The fall in the oil price is a bad thing in that it makes hydrocarbons more attractive against renewables, although on the timescale that investment decisions in energy production are taken, it would have to be sustained a great deal longer to have a major impact.
Contrary to popular myth, the fall has not been caused by Saudi Arabia cranking up production on behalf of the United States to damage Russia. Hydrocarbon supply has increased, while the increase in demand has been slower than expected. The United States itself has been responsible for a significant part of the production increase, though it is from a number of diverse sources. What Saudi Arabia has not done is play the role of market regulator by cutting back production to stabilise the price.
If you wish to see a target of Saudi inaction, it is the United States, not Russia. The single largest increase in hydrocarbon production in recent years has come through fracking in the United States. Fracking is high cost, and the fracking frenzy in the USA was built on a mound of corporate debt. Nobody would have initiated a fracking investment with oil under $70 a barrel. A few deep sea operations aside, no producers are hurt more than US frackers by the current oil price. The Saudis are enjoying watching the Americans fall on their arse.
As for Russia, I have explained repeatedly that it is a developing country economy dependent on raw commodity export. I am willing to wager that we will find that in 2014 the total GDP of Russia fell below that of Spain. Oil is not the only commodity price that is struggling. Putin has complacently presided over an astonishingly undiversified economy of which the key markers are raw commodity export, very narrow distribution of wealth from that raw commodity export, capital flight of 80% of the profit from that raw commodity export, and a consequent crippling investment shortage. The pretend sanctions “imposed” on Russia are responsible for almost none of the economic pain Russia is now suffering. Russia’s lack of value-adding industrial base and capital incontinence is coming home to roost.
I can’t finish this survey of oil politics without noting the appalling decision of the United Kingdom to open a naval base in Bahrain to service aircraft carriers. This crazed neo-imperial venture by a struggling economy is shameful. An aircraft carrier has no defensive purpose. Its entire rationale is the projection of airpower into foreign countries. That, after the total disaster of Middle East policy in the last decade, the United Kingdom is still seeking to project air power in the Middle East is horrifying. Furthermore, when we are supposedly trying to reach an agreement with Iran on its nuclear programme, it is incredibly provocative to open a major forward western
base almost within eyesight of Iran. Lastly, of course, Bahrain has a brutal dictatorial regime that has been murdering and torturing its majority Shia population for decades, with both open and covert British support. Britain’s callous action is a kick in the teeth for anybody who believes that human rights has a role to play in foreign policy.
The sooner we break up the United Kingdom the better. It really is a force for evil in the world.
@ Rehmat. This turn of fortune for our stealing pirates will no doubt mean that it can repay some of its foreign debts with the US and other countries. Not much wriggle room left there.
Why should these freebooters be given dolphin class submarines for nowt?
Habbabkuk (la vita è bella)
9 Dec, 2014 – 5:54 pm
“But it has most definitely not vindicated those who predicted most confidently on this blog that the report would never be published/be sabotaged be so heavily redacted as to become meaningless, etc,…”
………………………..
Yet another assertion by you Habbabkuk without any back-up.
No one can take you seriously without such back-up; name names, provide links or references or shut up!
Putin is trying to develop and diversify the economy domestically, and at least Russia has that massive potential for growth.
The West would have preferred Russia to remain undeveloped, as we saw from their looting policies in the 1990s, as we see from their colonial adventures everywhere.
Putin has had to deal with all of that and of course the remnants of Western gangsters who invaded the country in the 1990s.
Crawfords argument, if you could call it that, is little more than a restatement of myths that are fed daily in mainstream media.
“We’re the good guys. We just want to help Russia.”
What’s the financial deal with the Bahrainis?
Are we selling ourselves as a hired gun?
@Herbie
Putin is trying to develop and diversify the economy domestically, and at least Russia has that massive potential for growth.
What is remarkable is how badly Putin is doing in this respect — apparently due the predatory actions of public sector corruptionists and free-lance extortionists.
To some extent, Western sanctions must be welcome to Putin as a cover for poor economic management.
