicredit. "By the end of next year there won't be any money left in the oil reserve fund and there is a humongous deficit in the pension fund. They are running a budget deficit of 3.7pc of GDP but without developed capital markets Russia can't really afford to run a deficit at all."

A report by the Higher School of Economics in Moscow warned that a quarter of Russia's 83 regions are effectively in default as they struggle to cope with salary increases and welfare costs dumped on them by President Vladimir Putin before his election in 2012. "The regions in the far east are basically bankrupt," said Mr Mitov.

Russian companies have to refinance $86bn in foreign currency debt in the second half of this year. They cannot easily roll this over since the country is still cut off from global capital markets, so they must rely on swap funding from the central bank.

Dave Hanson

For once, Flimflambrose paints a fairly accurate picture. His formula is to take a few facts and stretch them to their illogical conclusion to create a story that sells subscriptions to the Telegraph. Sort of like the National Enquirer. He does that well. He only mentions the other side of the story in a sentence or two, usually at the end of his column. The scary headline at the top comes true perhaps one in a thousand times, just enough to keep readers from totally dismissing him as a fruitcake. Not yellow journalism. Clever journalism.

steph borne

jezzam steph borne •a day ago

''Under Putin Russia has progressed from a respectable rank 60 on the transparency international corruption index to an appalling rank 140. It is now one of the most corrupt countries in the world, entirely due to Putin.'' http://www.theguardian.com/wor...
.
jezzam is using the Corruption Perceptions Index as fact?
but it is ''Perceptions''???
''The CPI measures perception of corruption due to the difficulty of measuring absolute levels of corruption.[8]'' Wiki
Just more nonsense from Jezzam

soton

my wife is russian, she speak's to her mother on the phone every day, from what she tell's me nothing has changed economically for the "average joe" no doubt some of the abramovich types have seen the value of their properties plunge

Rosbif2

So if Russia is financially sinking below the waves, how come AEP in other articles claimed that Russia could buy themselves into Greece and menace Europe?
It seems like Greece & Russia are two drowning men who would grab onto each other & drown even faster
AEP seems to lack "joined up thinking" in his articles

giltedged

This man "forecasted" Russia's demise last year. He has to show that that forecast is still liable to happen

What Colby said is palpably true. That is why we don't hear real news and instead we are bombarded with news about their "celebs"

Real news to show that a new world economy is being built totally outside the control of US Neocons and Globalists, that the world is now multi-polar, that for example this journalist's capital city, London, now has officially a majority of the population not merely non-British in origin, but non-European, that his own country survives because of London property sales

Richard N

And isn't AEP rubbing his hands with glee at this supposedly desperate situation of Russia!

Colby, the ex-boss of the CIA, said in retirement that there is no journalist of consequence or influence in the Western media that the CIA 'does not own'.

I often find myself remembering that, when I read Ambrose pumping out the US neocon / CIA propaganda standard lines about 'Russian aggression' in Ukraine, and so on - choosing to ignore the fact that Russia's action in Crimea was in direct response and reaction to the US Neocons' coup in Ukraine, which overthrew an elected government in a sovereign state, to replace it with the current US puppet regime in Kiev.

Of course, this collapse of oil and gas prices are no accident at all - but are part of America's full-scale economic war against Russia, aiming to get Putin overthrown, and replaced by someone controlled by the US Globalists, leaving then
China as the only major power centre in the world outside the Globalists' control.

Richard N > jezzam • a day ago

If you bothered to read what I wrote carefully, you would see that, with reference to journalists, I was simply repeating what ex-head of the CIA Mr. Colby said.

He should know. And certainly, Western media coverage of the Ukraine crisis demonstrated to many millions of people in the West that major Western media is almost all controlled by the US neocons. Anyone with half a brain can see that - but clearly not you.

steph borne

''Russian bear will roar once more, says World Bank''

01 Jun 2015

''Russia economy forecast to grow by 0.7pc next year, reversing negative growth
forecast''

http://www.telegraph.co.uk/fin...

steph borne > TheBoggart

Do you understand what a trade surplus is?

Russia recorded a trade surplus of 15309 USD Million in May of 2015 http://www.tradingeconomics.co...

Halou > steph borne

Carried on to the absurd extreme at which all the dollars are held outside of America, the US simply prints more money thus devaluing it's currency and favoring exports (which are then cheaper to produce and cheaper buy) people giving their currency to the US in return for goods and services and restoring economic balance.

I can understand that Russia doesn't have much experience with the 'boom and bust' cycles of market economies. They've had less than 20 years experience at it.

Did you know that in the 19th century China's trade surplus with Europe was so vast that Europe almost went bankrupt and ran out of precious metals buying Chinese goods, surely by your thinking it was truly a golden age of eastern supremacy, western failure. Ask any Chinese person what the 19th century means to them, you might be surprised.

steph borne > Halou

Shame you can't provide a link or two to back up your thoughts on trade surpluses.. altho I know amongst bankrupt countries they tell you that money/assets leaving the country is a good thing....

Strange that the Germans don't agree --

''Germany recorded a trade surplus of 19600 EUR Million in May of 2015. Balance ...reaching an all time high of 23468.80 EUR Million in July of 2014...'' http://www.tradingeconomics.co...

Obviously another country heading for financial self-destruction

steph borne

02 Oct 2014 http://www.telegraph.co.uk/new... 02 Oct 2014
Russias-economy-is-being-hit-hard-by-sanctions.html

01 Sept 2014 http://www.telegraph.co.uk/new... 01 Sept 2014 Cameron-we-will-permanently-damage-Russias-economy.html
cameron says.??? Aha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha
ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha
ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha
ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha

29 Dec 2014 http://www.telegraph.co.uk/fin... 29 Dec 2014 /Recession-looms-for-Russia-as-economy-shrinks-for-first-time-since-2009.html

24 Nov 2014 http://www.telegraph.co.uk/fin... 24 Nov 2014 Russia-faces-recession-as-oil-crash-and-sanctions-cost-economy-90bn.html

22 Dec 2014 http://www.telegraph.co.uk/fin... 22 Dec 2014 Russia-starts-bailing-out-banks-as-economy-faces-full-blown-economic-crisis.html

http://www.telegraph.co.uk/fin... 29 Apr 2015
Ukraines-conflict-with-Russia-leaves-economy-in-ruins.htm
.
Still going!!!

Graham Milne

Russia has physical assets (oil, minerals and so on); we don't. It is the UK which is toast, not Russia.

billsimpson > Graham Milne

Russia is way too big & resource rich to ever be total toast. And the people are educated, even if they do drink a lot. But they could get a bit hungry in another economic collapse. All the nukes they have is the real problem. Those need to be kept secure, should another revolution occur, or the country break apart after an economic collapse.
The US & Canada would never sit back and watch the UK melt down. Witness the Five Eyes communal global spying system.
Electrify all the rail system that you can, so people can still get around on less oil. Some oil is essential for growing and transporting food.

Sal20111

Russia can't just blame it on sanctions, or price wars in oil and gas. They have not reinvested the proceeds of their prodigous fossil fuel sales smartly and neither have they diversified quickly enough - the gas sales to China was an afterthought after Ukraine.

Putin cracked down on some of the oligarchs but not all - national wealth has clearly been sucked out by a few. Nepotism and favouritism seem to be rife. They should have learnt the lesson from their communist history not to concentrate power in state contriolled organisations. Not sure whether there is much of a small to medium business culture.

With the amount of natural resources it has, and a well educated public, particularly in math and technical skills, Russia should be doing much better.

rob22

Russia is not interested in invading anyone. The US has tried to force Russia to invade Ukraine in an iraq style trap but it didn't work. So they had to invent an invasion, the first in living memory without a single satellite, video or photo image of any air campaign, heavy armour, uniformed soldiers, testimony from friends & family of servicemen they could pay to get a statement, not even a mobile photo of a Russian sitting on a tank.

Russia is too busy building up an independent agriculture and import substitution, not to mention creating economic and trade links with its Eurasian neighbours like China & India via the silk road, BRICS, Eurasian Ecconomic Union and the Shanghai Cooperation Organisation.

A total nightmare for the US which once hoped to divide & dominate the region (see new American century doc)

Putin enjoys about 85% approval ratings (independent foreign stats) because it knows to surrender to the US means a return to the 90`s where the nations oil revenue went to wall st and everything else

If things get bad they`ll just devalue the ruble, get paid in dollars and spend in rubles.

This is why most Russians are willing to dig in and play the long game.

Londonmaxwell

Over the top with Ambrose, as usual. Words like "depression", "crisis", "plummet", and "shrivels"; and these only in the first two paragraphs! Moscow looks absolutely normal to me: traffic jams, packed malls and restaurants, crowded airports and train stations. Unemployment is low, inflation is tolerable.

Ambrose misses some key points.

Russia's present situation is not glorious, but it is not as precarious as Ambrose portrays it to be. Be wary of writing off Russia. The great game is just beginning.

energman58 > Londonmaxwell

Except that the slack has to be taken up by inflation and declining living standards - Russia isn't unique; in Zimbabwe dollar terms almost every company there did splendidly but the place is still bust. The problem is that most of the debt is USD denominated and without the investment blocked by sanctions they are looking at a declining production, low oil prices and an increasing debt service burden. Presumably they could revert to the traditional model of starving the peasants that has served them so well in the past but I am not sure if the people with the real stroke will be quite so happy to see their assets wither away...

Londonmaxwell > energman58

Comparing Russia with Mugabeland is a stretch, but I see your point. If the sanctions stay and the oil price goes south permanently, then Moscow has problems. But I question both assumptions. Merkel/Hollande/Renzi already face huge pressure from their business leaders to resume normal relations with Russia; i.e., drop the sanctions. As for oil prices, the USA's shale sector is already in trouble. Russia's debt burden (both public and private) is manageable and can scarcely worsen since it is cut off from the credit markets. While the oil price slump certainly hurts Russia's economy, I don't see the wheels falling off anytime soon.

AEP writes well and is always thought-provoking, but his view that Russia is facing Armageddon because of oil prices and sanctions is way off the mark.

steph borne

Here come the Ukrainian Nazis.. You lot must be very happy
http://www.bbc.co.uk/iplayer/e... 18 minutes in..
Maidan number 3 on the way as I predicted a year ago.

midnightrambler

Amazing how the narrative for military action is being fostered by articles such as this one.

So many people eager for something they have no intention of getting involved in themselves

snotcricket

It is rather odd the posts on this thread accusing any & all who question the obvious US gov line in such articles.

Could it be that some have better memories ie the Ukrainian crisis was in fact created by the support of the US & EU for but a few thousand sat in Independence Sq just two years after the country had voted in the target with a majority the likes of Cameron, Obama could only dream of.

Only an idiot could not have seen the Russki response to a situation that could in but a very short timescale see NATO troops & kit but a literal footstep from Russki soil....while the ports used by the Russki fleets would be lost overnight usurped no doubt by a 'NATO' fleet of US proportions.....plainly the US knew the likely outcome to the deposing of the elected leader & replaced by the EU puppets....the Russki's had little option.....Putin or no Putin this would have been the outcome.

With regard to the US led attack on the Russki economy with sanctions....well those sanctions hurt the UK too...but of course not the US (they have lobbyist for such matters) our farmers were hurting afore the sanctions....that became a damn sight worse after the imposition.

The US attempts to turn off the oil/gas taps of Putin has done damage to the Russkis, similarly its done damage to W. Europe thus ourselves as oil prices are now held at a level by the sanctions reducing world supplies (the US have lobbyists for such matters) thus the god of the US, the market is skewed & forecourt prices too sighed Osborne as the overall taxation gathers 67% of what goes through the retailers till.

This has been rumbling for over 3 years since the BRICS held their meeting to create a currency that would challenge the $ in terms of the general w.w economy but specifically oil. They did mistime the threat & should have kept their powder dry as the US economy like our own lives on borrowed time & money.....but they made the mistake the US was in such decline they couldn't respond....of course the US have the biggest of all responses to any threat....its armed forces & their technology that advances far more rapidly than any economy.

Incidentally I write this sat at my laptop in the North of England in between running my own business & contacting clients etc..........I suspect my politics would make Putin wince.....however the chronology, actions/outcomes & the general logic of the situation has now't to do with supporting one or t'other.......& do remember the US grudgingly acknowledge without the Russkis the er, er agreement with Iran & non-proliferation would still be a can yet to be kicked down the road.

Personally I'd be more worried that Putin has made fools of the US/EU leaders so many times thus wonder just what is the intent in assisting the brokering of any deal? With the West & Iran.

steph borne

If Russia was worried about the oil price they would not have been so helpful in getting the usa & Iran together on a deal which will put more downward pressure on the oil price! http://www.telegraph.co.uk/new... Barack Obama praises Putin for help clinching Iran deal

oleteo

Reading this article I saw only one message to be sent to the Russians:"Russians,surrender!" The rumours about the desease and the ongoing decease of the Russian economy are greatly exaggerated.

steph borne

June 17, 2015 at 1:44 pm Boeing said it struck a $7.4 billion deal to sell 20 of its 747-8 freighters to Russia's Volga-Dnepr Group, providing a much-needed boost to the jumbo-jet program amid flagging demand for four-engine aircraft. http://www.seattletimes.com/bu...
MOSCOW, Russia (May 26, 2015) – Bell Helicopter,
a Textron Inc. (NYSE: TXT) company, announced today an agreement with
JSC Ural Works of Civil Aviation (UWCA) for the development of final
assembly capabilities by UWCA for the Bell 407GXP in order to support
UWCA in obtaining Russian registry to facilitate their operations. http://www.bellhelicopter.com/...
.
Oh business as normal at Bell looks like sanctions only to be paid heed by the useful idiots in the EU

snotcricket > steph borne

Yes the sanctions do seem to TTIP more in the US favour than their Western, er, er partners

Sonduh

Just like Brown Osborne is reducing borrowing but encouraging consumer debt which is close to 120% GDP. By the end of next year household debt will be 172% of earnings.Once household debt reaches saturation point and they start defaulting on their debt as they did in 2008 -- Game over. I hear the Black Sea is nice this time of year.

steph borne

A report by Sberbank warned that Gazprom's revenues are likely to drop by almost a third to $106bn this year from $146bn in 2014, seriously eroding Russia's economic base.''

Last year $146 billion bought 4672 billion pybs this year $106 billion will buy 6148 Billion pybs
Gazprom alone generates a tenth of Russian GDP and a fifth of all budget revenues. the Pyb devaluation vs. $ has led to a 31% increase in revenues..

Something Salmond should take notice of should the SNP want to go for independence again. Inflation at 16% may well be but its the price of imported stuff pushing up the prices.. mainly EU goods for sale .. that won't be bought!

As the merkins tell us a devalued dollar is your problem.. the devalued rouble is the EUs problem!

Nikki Santoro

What is happening is the Anglo-Muricuns are actively provoking the Chinese and Russkies into a war. However once it is all said and done, they are going to need a cover story. People are going to ask why the Russkies attacked. And then the Anglo-Muricuns are going to say that Putin put all his eggs in one basket. Yeah that is what happened but really if Putin does attack, it will be because of the endless Anglo-Muricun provocations. Just as they provoked Hilter to no end and Imperial Japan as well.

steph borne

Russian companies have to refinance $86bn....''

So what are you going to do if they default.. go in and repossess..You and who's army? They are struggling trying to get Greece to comply..

Russia's trade surplus is still in the Billions of Dollars while the usa's & UKs is mired in deficit.. Russia recorded a trade surplus of 17.142 USD Billion in May of 2015 http://www.tradingeconomics.co....

Debt public/ external debt ratios

U. K..................92%........317%
usa...................74%......... 98%
And
Russia...............8%..........40%

''And while UK growth could reach 3pc this year, our expansion is far too reliant on rising personal and government debt. ''
''The UK, with an external deficit now equal to 6pc of GDP, the second-largest in half a century,''
http://www.telegraph.co.uk/fin...
As ever the west points to Russia and says Look over there (for God's sake don't look here!)

Sonduh > steph borne

And don't forget all their gold reserves. And all their natural resources.

Skalla

Prosperous countries are usually benevolent (the US being the exception to the rule). Hungry countries get to be greedy and aggressive. The US with its economic and financial manipulations will turn a sleepy bear into a very awake and ravenous one, and after hibernation, the first thing bears do is FEED --

vandieman

A cynic could say that the US is driving the oil prices down to push Russia into a war.

Anth2305 > vandieman

Wait until Iranian oil comes fully on stream, which I heard some pundit on TV say could drive the cost down to < $30 a barrel, forcing the Saudis into having to eat massively into their foreign reserves.

gardiner

When the old USSR 'collapsed', what we call the 'Oligarchs' ( a collection of the most highly influential State officials who pocketed practically all the old State assets) corruption was at the very highest level, and society was at its weakest.

The economy became dependant on resource exports.

