The Drop in Oil Prices Turns the Geopolitical Chessboard

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Written by Tieri Maysan; Appeared at Memoriabg, translated from Bulgarian by Valentina Tzoneva exclusively for SouthFront

During the last two years, a coup d’etat took place on the global energy market. First of all, there was a considerable difference in supply and demand. And then the trade flows changed, after that the price of petrol collapsed. These changes put into question all the geopolitical principles in respect of oil.

THE MYTH OF LACK OF ENERGY RESOURCES

The economic decline in Western countries and in some developing countries resulted in the drop in the search for energy resources, while at the same time, there was a growth observed in Asian states. Thus, the demand on a global scale continued to grow. Regarding the supply – the production was not reduced in the state-producers at all, and countries like China having considerable strategic reserves, managed to increase them. As a result, the supply exceeded the demand.

This statement, however, contradicts the solid opinion of scientists and industrialists during 2000. Accordingly, the global production has reached its peak and the world will face an energy-resources-deficiency, which will result in the ceasing of existence of some countries and the wars for resources will begin.

The Drop in Oil Prices Turns the Geopolitical Chessboard

Dick Cheney

After coming back to the White House in January 2001, Dick Cheney formed a working group for development of national politics for energy (National Energy Policy Development – NEPD), named by Washington Post as “the secret society”. In deep secrecy, the presidential advisors listen to reports from the leaders of the big firms in this sector, the most prominent scholars and the leaders of special services. They reach the conclusion that there is no time and the survival of the economy of the USA must be guaranteed by the Pentagon on the road to acquiring the resources in the “big Middle East”. It is not clear who participated in this group, what database was used and how they reached this conclusion. All the documents have been destroyed and no one knows the extent of the statistical data available to the members of the group.

Specifically this group recommended the unleashing of wars against Afghanistan, Iraq, Iran, Syria, Lebanon, Somalia and Sudan, and the decision about this was taken by George Bush on the 15th of September 2001 at the meeting in Camp David.

I remember listening to the speech of the Secretary General of the Working Group of the White House at the AFPO Congress in Lisbon. He presented a report for studying of open locations, the inevitability of “Hubbert’s peak” (terminology introduced by the geophysicist, M. King Hubbert, which means the maximum global production of oil leading to the inevitable drop in production) and about the measures undertaken in the USA for reduction of consumption of energy. At that time, I was overwhelmed by his assessment and persuasiveness.

Despite this, with the passage of time it became clear that this analysis was completely incorrect and the first five wars (against Afghanistan, Iraq, Lebanon, Libya and Syria) from this point of view, have been useless although they continue to date. But this assessment in the prognosis should not come as a surprise because it is a consequence of “group-think”. A certain group of people always get united around an idea which no one dares to doubt due to the risk of being seen as a fool. This is the law of conformism. In this regard, the advisors of the White House appeared to be the prisoners of the theory of Malthus, which in the 19th Century dominated in the Anglican culture. According to the theory of Malthus, the population of earth increases in geometric progression and the resources in arithmetic progression. Thus over time, the resources for some become insufficient.

The Drop in Oil Prices Turns the Geopolitical Chessboard

A U.S. soldier stands next to an oil pipeline valve in Iraq in 2005. (Photo: YourLocalDave/cc/flickr)

In his theory, Thomas Malthus aimed to disprove the theory of Adam Smith, according to whom, the free market is a self-regulating system. In reality Pastor Malthus had been searching, through his unproven theory, for confirmation for his refusal to help the poor people in his parish. Why feed these people when their children will die of starvation tomorrow in any case? “The wasps” in the American politics were strongly represented in the government of George Bush; there were many representatives of the petrol industry, starting with vice president, Cheney, the former leader of the supplier of diesel and oil equipment – Halliburton.

And if petrol is not a renewable source of energy and therefore at one stage it is finished, nothing prevents us from thinking that the end is near. In 2001, there were only talks about oil of the Saudi type, which they knew how to purify. The oil of Venezuela whose reserves are sufficient to cover the global need for a whole year, were considered unsuitable for production.