The problem for Russia seems to be that few there believe in a free, competitive market economy: they are either sold out to the Western corporate interest or they are statists. That Russians cling to the collectivist approach is understandable, since they do it so well, as indicated by their formidable military.
The Rise of German Imperialism and the Phony “Russian Threat”
By Prof. James Petras
SNIP
US-German military and economic dominance in Europe was premised on retaining Russia as a weak quasi vassal state, and on the continued economic growth of their economies beyond the initial pillage of the ex-communist economies.
For the US, uncontested military supremacy throughout Europe was the springboard for near-time imperial expansion in the Middle East, South Asia, Africa and Latin America. NATO was ‘internationalized’ into an offensive global military alliance: first in Somalia, Afghanistan then Iraq, Libya, Syria and the Ukraine.
The Rise of Russia, The Islamic Resistance and the New Cold War
During the ‘decade of infamy’ (1991-2000) extreme privatization measures by the client rulers in Russia on behalf of EU and US investors and gangster oligarchs, added up to vast pillage of the entire economy, public treasury and national patrimony. The image and reality of a giant prostrate vassal state unable to pursue an independent foreign policy, and incapable of providing the minimum semblance of a modern functioning economy and maintaining the rule of law, became the defining view of Russia by the EU and the USA. Post-communist Russia, a failed state by any measure, was dubbed a “liberal democracy” by every western capitalist politician and so it was repeated by all their mass media acolytes.
The fortuitous rise of Vladimir Putin and the gradual replacement of some of the most egregious ‘sell-out’ neo-liberal officials, and most important, the reconstruction of the Russian state with a proper budget and functioning national institutions, was immediately perceived as a threat to US military supremacy and German economic expansion. Russia’s transition from Western vassalage to regaining its status as a sovereign independent state set in motion, an aggressive counter-offensive by the US-EU. They financed a neo-liberal-oligarchy backed political opposition in an attempt to restore Russia to vassalage via street demonstrations and elections .Their efforts to oust Putin and re-establish Western vassal state failed. What worked in 19991 with Yeltsin’s power grab against Gorbachev was ineffective against Putin. The vast majority of Russians did not want a return to the decade of infamy.
http://www.globalresearch.ca/the-rise-of-german-imperialism-and-the-phony-russian-threat/5418498
“The problem for Russia seems to be that few there believe in a free, competitive market economy:”
Nor does the West. It’s a myth. Even Soros says that.
“they are either sold out to the Western corporate interest or they are statists.
This is true. In order to build a diversfied economy you need first to harness the population to an objective. This is mostly done through nationalism and/or religion, family, tribe etc. All successful countries have gone through this process.
If you begin with individualism, you’ll fail, because so weakened you’ll just be picked off one by one. That’s the ruse, which the West trots out at every opportunity.
Divide and conquer, which has just as easily been practised on the populations of the West of course.
“That Russians cling to the collectivist approach is understandable, since they do it so well, as indicated by their formidable military.”
They’ve been concentrating on large projects. It’s agreed that that’s currently their forte.
Of course that will probably be a significant advantage in current circumstances.
Here’s a fairly good summation of those large Russian projects:
https://en.wikipedia.org/wiki/User:Greyhood/Major_development_projects_in_Russia
“In his opening speech at the SZ Economic Summit, German Foreign Minister Frank-Walter Steinmeier (SPD) appealed to business heads to support Germany’s rise to be a world power.”
“Steinmeier’s speech was remarkable not only for its call for German leadership in the world. It also expressed an openly imperialist programme. At its core was the conclusion that in a world that is increasingly dominated by national conflicts, Germany’s global interests can no longer be pursued by purely economic means, but must rely on foreign policy and military force.”
http://www.globalresearch.ca/german-foreign-minister-steinmeiers-great-power-speech-to-big-business/5418514
O/T, But it cheers me up to no end.
___________________________________
The Queen is set to lose funding worth millions of pounds a year thanks to a republican snub by Nicola Sturgeon’s SNP government.
In a move that threatens an explosive cross-border row, Scottish Ministers have signalled they will refuse to contribute to the costs of running the Royal Family.
A deal to hand new devolved powers to Scotland after September’s referendum on independence will effectively rob the Royals of more than £2 million in cash a year.
