Are Russia and Iran being driven to the economic wall by US fracking, Saudi increased pumping rates and Chines opportunism? No links, just my thoughts. Russia and Iran are utterly dependent on oil and gas revenues. Both need oil to stay over $110/bbl. Yesterday, Brent was going for $88/bbl. Russian oil is expensive to produce as most of it comes from the the lower Ob valley that makes the Alaskan North slope look inexpensive. The Iranians oil fields are in decline and they have a lot of fixed costs. The Chinese are hip-deep in cash and willing to pay in super-weak rubles. they are bargain-hunting and Putin needs the cash so he gives China a sweetheart deal on a lot of oil and gas at below world prices. The Saudis need money and their oil is still very inexpensive to extract, so they can easily flood the market with cheap oil. Also the Saudis need to put some cheap oil on the market to blunt the onrushing US shale oil surge. There are those that say the fall of the USSR was due to Saudis flooding the market after 1985. The economies of traditional big oil consumers (US, Europe and even China) are down so demand is soft and there is a lot of downward pressure on oil prices. The floor on fracked US shale oil is somewhere between $65 and $70 per barrel. Could Russia and iran be looking at destabilization?
That 1985 deal was contrived by us. We are probably at the bottom of this one as well. If one day the ground starts to shake and you hear of mushroom clouds over America, it was because we are waging economic war on Russia. Push a man far enough into a corner and he acts irrational, like any other animal. Wars are never rational, but irrational. Putin has already made it clear that Russia still has the capability to lay waste to America. Japan struck out at us for our economic war against them. History tends to repeat because we don't learn a thing from history.
Yes, Japan misunderestimated™ us under some crazy leadership. I don't think Russia, in particular the Russia of today, is so likely to do more than threaten us. I have to think that with nukes everywhere, world war in the vein of the prior two is a thing of the past. Economic warfare and proxy war "police actions" fought on a far smaller scale in nuke-free lands is the new way.
It does, and without a link, it will be moved or deleted. As for the topic, there's a lot of different opinions on what this threatened move by the Saudis means. Without a doubt, if they go through with this, more than just Russia and Iran will be hurt. After reading several takes on this, including Saudi oil reserve figures, this seems more like a bluff. If it's not, it's a reckless move by the Saudis and a dangerous one at that.
"We are probably at the bottom of this one as well." Taxcutter says: Nope. The US fracking boom has been an all-private phenomenon, carried out in spite of the opposition of Hussein Obama's EPA. Putin could strike at the US. That's why the US should never relax its military vigilance and preparedness. Iran is powerless and will simply be ground under. From best I can tell Iran is afraid of ISIS and will not help their Shi'ite Iraqi brethren.
A serious argument can be made for that . In 1985, the Saudis share of the oil market was flagging, so they radically changed their policy. They increased production by nearly four times to regain their former share of the market, which caused a corresponding drop in the price, and cost the USSR something like $20 billion a year IIRC. Since the USSR refused to cut military spending an couldn't cut food imports this left them with problems managing their international debt. They borrowed quite a bit until about 1988 but then their rating got downgraded forcing them to negotiate higher interest loans with western governments that came with rigid conditions like not using military force on separatist or pro democracy demonstrations leading to more unrest and the eventual disintegration of the union. It is of course more complicated than that but I'm not planning on typing a whole novel here.
Are falling oil prices the reason that Putin cannot goad the torpid bear into devouring more of the old empire?