Because the country's capital was so concentrated, there was practically no 'middle class' of entrepreneurs who could invest capital in job creating, internationally competitive industry.
Although a lot further down this road than the UK - the warning is stark!

beatonthedonis > gardiner

Abramovich wasn't a state official, he was a rubber-duck salesman. Berezovsky wasn't a state official, he was an academic. Khodorkovsky wasn't a state official, he was a PC importer. Gusinsky wasn't a state official, he was an unlicensed cab driver. Smolensky wasn't a state official, he was a blackmarketeer. Fridman wasn't a state official, he was a ticket tout.

daddyseanicus

So the political sanctions are bankrupting Russia because they dared to challenge EU expansion. Result millions of poor Russians will start to flow West and the UK will have another flood of Eastern Europeans.

But at least we showed them our politicians are tough.

Busufi > Jonathan

In the East there is a saying: Why use poison when sugar delivers the same result. Or say as Deng said, It doesn't matter whether the Cat is black or white, so long it catches the mice.

Spelling it out for Russia (or Britain) that would mean giving up Byzantine based ambitions and prospering through alliances with the Muslim Nation or Countries, including Turkey. In the short term such a move would quell internal dissent of the 11m immigrants in Russia, reduce unsustainable security expenditure with its central Asian neighbours, open and expand market for Russian goods in the Middle East, Far East and North Africa, and eventually form and provide a military-commercial -political alliance (like NATO) for the Muslim nations with Russia (with partner strength based upon what is mostly commercial placed on the table (see the gist in the Vienna Agreement between P5+1 and Iran).

The formation of such an alliance would trump Russia's (or Britain's) opponents ambitions and bring prosperity.


Sonduh

" They are running a budget deficit of 3.7pc of GDP but without developed capital markets Russia can't really afford to run a deficit at all."
We are able to have a budget deficit of 4.8% and 90% national debt, 115% non financial corporate debt , 200% financial corporate debt and 120% household debt due to voodoo economics ie. countries can print money to buy your debt.

PS we also have unfunded liabilities like pensions which amounts to many hundred pc of GDP.
The results showed the extraordinary sums that Britain has committed to pay its future retirees. In total, the UK is committed to paying £7.1 trillion in pensions to people who are currently either already retired or still in the workforce.

This is equivalent to nearly five times the UK's total economic output. Such a figure may be hard to put into proportion, as a trillion – a thousand billion – is obviously a huge number.

And we think Russia is in a bad state.

georgesilver

Propaganda. Laughable coming from the UK hack when the UK has un-payable debt and Russia has little external debt plus we have no Gold and Russia has probably 20,000 tonnes. NATO surrounds Russia yet they are the aggressors.

Laughable but idiots still believe the propaganda.

tarentius > georgesilver

The entire world combined has 32,000 tonnes of gold reserves. Russia has 1,200 tonnes.

Russia has government debt of 18% to GDP, a contracting GDP. It is forced to pay interest of 15% on any newly issued bonds, and that's rising. And it has a refinancing crisis on existing debt on the horizon.

Russia's regions are heavily in debt and about 25% of them are already bankrupt. The number is rising.

And we haven't even gotten into the problem with Russian business loans.

Turn out the lights, the party's over for Russia.

Bendu Be Praised > mrsgkhan

The issue is the medias portrayal of Putin .. If the UK media was straight up with the people and just said .. "our friends in the US hate the Russians .. The Russians are growing too big and scary therefore we are going to join in destroying the Russian economy before they become uncatchable " the people would back them ..

Lets be honest .. The Russians don't do anything that we don't .. Apart from stand up to the US that is

Jim0341

Yesterday, AEP spread the gloom about China, today it is Russia. As ever, he uses quotes from leading figures in banks and finance houses, which are generally bemoaning low returns on investments, rather than the wellbeing, or otherwise, of the national economy..
Whose turn is it tomorrow, AEP? My bet is Taiwan.

Bendu Be Praised > FreddieTCapitalist

I think you will find that the UK are just pretending the sanctions and wars are not hurting us ..

Just look at the budget .. 40% cuts to public services .. America tried to destroy the Russian economy by flooding the market with cheap oil but it will come back to bite them ..

The UK should just back off .. lift sanctions against Russia and let the US squabble with them by themselves ..

I sick of paying taxes for the US governments "War on the terror and the rest of the world"

alec bell

This article makes no sense. First of all, there is no way that Gazprom is responsible for 1/10th of Russia's GDP. That is mathematically impossible. 1/20th is more like it. Second, if push comes to shove, Russians are perfectly capable of developing their own vitally-important technologies. Drilling holes in the ground cannot be more complicated than conquering space.

Whatever problems Russia has, engineering impotence is not one of them.

And third, if Russians' reliance on resourses' exports has led to "the atrophy of their industry" as AEP rightly points out, then it must logically follow that disappearance of that revenue will inevitably result in their industrial and agricultural renaissance.

In the end, Ambrose is too ideological to be credible on the issue. Sure, Russia has couple lean years ahead, but it will come out of this ordeal stronger, not weaker. There are already reports of mini boomlets gathering steam under the surface.

alec bell > vlad

vlad, JFYI: According to research conducted by the World Economic Forum (which excludes China and India due to lack of data), Russia leads the way, producing an annual total of 454,000 graduates in engineering, manufacturing and construction. The United States is in second position with 237,826 while Iran rounds off the top three with 233,695. Developing economies including Indonesia and Vietnam have also made it into the top 10, producing 140,000 and 100,000 engineering graduates each year respectively.

Nikki Santoro

Don't mess with the Anglo-Muricuns. They will jack you up bad. Unless you are thousands of miles away and posting anonymously. But even still they can lens you out and cleanse you out should you take it too far. However their dominance is not some much because of their brilliance. They don't have any despite their propaganda. But rather the depths they are willing to stoop to in order to secure victory. Like blowing up an airliner and then pinning it on you for instance. Or poisoning their own farmland.

steve_from_virginia

Futures' traders got burned earlier this year betting that oil prices would rise right back to where they were a year previously. Now they have 'gotten smart'. They know now the problem isn't Saudi Arabia but billions of bankrupt consumers the world around.

Customers are bankrupt b/c of QE and other easing which shifts purchasing power claims from customers to drillers -- and to the banks. As the customers go broke so do the banks: instead of gas lines there are ATM lines.

At the same time, ongoing 'success' at resource stripping is cannibalizing the purchasing power faster than ever before. Soon enough, the claims will be worthless! When the resource capital is inaccessible, so is the purchasing power -- which is the ability to obtain that resource capital.

Business has caught itself in the net of its own propaganda; that there is such a thing as material progress out of waste ... that a better future will arrive the day after tomorrow.

Turns out tomorrow arrives and things get worse. Who could have thunk it?

Brabantian

If AEP is as right about Russia as he was about the Yank shale gas 'boom' - now collapsing into a pile of toxic bad debt -

Then our Russian friends have nothing to worry about

midnightrambler > Guest

The largest military spend - the US - bigger than the next 20 countries combined
The most bases - the US with 800, including many in Germany
Nobody wants war - but the US needs it as their largest industry is defence - apart from manipulative banking.
We are heading for a point of rupture between those who are peaceful and those whose main aim is control and conflict.
Take your pick
A few leaders choose war - most people (who will fight those wars) choose peace.
And of course all wars are bankers' wars - it is only they who profit

Timothy D. Naegele

Both Putin and Russia are in a spiral, from which they will not recover.

See https://naegeleblog.wordpress.... ("Putin Meets Economic Collapse With Purges, Broken Promises")

Tony Cocks > Timothy D. Naegele

"Both Putin and Russia are in a spiral, from which they will not recover."

This from someone whose former President and gang of criminal henchmen lied to the world on a monumental scale about WMD in Iraq , and waged an illegal war on that country killing hundreds of thousands in the process . Following that it was Libyas turn , then Syrias . Now its Russia the US neo con warmongers are hounding, the difference being that Russia holds the worlds biggest nuclear arsenal.
The US forces had their kicked out of Vietnam and were thoroughly beaten despite throwing everything they had at the conflict save the nuclear option.
Imagine what will happen if it eventually comes to armed conflict with Russia.

midnightrambler > Timothy D. Naegele

A yank lawyer advocating killing.
From the land of citizen killers
What a surprise
Stay away

stephenmarchant

Instead of demonising Putin and banging on about the problems of the Russian economy the MSM should be worried about indebted Western economies including the UK and US. Russian Govt finances are not burdened with nearly £2trn of debt that has funded unsustainable nominal growth. Here in the UK the real GDP growth per capita is declining at over 3% per anum so as a nation the UK is continuing its decline:-

Govt deficit at 5% per anum
Govt debt at about 80% GDP
Private debt and corporate debt each of a similar order
Record current account deficit of about 5% per anum
A deteriorating NIIP (Net International Investment Position)
Uncontrolled immigration

Our whole debt based fiat system is on the brink but few can see it whilst they party with asset and property bubbles. A few of us foresaw the first crash of 2007/8 but we now face a systemic collapse of our fiat system because of the resulting 'extend and pretend' policy of Govts and central bankers.

In the final analysis the true prosperity of a nation will depend upon its natural resources, infrastructure, skills of its workforce and social cohesion.

Graham Milne > JabbaTheCat

The scale of Russian kleptocracy pales into vanishing insignificance beside the criminality of western banks (and the government who 'regulate' them). Europe and the USA are regimes run by criminals; worse than that, they are run by traitors. At least Putin isn't a traitor to his country.

Busufi

The best way for Russia to beat the downturn in it's oil and gas is to invest in down-stream strategic production of petroleum products that would give Russia a competitive advantage on a global scale.

Selling raw natural resources is the Third World way of exports. Not smart.

[Aug 12, 2016] Poland just completed an LNG import terminal and talking about sending Qatari gas from the LNG terminal to Lithuania and the rest of Europe, to reduce horrible dependence on Russian gas, even if LNG gas is priced 3X higher than piped GAZPROM gas

peakoilbarrel.com
Watcher , 08/10/2016 at 1:32 am
GAZPROM wins. Gas will flow thru Turkey to Europe. The amounts will increase. Ukraine will soon no longer be a conduit, and lose all clout when they try to dodge paying the bill for their own.

Probably back in the Russian sphere of influence in a few years, assuming the EU won't pay their gas bill, and the present leadership will be wards of the EU somewhere in Germany. Actually, were Russia wise, they would just refuse gas to the Ukraine at any price. Surrender or freeze. Maybe needlessly heavy handed. Just impose increasingly crushing conditions. With a smile.

https://www.rt.com/business/355245-turkey-restart-tukish-stream/

Watcher , 08/11/2016 at 1:32 am

Europe Nat Gas consumption:
1.132 billion cubic meters/day (from mazama and converted to m^3)

minus Europe Nat Gas production –> about 570 million cubic meters/day imported (9.5% increase in 2015) X 365 = 208 billion cubic meters/yr

Nordstream pipeline 55 billion cubic meters/yr plans to double by 2019 to 110 billion m^3/yr. That's Gazprom thru Germany.

Ukraine pipeline(s) into Europe presently: 142 billion cubic meters/year.

Belarus pipeline(s) into Europe presently: 38 billion cubic meters/year

Adds to 235 billion cubic meters/yr which is 20 some billion more than the Euro number above because some is going to Macedonia, Serbia and other none EU countries. Relatively inconsequential.

Note that the popular phrasing that Russia only provides 31% of Europe's gas is almost certainly bogus. More like 45-50%.

Now then, Nordstream 2 (that's all GAZPROM gas) will be chopped from Ukraine's flow. Because GAZPROM can just force Belarus gas to be used by not flowing enough thru Ukraine.

The TANAP pipeline is to flow only 16 billion cubic meters/yr of gas from a non Russia source thru Turkey.

The agreement just reached between Putin and Erdogan is for a pipeline carrying Russian gas at 63 billion cubic meters/yr. Turkey will burn 14 of that (they burn 45 billion m^3 /yr) leaving 49 to flow to Europe.
The EU is already trying to interfere, saying there is insufficient capacity in pipelines north thru Greece and other countries, but clearly Greece will burn it and that reduces what's left going north.

Bottom line. Nordstream 2 will be a new 55 billion m^3/yr of GAZPROM gas. TurkeyStream will flow another 49 billion m^3/yr. This will be new from present flows. And Ukraine's flow is 142. They'll be reduced to under 40.

And that TANAP flow will cut them to 25ish.

They might as well surrender now.

Greenbub , 08/11/2016 at 2:20 am
Well, if the Russians and Turks can be best friends, maybe the Saudis and Iranians can too?
GoneFishing , 08/11/2016 at 8:17 am
It's one big family until the valves start to close.
Watcher , 08/11/2016 at 10:18 am
Ukraine gets almost $3 billion/yr in transit fees.

They have demanded just about a double of that 5 mos ago. GAZPROM has not agreed. The Ukraine transit pipeline system apparently also needs $19B in maintenance work GAZPROM had planned to pay for before Ukraine broke relations with Russia. No longer.

Ukraine GDP 90B in 2015 and is falling this year.

So either the EU picks up the $19B plus the $3B/yr in transit fees Ukraine will lose starting late next year (plus cost of Ukraine's consumption itself(they are 5th largest in Europe)), or the fat lady sings.

BTW Poland just completed an LNG import terminal. Look at those flow numbers above in the thread. Now . . . understand Poland is talking about sending Qatari gas from the LNG terminal to Lithuania and the rest of Europe, to reduce horrible dependence on Russian gas, even if LNG gas is priced 3X higher than piped GAZPROM gas. But yes, Poland is going to send gas to other countries from their LNG terminal.

Oh, and the new LNG terminal has a capacity of 5 billion m^3/yr. Repeat. 5 billion m^3/year. That's max in its final form.

Poland burns 16.

[Aug 08, 2016] China openly offers Russia an alliance against NATO

Chairman Xi Jinping is making Russia an offer that Russia can't refuse?
Notable quotes:
"... "We are now seeing the aggressive actions on the part of the United States, regarding both Russia and China. I believe that Russia and China could create an alliance toward which NATO will be powerless and which will put an end to the imperialist desires of the West." ..."
www.fort-russ.com

jfl | Aug 7, 2016 4:36:20 AM | 45

"The world is on the verge of radical change. We see how the European Union is gradually collapsing, as is the US economy -- it is all over for the new world order. So, it will never again be as it was before, in 10 years we will have a new world order in which the key will be the union of China and Russia."

"We are now seeing the aggressive actions on the part of the United States, regarding both Russia and China. I believe that Russia and China could create an alliance toward which NATO will be powerless and which will put an end to the imperialist desires of the West."

V. Arnold | Aug 7, 2016 5:07:56 AM | 46

jfl | Aug 7, 2016 4:36:20 AM | 45

Great link, thanks.
Given the real world politic, I don't see that Russia has much choice. The lack of pressure by the PRC is an important note; Russia isn't being coerced but rather romanced.
My fear has been, and remains, the bat shit crazy neo-cons and their inability to let go of the imperialist dream of world hegemon.

[Aug 07, 2016] Neocon from Foreign Policy magazine are still dreaming about dismembering and colonizing Russi

Notable quotes:
"... No kidding; Kiev's ability to interrupt gas flows to Europe – which the west previously would not even discuss, since it was obviously Russia using energy as a weapon – is presented as just kittenish playfulness, and such an interruption is not a big problem because it's so amusing to watch the clever Ukrainians tweak Moscow's nose. All in good fun, of course, and transit fees are a right. There's just nothing about going around Ukraine to prevent that from happening which could be described as good fun, or tweaking Kiev's nose. Because the Ukrainians are cute, and the Russians are savages. ..."

ucgsblog, August 5, 2016 at 1:08 pm

Waaa! Waaa! Waaa! http://foreignpolicy.com/2016/08/05/poland-takes-aim-at-putins-pipe-dreams/

"This summer hasn't seen a lot of setbacks for Russia, not even for its Olympic hopefuls. Crimea has been annexed and fully absorbed, with the blessing of Republican presidential front-runner Donald Trump, who also calls NATO "obsolete." Russian intelligence services have allegedly been pawing through the emails of U.S. political parties, and releasing them at their leisure. Turkey, in the wake of a failed coup attempt, is rushing to mend fences with Moscow."

Couple of things, my unfellow whiner. First, Crimea has been annexed and absorbed prior to Trump's statement. Ergo it could not have happened with his blessing, since his blessing could only come after the events took place, but what's temporal physics to a "journalist" from FP? Second, at this point I think it's safe to conclude that every intelligence service of any powerful countries studied those e-mails, no need for allegedly. And we don't know if it's the Russians that are releasing them. Third, Turkey rushed to mend ties with Moscow before the coup, not after, but then again, what's temporal physics to a "journalist" from FP? This article promises to deliver mirth, let's read on!

"All of which makes last month's decision by the Polish antitrust regulator to file a formal objection against Russia's proposed "Nord Stream 2" gas pipeline more noteworthy. That regulatory spanner could be Europe's last and best chance to halt construction of a pipeline that critics say will divide Europe, beggar Ukraine, and reinforce Moscow's energy dominance for another generation."