The Mail on Sunday can reveal that the SNP is planning to reap the financial benefits of the new deal – while refusing to hand across the money to fund the Monarchy.
With the first formal meeting between new First Minister Ms Sturgeon and the Queen just three days away, the move threatens to provoke a major rift between the Scottish Government and the Royal Family.
Ms Sturgeon’s calculated snub will also strain the fraught relationship between the governments in London and Edinburgh.
___________________________________________
Well done Nicola, stick to your guns, the more you can squeeze out of old droopy chops Queen Lizzie, and parasitic brood the better.
I can only hope a rift as wide as the Grand canyon opens up between Holyrood and Buckingham Palace.
If only Scotland was a republic, we could ignore those blue blood suckers, one day, it surely will be.
http://www.dailymail.co.uk/news/article-2863796/Outrage-Scots-rob-Queen-2-1-million-vow-hold-rights-Crown-Estates-including-Tobermory-Waterfront-shore-windfarms.html
How can you/global research (blundering bo@+*^s)) speak of the annexation of east Germany by Germany?, when it always was part and parcel of one country, that article is utter made up conjecture.
The reunification with east Germany, despite the brainwashing and spying on a huge level that had held up this Soviet vassal, was an inevitable step, go ask Gorbachev.
Walls, hallo Israel, do not keep people out, they keep you in, it is a distinctive mark of failure to communicate.
‘It seized control of major industrial enterprises via corrupt privatisations decreed by the newly installed pro capitalist client regime’
What was there to ‘seize’? despite the DDR being regarded as the most productive and organised state in the USSR, it had the best wares and machined goods, it was still hopelessly out of date and behind that of equivalent western companies.
What does this mean, firstly East Germany was unproductive bar a few companies with international clients such as Leica and Zeiss, it was hopelessly backward trying to produce goods with decades old machinery, a bit like Britain’s Triumph motorcycle history that never modernised itself and produced oily rags for bikes.. Most of the assets were worth scrap and Germany invested such vast sums, some 68 billion so I remember, during the first four years, that its brought its own economy to its knees and went into stagnation.
Everyone in the whole world knew that the DDR’s currency was worth about zilch on reunification, still West Germany offered an exchange of 1:1 to enable people to start up a new business or try their luck elsewhere, which many did. It was the German state that carried the burden and paid for it with a stagnating economy, just as it did support the soviet economy with 300 billion when it needed to modernise its scrap to compete and make ends meet at home.
To argue that the eastern European economies were ‘robbed’ by an increasing western support, to uphold limited social structures and enable some to modernise and sling their soviet central state supply chain, old fashioned, and decrepit as it was, lives in cloud cuckoo land.
This article has been written by a warmonger who’s choice of words seems to have been cleared by the CIA rogue agency, making out that a strong lesser indebted Germany, with many high value foreign assets and workforces, is far worth than a gang riddled Russian state, led by gangsters who discarded their uniform and took companies away from the Russian state and its people.
faecicous clap trap, Silvio, and I mean faecicous.
To call this an annexation is an outrageous slur, I will have to revise my view of global research and its choice of words.
“The problem for Russia seems to be that few there believe in a free, competitive market economy:”
Nor does the West. It’s a myth. Even Soros says that.
If the Russians ever again get the idea of leading the world, they might undertake to make the myth a reality.
Corruption can be controlled if there is determination at the top. One useful innovation would be a digital currency of which every unit has a unique numerical identifier, makes all transactions, legal or otherwise, open to scrutiny.
Another useful innovation would be to make the money power more responsible by giving it a public role That was the purpose of the House of Lords: the great landowners had to defend their interests publicly. We need a similar institution today. Membership of the Lords should be granted those who have paid the most tax. If nothing else, this would do something to encourage the payment of taxes.
Nevermind
“To call this an annexation is an outrageous slur, I will have to revise my view of global research and its choice of words.”
____________________
You might remember that I’ve told people about the pretentiously named “globalresearch.org” many a time on this blog. Well, exposed it, to be precise.
Were you one of the regulars who sneered at me when I did so?
