Tag Archives: Oil

Joe Biden Wants You to Die for the Emirati Royal Family, by Doug Bandow

The Emirati Royal Family has a hell of a lot more money than you do, so you should be willing to risk your own or your children’s lives for them. That’s what serfs do. From Doug Bandow at antiwar.com:

Why Is Washington So Fond of Medieval Dictatorships?

President Joe Biden made headlines with his preparations to visit Saudi Arabia and kowtow to Crown Prince Mohammed bin Salman, who candidate Biden pledged to treat as a pariah. Receiving less attention is the president’s plan to take his ostentatious grovel from Riyadh to Abu Dhabi.

According to Axios: “The Biden administration and the United Arab Emirates are discussing a possible strategic agreement that would give the Gulf country certain U.S. security guarantees.” Washington reportedly has sent a draft text, which would effectively turn American military personnel into mercenaries for the Emirati royals. Just as the UAE hires out most other difficult work to others, it wants the US to provide bodyguards for the oppressive regime.

By truckling to the Gulf kingdoms, the administration hopes to convince the royals to increase oil production. Washington has been too successful in driving Venezuelan, Iranian, and most recently Russian petroleum off the market and now is desperate to lower gasoline prices. It is a forlorn hope – the Saudis and Emiratis are enjoying the financial bounty of high oil prices – but the president, facing a potential midterm congressional wipeout in November, is attempting a sort of “Hail Allah” pass.

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Europe’s Ban On Russian Energy Will Only Trigger More Inflation Pain In The West, by Tyler Durden

The West’s self-inflicted oil and gas supply constraints (sanctions on Russian oil and gas) has and will continue to raise the price the West must pay for oil and gas. It’s that simple. From Tyler Durden at zerohedge.com:

Europe’s extreme dependency on Russian energy products from oil to natural gas is made clear recently from the manner in which they have approached sanctions – with incrementalism, slowly sinking back into the bushes.

The latest agreement among member nations on export bans targeting Russia is largely oil focused, not natural gas focused, with the union demanding an immediate 70% decrease in Russian oil transferred BY SHIP. Oil transferred by pipeline will continue to flow into the EU for now. The ban is intended to expand to 90% of all shipborne Russian oil by the end of this year. Natural gas imports from Russia will also continue.

While some European nations are more dependent on Russian energy than others, overall 40% of the EU’s needs are supplied by the country’s industry. It is not surprising that they are seeking an incremental approach to sanctions, they simply would not be able to survive another winter if they were to go cold turkey and block Russian imports completely. Of course, this does not mean that Russia has to operate on Europe’s timetable.

Russia is already reducing exports of natural gas to multiple EU countries, with Denmark, Netherlands and Germany being the latest to see losses. The EU’s ban was oil and ship focused because they cannot find an alternative source for natural gas that would resolve shortages if they banned everything. Germany in particular would be destroyed by the loss of natural gas supplies from Russia with its 42% dependency.

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What’s Keeping China From Buying More Russian Crude? By Tsvetana Paraskova

The logistics problems getting Russian oil to China are monumental. From Tsvetana Paraskova at oilprice.com:

  • Russia is offering deep discounts for its crude following a wave of sanctions on its energy industry.
  • While China and India are still buying some discounted oil, logistical hurdles are becoming increasingly difficult to navigate.
  • Contractual obligations and shipping constraints are posing major problems for would-be-buyers of Russian oil.

Outbound shipments of Russian oil have yet to show signs of a major decline, as many analysts feared last month. In fact, Russia’s shipments of crude oil rebounded in the first full week of April to the highest level so far this year, Bloomberg News’ tracker of crude leaving Russian ports showed on Monday.    Yet, a “buyers’ strike” in Europe with many majors refusing to deal with Russian spot cargoes is forcing Russian crude to make much longer and complicated voyages to reach willing buyers in Asia. While China and India are not shying away from Russian crude—which sells at hefty discounts attracting price-sensitive buyers—the logistics of shipping oil from Russia’s Black Sea and Baltic ports to Asia and the scarce tanker availability, bank guarantees, and insurance for Russian cargoes would limit the amount of oil that Asia could take and compensate for lost barrels that are no longer going to Europe, analysts say.

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Oil for Gold (and Bitcoin)… the End of the Petrodollar and What It Means for You, by Nick Giambruno

Nobody talks about monetary privilege, which is the ability to exchange a piece of paper for real goods and services from other lands simply because that piece of paper is considered the world’s reserve currency. From Nick Giambruno at internationalman.com:

Petrodollar

The US government reaps an unfathomable amount of power from its racket of printing fake money out of thin air and forcing it on the world.