That's a big deal? Poland's opposition to Nord Stream 2 has been well document throughout the ages. Ukraine is already beggared, but let's all blame that on Russia. Moscow's energy dominance comes from the EU being a voracious money swallowing pit, and not enough solar/wind/nuclear powerplants being built, due to, wait for it… lack of funding! Those funds are in places like Syria and Iraq. Oh, and won't the lack of construction divide Europe? Cause I doubt that Russia's going to prop up Ukraine, so if Southern Europe has no gas and Northern Europe has some, won't that be divisive?

"For years, Russia has sought to keep Europe dependent on its exports of energy, especially through natural gas pipelines. But Moscow is also desperate to cut out potentially meddlesome middlemen, like Ukraine, which sits smack between Russia's natural gas fields and millions of European consumers. That gives Kiev the ability to interrupt Russian gas flows headed to Europe, infuriating Moscow, but also earns Ukraine billions of dollars in much-needed transit fees."

Oh really? So Kaliningrad's border with EU member states are somehow attached to Ukraine? Intriguing, very intriguing, did someone skip his geography class?

"A decade ago, Russia enlisted former German Chancellor Gerhard Schröder to help it build a pipe across the Baltic from Russia to Germany, sidestepping Ukraine: Nord Stream. Then Russia tried to build another pipeline, "South Stream," across the Black Sea from Russia to Bulgaria, also bypassing Ukraine, but that was quashed by the European Union in 2014. Then, Moscow invented the idea of a "Turkish Stream," another proposed Black Sea pipe, one landing in Turkey, outside of Brussels's reach. But last fall, Turkish F-16s shot down a Russian jet, and with it hopes of any immediate Russo-Turkish energy cooperation."

Really? Because in the beginning, the article claimed that "Turkey…is rushing to mend fences with Moscow." So they're rushing to cooperate, ergo there won't be cooperation? Stellar "journalism" absolutely stellar.

*drops mic*

Jen, August 5, 2016 at 2:34 pm
'… But the Polish Office of Competition and Consumer Protection last month determined that Nord Stream 2 - which wouldn't even touch Polish territory - could harm consumers. "The Office found that the concentration might lead to restriction of competition," it tentatively concluded, adding that the project could "further strengthen" Gazprom's "dominant position." …'

Looks as if the Poles and the FP writer have a strange idea of what free market competition is. Their idea seems to be that the more middlemen there are, taking their cut, oops, share of the transit fees, and passing the costs down the pipeline, the more competition there is. Plus the journalist fails to see what's wrong with Ukraine interrupting the flow of gas from Russia to the EU to get transit fee income, unless of course he thinks extortion is a legitimate way of doing business.

Patient Observer, August 6, 2016 at 11:11 am So many succulent quotes but my favorite is:

That gives Kiev the ability to interrupt Russian gas flows headed to Europe, infuriating Moscow, but also earns Ukraine billions of dollars in much-needed transit fees.

So, when Ukraine interrupts gas flow to Europe to "infuriate" Moscow, Europe is not infuriated to contend with a crippling gas shortage? And how long is Russia expected to rely on a transit country that likes to infuriate its customer? Gawd, this guy is stupid.

marknesop , August 6, 2016 at 1:54 pm
No kidding; Kiev's ability to interrupt gas flows to Europe – which the west previously would not even discuss, since it was obviously Russia using energy as a weapon – is presented as just kittenish playfulness, and such an interruption is not a big problem because it's so amusing to watch the clever Ukrainians tweak Moscow's nose. All in good fun, of course, and transit fees are a right. There's just nothing about going around Ukraine to prevent that from happening which could be described as good fun, or tweaking Kiev's nose. Because the Ukrainians are cute, and the Russians are savages.

It looks like Russia is not going to be told that it must continue transiting gas through Ukraine, although Ukraine has been on its best behavior where transit is concerned over the last little while (to show how reliable it can be), and transit through Ukraine has actually increased, a fact they lose no opportunity to point out (as if to say, you need us now more than ever). But Kiev reserves the right to hike the transit fees whenever it needs a little more struttin' money, and while the obstructive talk is on hold for now, the Ukrainians love to shoot their mouths off and have made it clear they will simply take gas intended for Europe if Russia restricts Ukraine's supply (although they have brought their Russia supplies way, way down by buying Russian gas from other European countries, bought with gas money given it by the IMF.

Russia would very likely agree to continue supplying Ukraine through its own pipeline network, probably even at a quite attractive price – but if Ukraine started any of its special-needs antics, Russia would not have to worry about Europe's supply going through Ukraine's decrepit pipeline system. Ukraine could be cut off without a second thought, as any reasonable supplier would do if it is not getting paid or is otherwise abused by its customer – and as Europe would do in a second if it were the other way round and Russia was spending billions for European gas transited through Ukraine, which the Ukrainians poached at their leisure.

[Aug 07, 2016] Why does Nord Stream operate at less than 100% capacity?

Notable quotes:
"... Expect this issue to take center stage in the coming months, because northwest Europe, with declining production of its own gas, is going to need a reliable solution, and should be getting pretty tired of propping up Ukraine, Romania and Poland the perennial malcontents. At the present time Poland's regulatory commission is holding up Nord Stream II just because it can – but don't expect that to last. The EU is soon going to be faced with the choice of a Russian gas pipeline in whose operation they will at least have input and in whose construction European companies will share some of the lolly – or a Russo-Turkic pipeline in which they have no say at all and the gas delivery point is at the border. ..."
"... Expect Brussels to accuse Russia of 'dumping' gas on the EU market, regardless of any truth. Russia could still reduce price and make a profit, ergo not 'dumping' in any sense. I would then expect all those new gas reservoirs being built by Germany, Gasprom and others to fill up on cheap Russian gas. ..."
marknesop.wordpress.com

marknesop , August 3, 2016 at 11:11 pm

Why does Nord Stream operate at less than 100% capacity? Because of capacity restrictions imposed by Brussels – just remember that the next time that poxy twat Sefcovic starts blabbering on about why do we need Nord Stream II when the original pipeline only operates at half-capacity? And he will, be sure of it. If Nord Stream could operate at 100% capacity, it would be half the cost of transiting through Ukraine. Just how much charity is Russia expected to offer, especially considering Ukraine imposed a transit rate hike last year for the privilege of using its leaky, whistling, rotting pipeline network?

Expect this issue to take center stage in the coming months, because northwest Europe, with declining production of its own gas, is going to need a reliable solution, and should be getting pretty tired of propping up Ukraine, Romania and Poland the perennial malcontents. At the present time Poland's regulatory commission is holding up Nord Stream II just because it can – but don't expect that to last. The EU is soon going to be faced with the choice of a Russian gas pipeline in whose operation they will at least have input and in whose construction European companies will share some of the lolly – or a Russo-Turkic pipeline in which they have no say at all and the gas delivery point is at the border.

And really, the EU's arguments make it look like it was dropped on its head as an infant. If Turkish Stream goes ahead, the story goes, it will increase dependency on Russian gas, but block Caspian supplies. How? Caspian supplies (Azerbaijan) are supposed to come via the Southern Gas Corridor, which the EU keeps saying it is pressing on with but has yet to lay a foot of. Remind you of the talking-shop that Nabucco became? How much money was pissed away on that, and they didn't build any of it. But the argument seems to be that if Turkish Stream is built, the Southern Gas Corridor cannot be. Why not? What's stopping you?

Price. The EU is scared it cannot do it as cheaply as Russia. And it probably can't. How does that bear on the consumer? Sefcovic already told you – it's not all about price. What price freedom, my friends? Aren't you willing to pay more for your gas so you can say it is Azerbaijani gas instead of Putin's gas? What do you say, European consumer? But it keeps going on about how Turkey and everybody else will get cheap gas, but is still trying to frighten Europeans that if they depend on Russian gas it will go up. Why would it, if it's costing Russia less to ship it?

Kiev should be getting scared. Because there is an increased chance Brussels will cave on the Nord Stream II issue, considering the factors I've already laid out. Or else Putin will build Turkish Stream, and the EU will have to build its own infrastructure to hook up at the border, and either solution will bypass Ukraine – through which, incidentally, transit was up 21% in the first months of 2016, as the Ukrainians try to showcase what reliable partners they are. But that route fails on price. Wah wah wahhhhhh….sorry, Kiev.

Jeremn , August 4, 2016 at 1:38 am
I think EU dithering will force the price of gas up, and then the US will rush to save us with LNG and fracking. But, then, I'm a pessimist.
marknesop , August 4, 2016 at 6:45 am
But even if the price of gas did rise due to EU dithering, Russia could still undercut American LNG price. It comes down to how much are you willing to pay to proudly say "No thank you, Mr. Putin"? It's like Sikorski and his Polish LNG terminal, where he said it costs more, but at least it flies the Polish flag, or like how you could probably sleep with the starlet of your dreams…if you were willing to do anything to get her. Prostitute yourself, sell drugs, move to another country, completely change your lifestyle, whatever it took. A lot of things that are attainable in the abstract are simply not worth it. the UK might be able to get by with no gas imports at all – it still has a little, and they could go back to coal and wood-burning fireplaces like on "Upstairs, Downstairs" (my ex loved that program", and theoretically they could do it, with just a little of that famed British pluck and a stiff upper lip. But nobody wants to do it, because the illusion of independence is not worth behaving so stupidly. It has become a game to see who can get their people deeper in self-denial so that their leader can thumb his nose at Putin.
Jeremn , August 4, 2016 at 7:54 am
It is a bit like Hinckley Point – the UK can't be reliant on Chinese involvement for security reasons (although the French suffered too when the agreement was frozen). Our elites try to get away with it by keeping the population in a state of fear. But they also reward their own chums with contracts, no matter what the cost.

So, yes, I do think they'll try to get away with it, whatever the cost (they'll just blame the utility companies).

marknesop , August 4, 2016 at 8:10 am
There would be the entry of an opposition political figure, telling the populace as much as it would listen to about how an alternate source which is cheaper is available but our political masters make us pay more in order to score political points with their master and perhaps advance themselves and their positions…if the situation were reversed and Russia were dependent on European gas, and Putin was trying to wean the Russians off of it in favour of a more-expensive but more exclusionary alternative.

In my opinion, Russia needs to do that more. Sponsor opposition politicians in enemy countries, I mean. It's a go-to western tactic.

et Al , August 4, 2016 at 9:13 am
Expect Brussels to accuse Russia of 'dumping' gas on the EU market, regardless of any truth. Russia could still reduce price and make a profit, ergo not 'dumping' in any sense. I would then expect all those new gas reservoirs being built by Germany, Gasprom and others to fill up on cheap Russian gas.

I have a question though. If gazprom fills up its CEEC/Balkan reservoirs when gas is X price at X time, is that the fixed price of the gas or if the world price drops, it can sell it for less without it technically being 'dumping'? Does anyone know what the mechanism is?

Fern , August 4, 2016 at 5:07 pm
Here's those good ole western values again on display here, this time directed at the peons in Europe. You wouldn't know it from our posturing politicians but fuel poverty is a massive problem in Europe affecting between 50 to 125 million people. The health consequences are dire from thousands of excess deaths in winter's maw to increases in chronic lung and respiratory diseases. And would you believe it but the Baltic chihuahuas, ever-reliably yapping at all things Russian, have large numbers of their populations living in fuel poverty. Ever read anything by Edward Lucas on this? No, me neither. So, I couldn't really do justice to how angry the behaviour of these morons makes me….people die before their time every year because they can't afford to properly heat their homes and these geniuses in Brussels paid for by us are totally OK with rocketing fuel prices as long as they can say they poked a finger in Vladimir Putin's eye. Reply

[Jul 28, 2016] Ambassador Pyatt hallusinations

marknesop.wordpress.com
Moscow Exile , July 26, 2016 at 1:30 pm
Russia can no longer use gas for manipulating Ukraine – Pyatt

Ukraine has managed to get rid of its gas dependence on Russia, thus destroying the "energy weapon" of the Kremlin, U.S. Ambassador to Ukraine Geoffrey Pyatt has said.

The Ukrainian authorities over the past few years have in fact destroyed Moscow's energy weapon, which used gas in this way, Pyatt said during a meeting of the discussion club "Open World" on the transformations in Ukraine, progress and tasks for the future in Kyiv on Tuesday.

The diplomat said that Ukraine's national gas company Naftogaz Ukrainy currently purchases gas only if it finds the price acceptable, but the natural gas has ceased to be the instrument of manipulation. Ukrainians are no longer in the situation when the Kremlin uses energy resources as a weapon, as an instrument of manipulating Ukrainian politicians, so that they should take certain decisions, he said.

Pyatt also said that the Ukrainian energy sector is undergoing serious transformations and this is very important to bring these changes to completion.

What? Buying the cheapest gas on the market is more economical than not paying for it at all, which is what they did as regards gas directly supplied by Russia?

And where does this cheaper alternative supply come from - originally, not through an intermediary?

Moscow Exile , July 26, 2016 at 1:36 pm
Reverse supply, Pyatt! Ever heard f it?

And the wonderful terms and conditions for EU "association" that Yanukovich could only refuse?

Remember them, you twat?

And billions that the Ukraine owes Gazprom?

Moscow Exile , July 26, 2016 at 9:45 pm
Perhaps Pyatt lauds this action of the Ukrainians as regards their good business practice concerning energy supplies:

На Украине не видят причин возвращать России долг в $3 млрд

Украина не должна возвращать России $3 млрд, которые были получены во времена Виктора Януковича. Об этом в программе "О политике" с Сергеем Руденко в эфире Еспресо [sic].TV заявил министр финансов Александр Данилюк. "Это был политический кредит, который нас заставили взять",- пояснил министр.

По словам господина Данилюка, эти средства в то время могли пойти на различные выплаты в государстве. "Наша позиция заключается в том, что мы не должны возвращать эти деньги",- сказал Александр Данилюк.

In the Ukraine they see no reason for paying back their $3 billion debt to Russia

The Ukraine is not obliged to return to Russia the $3 billion debt that was accrued during Victor Yanukovych's presidency.This is what Finance Minister Alexander Danyluk said live on air to Sergei Rudenko during the Espresso TV programme "On Politics". "Our position was that we were politically forced to accept this credit. Therefore, our position is that we do not have to return this money", explained the minister.

According to Mr. Danyluk, at the time they were able to use the money for the payment of various state benefits. "Our position is that we should not return the money", said Alexander Danyluk.

On December 16 last year, the IMF Executive Board recognized the official status of the $3 billion Russian loan to the Ukraine. In response, the Ukraine announced a moratorium on the payment of any debts to the Russian Federation.

Which is good business practice, according to Pyatt Twat, I presume.

marknesop , July 26, 2016 at 10:17 pm
They evidently believe Daddy Pyatt's muck that they are getting off the Gazprom tit just because they are buying Gazprom gas from someone else. I would have a quiet word with those people to warn them of the possibility that they might have to suddenly find 45% to 90% of their gas supplies somewhere else if they did not put pressure on Ukraine to pay its debts. Because it has evidently not occurred to Ukraine where they would get their gas if their brotherly suppliers did not have any to sell, and were scrambling to find enough for themselves. America would crow that Russia was using energy as a weapon, of course, but Russia should be past caring what America thinks or says because they are never going to be anything like friends no matter what Russia says or does.

Meanwhile, Daddy Pyatt is going to have some 'splainin' to do when Gazprom refuses to sell Ukraine any more gas until they pay. Because they're still getting more than 10% directly. Russia is being nice, and usually sells them gas as soon as they pay in advance for that amount. But maybe they should say, "You know what? I think you should pay all your past dues before you get any more". And they wouldn't have a leg to stand on, because it doesn't matter what 'their position' is; the debt has been recognized as legal and binding.

Moscow Exile , July 26, 2016 at 10:31 pm
Посол США на Украине Пайетт – дурак или всё же идиот?

The United States Ambassador to the Ukraine - a fool or just an an idiot?

I thought he'd been moved to some Stan-republic?

marknesop , July 26, 2016 at 11:32 pm
He would take any criticism from Russia as an accolade, an indicator that he is doing something right, because getting up Russia's nose is his stock in trade and the reason he's posted in there. He's there to provoke confrontation between Russia and Ukraine, the more the better, and he could not care less what will happen to Ukrainians after he's gone.
marknesop , July 26, 2016 at 1:48 pm
As usual, Pyatt is trumpeting nonsense, although I would love for some intrepid journalist to ask him why the USA is so resistant to Nord Stream II and preserving Ukraine's transit fees for Russian gas. If it's so easy to cut your imports of Russian gas by more than half that the poorest country in Europe can do it, why couldn't anyone do it?

Such as the countries from whom Ukraine now buys its gas – Slovakia, Hungary and Poland. Of the three Slovakia is 90% dependent on Russian gas, Hungary 44%, and Poland 45%. These are the countries that scream Nord Stream II must not be built – what would happen if Russia stopped supplying them with gas? Where would Ukraine get its gas then? Where would its suppliers make up their shortfall? American LNG? Ah ha, ha, ha!! Yes, I'm sure; forgive me for laughing, I couldn't help it.