Nevermind
And you are exactly right in your description of the ludicrously named German “Democratic” Republic. The whole thing was a gigantic bluff and fraud.
Some possibly significant things occurred in quick succession:
* The Scottish independence referendum returned No as its result.
* Within two days, Westminster committed the UK to another war in the Middle East, saying it could go on for years and spread from Iraq to other countries; Syria was mentioned.
* Within two weeks the first bombs were being dropped.
* The price of oil began its rapid descent.
These things may or may not be connected, or something in-between.
RepublicOfWilkdImaginings
“Well done Nicola, stick to your guns, the more you can squeeze out of old droopy chops Queen Lizzie, and parasitic brood the better.”
___________________
Your source is The Daily Mail, I believe?
In which case, don’t count your chickens…..
~~~~~~~~~~~~~~~~
By the way, whose chops are droopier – Her Majesty’s or yours? 🙂
Clark
“These things may or may not be connected, or something in-between.”
__________________
That’s about the most useless comment I’ve read on here for quite a while.
I do love a chappie with firm opinions.
Craig; I don’t know why you resist.
“The sanctions against Russia have almost no real effect at all.”
Russias economic forecasts anticipate $100 per barrel. To blithely exempt their economy from the effects of sanctions simply flies in the face. Also still waiting for your response on how many Russian children will have to eat paint chips ala Oil for Food debacle.
The poster above obviously omits to read his own piffle.
“I do love a chappie with firm opinions.”
Is that a euphemism?
Good lord. Now habby is accusing GlobalResearch of too much diversity of opinion.
You wonder is there actually a calculating brain there at all, or is it just some sort of sub-Turing repeating machine.
Bit like Crawford’s “arguments”.
===============================
I’d say that the money system itself is corrupt and that in turn corrupts everything else.
We don’t actually need profiteering middlemen for the issuance of currency, nor for the maintenance of stable levels of money in the economy.
Every economic problem is down to these manipulating bastards.
Hi Craig, there was an interesting article here
Oil wars: Saudi Arabia makes enemies as prices tumble
which says that Saudi Arabia needs the oil price at $98 a barrel to cover it’s cost of production and that it risks a budget deficit at a lower price. It has however got monetary reserves to keep it going until the price (maybe) recovers. However if the US shale production continues Saudia Arabia may find it has lost its hold on the market.
My comment was addressed to the poster before Ben.
I knew that, Mary. 🙂
Saudis have plenty of cash to drag this out. $750 Billion in reserves means they can absorb the loss at $40 for…….10 years.
The Big Dog either is screwing with the petrodollar (US shale cutting into their game) or payback to Putin…or both.
It’s a two-fer.
Herbie
“Good lord. Now habby is accusing GlobalResearch of too much diversity of opinion.”
_________________
Wrong again, Herbie – I’m (again) pointing out the “globalresearch” writes bollocks.
And I get the impression that Nevermind rather agrees.
Herbie
“We don’t actually need profiteering middlemen for the issuance of currency”
____________________
I quite agree.
Every individual should be able to issue his or her own currency, without let or hindrance.
But, until that happy day, I think I’ll hold on to my £s, $s, €s and shekels.
Re:
@Habbabkuk
” I am willing to wager that we will find that in 2014 the total GDP of Russia fell below that of Spain.”
How do you expect this miracle to occur, Habby. Will Spain with a youth unemployment rate currently over 50%, experience a 60% GDP growth this year, or will Russia’s GDP contract by eight hundred billion or so, an amount greater than the GDP of Saudi Arabia, Netherlands, Indonesia or Turkey?
No answer. QED. LOL.
@Ben
To blithely exempt their economy from the effects of sanctions simply flies in the face.
Putin should be truly grateful for sanctions, for although Russia’s economy is a lot larger than Craig repeatedly pretends, it is a hell of a lot smaller than it would be without massive swindling, extortion and theft by politicians, state employees and the mafia. The sanctions now provide Putin with the cover he needs for such grotesque misrule, which has left Russia ill-prepared for a slump in resource prices.
Yet you blithely ignore Putin’s raging popularity at home, Canspeccy.
You think he regards that lightly?