Who wants to put US shale oil drillers out of business more, Russia or Saudi Arabia? From Tyler Durden at zerohedge.com:
While it appears an expected emergency virtual OPEC+ meeting planned for Monday has been postponed, pushed back to later in the week to allow more time for negotiations, it’s likely that we’ll actually see the heated blame-game for the collapse in oil prices ratchet up — and oh,in the meantimeoil is set to crater come Monday as the feud is only expected to get uglier.
Indeed the aggressive war of words has started, with Putin offering a biting Russian narrative aimed at the Saudis in remarks Friday: “It was the pullout by our partners from Saudi Arabia from the OPEC+ deal, their increase in production and their announcement that they were even ready to give discounts on oil” that drove the crash alongside the double-whammy of the coronavirus-driven drop in demand, Putin said according to Bloomberg.
“This was apparently linked to efforts by our partners from Saudi Arabia to eliminate competitors who produce so-called shale oil,” Putin continued. “To do that, the price needs to be below $40 a barrel. And they succeeded in that. But we don’t need that, we never set such a goal.”
Editor’s Note: Vladimir Pozner is Russia’s most influential TV political-talk-show host, journalist and broadcaster.
Pozner has hosted several shows on Russian television, where he has interviewed famous figures such as Hillary Clinton, Alain Delon, President Dimitri Medvedev and Sting.
Pozner has appeared on a wide range of networks, including NBC, CBS, CNN and the BBC. In his long career, he has been a journalist, editor (Soviet Life Magazine and Sputnik Magazine) and TV and radio commentator, covering all major events in Russia.
Pozner has appeared on The Phil Donahue Show and Ted Koppel’s Nightline.
He co-hosted a show with Phil Donahue called Pozner/Donahue. It was the first televised bi-lateral discussion (or “spacebridge”) between audiences in the Soviet Union and the US, carried via satellite.
In 1997, he returned to Moscow as an independent journalist.
Doug Casey’s friend Mark Gould sat down with Pozner in Moscow to help us better understand the relationship between the US and Russia.
International Man: Naturally, Americans have a lot of misconceptions about Russia. The US government and media offer an overly simplistic and unfavorable view of the country.
Trump is probably not going to be able to negotiate much of a cease fire with Vladimir Putin in Putin’s war on US shale oil. From Moon of Alabama at moonofalabama.org:
Three weeks ago, when the Russian and Saudi war on U.S. shale oil started, we wrote:
In the first week of January crude oil reached $69/bl but it has since dropped to $45/bl as the coronavirus crisis destroyed the global demand. The Saudis tried to make a deal with Russia, the second largest exporter after Saudi Arabia, to together cut oil production to keep the price up. But Russia rejected a new OPEC cut. It wants to keep its production up and it will use the crisis to further undermine U.S. oil fracking production. As the whole fracking boom in the U.S. is build on fraud the move might well be successful.
Russia does not have a budget deficit and is well positioned to survive lower crude oil prices without much damage. Saudi Arabia is not.
Only a week later oil was already at $30/barrel and we predicted that it would go down to $20/bl.
On Monday the U.S. WTI oil price index reached that mark. Oil prices in other places are falling even further:
Canadian heavy crude has become so cheap that the cost of shipping it to refineries exceeds the value of the oil itself, a situation that may result in even more oil-sands producers shutting operations.Western Canadian Select crude in Alberta dropped to a record-low close of $5.06 a barrel on Friday, according to Bloomberg data going back to 2008 …
The corona virus crisis has led to drop in global demand by some 20%. The world production and consumption in normal times was at about 100 million barrel per day. Consumption is now below 80 million bl/d. But after the OPEC+ agreement failed Saudi and Russia both started to pump as much as they could to regain market shares. Together they are increasing their production by some 3-4 million barrels per day. All that oil has to go somewhere.
MBS is playing tiddlywinks; Vladimir Putin is playing nine-dimensional chess. From Simon Watkins at oilprice.com:
One might reasonably posit that when Crown Prince Mohammed bin Salman (MbS) signalled that Saudi Arabia was once again going to produce oil to the maximum to crash oil prices in a full-scale oil price war, Russian President Vladimir Putin probably fell off the horse he was riding bare-chested somewhere in Siberia because he was laughing so much. There is a phrase in Russian intelligence circles for clueless people that are ruthlessly used without their knowledge in covert operations, which is ‘a useful idiot’, and it is hard to think of anyone more ‘useful’ in this context to the Russians than whoever came up with Saudi’s latest ‘plan’. Whichever way the oil price war pans out, Russia wins.