Russia is not making as much money, that's certainly true and will remain true for as long as the west can force the price down through oversupply. Who will run out first? I guess we'll see. But although profits are undeniably lower, Gazprom's exports to Europe increased by approximately 16% between January and May of this year. I think Europeans should be asking themselves how important Ukraine really is in their gas-distribution network. But bravo to Ukraine! See if you can reduce your Gazprom imports to zero! Now, there's a worthy target. Just ask Daddy Pyatt from time to time how you're doing.

Cortes , July 26, 2016 at 5:50 pm
Excellent.

Back in the day contracts were "consensus in idem" or, my version = "agreement in all essentials".

The "partners" ought to be aware that the RF (and its "emanations of the State" (c) EU Law) appears to be relying on that, hmmm, understanding of "the rule of Law".

Chihuahua yelps and Banderastan yowls and EU poodle elite yips aside, the rest of the wide world sees reality as the RF does.

[Jun 02, 2016] Oil trading giant Gunvor handed its chief executive a $1bn dividend to fund a deal that helped the company distance itself from US sanctions against Russia.

Notable quotes:
"... Timchenko's exit was designed to quell any concerns about his role in the company, as he was due to be named in a list of people with alleged links to the Kremlin sanctioned by the US after Russia's invasion of Crimea. ..."
peakoilbarrel.com
likbez , 06/01/2016 at 9:25 am
This is from Guardian:

https://www.theguardian.com/business/2016/may/31/gunvor-oil-chief-dividend-russia-us-sanctions-tornqvist-timchenko

Oil trading giant Gunvor handed its chief executive a $1bn dividend to fund a deal that helped the company distance itself from US sanctions against Russia.

Torbjörn Törnqvist agreed to buy a 43% stake in the company, the fourth largest oil trader in the world, from co-founder Gennady Timchenko in 2014 for an undisclosed fee.

Timchenko's exit was designed to quell any concerns about his role in the company, as he was due to be named in a list of people with alleged links to the Kremlin sanctioned by the US after Russia's invasion of Crimea.

But the sheer size of Gunvor, which pulled in revenues of $64bn (£44bn) last year despite rock-bottom oil prices, meant Törnqvist could not fund the deal in one go.

The payment of a $1bn dividend, only part of which was used to fund the deal, allowed Törnqvist to settle his remaining debt to Timchenko.

[Jun 02, 2016] Medvedev to launch a new complex at Lukoil's oil refinery in Volgograd Russia Oil and Gas, Metals and Mining News

rusmininfo.com

​The new complex will allow to increase the output of diesel fuel of Euro-5 class.

The PM D. Medvedev will visit Volgograd on May 31st.

He will participate in the ceremony of start-up and commissioning works at the plant "Lukoil-Volgogradnetepererabotka".

The new complex of deep processing of vacuum gasoil with the capacity of 3,500 thousand tons a year is to become the largest one in Russia. The complex comprises: a unit of vacuum gasoil hyrocracking; a hydrogen production unit meant for hydrogen containing gas supply to the hydrocracking process; a combined sulfur unit used for utilization of hydrogen disulfide containing amine solution of the hydroracking process. With the putting of the complex into operation the output of diesel fuel of class-5 will grow by 1.8 mln tons a year, oil processing efficiency will reach 95%.

[May 18, 2016] Russian Q1 GDP came in better

oilprice.com

Russian Q1 GDP came in better than expected but still showing contraction at -1.2 percent YoY (versus -2.1 percent expected). A piece in the Wall Street Journal today addresses the challenges experienced by Russia currently, as the government is considering raising taxes to help ease its budget deficit. As the chart below illustrates, Russia's reserve fund is being swiftly depleted – to levels not seen since the 2009 financial crisis – as the government tries to plug the gap left by lost revenue from lower oil prices:

[May 18, 2016] Russias oil policy is driven by economic considerations

Notable quotes:
"... Russia is diversifying oil and gas exports towards rapidly rising Asian markets due to economic and security considerations. But cutting oil exports to Europe, even for one month, would be inefficient and self-destroying. ..."
"... There are also serious logistical issues. Russia exports oil to Asia from the fields in Eastern Siberia and Far East. The fields in West Siberia, Volga-Urals and Timan-Pechora regions are not linked by pipelines with Russia's eastern borders and transportation costs in this case would be too high. ..."
"... Cutting energy supplies to Europe, even for a month, would destroy Russia's reputation as a reliable supplier and result in multiple lawsuits and potential multi-billion fines. Note that Russian oil companies own significant assets in Europe, including refineries, oil terminals, storage facilities, etc. ..."
"... However, if Russia (even for economic reasons) began diverting supplies to Asia via pipelines, wouldn't that mean there would be less for the West to buy? Due to the laws of mathematics? ..."
"... Try putting together a spreadsheet with sources and sinks. Use transport costs to link these two. When you do you'll see the only difference is to change transport costs and security. I used to work and live in Russia and I'm sure they are using models like we did to understand the best options to move Russian oil. I'm a bit outdated, but what we see is a need to refine oil for internal consumption with a better kit. They need to improve their refineries to grind oil molecules for real. ..."
"... This is a very questionable assumption. Supply/demand dynamics, especially reckless financing of shale in the USA was a factor (as in "crisis of overproduction" - if we remember classic Marxist term ;-), but this is only one and probably not decisive contributing factor. Paper oil, HFT, Saudis oil damping and Western MSM and agencies (Wild cries "Oil Glut !!!", "OMG Oil glut !!!" supported by questionable statistics from EIA, IEA and friends) were equally important factors. It you deny this you deny the reality. ..."
"... I agree, but this not the whole story. Western MSM went to crazy pitch trying to amplify Saudi animosities and to play "young reckless prince" card toward Iran and Russia. Do you remember the interview the prince gave to Bloomberg just before the freeze ? Do you think that this was accidental? ..."
"... definitely $50-$60 price band is not enough to revive the US shale. LTO is dead probably on any level below $80 and may be even above this level. That does not exclude "dead chicken bounce". Moreover LTO is already played card for financial industries. In reality it probably needs prices above $100 to fully recover. ..."
"... neoliberals still dominates in Russia. Especially oil and economics ministries. Reading interviews of Russian oil officials is pretty depressing. They swallow and repeat all the Western propaganda one-to-one. Unfortunately. In this area they have a lot to learn from Americans :-). ..."
"... At the same time, increasing the volume of high additional value products such as plastics, rubber, composites, etc is in best Russia's interest. It is difficult to achieve though. I think creating the ability to withhold substantial amount of oil from the markets for the periods of say 6 to 12 month is more important. And here they can get some help from OPEC members, Saudi be damned. ..."
"... This is a tricky balancing solution, but still this is some insurance against the price slumps like the current one, when Russia was caught swimming naked and did not have any viable game plan. It is unclear what is the optimal mix, but in no way this 100% or even 80% raw oil. ..."
peakoilbarrel.com
SatansBestFriend , 05/13/2016 at 6:32 pm
3) Russia's oil policy is driven by economic considerations. Cutting oil exports (and hence foreign currency revenues) in order to "punish" the West is like shooting yourself in the foot.

Aleks,

I agree that a sustained embargo on the West by Russia is not realistic economically. Cutting supplies for a month to send a message might be.

Or you could do something else…send your supplies via pipeline to Asia.
There by you get your money and decrease the supplies the West has access to.

Russia pipeline to India:

https://in.rbth.com/economics/cooperation/2015/12/21/gas-pipeline-to-india-being-considered_553397

Russia to China oil pipeline:

http://www.rferl.org/content/russia-china-pipeline-cnpc/27731340.html

Russia to Pakistan pipeline:

http://learningenglish.voanews.com/a/russia-to-spend-billions-on-gas-pipeline-in-pakistan/3193228.html

AlexS , 05/13/2016 at 7:55 pm
SatansBestFriend,

I am sorry, but what you and likbez are saying here sounds naïve.

Russia is diversifying oil and gas exports towards rapidly rising Asian markets due to economic and security considerations. But cutting oil exports to Europe, even for one month, would be inefficient and self-destroying.

1) European customers could easily find alternative sources of supply. Saudi Arabia and Iran would be happy to take Russia's share in the European market and it would be very difficult to take it back.

2) It is impossible to redirect all Russian oil exports to Asia. Nobody there expects sharply increased volumes of Russian oil. China has increased oil imports from Russia, but is not willing to depend entirely on Russian supplies. There are also serious logistical issues. Russia exports oil to Asia from the fields in Eastern Siberia and Far East. The fields in West Siberia, Volga-Urals and Timan-Pechora regions are not linked by pipelines with Russia's eastern borders and transportation costs in this case would be too high.

3) Contrary to what the western MSM is saying, Russia has never used energy exports as a political weapon. The episodes when Russia was cutting gas supplies to Ukraine were related with prolonged non-payments from that country. As soon as payments were resumed, Russia restarted gas supplies. Today, when relations between Russia and Ukraine are worse than ever, Russia is supplying gas to Ukraine as Ukraine is paying for it.

Cutting energy supplies to Europe, even for a month, would destroy Russia's reputation as a reliable supplier and result in multiple lawsuits and potential multi-billion fines. Note that Russian oil companies own significant assets in Europe, including refineries, oil terminals, storage facilities, etc.

In general, Russia and Europe are so interdependent in the energy sector, that any drastic steps there may have extremely negative consequences for both sides. Not surprisingly, the western sanctions against Russia did not include a ban on the imports of Russian oil and gas. Russia, on its side, will never cut its energy supplies to Europe.

SatansBestFriend , 05/13/2016 at 8:10 pm
"Russia is diversifying oil and gas exports towards rapidly rising Asian markets due to economic and security considerations. But cutting oil exports to Europe, even for one month, would be inefficient and self-destroying ".

Hey AlexS,

I think you are correct with the bolded part above.

However, if Russia (even for economic reasons) began diverting supplies to Asia via pipelines, wouldn't that mean there would be less for the West to buy? Due to the laws of mathematics?

Unless of course Russia's Oil/Gas production is growing to offset the diversion.

Also, please note that my couch potato analysis was meant to be considered under Peak Oil/ELM conditions. Not BAU as in today. I should have specified.

If there is anyone to trust on this point…It isn't me!!! LOL!

thanks for you analysis AlekS.

Fernando Leanme , 05/14/2016 at 11:10 am
No. Try putting together a spreadsheet with sources and sinks. Use transport costs to link these two. When you do you'll see the only difference is to change transport costs and security. I used to work and live in Russia and I'm sure they are using models like we did to understand the best options to move Russian oil. I'm a bit outdated, but what we see is a need to refine oil for internal consumption with a better kit. They need to improve their refineries to grind oil molecules for real.
likbez , 05/13/2016 at 10:16 pm
Alex,

The current oil price slump is due to supply/demand dynamics, not to western conspiracies

This is a very questionable assumption. Supply/demand dynamics, especially reckless financing of shale in the USA was a factor (as in "crisis of overproduction" - if we remember classic Marxist term ;-), but this is only one and probably not decisive contributing factor. Paper oil, HFT, Saudis oil damping and Western MSM and agencies (Wild cries "Oil Glut !!!", "OMG Oil glut !!!" supported by questionable statistics from EIA, IEA and friends) were equally important factors. It you deny this you deny the reality.

Remember the key Roman legal principle "cue bono". And who in this case is the prime suspect? Can you please answer this question.

And please remember that the originator of the word "conspiracies" was CIA (to discredit those who questioned the official version of JFK assassination).

2) The Doha deal was torpedoed by Saudi Arabia, primarily due to its conflict with Iran and the intention to defend market share.

I agree, but this not the whole story. Western MSM went to crazy pitch trying to amplify Saudi animosities and to play "young reckless prince" card toward Iran and Russia. Do you remember the interview the prince gave to Bloomberg just before the freeze ? Do you think that this was accidental?

BTW I agree that this was a huge win of Western diplomacy and "low oil price forever" forces.

An increase in oil prices well above $50 this year is not in Russia's or Saudi interest, as it could reverse the declining trend in LTO output.

Nonsense. First of all mankind now needs oil above $100 to speed up the switch to hybrid cars for personal transportation, and Russia and Saudi are the part of mankind.

It is also in best Russia's and Saudi economic interests, contrary to what you read on Bloomberg or similar rags. World oil production is severely damaged by low oil prices and 1MB/d that shale it can probably additionally produce in best circumstances is not that easy to achieve after this slump.

And definitely $50-$60 price band is not enough to revive the US shale. LTO is dead probably on any level below $80 and may be even above this level. That does not exclude "dead chicken bounce". Moreover LTO is already played card for financial industries. In reality it probably needs prices above $100 to fully recover.

For probably the next five-seven years everybody will be too shy in financing shale and other high risk oil production ventures. So the oil price will probably set a new record. After that we will have another round of "gold rush" in oil as institutional memory about the current oil price slump will gradually evaporate. Neoliberalism is an unstable economic system, you can bet on that.

Russia's oil policy is driven by economic considerations. Cutting oil exports (and hence foreign currency revenues) in order to "punish" the West is like shooting yourself in the foot.

Nonsense. No nation politics is driven only by economic consideration but Russia stupidly or not tried to play the role of stable, reliable oil and gas supplier to people who would betray you for a penny. And sometimes this desire to play nice with the West led to betraying its own national interests.

If I were Putin I would create strategic reserves and divert part of oil export to them to sell them later at higher prices. Buy low, sell high: is not this a good strategy :-)

Or play some other card by artificially restricting export of oil to Western Europe to refined products (and to please the USA, as it so badly wanted Russia to restrict supplies to EU to damage their long time strategic partner :-) and let the EU face consequences of their own polices.

But this is probably not a possibility as neoliberals still dominates in Russia. Especially oil and economics ministries. Reading interviews of Russian oil officials is pretty depressing. They swallow and repeat all the Western propaganda one-to-one. Unfortunately. In this area they have a lot to learn from Americans :-).

Exports are reliable hard currency stream. But it not a stable stream, as Russia recently discovered.

At the same time, increasing the volume of high additional value products such as plastics, rubber, composites, etc is in best Russia's interest. It is difficult to achieve though. I think creating the ability to withhold substantial amount of oil from the markets for the periods of say 6 to 12 month is more important. And here they can get some help from OPEC members, Saudi be damned.

Upgrading oil refining capacity means that Russian oil companies are able to increase the share of refined products in total exports at the expense of crude oil.

This is a tricky balancing solution, but still this is some insurance against the price slumps like the current one, when Russia was caught swimming naked and did not have any viable game plan. It is unclear what is the optimal mix, but in no way this 100% or even 80% raw oil.

[May 17, 2016] Work starts on new pipeline bringing Azeri gas to Italy

bakken.com

Construction work is starting on a new pipeline project bringing Azeri gas through northern Greece and Albania to Italy, reducing Europe's energy dependency on Russia.


The Trans Adriatic Pipeline will run for 878 kilometers (550 miles), from Greece's border with Turkey to southern Italy, and includes a 105-kilometer (65-mile) stretch under the Adriatic Sea. First deliveries to Europe are expected in 2020.

Greek Prime Minister Alexis Tsipras said the project would create 8,000 jobs in his financially struggling country, which has more than 24 percent unemployment.

He spoke at a ceremony Tuesday to mark the beginning of the pipeline's construction in the northern port city of Thessaloniki.

TAP is a joint project by Britain's BP, Azerbaijan's SOCAR, Italy's Snam, Belgium's Fluxys, Spain's Enagas and Swiss Axpo.

[May 14, 2016] Russian oil exports are expected to shrink

Notable quotes:
"... This is a very questionable assumption. Supply/demand dynamics, especially reckless financing of shale in the USA was a factor (as in "crisis of overproduction" - if we remember classic Marxist term ;-), but this is only one and probably not decisive contributing factor. Paper oil, HFT, Saudis oil damping and Western MSM and agencies (Wild cries "Oil Glut !!!", "OMG Oil glut !!!" supported by questionable statistics from EIA, IEA and friends) were equally important factors. It you deny this you deny the reality. ..."
"... I agree, but this not the whole story. Western MSM went to crazy pitch trying to amplify Saudi animosities and to play "young reckless prince" card toward Iran and Russia. Do you remember the interview the prince gave to Bloomberg just before the freeze ? Do you think that this was accidental? ..."
"... definitely $50-$60 price band is not enough to revive the US shale. LTO is dead probably on any level below $80 and may be even above this level. That does not exclude "dead chicken bounce". Moreover LTO is already played card for financial industries. In reality it probably needs prices above $100 to fully recover. ..."
"... neoliberals still dominates in Russia. Especially oil and economics ministries. Reading interviews of Russian oil officials is pretty depressing. They swallow and repeat all the Western propaganda one-to-one. Unfortunately. In this area they have a lot to learn from Americans :-). ..."
"... At the same time, increasing the volume of high additional value products such as plastics, rubber, composites, etc is in best Russia's interest. It is difficult to achieve though. I think creating the ability to withhold substantial amount of oil from the markets for the periods of say 6 to 12 month is more important. And here they can get some help from OPEC members, Saudi be damned. ..."
"... This is a tricky balancing solution, but still this is some insurance against the price slumps like the current one, when Russia was caught swimming naked and did not have any viable game plan. It is unclear what is the optimal mix, but in no way this 100% or even 80% raw oil. ..."
peakoilbarrel.com

likbez , 05/13/2016 at 3:45 pm

Alex,

I doubt that Russian will so easily forgive the West the current price slump and sanctions. Remember it was Russia which was one on the main initiators of "freeze" the US and EU managed to derail.

