On March 9th and 10th, American media immediately discovered what was behind the current oil price war: Russia is “waging an oil war with America.”
This was reported by both the National Interest and CNN, both outlets alleging in a very veiled, unclear and, in a manner very obviously constructed out of thin air, that Moscow (and “evil overlord” Vladimir Putin) are somehow specifically “attacking” the US economy.
Nikolas K. Gvosdev, whose piece was published in National Interest is the Captain Jerome E. Levy professor of economic geography and national security at the U.S. Naval War College, and a senior fellow at the Foreign Policy Research Institute.
According to him, it is very apparent that this is a “big gamble” for Moscow, but it bets that by the end of 2020 “it will be able to not only push back against the United States but also to reconstruct its partnership with Saudi Arabia.”
The entire Russian strategy is based on US politicians’ apparent complete inability to hide any of their future plans and, as such, reveal whatever they’re about to do months, or even years in advance.
And an example was given with Nord Stream 2 and TurkStream:
“Moscow attempted to accelerate the completion of these projects before a slow-moving U.S. legislative process could finalize another round of punitive sanctions. Turkish Stream was completed just in time and is already sending Russian energy to Turkey and Southern Europe. Meanwhile, Nordstream-2 would have made it if it hadn’t been for those pesky Danes and their environmental protection processes, which held up work on Nordstream just long enough for an eleventh-hour U.S. sanctions push.”
Too bad Nord Stream 2 will begin work soon, and, as it has become more than apparent, US sanctions are unlikely to deter it.
Gvosdev is attempting to justify the US’ questionable success in diplomacy in recent months and years, with a focused attempt and attack by Moscow.
This is furthermore presented, according to the professor, in Russian opposition of Turkey in Syria, which is, also, an apparent attempt to counter US influence.
“We have seen over the past several months a new hardening in the Kremlin’s policies—where Russia is willing to risk escalation in order to gain advantage or discredit the United States. The world has watched this pattern unfold in Syria vis-a-vis Turkey over the past several weeks. The Russians pushed through some of Ankara’s red lines and then let Turkey see to what extent it could or could not rely on the United States and its European allies—and then President Recep Erdogan traveled to Moscow to re-open negotiations with Vladimir Putin.”
At the same time, the opinion piece entirely missed any reports that US were arming groups that were directly attacking Turkish forces in northeastern Syria, for example.
And, of course, the current oil price war – which according to US media, Russia began, is specifically aimed at US, and it doesn’t matter that it is a very scorched earth approach, Moscow doesn’t care – it’s willing to do anything it takes to cripple the Americans, even cripple itself much more.
In this very “cut your nose to spite your face” approach, Moscow has the following agenda:
“Russia seems willing to engage in a major stress test of the U.S. energy export approach to a prolonged price war. Given that the Trump administration is unlikely to purchase large amounts of U.S. production at a guaranteed high price for the strategic reserve, U.S. producers will face the prospect of much lower revenue—and reach a point where it no longer makes business sense to stay in operation. While some projects are likely to be absorbed by the energy majors, whose economies of scale can make some projects cost-effective, overall U.S. production may decline.”
This also goes further, it depends on the chance that Joe Biden could become President, and assume office in January 2021, reintroduce Barack Obama’s restrictions on oil production, and then, if Russia isn’t entirely bankrupt – it could announce its victory over Washington.
CNN looks at the situation in a rather more “analytical” manner, presenting numbers of how much the US is losing.
Mind the quotations, since the “analytical” part only presents US companies and numbers, and acts as if those of Russian companies and the dropping value of the ruble, specifically against the USD doesn’t even exist.
“Putin’s goal is to wrest market share back from American frackers, whose debt-fueled growth caused Russia to lose its title in 2018 as the world’s largest oil producer.”
“This is a response to try to cripple the US shale industry,” said Matt Smith, director of commodity research at energy research firm ClipperData.
“Russia’s strategy seems to be targeting not simply US shale companies — but the coercive sanctions policy that American energy abundance has enabled,” RBC Capital’s Helima Croft said.
These reports are all and well, and are constructing a very “convincing” illusion that Russia is behind this entire plan, that in the long term would cripple the US, if Moscow’s economy could even survive such a gauntlet (which neither of the reports take into account).
Both reports entirely disregard that the aggressive actions, in the form of flooding the market with oil, providing astounding discounts and more were initiated by Saudi Arabia.
Riyadh’s actions damaged Russia’s interests directly, with massive losses in just a matter of days. If Russia’s plan was to, instead, cripple the US, that plan is failing, terribly.
Furthermore, Saudi Arabia’s energy ministry has directed oil producer Saudi Aramco <2222.SE> to raise its output capacity to 13 million from 12 million barrels per day (bpd), CEO Amin Nasser said in a statement.
“The company is exerting its maximum efforts to implement this directive as soon as possible,” Nasser added.
Moscow said Russian oil companies might boost output by up to 300,000 bpd and could increase it by as much as 500,000 bpd, sending the Russian ruble and stocks plunging.
Where specifically Washington fits in the entire picture in Saudi Arabia initiating and continuing to wage a full-scale oil price war, aimed at Russia, remains a mystery for all but American media.
MORE ON THE TOPIC:
- Saudi-Initiated All-Out Oil War Could Lead To Collapse Of Kingdom Itself
- Russia Appears Unprepared For Market Chaos (Again)