In purely basic oil economics terms, Russia has a budget breakeven price of US$40 per barrel of Brent this year: Saudi’s is US$84. Russia can produce over 11 million barrels per day (mbpd) of oil without figuratively breaking sweat; Saudi’s average from 1973 to right now is just over 8 mbpd. Russia’s major oil producer, Rosneft, has been begging President Putin to allow it to produce and sell more oil since the OPEC+ arrangement was first agreed in December 2016; Saudi’s major oil producer, Aramco, only suffers value-destruction in such a scenario. This includes for those people who were sufficiently trusting of MbS to buy shares in Aramco’s recent IPO. Russia can cope with oil prices as low as US$25 per barrel from a budget and foreign asset reserves perspective for up to 10 years; Saudi can manage 2 years at most.
Surely America’s problems can’t be caused by Americans? The notion is so absurd that we’ll consider it no further. From Caitlin Johnstone at medium.com:
The hashtag #ChinaLiedPeopleDied was recently sent trending on Twitter by “new right” pundit Michael Courdrey with the amplification of all the usual Trump bootlickers and their sheep-like followers, further feeding into the anti-China cold war hysteria conservatives have been aggressively pushing with increasingly frenetic urgency lately. Which is hilarious, since these are the same people who’ve spent the last three years making fun of liberals and calling them NPCs for doing the exact same thing with Russia.
And when I say the exact same thing, I mean literally the exact same thing. The frenzied, shrieking hysteria I’m witnessing right now among Trump’s base regarding China looks and moves in the exact same way the mental zombification of Russia hysteria looked and moved when it began tearing through rank-and-file Democrats in late 2016 and early 2017. The seething, screaming vitriol I get from the MAGA crowd on social media when I talk about this is identical to what I got during that period from Democrats: just as irrational, just as vituperative, and just as emotion-driven.
Cheap gas will make life easier for those of us who drive. It might put a dent in electric car sales, though. FromMarko Marjanović at anti-empire.com:
The world should be mailing thank-you letters to Moscow right about now
$30 dollar oil will be great for the global economy (and in turn, a good global economy is good for oil). At a time when the global economy is visibly losing steam, when we’re overdue for another business cycle recession, and when nobody seems to have an answer, Moscow delivered what nobody else could — a massive economic boost for the whole world.
Sure there will be losers, chief among them US shale and the Saudis who need far higher prices to make their budgets work.
But then as a whole, the US shale has always been a loss-making enterprise for America. The scaling-down of shale is not bearish for the US at all. It’s bullish. If Putin can make Americans stop throwing more good money down the shale pit that’s not a bad thing, that’s a giant favor to the US and the health of its economy right there.
To say nothing of the effect of cheap energy itself. Personally I don’t think even $30 oil will be enough to avert a crash but if anything could, it would be that.
The ceasefire in Syria allows Turkey to save face, but make not mistake, Russia has won decisively. From Scott Ritter at theamericanconservative.com:
Erdogan talked tough, but in the end had to surrender gains to Moscow and Damascus.
President of Turkey Recep Tayyip Erdogan (L) and President of Russia Vladimir Putin (R) shake hands at the end of a joint news conference following an inter-delegation meeting at Kremlin Palace in Moscow, Russia on March 5, 2020. (Photo by Sefa Karacan/Anadolu Agency via Getty Images)
When the history of the Syrian conflict is written, the fighting that took place between the Syrian Army and its allies on the one side, and the Turkish military and Turkish-backed Syrian rebels on the other, from early February through early March 2020 in and around the Syrian town of Saraqib, will go down as one of the decisive encounters of that war.
Representing more than a clash of arms between the Syrian and Turkish militaries, the Battle for Saraqib was a test of political will between Turkish President Recep Erdogan and his Russian counterpart, Vladimir Putin. History will show Turkey lost on both accounts.
The Battle for Saraqib had its roots in fighting that began back in December 2019, in the form of an offensive carried out by the Syrian Army, supported by the Russian Air Force, against pro-Turkish opposition forces in and around Idlib province. The Syrian-Russian offensive represented the collapse of the so-called Sochi Agreement of September 17, 2018, which established what were known as “de-escalation zones” separating the Syrian Army from anti-government rebel forces in Idlib. As part of the Sochi Agreement, Turkey set up a dozen “observation posts”—in reality, fortified compounds housing several hundred troops and their equipment—throughout the Idlib de-escalation zone.
In exchange for legitimizing the existence of fortified Turkish observation posts, the Sochi Agreement mandated specific actions on Turkey’s part, including overseeing the establishment of a “demilitarized zone” within the de-escalation zone where tanks, artillery and multiple rocket launchers were to be excluded, and from which all “radical terrorist groups” would be removed by October 15, 2018. Moreover, Turkey was responsible for restoring transit traffic on two strategic highways linking the city of Aleppo with Latakia (the M4 highway) and Damascus (the M5 highway.)
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