My impression is that Russia wants to process most of its oil internally which will reduce the amount of oil available for export significantly. That's now semi-official policy.

Production figures are less meaningful in this context then export volumes and are like a smokescreen on the eminent move to oil shortages on world markets.

Yes, production might be stable or slowly declining. But exports will not be stable. They will be declining. Now what ?

AlexS , 05/13/2016 at 5:45 pm

nonsense.

1) The current oil price slump is due to supply/demand dynamics, not to western conspiracies. This is very well understood by Russian officials.

2) The Doha deal was torpedoed by Saudi Arabia, primarily due to its conflict with Iran and the intention to defend market share.

3) The output freeze deal was intended at changing the sentiment in the market and prevent further decline in oil prices. This objective was achieved: oil prices are up 70% from February lows, which is partly due to the talks between Russia, Saudi Arabia and others that started in February.

Nobody expected the Doha deal to help oil prices to return to $100 levels, as an output freeze is not an output cut. Besides, the agreement should have been non-binding and there was no mechanism to control its implementation.

An increase in oil prices well above $50 this year is not in Russia's or Saudi interest, as it could reverse the declining trend in LTO output. Russia's government officials, management of oil companies and experts generally think that rebalancing of the oil market should be left to market forces, and any attempts to artificially cut supply would be counter-productive. Therefore, nobody saw the failure of the Doha agreement as a tragedy, particulalry as prices are already at acceptable levels.

3) Russia's oil policy is driven by economic considerations. Cutting oil exports (and hence foreign currency revenues) in order to "punish" the West is like shooting yourself in the foot.

4) As Russian oil production was increasing in the past 15 years, and domestic demand remained relatively stable, the country has been ramping up exports of both crude oil and refined products. Upgrading oil refining capacity means that Russian oil companies are able to increase the share of refined products in total exports at the expense of crude oil.
This results in changing structure of liquid fuel exports, not in the decrease in its combined volume. In fact, the structure of petroleum exports depends on comparative profitability of crude and product exports. Sometimes it is more profitable to export crude rather than diesel or fuel oil.

likbez , 05/13/2016 at 10:16 pm
Alex,

The current oil price slump is due to supply/demand dynamics, not to western conspiracies

This is a very questionable assumption. Supply/demand dynamics, especially reckless financing of shale in the USA was a factor (as in "crisis of overproduction" - if we remember classic Marxist term ;-), but this is only one and probably not decisive contributing factor. Paper oil, HFT, Saudis oil damping and Western MSM and agencies (Wild cries "Oil Glut !!!", "OMG Oil glut !!!" supported by questionable statistics from EIA, IEA and friends) were equally important factors. It you deny this you deny the reality.

Remember the key Roman legal principle "cue bono". And who in this case is the prime suspect? Can you please answer this question.

And please remember that the originator of the word "conspiracies" was CIA (to discredit those who questioned the official version of JFK assassination).

2) The Doha deal was torpedoed by Saudi Arabia, primarily due to its conflict with Iran and the intention to defend market share.

I agree, but this not the whole story. Western MSM went to crazy pitch trying to amplify Saudi animosities and to play "young reckless prince" card toward Iran and Russia. Do you remember the interview the prince gave to Bloomberg just before the freeze ? Do you think that this was accidental?

BTW I agree that this was a huge win of Western diplomacy and "low oil price forever" forces.

An increase in oil prices well above $50 this year is not in Russia's or Saudi interest, as it could reverse the declining trend in LTO output.

Nonsense. First of all mankind now needs oil above $100 to speed up the switch to hybrid cars for personal transportation, and Russia and Saudi are the part of mankind.

It is also in best Russia's and Saudi economic interests, contrary to what you read on Bloomberg or similar rags. World oil production is severely damaged by low oil prices and 1MB/d that shale it can probably additionally produce in best circumstances is not that easy to achieve after this slump.

And definitely $50-$60 price band is not enough to revive the US shale. LTO is dead probably on any level below $80 and may be even above this level. That does not exclude "dead chicken bounce". Moreover LTO is already played card for financial industries. In reality it probably needs prices above $100 to fully recover.

For probably the next five-seven years everybody will be too shy in financing shale and other high risk oil production ventures. So the oil price will probably set a new record. After that we will have another round of "gold rush" in oil as institutional memory about the current oil price slump will gradually evaporate. Neoliberalism is an unstable economic system, you can bet on that.

Russia's oil policy is driven by economic considerations. Cutting oil exports (and hence foreign currency revenues) in order to "punish" the West is like shooting yourself in the foot.

Nonsense. No nation politics is driven only by economic consideration but Russia stupidly or not tried to play the role of stable, reliable oil and gas supplier to people who would betray you for a penny. And sometimes this desire to play nice with the West led to betraying its own national interests.

If I were Putin I would create strategic reserves and divert part of oil export to them to sell them later at higher prices. Buy low, sell high: is not this a good strategy :-)

Or play some other card by artificially restricting export of oil to Western Europe to refined products (and to please the USA, as it so badly wanted Russia to restrict supplies to EU to damage their long time strategic partner :-) and let the EU face consequences of their own polices.

But this is probably not a possibility as neoliberals still dominates in Russia. Especially oil and economics ministries. Reading interviews of Russian oil officials is pretty depressing. They swallow and repeat all the Western propaganda one-to-one. Unfortunately. In this area they have a lot to learn from Americans :-).

Exports are reliable hard currency stream. But it not a stable stream, as Russia recently discovered.

At the same time, increasing the volume of high additional value products such as plastics, rubber, composites, etc is in best Russia's interest. It is difficult to achieve though. I think creating the ability to withhold substantial amount of oil from the markets for the periods of say 6 to 12 month is more important. And here they can get some help from OPEC members, Saudi be damned.

Upgrading oil refining capacity means that Russian oil companies are able to increase the share of refined products in total exports at the expense of crude oil.

This is a tricky balancing solution, but still this is some insurance against the price slumps like the current one, when Russia was caught swimming naked and did not have any viable game plan. It is unclear what is the optimal mix, but in no way this 100% or even 80% raw oil.

[May 14, 2016] Russia is not planning to significantly ramp production capacity

Notable quotes:
"... Russia is not planning to significantly ramp production capacity. Energy Minister Novak said today that the country will be able to maintain long-term production levels within the range 525-545 million tons per year (10.5-10.9 mb/d). That's what Russian officials were saying earlier. ..."
"... According to the Saudi officials, planned expansion of the Khurais and Shaybah oil fields will only compensate for falling output at other fields. They claim that the country's "maximum sustainable output capacity is 12 million barrels per day and the nation's total capacity is 12.5 million bpd", but there are no plans to increase capacity and there is no evidence that this capacity really exists. ..."
peakoilbarrel.com
Hi Ron,

In your opinion will the Saudi's and Russians be able to significantly ramp further production capacity as they threaten?

AlexS , 05/13/2016 at 7:14 am
I'm not Ron, but this is my view:

Russia is not planning to significantly ramp production capacity. Energy Minister Novak said today that the country will be able to maintain long-term production levels within the range 525-545 million tons per year (10.5-10.9 mb/d). That's what Russian officials were saying earlier.

According to the Saudi officials, planned expansion of the Khurais and Shaybah oil fields will only compensate for falling output at other fields. They claim that the country's "maximum sustainable output capacity is 12 million barrels per day and the nation's total capacity is 12.5 million bpd", but there are no plans to increase capacity and there is no evidence that this capacity really exists.

I think that in reality Saudi Arabia is able to increase crude production from the current 10.2 mb/d to 10.5-10.6 mb/d during the peak season for local demand in the Summer, but not well above those levels.

Dennis Coyne , 05/13/2016 at 11:40 am
Hi John,

I agree with AlexS's assessment. In short, no not much further increase in output will come from Russia and Saudi Arabia, certainly not until oil prices rise above $70/b in 2018, and perhaps never.

The combined output of Russia and KSA will remain within +/- 2 Mb/d of 2015 C+C output levels until 2020 in my view.

likbez , 05/13/2016 at 3:47 pm
IMHO Alex missed the bigger picture. Exports will decrease. Might be significantly because more and more oil will be processed internally.

[May 09, 2016] Russian Oil Executives Not Optimistic About Oil Prices

Russia is bleeding hard currency but still its oil industry is the best shape among OPEC nations, despite low oil prices and sanctions. It might well be that Russia will preserve the level of oil production which it reached in 2015 in 2016.
OilPrice.com

While discussing major factors influencing the oil market at the Forum, the speakers agreed the geopolitics have become an essential factor, although the condition of the world economy and market forces along with the technological advancement seemed to still be taking a lead in driving oil prices.

"We must understand that the oil prices cannot change drastically because we are now reaching the projected output level that we set out to achieve with the investments that we historically made six, five, four years ago, and the production cannot be curtailed," said Vagit Alekperov, LUKoil's Chief Executive Officer. According to Alekperov, last year LUKoil spent 300 billion rubles on investments in the industry, and 112 billion rubles of investments in the first quarter of 2016.

Related: ISIS Working On Driverless Car Causes More Worry Than Necessary

Alekperov also said that the complex geopolitical situation in the Persian Gulf has caused the OPEC members from the Middle East to compete harder for their share of the oil market.

"What we see here, is that amidst the oil prices slump the Persian Gulf countries attempt to increase their production output to cover their budget deficits caused by slashed oil revenues, including compensating for the part of budget they need for procuring arms", Alekperov noted.

However, LUKoil's CEO believes oil prices are passed their lowest point, and the equilibrium price should fluctuate around $50 per barrel for the rest of 2016 and first half of 2017. Prices should then rise in the second half of 2017 as demand begins to exceed supply.

The Chairman of the Russian Union of Industrialists and Entrepreneurs, Alexander Shohin, described a litany of geopolitical issues affecting oil prices. "The fact that the Saudis rejected freezing the output blaming it on Iran's absence from the negotiations and its refusal to cooperate by announcing intention to raise the production back to pre-sanctions level of 5 million bpd plus a couple million bpd on top of that; turmoil in Libya's political situation, and a lack of a legitimate government there ; let alone the conspiracy plots that impact oil prices in countries that may be regarded as 'unfriendly'…all this definitely points to a high role of geopolitics in global oil market," he said.

[May 09, 2016] Can Iran And Saudi Arabia's Production Claims Be Believed

Notable quotes:
"... From the Iranian side, I have no doubts that an increase of another 1m barrels a day is precisely what they hope will happen, but the reality will surely be different. For all oil production, whether it is from an independent oil company or a sovereign nation, capital expenditures will determine the increase or decrease that can be achieved. Iran has a decidedly arthritic oil infrastructure, slowed by the lack of Western technology and the impact of a decade of sanctions. Their own economy is too weak to generate anywhere near the capex required to increase another 1 million barrels in the next year, and their overtures to foreign oil companies for leases inside Iran has been met cooly by prime contenders Total (TOT) and Eni (E). There is a lagged amount of already developed barrels that Iran can push onto the global market – perhaps 300,000 barrels a day; but by my reckoning, already 150,000 of those barrels have been added – making their ultimate targets very unlikely indeed to be reached. ..."
"... It wouldn't be consistent to believe that for the last year and a half, the Saudis have been capable of increasing their production by another 20 percent, but have so far kept that potential under wraps. Instead, I am fully of the opinion that the Saudis are near, if not at their full production potential right now. ..."
"... The oil market seems to agree – in February, if the threat of another 3 million barrels of oil hitting the global market had been unleashed, oil might have reached below $20 a barrel; today, oil is getting very close to rallying towards $50 a barrel instead. ..."
OilPrice.com

In light of the missed opportunity at Doha to curb OPEC production, angry statements have emerged from both Iran and Saudi Arabia on oil production – the Iranians saying that they cannot be stopped in increasing their exports another 1m barrels a day in the next 12 months, the Saudi oil minister in turn threatening to increase production another 2m barrels a day. Both of these statements need to be taken with not a grain, but a 5-pound bag of salt.

From the Iranian side, I have no doubts that an increase of another 1m barrels a day is precisely what they hope will happen, but the reality will surely be different. For all oil production, whether it is from an independent oil company or a sovereign nation, capital expenditures will determine the increase or decrease that can be achieved. Iran has a decidedly arthritic oil infrastructure, slowed by the lack of Western technology and the impact of a decade of sanctions. Their own economy is too weak to generate anywhere near the capex required to increase another 1 million barrels in the next year, and their overtures to foreign oil companies for leases inside Iran has been met cooly by prime contenders Total (TOT) and Eni (E). There is a lagged amount of already developed barrels that Iran can push onto the global market – perhaps 300,000 barrels a day; but by my reckoning, already 150,000 of those barrels have been added – making their ultimate targets very unlikely indeed to be reached.

The Saudis do not have any of the capex or technology problems that plague the Iranians. But the question of how much capacity the Saudis actually do have comes into play when they threaten to increase production by another 2 million barrels. For my entire career in oil, there has always been a dark question on Saudi 'spare capacity' – How much could the Saudis ultimately pump, if they were willing to open the spigots up fully? For years, the speculation from most oil analysts was near to 7.5m or 8m barrels a day – a number that was blown out in the last two years as Saudi production rocketed above 10m barrels a day.

But the strategy the Saudis have pursued has been clear – they have been working towards full production and an aggressive fight for market share since the failure of the Vienna OPEC meeting in November of 2014. It is very difficult to believe that the Saudis have had much, if any, remaining capacity to easily put on the market since that time, or if any spare capacity could be developed at all. It wouldn't be consistent to believe that for the last year and a half, the Saudis have been capable of increasing their production by another 20 percent, but have so far kept that potential under wraps. Instead, I am fully of the opinion that the Saudis are near, if not at their full production potential right now.

The oil market seems to agree – in February, if the threat of another 3 million barrels of oil hitting the global market had been unleashed, oil might have reached below $20 a barrel; today, oil is getting very close to rallying towards $50 a barrel instead.

[Apr 24, 2016] In riposte to Riyadh, Russia says ready to ramp up oil output

Notable quotes:
"... "They (Saudis) have the ability to raise output significantly. But so do we," Russian Energy Minister Alexander Novak told journalists on the sidelines of an international energy conference in Moscow. ..."
"... He said Russia was "in theory" able to raise production to 12 or even 13 million bpd from current record levels of close to 11 million bpd. ..."
"... Russian oil output has repeatedly surprised on the upside over the past decade, rising from as low as 6 million bpd at the turn of the millennium. Oil experts have repeatedly predicted an unavoidable decline but it has yet to happen. ..."
"... we are headed for some incredibly rough times. We need for oil to be just like Goldilock's porridge, not to hot, not too cold, not too plentiful and cheap, not too scarce and expensive, for at least another couple of decades. ..."
peakoilbarrel.com

AlexS , 04/20/2016 at 11:16 am

A war of words:

In riposte to Riyadh, Russia says ready to ramp up oil output

Apr 20, 2016
http://www.reuters.com/article/us-opec-russia-idUSKCN0XH1ST

Russia said on Wednesday it was prepared to push oil production to new historic highs, just days after a global deal to freeze output levels collapsed and Saudi Arabia threatened to flood markets with more crude.

The deal had been meant to help the market rebalance by removing a large chunk of oversupply and a stockpile glut.

But Saudi Arabia said it could jack up output instead – by as much as 2 million barrels per day (bpd) to over 12 million, which would allow it to overtake Russia as the world's largest producer.

"They (Saudis) have the ability to raise output significantly. But so do we," Russian Energy Minister Alexander Novak told journalists on the sidelines of an international energy conference in Moscow.

He said Russia was "in theory" able to raise production to 12 or even 13 million bpd from current record levels of close to 11 million bpd.

Russian oil output has repeatedly surprised on the upside over the past decade, rising from as low as 6 million bpd at the turn of the millennium. Oil experts have repeatedly predicted an unavoidable decline but it has yet to happen.

Silicon Valley Observer , 04/20/2016 at 1:47 pm
I'll believe it when I see it.
Oldfarmermac , 04/20/2016 at 1:05 pm
"Oil experts have repeatedly predicted an unavoidable decline but it has yet to happen."

This is a "WHEN" question, rather than an "if" question. Let's hope and pray to the Sky Daddy or Sky Mommy of our choice that the supply of oil holds up well enough, long enough, for the renewables and electric car industries to grow up.

Otherwise, we are headed for some incredibly rough times. We need for oil to be just like Goldilock's porridge, not to hot, not too cold, not too plentiful and cheap, not too scarce and expensive, for at least another couple of decades.