Afterwards, the conclusion was reached that the “theory of the human factor as a reason for global warming” is as unsubstantiated as the theory of the “petrol peak”. It comes from the same theory of Malthus and apart from that, it allows its supporters to enrich themselves from the Climate Exchange in Chicago, trading quotas for emission of greenhouse gasses. This idea was spread around the population aiming at the reduction of consumption of energy and carbon in Western countries, therefore the world would be prepared for the fact that there will be less petrol available and that it will be more expensive.

THE END OF THE ARTIFICAL PETROL PRICE

It seemed that the increased price of $110 per barrel confirmed the conclusions of Dick Cheney’s group, but its sudden drop to $35 per barrel showed that they were inaccurate. It began in 2008 and accelerated after the vote in Europe for anti-Russian sanctions, which disorganised the international trade; it brought in the displacement of capitals and as a result, the speculative oil bubble burst. This time, the low price was supported by the USA, which saw it as an additional means to ruin the Russian economy.

The drop in prices accelerated more when Saudi Arabia became interested in it. Satisfying the market with its own petrol, Riyadh began to maintain the price in the range of $20 to $30 per barrel of oil of the brand ‘Arabian Light’. This made investment in alternative sources of energy unprofitable and secured power and high levels of income for Riyadh for years ahead. Saudi Arabia manged to convince its partners from OPEC  to maintain this course. The members of the cartel decided to save power for themselves in a long-term plan, even at the prospect of drastically-reduced income in the frame of several years.

The Drop in Oil Prices Turns the Geopolitical Chessboard

Last year, the leaders of the biggest Western petrol companies announced their support for reduction of carbon emissions. They expected to get state support for development of alternative energy resources. Today, the low price of petrol deprives these investments from profitability.

As a result, the Washington-supported drop in oil prices aimed at Moscow backfired. If job losses in the energy sector have dropped by 250 000 over the last two years, half of these affect the United States. Seventy-eight percent of the petrol platforms were closed. And although the drop in production is not so dramatic, it does not change the fact that the USA is not so energy-independent.

This does not only refer to the USA. The whole Western capitalist system has been affected. In 2015 the company, Total, lost $2.3 billion, Conoco Phillips – $4.4 billion, BP – $5.2 billion, Shell – $13 billion, Exxon – $16.2 billion, Chevron – about $23 billion.

This brings us back to the “Carter Doctrine” of 1980. At that time, Washington granted itself  the right for millitary intervention in the Middle East to secure guaranteed access to petrol. In order to achieve this Doctrine, President Reagan created the Central Command of the USA. Today, oil is extracted throughout the world by multiple methods. The fictitious “peak of  Hubbert” was uncrowned. Now, President Obama has ordered the troops of the Central Command to relocate to the Pacific (defined by Obama as ‘the Asian axis’). This plan was changed after the concentration of forces in Western Europe, but it will probably be re-established if the price of oil settles in the frame of $20 to $30 per barrel. In this case, the production of some oil products will be terminated and only raw ‘Arabian Light’ will be used. That is why today we are again facing the question of sending forces to the Middle East.

If Washington takes this road, it will change the tactics of the Pentagon. Although the “theory of chaos” allows the control of vast territories by a minimum number of people, it also requires a long time for development of the vast resources, as we can see from the experience in Afghanistan, Iraq and Libya. Maybe it would be meaningful for Washington to return to wiser politics: to stop supporting terrorism, to accept peace and to start trading with these states, or what’s left of them.

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  • Nexusfast123

    The last sentence is wishful thinking. Washington is a one trick pony.

    • John Whitehot

      in part I agree, yet recent history teaches that “shit happens”, and most definitely it will happen

  • Zionism thrives on chaos and terrorism. While everyone is preoccupied, the Zionist extend their control and make their matrix of power more multilayered.