The petrodollar system is a big reason it has gotten away with this scam for so long.

In short, here’s how it works…

Oil is by far the largest and most strategic commodity market. For the last 50 years, virtually anyone who wanted to import oil needed US dollars to pay for it.

Every country needs oil. And if foreign countries need US dollars to buy oil, they have a compelling reason to hold large dollar reserves.

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Petrodollar System Flirts With Collapse… What It Means for Gold, Oil, and the Dollar, by Nick Giambruno

If the petrodollar standard falls, so goes the American empire. From Nick Giambruno at internationalman.com:

Petrodollar

It’s been rightly said that “he who holds the gold makes the rules.”

After World War 2, the US had the largest gold reserves in the world, by far. Along with winning the war, this let the US reconstruct the global monetary system around the dollar.

The new system, created at the Bretton Woods Conference in 1944, tied the currencies of virtually every country in the world to the US dollar through a fixed exchange rate. It also tied the US dollar to gold at a fixed rate of $35 per ounce.

The dollar was said to be “as good as gold.”

The Bretton Woods system made the US dollar the world’s premier reserve currency. It forced other countries to store dollars for international trade or to exchange with the US government for gold.

However, it was doomed to fail.

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Europe Energy Independence Is Impossible with The Current Policies, by Daniel Lacalle

Europe would have to deemphasize wind and solar, allow more development of oil and natural gas, and promote nuclear energy to get within field-goal range of energy independence. From Daniel Lacalle at dlacalle.com:

Europe is not going to achieve a competitive energy transition with the current interventionist policies. Europe does not depend on Russian gas due to a coincidence, but because of a chain of mistaken policies. Banning nuclear in Germany, prohibiting the development of domestic natural gas resources throughout the European Union, added to a massive and expensive renewable roll-out without building a reliable back-up.

Solar and wind do not reduce dependency on Russian natural gas. They are necessary but volatile and intermittent. They need back-up for security of supply from nuclear, hydro, and natural gas. Dependency rises in periods of low wind and little sun, just when prices are highest.

“Solar goes to zero for twelve hours a day, and that is guaranteed. The wind blows sometimes, and sometimes it does not, also guaranteed. They both depend on weather, which is 100% out of human control. They are on their best day a supplement” wrote a Navy pilot follower.

Batteries are not an option either. It is impossible to build an industrial-size network of enormous batteries, the cost would be prohibitive and the dependency on China build them (lithium etc.) would be even more of a problem. At current prices, a battery storage system of Europe’s size would cost more than $2.5 trillion, according to an MIT Technology Review paper. Massively more expensive than any other alternative.

Just the added cost of a battery grid plus the distribution and transmission network would make household bills soar even further.

Inflation was already out of control in Europe before the invasion of Ukraine was even a risk. CPI in Spain was 7.6%, in Portugal it was 4.2% and in Germany, 5.1%. Euro area CPI was 5.8%.

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The West’s Green Delusions Empowered Putin, by Michael Shellenberger

Anything that raises the price of oil and natural gas benefits Russia, and green energy policies are doing just that. From Michael Shellenberger at bariweiss.substack.com:

While we banned plastic straws, Russia drilled and doubled nuclear energy production.

In a Greenpeace action, a CO-2 sign stands in front of the Brandenburg Gate with flames coming out of it. (Jörg Carstensen via Getty Images)

How has Vladimir Putin—a man ruling a country with an economy smaller than that of Texas, with an average life expectancy 10 years lower than that of France—managed to launch an unprovoked full-scale assault on Ukraine?

There is a deep psychological, political and almost civilizational answer to that question: He wants Ukraine to be part of Russia more than the West wants it to be free. He is willing to risk tremendous loss of life and treasure to get it. There are serious limits to how much the U.S. and Europe are willing to do militarily. And Putin knows it.

Missing from that explanation, though, is a story about material reality and basic economics—two things that Putin seems to understand far better than his counterparts in the free world and especially in Europe.

Putin knows that Europe produces 3.6 million barrels of oil a day but uses 15 million barrels of oil a day. Putin knows that Europe produces 230 billion cubic meters of natural gas a year but uses 560 billion cubic meters. He knows that Europe uses 950 million tons of coal a year but produces half that.

The former KGB agent knows Russia produces 11 million barrels of oil per day but only uses 3.4 million. He knows Russia now produces over 700 billion cubic meters of gas a year but only uses around 400 billion. Russia mines 800 million tons of coal each year but uses 300.

That’s how Russia ends up supplying about 20 percent of Europe’s oil, 40 percent of its gas, and 20 percent of its coal.

The math is simple. A child could do it.