[Apr 17, 2016] Russia as an energy exporting country

Notable quotes:
"... There is a LOT of food for thought in it. Russia may soon peak as as oil producer, but gas production is another story. Russia may now turn out to be the swing producer in some respects. ..."
"... I read that the Russian government is selling a 19.5% stake in Rosneft and looking for a "non-greedy" partner for the interest. Russia also says do not expect prices to rise after Doha meeting. I believe we discussed this back in February. The goal is not necessarily to return prices back to 2011-14 levels, but to stop the speculators driving the prices into the $20s and below. ..."
"... I wish they shale guys would say they need $70 to survive. Then OPEC and Russia would be ok with $60, and $60 WTI would be just fine by us for quite awhile. ..."
"... Wait, you're playing the speculator card? I thought those HFT engines were all that was putting it at $110. ..."
peakoilbarrel.com
Oldfarmermac , 04/15/2016 at 7:03 am
This link is a longer one ( not for sound bite fans ) going into some substantial detail concerning Russia as an energy exporting country, and what it means to the rest of the world politically and economically.

Read it for insight. There is a LOT of food for thought in it. Russia may soon peak as as oil producer, but gas production is another story. Russia may now turn out to be the swing producer in some respects.

Russia can sell pipeline gas cheaper than we yankees can sell LNG overseas for instance.

http://www.huffingtonpost.com/the-conversation-us/russia-a-global-energy-po_b_9693032.html

shallow sand , 04/15/2016 at 7:20 am
I read that the Russian government is selling a 19.5% stake in Rosneft and looking for a "non-greedy" partner for the interest. Russia also says do not expect prices to rise after Doha meeting. I believe we discussed this back in February. The goal is not necessarily to return prices back to 2011-14 levels, but to stop the speculators driving the prices into the $20s and below.

I wish they shale guys would say they need $70 to survive. Then OPEC and Russia would be ok with $60, and $60 WTI would be just fine by us for quite awhile.

Watcher , 04/15/2016 at 1:43 pm
Wait, you're playing the speculator card? I thought those HFT engines were all that was putting it at $110.

[Apr 13, 2016] Rosneft is implementing the most ambitions modernization program in RF

peakoilbarrel.com
AlexS , 04/12/2016 at 4:06 pm
"All oil producing countries … now started accelerated development of petrochemical industry.
This is probably the most important consequence of this oil price slump.
They all want to export more refined products and products with substantial added value (plastics, composites)."

This process started at least 10 years ago and has nothing to do with the drop in oil prices. See, for example, the chart below:

Russia's crude oil and refined products exports (million tons)

likbez , 04/12/2016 at 4:45 pm
Alex,

Not so fast. I remember that Sechin on one of International conferences had proudly pumped his chest explaining how good a player Russia is in a sense that they are just exporting raw oil instead of refined products. This guy dumped huge amount of money into Arctic shelf instead of building refineries and other chemical plants which would help enormously in 2015.

Can you please compare that with KSA dynamics. Because that will tell us how backward in this respect Russians were up to this day in comparison with Arab sheikhs.

The recent refinery built in KSA (0.4 Mb/d):

Yanbu Aramco Sinopec Refining Company (YASREF) Ltd. King Salman and Chinese President Xi Jinping inaugurate YASREF Refinery Riyadh, Saudi Arabia, January 20, 2016 The Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud, the King of Saudi Arabia and His Excellency Xi Jinping, the President of the People's Republic of China today jointly inaugurated the Yanbu Aramco Sinopec Refining Company (YASREF)refinery. https://lnkd.in/eCBZ4PZ W.J

AlexS , 04/12/2016 at 5:39 pm
I do not know what you remember, but there are statistical facts.
The share of refined products in Russia's oil and product exports increased from 25-30% in 2000-2005 to 41-42% in 2014-2015.
In volume terms, exports of refined products increased by 174% (almost 3 times) between 2000 and 2015.
Given that Russia has sufficient primary distillation capacity, there was an intensive modernization program.

Saudi Arabia has also been developing refining capacity and currently covers all its domestic needs. In 2015, refining products accounted for 13% of total crude and products exports.

Saudi Arabia's crude and refined product exports (mb/d)
source: JODI

AlexS , 04/12/2016 at 5:51 pm
As you mentioned Sechin, here is a brief summary of Rosneft's refinery modernization program:

"Rosneft is implementing the most ambitions modernization program in RF: more than 30 construction projects, reconstruction of re-refinery units. The Company's refineries are implementing the modernization program that implies significant increase of the refining depth and improvement of the produced petroleum products (all motor fuels will correspond to the European environmental class Euro-5).

The capacity of the modernization program projects:

primary processing – 12.0 million tons/year;
conversion processes – 23.6 million tons/year;
reforming processes – 35.9 million tons/ year.
At present, within the framework of implementation of the program, reconstruction and construction works are being performed with respect of the following:

reforming, isomerization, alkylation plants for production of high-octane gasoline components;
catalytic cracking plants for production of high-quality gasoline components and oil conversion rate increase;
hydrocracking plants for production of high-quality diesel fuel components, jet fuel and oil conversion rate increase;
hydrotreatment plants for compliance with the requirements of the Technical Regulations of the Customs Union in terms of sulfur content in the products."

http://www.rosneft.com/Downstream/refining/Refinery_Modernization_Program/

likbez , 04/12/2016 at 6:27 pm
Alex,

Sorry, I was wrong.

[Apr 11, 2016] Russia produces higher volume of oil with a much less number of wells.

Notable quotes:
"... even if LTO output starts to recover, its annual growth rate will never return to previous high growth rate of 1 mb/d. ..."
"... Potential 300-400 kb/d annual growth in LTO output will be much less than 1.2mb/d projected growth in global demand. ..."
"... I do not dispute Russian companies are cash flow positive. My point is, what do Russian oil and gas industry workers make in salary and benefits, in relation to their US peers? If it is substantially less, is this why, in part, Russian oil and gas companies are still cash flow positive? ..."
"... Yes, salaries in Russia are generally much lower than in the U.S., not just in the oil industry. Especially, if they are measured in dollar-terms, rather than in real purchasing power. Locally produced equipment, pipes, other materials, electricity, services, etc. are also much less expensive, especially after the depreciation of the local currency. ..."
"... Finally, and particularly important, Russia produces higher volume of C+C with a much less number of wells. The number of new wells drilled annually is also several times less than in the U.S. ..."
"... Old conventional onshore fields are on average less mature. There is almost no stripper wells. There is much less (high-cost) deep offshore production. And almost no LTO output. ..."
"... I do not know a lot about Russian oil and gas production, but it does appear to me that a combination of lower costs, and less mature fields, is keeping Russian oil and gas companies generally profitable, despite the downturn. ..."
"... Maybe too simplistic, but there was a time, from 1986-2004, where we would have been cheering $40 WTI. A combination of lower production volumes, combined with much higher costs, make $40 WTI a money loser in most onshore US fields, or at least not enough for new wells. I guess maybe Russia is just where the US was 30 years ago? 30 years ago, $40 WTI would have been very profitable in most US onshore fields. ..."
peakoilbarrel.com
AlexS , 04/11/2016 at 8:30 am
"I read Russian companies are still making money, but the purchasing power of their currency is much less than it was."

shallow sand,

Their revenues are mostly in dollars, and 90% of costs are in rubles. So the decline of the ruble's rate versus the dollar is very positive for the Russian companies, as it partially mitigates the negative effect of low oil prices.

http://www.bloomberg.com/news/articles/2016-04-08/goldman-sees-russian-oil-output-rising-amid-doha-freeze-talks
----------–
"LTO has almost destroyed the balance sheets of noteworthy companies like Marathon Oil, Hess, ConocoPhillips, Apache and Anadarko, just to name a few."

Which means that OPEC decision not to cut output was correct. One year more of relatively low oil prices ($40-50) and LTO will not be a threat to other producers.
The excess supply will be eliminated by that time. And even if LTO output starts to recover, its annual growth rate will never return to previous high growth rate of 1 mb/d.

Potential 300-400 kb/d annual growth in LTO output will be much less than 1.2mb/d projected growth in global demand.

shallow sand , 04/11/2016 at 8:49 am
AlexS,

I do not dispute Russian companies are cash flow positive. My point is, what do Russian oil and gas industry workers make in salary and benefits, in relation to their US peers? If it is substantially less, is this why, in part, Russian oil and gas companies are still cash flow positive?

I do not know the answer, maybe you could provide some information in that regard?

AlexS , 04/11/2016 at 9:16 am
shallow sand,

Yes, salaries in Russia are generally much lower than in the U.S., not just in the oil industry. Especially, if they are measured in dollar-terms, rather than in real purchasing power. Locally produced equipment, pipes, other materials, electricity, services, etc. are also much less expensive, especially after the depreciation of the local currency.

Finally, and particularly important, Russia produces higher volume of C+C with a much less number of wells. The number of new wells drilled annually is also several times less than in the U.S.

Old conventional onshore fields are on average less mature. There is almost no stripper wells. There is much less (high-cost) deep offshore production. And almost no LTO output.

Fernando Leanme , 04/11/2016 at 11:00 am
They earn less. They also spend less.
shallow sand , 04/11/2016 at 11:38 am
AlexS,

Thanks. I always appreciate your comments on this site.

I do not know a lot about Russian oil and gas production, but it does appear to me that a combination of lower costs, and less mature fields, is keeping Russian oil and gas companies generally profitable, despite the downturn.

Maybe too simplistic, but there was a time, from 1986-2004, where we would have been cheering $40 WTI. A combination of lower production volumes, combined with much higher costs, make $40 WTI a money loser in most onshore US fields, or at least not enough for new wells. I guess maybe Russia is just where the US was 30 years ago? 30 years ago, $40 WTI would have been very profitable in most US onshore fields.

Fernando, I also agree on the spending part, but I doubt you will find many places more consumer spending driven than the US. But I am going to refrain from further comment on this topic, as last time I discussed it, I put both feet in my mouth. And we need to stick to the oil topic. LOL!

[Apr 10, 2016] Russia wants oil price to be between 50 and 60 in a short run and above 80 in a long run

Notable quotes:
"... Looks like this is what the West wants Russia to want, not what Russia wants :-). I think in reality Russia wants $80 or higher, but with capex reduced most Russian oil companies for some short period might be content with $50-$60 range. ..."
"... If we are talking about a fair price of oil globally, I believe this is $80 per barrel. Keep in mind that a significant part of oil – about a third – is produced offshore, where the cost can be high. And there is a deep-water shelf, for example, in Brazil, where one of the first well cost more than $300 million. Subsequent wells would of course cost less, around the half the price, but still very expensive. ..."
peakoilbarrel.com

Heinrich Leopold , 04/09/2016 at 3:23 am

Silicon Valley Observer,

Russia and Saudi Arabia gave signals that they want to have a price of no more than USD 45 per barrel as this prevents high cost oil to gain market share for some time.

Thus, Saudi Arabia prefers to export 10 mill bbl/d at USD 45 per barrel rather than 5 mill bbl/d at USD 90 per barrel. Saudi Arabia has still 2 mill bbl/d as reserve capacity, which will take some time to come to the market, yet I think the Saudis are ready to use this. USD 45 per barrel is a comfortable price for Saudi Arabia and Russia.

As a conclusion, it could take – depending on the Saudis – a long time until prices can go up again, which is clearly a disadvantage for shale. It is now up to the shale production to reduce capacity and bring prices up again.

likbez , 04/09/2016 at 6:32 pm
Russia and Saudi Arabia gave signals that they want to have a price of no more than USD 45 per barrel as this prevents high cost oil to gain market share for some time.

Looks like this is what the West wants Russia to want, not what Russia wants :-). I think in reality Russia wants $80 or higher, but with capex reduced most Russian oil companies for some short period might be content with $50-$60 range. See interview of the President of the Union of oil and gas Industrialists of Russia Gennady Shmal ( http://peakoilbarrel.com/open-thread-petroleum-oil-natural-gas/#comment-565010 ):

A: If we are talking about a fair price of oil globally, I believe this is $80 per barrel. Keep in mind that a significant part of oil – about a third – is produced offshore, where the cost can be high. And there is a deep-water shelf, for example, in Brazil, where one of the first well cost more than $300 million. Subsequent wells would of course cost less, around the half the price, but still very expensive. Therefore, the capex of this oil extraction is high enough. The breakeven price of our oil production without taxes is around $10 per barrel, nationally. But when we include taxes, we get around $30 per barrel. But this cost is not no tragedy for us. I remember a time when a barrel of oil was less than $10. Then we dreamed about the price rising to $20.

When the three-year average cost of oil was above $100 per barrel, we got too used to it. But the high price has one big drawback – it can negatively affect demand and stimulates production. And that's what basically happened.

Therefore, now our oil companies might be now content with the price around $50-60 per barrel.

And I think in general, globally it would be OK price for both producers and consumers. Even for the United States that would be an acceptable price. Canadians with their oil sands would need a higher price – up to $80. But as the Canadian oil going to the United States, anyway, losses can be compensated with the domestic shale production and they would have to come to a common denominator.

[Apr 10, 2016] KAS oil policy clearly demonstrates the grave danger inherent in absolute monarchy - a lot depends on the man at the top

peakoilbarrel.com

Silicon Valley Observer, 04/09/2016 at 7:45 pm

I have to laugh at the argument that today's low oil prices are something Saudi Arabia wants in order to (1) punish LTO producers in the U.S or (2) punish Russia or (3) punish other OPEC producers or (4) punish (insert country name here). There is no way SA wants low prices and their economy is suffering. They are burning through their foreign reserves. So why are the continuing to produce flat out as Ron insightfully informs us?

Because they have no choice! They need every dollar they can get and they don't control the price of oil. If they export less the price of oil will go up somewhat, of course, but not enough to increase their net take. In other words, their profitability would go up but their total profit would decrease.

Now it's true that SA has made statements that make it look like this is part of some strategy, but I believe that is all just public relations. Putting lipstick on a pig, if you will (apologies to Muslim readers). If prices remain low we could be looking at some big time internal and regional disruption as poor Saudi's (and there are lots of them) become desperate and the privileged Saud class finds their standard of living declining. Saudi Arabia has been a pillar of stability (yes, repressive stability) in the mid east for decades. If that changes many bad things could happen.

But please, stop with the talk that SA wants low oil prices.

Econ , 04/10/2016 at 4:00 am
If KSA cut production by 3 million barrels per day (for example), I'd bet my life savings that oil prices would at least double to say 70 or even 80 USD per barrel – and I think that is being conservative. That cut would totally eliminate the current rate of oversupply.

That sacrifice would reduce their volume of oil exported by about 30%, but revenue from that oil would double – with that production providing greater profit margins as well for the same given revenue.

I don't think it is accurate to say that a) they couldn't control the price of oil at least directionally, and b) that their total profit would decrease – it simply wouldn't, it would increase. How else did OPEC work in the past if that was not the case?

Silicon Valley Observer , 04/10/2016 at 12:32 pm
Well, you can make your bet and I'd make mine. When I say control the price of oil I mean CONTROL the price - not just influence it. Any producer can influence the price at some marginal level. But Saudi Arabia is seen by many as holding the key to world prices. So your assertion is that KSA could cut back and increase the price sufficiently to more than make up for the lost exports. So why aren't they? To hurt the US frackers? To hurt Russia? To hurt Iran? I just don't but it. They are burning through their foreign exchange reserves at a blistering pace. And if they someday decide to cut production and increase world prices, won't that just bring back the other producers?

It's all my opinion, of course, and we are all entitled to one, but I don't see how KSA is operating on some kind of brilliant strategy.

likbez , 04/10/2016 at 8:01 pm
Silicon Valley Observer,

I have to laugh at the argument that today's low oil prices are something Saudi Arabia wants in order to (1) punish LTO producers in the U.S or (2) punish Russia or (3) punish other OPEC producers or (4) punish (insert contry name here). There is no way SA wants low prices and their economy is suffering. They are burning through their foreign reserves. So why are the continuing to produce flat out as Ron insightfully informs us?

KSA used predatory pricing to drive down oil prices. This is undisputable. It takes two for tango and they were supported by growth of US shale production and the heavy artillery of the USA MSM claiming "Oh my God, oil glut, oil glut !" as well as disingenuous statistics from EIA and IEA (both controlled by the same people).

It looks that oil glut did occurred, mainly due to condensate overproduction for the second half of 2014 and the first half of 2015 and this fact was used to drive oil prices from over $100 to below $30 or three times. Wall Street guys are called "masters of the universe" for a reason.

That put most oil producing nations in a very precarious situation with several countries balancing of the wedge of bankruptcies. This also was equivalent to huge monetary stimulus for the Western and Asian economies. For the USA it was equivalent to the continuation of the Fed stimulus program.

Probably around 600 billion per year worldwide were redistributed from oil producing nations to oil consuming nations.

KSA actions also created tensions between two groups of OPEC nations - Gulf monarchies and everybody else to the extent that OPEC now exists only formally (not withstanding that cheating OPEC quotas was widespread practice even before).

In February the situation looked really grim for oil producing nations and Russians became really concerned that Wall Street manipulators (aka paper oil producers) will manage to drive oil to $20 (you can almost sense the level of panic in Sechin speech in London http://www.rosneft.com/attach/0/57/51/pdf_10022016_en.pdf )

Our message about the gap between the financial instruments of the oil market which, in fact, determine the prices and specifics of the actual industry development has been clearly confirmed. The financial market observes its own interests, and they are often abstracted from the problems of sustainable development of the industry. In this market, prices can both fall to the "bottom" where any development or stable functioning are impossible, and climb to unreasonably high levels.

Financial players have tools that allow them making profit on both rise and fall in prices. Today, the financial technique implies that decisions are often made by robots at the trading platforms, and the programs managed by them impersonally respond instantly to such short-term changes of the situation or information on the oil reserves movements;

Link of the price dynamics with the parameters of production is primarily important to the producers who have a long-term horizon of decision-making, investment and implementation of major projects, and the consumers who are also interested in predictability. In the past year, we saw developments in which producers were split up, and some of them announced a "price war" setting up a mission to oust "ineffective" suppliers from the market and take their place at the market, in fact, this price war should have determined who is "ineffective".

In these circumstances, it is quite expected that the financial market players went bears while the related (if not affiliated) think tanks helpfully prompted lower and lower price benchmarks to the market.

Who was the main beneficiary of the current crisis? Apparently, not consumers because the retail prices fell by less than 20% on average, but rather financial players who, by the way, have not redirected $250-300 bln investments released from oil sector into projects in other sectors of the economy so far.

Slide 5. Explosive growth of shale oil production in the US in 2013-2014 ceased in 2015

As we know, the explosive growth of shale production in the US in 2013-2014 became another crucial factor, and even the "trigger" of the crisis.

In 2013-2014, this growth was probably unprecedented in the world history in terms of its scale and pace. We have already noted that this reflected the advantage of the developed US market with its financial instruments (large-scale hedging of risks, availability of cheap investment, propensity of investors to take prompt decisions, use of land pledge and encumbrances, etc.), and its capacities in drilling, service and transportation.

In late 2014, some of the leading oil producers from the Middle East followed the example of the US strategy in increasing oil production.

As the result, the problems of excess oil on the market, long-time decline in oil prices, falloff in capacity of commercial shale oil production in the US have become worse.

Slide 6. OPEC actions gave backing to imbalance in the oil market

There is every reason to believe that these producers have deliberately created and continue to maintain a surplus of supply over demand claiming their commitment to the policy of low prices. The consequences of this policy, even if it is changed or adjusted, will have affect for a certain time.

Slide 7. Positions of major speculators in the oil futures markets

We have to admit we underestimated the fact that the financial market players have no restrictions in dealing with their sheer financial objectives and are ready to "test" any price levels – for example, 27$ in January – down to $10 per barrel as it was recently announced by a reputable investment structure. What is it if not "an invitation to the irresponsible game" for an unlimited price drop?

That's why all those talks about freeze started in February - this was a meek attempt of damage control of KSA reckless gambit from which other oil producing nations suffered greatly (and Saudis decided to get on board of this initiative for a simple reason that events got out of control and they also feel really threatened by the possibility of $20 oil).

The most interesting is the fact that Saudis cooperated with Russia (whom they consider their enemy). Russia in turn decided to cooperate with KSA not out of good will toward KSA. They consider Wahhabism a mortal threat for Russia and you can get in jail if you just get Wahhabi literature in Russia, to say nothing about openly declaring yourself to be adherent of this dominant in KSA sect (it is considered to be criminal organization in Russia). That tells us something about the precarious situation in which oil producing nations has found themselves in February.

In any case, in February it looked like oil producing nations will be taken for a ride by Wall Street for 2016 and probably 2017. And financially raped.

That's why this freeze agreement was announced and it helped to push prices slightly higher even before it full ratification which might occur in late April despite all the efforts by the West to torpedo the agreement (and somewhat duplicitous behavior of Iran, which it seems does not understand that producing 4 Mb/day at $30 is equivalent to producing 2 Mb/d at $60).

Russia also launched a national program of development of their petrochemical industry which will eventually reduce the amount of oil available for export, even if production remains flat.

Saudis did the same and actually on much larger scale. So their internal consumption will be rising faster then their production capacities.

To get out this KSA induced fiasco with oil prices this cocky and impulsive new Saudi prince is now trying to save his butt pretending to be Margaret Thatcher of Saudi Arabia. He is trying to launch the program of privatization of state assets including part of Aramco to lessen the draw of foreign reserves due to budget deficit (currently around $100 billion a year; KAS needs around $90 per barrel to balance the budget; Russia needs around $60).

So either with gentle encouragement of Obamoids or on their own initiative this new prince ( who actually rules the county instead of his father king who is suffering from dementia ) essentially destroyed around one third of the country foreign reserves, engaged in destructive war in Yemen, deteriorated relations with the major geopolitical rivals such as Iran (via war in Yemen and the execution of Shiite cleric) and Russia (by supporting and financing (indirectly) Syria jihadists) and got nothing in return.

Moreover he managed even to cool relations with the USA - the major beneficiary of his actions.

That clearly demonstrates the grave danger inherent in absolute monarchy - a lot depends on the man at the top.


Heinrich Leopold , 04/10/2016 at 11:24 am
SVO,

I still differ with your opinion and I am in good company:

http://www.forbes.com/sites/panosmourdoukoutas/2016/03/27/saudi-arabia-sets-a-20-40-price-range-for-crude-oil-for-now/#3c1cb7554a6b

…..Why would a price spike above $40 be a bad thing for Saudi Arabia?

Because it would provide a life support to American frackers who have undermined the pricing power of the Kingdom these days, as was discussed in a previous piece here.

But there's another, more important problem: high crude prices can help Russia and Iran raise the funds they need to support insurgent movements that threaten the Kingdom's regime………

http://oilpro.com/post/23672/iran-steps-up-market-share-battle-freeze-talks-near

Saudi Arabia and Russia are by no means at the end of their finances as can be seen from their still unabated drilling activity, buying refineries in the US, investing in Europe…:

http://oilpro.com/links/detail/30982/gazprom-to-invest-european-lng-facilities

It is the shale industry which is at its knees.

Please stop trying to prevent other people to express their opinion.

Silicon Valley Observer , 04/10/2016 at 12:26 pm
Heinrich, your assertion that I am trying to prevent people from expressing their opinion is insulting as well as misplaced. I did nothing of the sort. Also, I certainly don't consider Forbes to be good company on pretty much any subject. SA's foreign exchange reserves dropped from about $740 billion in Oct 2014 to about $590 billion today, having dropped $9 billion in February alone. I'm not saying they are on the ropes yet, but the Kingdom is scaling back on social welfare payments. They are running a massive budget deficit. Anyone who thinks this is part of some brilliant strategy is misguided.

Your assertion that unabated drilling activity is a sign of financial strength is not supported by the link you provided. That's about investing in LNG facilities. What does that have to do with oil production?

[Apr 09, 2016] There Is No Secret Russian Oil War The National Interest by Paul J. Saunders

April 3, 2016 | nationalinterest.org

Moscow isn't sowing Middle East chaos to drive up oil prices.

Russia's leaders certainly do care about oil prices, and with good reason. Plunging oil prices decrease the ruble's value, which closely follows oil prices. Oil exports are important to Russia's federal budget and to its overall balance of trade. Indeed, when monthly average Brent oil prices peaked at about $125 per barrel in March 2012, the ruble was close to its own peak, at approximately twenty-nine rubles to every U.S. dollar. When Brent prices fell to $30.70 per barrel in January 2016, the ruble had fallen to about eighty rubles to the dollar. It is easy to examine this currency-resource correlation by comparing U.S. Energy Information Administration oil price data with Russian Central Bank ruble values. As a result, the Russian government has imposed sweeping budget cuts that will now affect defense expenditures as well as social programs and other areas.

... ... ...

On the contrary, Russia has been working with Riyadh to contain prices and announcing a withdrawal from Syria and a new focus on peace talks there. If Russia were determined to play the oil card, it could do so in many different ways. For example, one option might be to step up support for Assad's government to win a comprehensive military victory over its foes. If Russia looked seriously at this option, the changing conditions could draw Saudi Arabia and other supporters of the Syrian opposition more deeply into the conflict and perhaps expand it. This is much more likely to raise oil prices than what Moscow has done in the past. But Syria is not a major oil producer or exporter. So perhaps Russia's policy in Syria is not oil centric, but its approach to other problems could. Unfortunately, there is not much evidence to support this argument either.

One of the strongest counterarguments to the oil-price theory of Russian foreign policy is the recent Iran nuclear agreement, known as the Joint Comprehensive Plan of Action (JPCOA). If higher oil prices were Russia's principal goal in dealing with Iran-which has the world's fourth-largest proven oil reserves-why facilitate the JPCOA at all? It would be far better to block the agreement in hopes of forcing a showdown between Washington and Tehran, possibly including U.S. military action. Alternatively, Russia could have agreed to Western proposals to tighten sanctions on Iran's energy sector, further limiting oil supplies. Or Moscow could have delayed the talks, hoping that this would create sufficient uncertainty to raise oil prices. Instead, at a time when Russia was already suffering economically from low oil prices and from Western economic sanctions, President Vladimir Putin decided to support an agreement that would only further decrease oil prices.

... ... ...

...Russia did much less to oppose U.S. and NATO air strikes in Libya in 2011-so maybe this proves that Moscow wanted disorder there to increase oil prices? It doesn't look that way. First, then-president Dmitry Medvedev agreed to accept the strikes after intense pressure from President Obama and appeared to do so in large part to appease the United States. Second-perhaps more importantly-then-prime minister Putin criticized Medvedev's decision to order Russian diplomats to abstain in United Nations Security Council vote, prompting a rebuke from Medvedev. Since Putin has been controlling Russian foreign policy for most of the last sixteen years, Medvedev's move was likely an exception rather than the rule. Finally, oil prices were already quite high in early 2011 when Medvedev made his choice. Even if moving oil prices upward was a top priority in Russian foreign policy, it would have been much less necessary at this specific time.

While oil prices are important for Russia, they are generally not a driving factor of Russian leaders' key decisions. Thus, Russia does seek to shape oil prices, but does so through routine diplomatic processes. There are many reasons for this, but one of the most significant is that Russia sees critical national-security interests in the Middle East that override its concerns over oil prices. In fact, in each of the above cases-Syria, Iran and Iraq-President Putin has pursued policies that appear intended to produce stability. So Russia's supposed secret plans to boost oil prices may produce entertaining conversation, but they don't lead to much else.

Paul J. Saunders is Executive Director at the Center for the National Interest and a Research Scientist at CNA Corporation.

Borgþór Jónsson > Guest

You are correct,except the US wars are not so secret.
They are there for everyone to see.

Sinbad2 > Borgþór Jónsson

Americans don't see their wars. The US Government keeps the American people in a cocoon of ignorance.

O_Pinion > Guest

Who needs secret wars when you can have secret bank accounts?

http://www.dailymail.co.uk/new...

O_Pinion > Sinbad2

So the US fracking oil boom never happened, iraq's oil output didn't increase to an all time high, there are no macroeconomic forces cooling demand and the law of supply and demand is a fiction.

it is all simply a grand conspiracy cooked up by Saudi Arabia and the US.

Serge Krieger > Sinbad2

It is very complex topic. I think too many things came together to create this perfect storm. Frankly, new oil reserves are not profitable at anything below $70.

I guess it was both market overproduction with Canadian sands and US fracking and Saudis and possibly even Russian oil production that caused this. I do not think Saudis alone would be capable of such fit.

Anthony Papagallo , 7 days ago
Sensible analysis, its much more likely Russia is just preparing the way to make sure it doesn't end up with an American boot stamping on its face forever.
International Thinker -> Guest , 7 days ago
Because of this Russia is in the cross hairs of the Anglo-Zionists who can only survive if they tear apart Russia and take control of its vast resources.
bob bear -> Guest , 7 days ago

So?

China and the US who are the 2 biggest purchasers of energy in the world, have been doubling their investments in renewable energy!

Castlerock58

The US,Turkey and Saudi Arabia are promoting the instability in the Middle East.

Bankotsu

"Moscow isn't sowing Middle East chaos...."

I think the writer confused Russia with U.S.

Pacemaker4

Russia oil and gas industry accounts for 15% of their GDP.... that fact is lost on the author.


Kalinin Yuri > HotelQuebec

All the vessels in the ocean instead of Diesel should use some nuclear reactors, right? The trucks that move all the goods - also batteries? Has anybody calculated emissions from power stations in order to charge a car that runs 80 km? Also how much does it cost to recycle the batteries?

Sinbad2 > Kalinin Yuri

The silicon used in solar panels, is one of the dirtiest refining processes on the planet.

Hippies are well meaning critters, but not very smart.

Gregory Anbreit

Oh wow, so it was Russia who started all the chaos in the Middle East? Is this a joke? Who invaded Iraq in 2003? Who has destroyed Libya? Who was supporting "Arab springs"? Who sends weapons to AQ and ISIS in Syria?

But yeah, blame Russia.....how typical.


deadman449

Russia exports two things. Oil and weapons. If you think about it, it makes sense to cause mischief in other countries near oil production. Question is, then why is the oil price so low?

Andre

If Russia really wanted to use conflict to raise oil prices and achieve irridentist ambitions at the same time, it would launch a Crimean/Donbas-type dirty war in northern Kazakhstan with a view to annexing the Russian-inhabited areas. Kazakhstan occupies a similar position with respect to oil production as Libya did in 2011 and its cost of production is not too much more than many Gulf Arab states. Kazakhstan is also non-aligned and quite frankly indefensible. From a geopolitical standpoint I see this move as much more likely than some dangerous play in the Baltics which would yield little in terms of added Russian citizens or resources.

Andre
If Russia really wanted to use conflict to raise oil prices and achieve irridentist ambitions at the same time, it would launch a Crimean/Donbas-type dirty war in northern Kazakhstan with a view to annexing the Russian-inhabited areas. Kazakhstan occupies a similar position with respect to oil production as Libya did in 2011 and its cost of production is not too much more than many Gulf Arab states. Kazakhstan is also non-aligned and quite frankly indefensible. From a geopolitical standpoint I see this move as much more likely than some dangerous play in the Baltics which would yield little in terms of added Russian citizens or resources.
Roman Lvovskiy > Andre
you're like Tom Clancy reborn, honestly
Andre > Roman Lvovskiy
Tom Clancy was remarkably prescient among techno-thriller writers, although some works were much better than others, particularly "The Hunt for Red October", "Red Storm Rising" and "SSN".

You may consider my opinions fanciful, but look at the academic debate: there is an assumption that Russian military intervention in Georgia and Ukraine poses a threat to NATO, and that the Syrian adventure merely compounds this.

In comparison, I maintain the view that while Putin can be reckless - a common human flaw - his aggression has been highly targeted to interests that have been articulated for many years, including prior to his presidency e.g. absorbing the ethnic Russian diaspora bordering the RF, halting NATO expansion, regaining global prestige.

Both Georgia and Ukraine were non-aligned countries when he invaded, and there is every indication that he is aware of the distinction between NATO and non-NATO members. Therefore, if he is planning on intervening anywhere, I would expect that country to: (a) be a "core interest", (b) be non-aligned and (c) feature developments that challenge Russian interests. Belarus and Kazakhstan both meet all these criteria, as each is drifting away from Russia. In Kazakhstan's case, the recent policies concerning the official use of Kazakh and Russian are increasingly discriminatory toward Russian-speakers, more so than any policies even contemplated by the post-Maidan Ukrainian government. Unlike Belarus, Kazakhstan features immense natural resources and many more ethnic Russians...

Roman Lvovskiy > Andre
i suspect it, that 'Red Storm Rising' is your fave. i like it as well, despite the fact that it's hardly accurate when it comes to wording out actual features possessed by the Soviet hardware of that period, described thereby.

one thing that eludes you always is that Putin can not afford to subjugate anyone. that would be stretching beyond capacity, both financially and politically. also, there's hardly that much of anyting that is in Kazakhstan's possession presently or in short-to-midterm perspective to make Putin even think about considering the risks.

so i'm guessing it's just your wishful thinking. i'd also suggest reading something more profound, like something by Vonnegut or Trumbo. there's more to American culture than your garden variety of trash usually presented on TV, sadly - less and less with each passing year.

Andre > Roman Lvovskiy
You're correct that Putin can't afford a grinding counter-insurgency, and he seems to have taken in the Soviet experience in occupying East-Central Europe, as well as the quagmires in Afghanistan and Chechnya. Interestingly, as soon as it became apparent that support for union with Russia was not as warm in Donbas as Crimea, the Novorossiya project was quietly buried.

But Putin certainly has his eye on Belarus and Kazakhstan, and Astana's been taking an increasingly independent line. There is a demographic and economic case, as I've laid out in prior comments. But this is not a "call", after all, Crimea was annexed 20 years after analysts were worried about it.