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A Geology Insider Explains Why The Global Energy Crisis Is Going To Get Much, Much Worse, by Michael Snyder

It’s getting harder and harder to find and extract oil. From Michael Snyder at theeconomiccollapseblog.com:

It is becoming clear that we are in far more trouble than we are being told.  In recent months, all forms of traditional energy have become significantly more expensive, and this is fueling price increases all over the planet.  This new global energy crisis is directly responsible for the astounding rise in fertilizer prices, it has resulted in a tremendous amount of pain at the pump for millions of average Americans, and since virtually everything that we buy has to be transported it is a major contributing factor to the “inflation boom” that we are currently witnessing.  Unfortunately, this is just the beginning.

I was recently contacted by a geologist that worked in the oil industry for more than a decade.

He patiently explained to me why things aren’t going to be getting any better.

I asked him if I could share some of what he sent to me with all of you, and he agreed.  After reading this, I think that you will agree that it is quite a sobering assessment of the current state of affairs…

I am a geologist who has worked in the oil industry for over ten years. I was just coming out of school in time for the shale revolution and worked in Denver on the Bakken play in North Dakota, and then I worked the Permian out of Midland. These were the two major shale plays, so I have firsthand knowledge. I now teach environmental science for high-schoolers in Amman, Jordan.

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Friends of the House of Saud: America Ever Owes the Royals Deference and Defense, by Doug Bandow

The Saudi Arabian government is just as nasty, if not nastier, than Iran’s, but it gets a free pass from the U.S. government. From Doug Bandow at antiwar.com:

No matter the many crimes committed by the House of Saud, defenders rush to take up their cause. The Wall Street Journal’s Karen Elliott House was the latest. Readers can imagine tears cascading across her keyboard as she wrote about the plight of the Kingdom of Saudi Arabia, which “is begging the U.S. for Patriot interceptors to defend itself against drone and missile attacks from the Iranian-backed Houthis in Yemen.”

House complained that this is bad for America for three reasons. “First, it endangers the Saudi people, who look to the US for protection.” Actually, what endangers the Saudi people is their reckless crown prince, Mohammed bin Salman, and especially his continuing war of aggression against the KSA’s much poorer neighbor.

Nearly seven years ago Riyadh attacked Yemen to reinstate the latter’s pliable president, who had been ousted by a coalition of his predecessor and the armed Ansar Allah movement, known as the Houthis. The Saudi and Emirati air forces hit hundreds of civilian targets and killed thousands of civilians. The impact of the war – malnutrition and starvation, disease, poverty – killed hundreds of thousands more. Surprising the Saudis, Ansar Allah shot back. (Apparently, they believed winning wars without loss was just another royal prerogative.) The KSA should acknowledge that it has lost, halt its attacks, and seek a realistic negotiated settlement.

Next, House contended that administration policy “endangers an ally and benefits Iran.” In fact, Saudi Arabia has no treaty commitment. Its value to American security is much overstated. The Saudi military performed miserably in Yemen. With the Abrahamic Accords Riyadh should look to Israel rather than the US as its chief security partner. As for economics, the oil market has changed dramatically, Riyadh’s importance is much diminished, and the royals recently made clear that they will pump oil to suit their, not America’s, interest.

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Biden Targets Another US Pipeline For Shutdown After ‘Begging’ Saudis For More Oil, by Tyler Durden

You can’t make this stuff up. From Tyler Durden at zerohedge.com:

Despite approval ratings in the toilet, President Biden and his administration are reportedly exploring the closure of yet another pipeline in a bid to shift the US away from fossil fuels and appease environmental activists.

The move – shutting down the Line 5 pipeline which links Superior, WI to Sarnia, Ontario, would cost tens of thousands of US jobs, billions of dollars in economic activity, and further exacerbate energy shortages and price increases hitting lower-income Americans the hardest, according to a Thursday letter from 13 House Republicans led by Rep. Bob Latta

Via the Daily Mail

According to the letter, the closure would affect workers across “Ohio, Michigan, Wisconsin, and the region,” and would place the environment at greater risk “due to additional trucks operating on roadways carrying hazardous materials.”

Line 5 is part of a network of oil pipes which move approximately 540,000 barrels per day from western Canada to Escanaba, Michigan.

“Furthermore, as we enter the winter months and temperatures drop across the Midwest, the termination of Line 5 will undoubtedly further exacerbate shortages and price increases in home heating fuels like natural gas and propane at a time when Americans are already facing rapidly rising energy prices, steep home heating costs, global supply shortages, and skyrocketing gas prices.”

This comes less than two weeks after the White House begged OPEC to increase oil production amid ‘supply issues’ and soaring energy prices.

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