I'll be honest with you - I've never read a Clancy book all the way through - I've read many papers on military technology and strategy, but I still find Clancy too dry. There are more contemporary American authors that are great, McCarthy being one.

dennis powell
There seems to be a lot of russian supporters , who are seeing the world thru rose colored glasses , commenting here. Russia would love nothing more then to see oil higher. Inside their own country the fall of the ruble isn't as much a big deal as it is when they try and conduct business outside of russia.

They are paying for their actions in the ukraine. The annexation of crimea was a just move to take back what should have never been given away. Their mistake was in how it was done. Their move into syria wasn't about right and wrong but about protecting their military interests. Any one who says anything different is being foolish. Their subsequent withdrawal is an indication that they have satisfied that end. It also , I suspect , is to contain the costs of such an operation. Russia is a gas station parading as a country.

Their only claim to significance is their nuclear arsenal. They have an overblown view of themselves which masks their deep paranoia. Take away their nuclear arsenal and they wouldn't be anymore significant then brazil.

Frank Blangeard > dennis powell • 6 days ago
The last three lines of your comment seem to apply more to the United States than to Russia.
Randal > dennis powell • 7 days ago
"They are paying for their actions in the ukraine."

How have Russia's actions in the Ukraine caused the oil price to fall dramatically? The US sphere sanctions are an irrelevant pinprick in comparison.

"The annexation of crimea was a just move to take back what should have never been given away. Their mistake was in how it was done."

I'd love to hear how you think it could possibly have been done any other way.

"Their move into syria wasn't about right and wrong but about protecting their military interests. Any one who says anything different is being foolish."

What military interests? Surely you aren't talking about the Tartus base? Have you actually seen it? Apart from that they had almost zero military interests in Syria before the commencement of the regime change attempt there.

"Their subsequent withdrawal is an indication that they have satisfied that end. It also , I suspect , is to contain the costs of such an operation."

Given the trivial costs in Russian budgetary terms of their relatively small operation in Syria, how do you justify claiming that would be an overwhelming factor in their decision making?

"Russia is a gas station parading as a country."

That pretty much discredits you terminally as any kind of objective observer on Russia, I think.

"Their only claim to significance is their nuclear arsenal. They have an overblown view of themselves which masks their deep paranoia. Take away their nuclear arsenal and they wouldn't be anymore significant then brazil."

Oh, really? Do feel free to explain exactly how their nuclear arsenal enabled them to intervene successfully in Syria, in stark contrast to the US regime's repeated failures. And while you are about it, feel free also to explain the utility of their nuclear arsenal in recovering the Crimea, or any of Russia's other recent activities.

Presumably you think Brazil could have done both, if it only had a nuclear arsenal like Russia's.

Borgþór Jónsson > dennis powell

Of course Putin went to Syria to protect the bases,but there are also several other reasons.

That is exactly what would have happened if he did not intervene.
It would have happened ,because that is what the US wanted. They wanted to grow a terrorist state close to Russia borders.

Putin also went to Syria because he wanted to fight terrorism in area where they would be easier to defeat than in Caucasus.
Imagine the trouble it had cost him if he had a terrorist state in Syria constantly supplying terrorists and weapons to the Caucasus.
That was one of the aims of the US,that is the reason they fed the terrorists with weapons.
The final goal was that they would later use those weapons against Russian people.

Same goes for the Ukraine.

The final goal there is that the Ukrainian Nasis will finally attack Russia.That is the reason for the Us cooperation with Ukrainian nationalists. Ukrainian nationalists are violent idiots on par with ISIS as you know.

You are not the only person that are obsessed with that misunderstanding that Russia is a gas station. This misunderstanding is the reason the US sanctioned Russia. But it does not work,because after all, the oil is only 12% of the Russian GDP. It is uncomfortable because it is so big part of the export, but Russia is in no way going to collapse because of it.

In fact the Russian economy is exceptionally strong,I believe that no other nation on earth would have been able to withstand such hardship as the sharp fall of their export and at the same time sanctions from the western powers.

Later this year or next year their economy will most likely start growing again. Well done Russia.

Borgþór Jónsson > Borgþór Jónsson

I forgot to address another misunderstanding of yours. Russia has not left Syria.

In the beginning Russia used SU 24 and SU 25 plains for strategic bombing. What it means is that they were used for taking out the oil business of the terrorists and also their weapons depots,their control stations and training facilities. That is now over and those plains are sent home.

Now they have the SU 34 And SU 35 that are more suitable for assisting the Syrian Army in their offence. On top of that they have the MI 28 attack helicopters and of course the the dreaded KA 52. All those plains and helicopters played a vital role in the liberation of Palmyra.

The Russians are not home yet,they will stay in Syria and fight the terrorists till the end.

Valhalla rising

its not the jewish NeoCohens and liberal Hawks that destabilized the Middle East.Nope the Russians are goyim -- The Russians are evil goyim -- Czar Putin shuts us down -- The Russians disposed Muhammad Gaddafi -- The Russians supported the Muslim Brotherhood in egypt -- The Russians supported the islamic onslaught against Assad -- ... ... ...
http://www.dailystormer.com/gl...


[Apr 07, 2016] Is A Permanent Decline Coming For Russia

Apr 06, 2016 | OilPrice.com

The Russian energy ministry sees the very real possibility that Russian oil production enters long-term decline, possibly even falling by half by 2035. Russia's major oil fields are decades old, so it will be increasingly difficult to prevent output from falling. At the same time, Russian oil companies are not discovering new sources of supply that could replace that lost output. The Arctic offers one area where very large reserves could be exploited, but western sanctions have blocked the participation of major international oil companies, which could help Russian companies pull off the expensive and tricky Arctic drilling operations.

Meanwhile, Russia's natural resources minister said in late March – with an eye on the Doha meeting – that Rosneft will likely lower its output this year. Rosneft actually did not comment on his remarks, but the minister's comments were likely meant to demonstrate Russia's willingness to cooperate with OPEC in Doha.

... ... ....

Russian output is expected to decline by 20,000 barrels per day on average this year, according to OPEC's latest assessment.

[Apr 02, 2016] Once upon the time we dreamed that the price of barrel of oil rising to 20 dollars per barrel

likbez, 04/03/2016 at 4:35 pm
See an interesting interview (slightly edited Google translation). Looks like the new oil reserves in Russia are very expensive, on par with the US shale and the old are mostly depleted.

============================================

izvestia.ru

The President of the Union of oil and gas Industrialists of Russia Gennady Shmal told "Izvestia" about what oil price is needed for Russia and when the industry will overcome dependence on imported equipment

Q: OPEC believe that soon the price of oil should stabilize at a "normal", but not a too high level. What do you think, what level of oil prices can be considered normal for Russia today?

A: If we are talking about a fair price of oil globally, I believe this is $80 per barrel. Keep in mind that a significant part of oil – about a third – is produced offshore, where the cost can be high. And there is a deep-water shelf, for example, in Brazil, where one of the first well cost more than $300 million. Subsequent wells would of course cost less, around the half the price, but still very expensive. Therefore, the capex of this oil extraction is high enough. The breakeven price of our oil production without taxes is around $10 per barrel, nationally. But when we include taxes, we get around $30 per barrel. But this cost is not no tragedy for us. I remember a time when a barrel of oil was less than $10. Then we dreamed about the price rising to $20.

When the three-year average cost of oil was above $100 per barrel, we got too used to it. But the high price has one big drawback – it can negatively affect demand and stimulates production. And that's what basically happened.

Therefore, now our oil companies might be now content with the price around $50-60 per barrel.

And I think in general, globally it would be OK price for both producers and consumers. Even for the United States that would be an acceptable price. Canadians with their oil sands would need a higher price – up to $80. But as the Canadian oil going to the United States, anyway, losses can be compensated with the domestic shale production and they would have to come to a common denominator.

Q: You're talking about this level of prices, without taking into account the Arctic shelf projects?

A: Arctic shelf – it is quite another matter. My point of view on this issue is different from the most popular view that exists today. I believe that we need to engage the shelf in terms of prospecting, exploration. We generally do not even know that there, how much oil we have on the shelf. We have so far only preliminary estimates of reserves – C2, C3 (preliminary estimated reserves, potential reserves). And in order to have A, B, C1 (proven reserves), it is necessary to drill. I am sure that we are not ready to work on the Arctic shelf both technically and technologically, nor economically.

We do not have qualified people for that too. First of all, we need several platforms. One platform for "Prirazlomnoe" that we now have been built for more than 15 years, and we sank into it about $4 billion

And this one is not a new one, this is a second hand equipment. In order to seriously develop the shelf, we need not one, but dozens of platforms, support vessels. Also offshore operations must have the regulatory framework.

That means all the necessary technical regulations, standards. We have nothing. But the main thing – the cost effectiveness of this oil: it is necessary to consider how profitable in today's environment to produce Arctic oil. So, I think we now have enough things to do on land – in Eastern Siberia, for example, before we need to jump with two legs into arctic oil extraction.

Q: How record oil production that Russian oil companies demonstrate in the past few years, affects the structure of the Russian economy?

A: First of all, I believe that there are no records. Yes, we produced 534 million tons. But in 1987 the Russian Federation has produced 572 million tons. Compared to the 1990s there is a certain growth in recent years, but I would not talk about records. Second, the question about optimal production volumes is a very complex one. The main question to which I have no answer today: how much oil we need to extract?

Without answer on this question it is impossible to say whether we produced too little oil or too much. If we consider that in 2015 we extracted more then 246 million tons, then, I would say we produced too much. This is not the way this business should be run. The fact is that Russia can not influence the world oil price too much because we make only 19-20% of the market. But we can and should make the country less dependent on raw oil price fluctuations. We could process all extracted oil and export mainly gasoline and diesel fuel, as well as products with high added value in the form of chemicals, petrochemicals, composite materials.

That means that we need to adopt a different approach to the structure of our industrial production.

For example, China in the last twenty years has built a series of petrochemical plants, and today they have the chemical products sector with total value of production about $1.4 trillion, or around 20% of China GDP. It should be noted that China's GDP is eight times more than ours. Our chemical sector production is around $80 billion – 1.6% of Russia's GDP. In 2014 alone BASF Chemicals (which is a single German company) produced 1.5 times more than all the chemical enterprises of Russia. Petrochemicals may be the critical link, pulling which we could change the whole structure of industrial production in Russia.

Q: If we talk about production prospects, what we levels of production we can expect in the future, based on our today's oil reserves structure?

A: Unfortunately, today we do not have a reliable statistics. According to some estimates, of those oil reserves that are under development, about 70% are so-called hard-to-extract oil. That is, stocks, where oil production is complicated mining and geological, geographical conditions.

In these fields there might be tight reservoirs, reservoirs with low permeability, viscous oil, etc. By the way, today we have no any clear definition of hard-to-extract inventory, although this defines the benefits that can be granted to companies to work on the fields with such reserves. Therefore we need serious work on the classification and definition of reserves that will be put into the hard-to-extract category.

By the way, the current production mostly (about 70%) relies on the old fields, which now have a high water content, high percentage of depletion of reserves. Of course, they will not last forever. Therefore, sooner or later, will have to enter the development of the fields with hard to recover reserves.

Q: Extraction of hard inventory requires new technologies, which in Russia does not fully have. What are the tools the government has to encourage their development?

A: The state has a lot of tools to stimulate those technological developments. Our tax system can perform stimulating role along with fiscal and re-distributive functions. However, our tax system currently performs mostly fiscal function and only slightly – re-distributive function. Simulative function is not yet here. As an illustration, take Texas, USA: if the well there gives 500 liters of oil per day, it is considered a cost-effective – this way the tax system is built. For us a well, which gives 4000 liters per day, is already viewed as unprofitable, and is moved into the idle fund. Now, of course, some work is being done in respect of incentives for low producing wells – MET rates introduced.

But I believe that the future of our oil industry is largely dependent on whether we are able to create the technology of oil production from the Bazhenov Formation or not. Because the geological reserves of the Bazhenov Formation in Western Siberia are more than 100 billion tons of oil. Even at a conservative estimate, if it is possible to extract around 40-60 billion tones of oil with the current technologies.

And please remember that all we have in Russia today, all C2 stocks, are just around 28 billion tons So if we find the necessary technology that can be applied to the Bazhenov Formation, the peak oil production issue for Russia can be resolved for a sufficiently long period of time. And in respect of the help from the state it could be such measures such as tax holidays, tax exemption, reduction in mineral extraction tax, etc.

But currently the Ministry of Finance is interested only in filling the budget. We need to make sure that taxes are fair. For this, they must be applied to the end result of production. In our country today we have taxes on earnings – up to 65-70% of the average withdrawal. Norway, for example, has high taxes too, but they are levied on profits.

Taxes should be applied to profits, not revenue, the latter for us looks like the absolutely wrong approach.

Q: According to various estimates, in the Russian oil and gas industry today up to 45-50% of the equipment are imported. Will Russian oil companies to move away from this dependence in view of sanctions. And what should be role of the state in achieving this results?

A: At the request of "Lukoil" we did last year such a study. We've got that on average 53% of drilling equipment in Russia is imported. Of course, we must bear in mind that, for example, pipes, with rare exceptions, we can produce domestically. But today there are some technological segments where there is a high dependence of Russian oil from foreign suppliers. Those segments include: software control, automation and remote control.

Today, the Ministry of Energy to the Ministry of Industry set up working groups that are engaged in import substitution. And we have already been there for some equipment that is competitive with foreign models. So, one of the factories in Perm began to produce excellent pumps, which match in quality the best foreign analogues. Some factories in Bashkortostan started the production of valves, cut-offs switches and other fittings for any type of drilling. But it is not necessary to replace all the foreign oil production equipment. And, of course, we can not do this.

We make good tanks, but we do not produce luxury cars like Mercedes. We just don't produce them. I believe that if we had a dependence on imports in the range of 20-25%, it would be acceptable and probably close to optimal.

Today we can get rigs from China. Our experts say that they are of a sufficient level of quality. We also have a factory, which in 1990 produced drilling rigs – "Uralmash". Then, the plant produced 365 sets of drilling equipment per year. In the past year – only 25.

Therefore we need to rely on the Chinese oil extracting equipment, as they have learned to make a decent drilling equipment. And for the price, no one can match them. I believe that we need to very clearly define few areas of oil extraction equipment, which are critical for us. and then pay close attention and allocate resources to those areas. We do not need to cover everything. And I am sure that before the end of 2020 Russia could reduce this dependence on foreign equipment to 25-30%.

[Mar 29, 2016] Russia could face long gradual decline in oil

oilprice.com

Russia's oil output hit a post-Soviet record of 10.9 mb/d in January 2016, but that could be a ceiling as the country's massive oil fields face decline. The bulk of Russia's oil output comes from its aging West Siberian fields, which require ever more investment just to keep output stable. The depreciation of the ruble has helped a bit, lowering the real cost of spending on production and allowing Russian companies to increase investment by one-third this year. However, some long-term projects are being pushed off due to the financial squeeze from western sanctions and low oil prices. An estimated 29 projects, amounting to 500,000 barrels per day in new production, have been delayed. With most of Russia's large oil fields having been under production since the Soviet era, and with precious few new sources of supply, Russia is facing long-term decline.

[Mar 10, 2016] EIA Inventory Report and Oil Market Analysis 3 9 2016

(Video)
Notable quotes:
"... The rising clamor at home from the crashing shale sector and the banks that financed it; the resilience of Russia in spite of sanctions and its exclusion from Western capital markets; Russia's entrance into the Syrian take-down attempt having put Russia into a new position of influence in the Middle East; demands for higher prices from more and more OPEC members; Russian and Iranian resistance to demands that they agree to limit production; Kuwait refusing to limit production; Venezuela and Mexico nearing default; Ukraine melting down politically, financially, and militarily: financial tremors at home and in Europe; and the rise of Trump and Bernie as an election nears, - these factors have led Western leaders to stop suppressing the price of crude. ..."
Zero Hedge

Al Tinfoil ,|

IMHO, the rise in crude prices is evidence that the West has blinked and is giving up on its attempt to bankrupt Russia in order to make Putin kowtow to the West.

The rising clamor at home from the crashing shale sector and the banks that financed it; the resilience of Russia in spite of sanctions and its exclusion from Western capital markets; Russia's entrance into the Syrian take-down attempt having put Russia into a new position of influence in the Middle East; demands for higher prices from more and more OPEC members; Russian and Iranian resistance to demands that they agree to limit production; Kuwait refusing to limit production; Venezuela and Mexico nearing default; Ukraine melting down politically, financially, and militarily: financial tremors at home and in Europe; and the rise of Trump and Bernie as an election nears, - these factors have led Western leaders to stop suppressing the price of crude.

The commodities traders and their algos will now be allowed to manipulate up the prices. Fundamentals of excess supply and weak demand do not matter, and have not mattered for a long time. Futures contracts, refinery shutdowns for fires or scheduled maintenance, pipeline ruptures, and rumors of international instability can all be used to increase crude prices.

The oil bulls are being let loose!