Tag Archives: Saudi Arabia

Trump: Live by the Oil, Die by the Oil, by Tom Luongo

Posted on April 24, 2020 | 1 comment

Trump’s Energy Dominance policy has not led to energy dominance for the US and is in part responsible for the impending destruction of the US shale oil industry. From Tom Luongo at strategic-culture.org:

From the very beginning I’ve been a staunch critic of President Trump’s “Energy Dominance” policy. And I was so for a myriad of reasons, but mostly because it was stupid.

Not just stupid, monumentally stupid. Breathtakingly stupid.

And I don’t say this as someone who hates Trump without reservation. In fact, I continue to hope he will wake up one day and stop being the Donald Trump I know and be the Donald Trump he needs to be.

I don’t have Trump Derangement Syndrome of any sort. Neither MAGApede nor Q-Tard, an Orange Man Bad cultist or NPC Soy Boy, I see Trump for what he is – a well-intentioned, if miseducated man with severe personal deficiencies which manifest themselves in occasionally brilliant but mostly disastrous behavior.

Energy Dominance was always a misguided and Quixotic endeavor. Why? Because Trump could never turn financial engineering a shale boom into a sustainable advantage over lower-cost producers like Russia and the OPEC nations.

The policy of blasting open the U.S. oil spigots to produce a production boom built on an endless supply of near-zero cost credit was always going to run into a wall of oversupply and not enough demand.

The dramatic collapse of U.S. oil prices in the futures markets which saw the May contract close on April 20th at $-40.57 per barrel is the Shale Miracle hitting the fan of low demand and leaving the producers and consumers in a state which can only happen thanks to biblical levels of government intervention.

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AG Barr Blocks Release Of 9/11 Documents Despite Promises To Victims’ Families, by Derrick Broze

Posted on April 20, 2020 | Leave a comment

There’s a widely held belief among Trump supporters that Attorney General William Barr is a good guys who generally does the right thing. That belief has no basis in his actual record. From Derrick Broze at themindunleashed.com:

In a last minute court filing, U.S. officials demanded a federal judge block the release of files detailing Saudi connections to the 9/11 attacks.

9/11 Documents
Photo credit: Office of Public Affairs, Flickr
(TMU) — On Monday, U.S. Attorney General William Barr, acting director of national intelligence Richard Grenell, and other senior officials called on a federal judge to prevent the disclosure of files related to the role of the government of Saudi Arabia in the September 11 attacks. The officials told the judge in the civil case that the release of the files would endanger national security.

The files are being sought by families of the 9/11 victims who have spent the last two decades attempting to uncover the truth about the attacks. The families filed a lawsuit in federal district court in New York in 2017 as part of their effort to uncover the role of the Saudi government. What is publicly known is that the alleged 9/11 hijackers had a relationship with Saudi government officials. As Pro Public reported, at the 2019 White House September 11 memorial, U.S. President Donald Trump promised the families he would help them uncover the truth about 9/11. He made similar promises while he was campaigning for president.

“He looked us in the eye on 9/11, he shook our hands in the White House and said, ‘I’m going to help you—it’s done’,” Brett Eagleson, a banker whose father was killed in the World Trade Center, told Pro Publica. “I think the 9/11 families have lost all hope that the president is going to step up and do the right thing. He’s too beholden to the Saudis.”

The Trump Administration stated that the national security threat was so great that even sharing the reasoning behind the request for secrecy could cause harm. According to Pro Publica, AG Barr told the court that public discussion of the issue “would reveal information that could cause the very harms my assertion of the state secrets privilege is intended to prevent.”

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The Russia-Saudi Oil-Price War Is a Fraud and a Farce, by Mike Whitney

Posted on April 19, 2020 | 2 comments

Saudi Arabia wants to punish US oil producers for reaping the benefits of the global oil cartel without bearing any of the costs. from Mike Whitney at unz.com:

The Russia-Saudi oil-price war is a fabrication concocted by the media. There’s not a word of truth to any of it. Yes, there was a dust up at an OPEC meeting in early March that led to production increases and plunging prices. That part is true. But Saudi Arabia’s oil-dumping strategy wasn’t aimed at Russia, it was aimed at US shale oil producers. But not for the reasons you’ve read about in the media.

The Saudis aren’t trying to destroy the US shale oil business. That’s another fiction. They just want US producers to play by the rules and pitch in when prices need support. That might seem like a stretch, but it’s true.

You see, US oil producers are not what-you’d-call “team players”. They don’t cooperate with foreign producers, they’re not willing to share the costs of flagging demand, and they never lift a finger to support prices. US oil producers are the next-door-neighbor that parks his beat-up Plymouth on the front lawn and then surrounds it with rusty appliances. They don’t care about anyone but themselves.

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Trump – Master of the Seen – Vandalizes U.S. Economy, by Tom Luongo

Posted on April 18, 2020 | Leave a comment

Trump’s emergency economic measures ignore both causes and consequences. From Tom Luongo at tomluongo.me:

Government intervention into the market is always, and without fail, the wrong response to an economic problem. Politicians justify their intervention with ‘saving jobs,’ ‘dealing with a crisis’ or simply, ‘because I can.’

They only focus on the ‘seen’ and ignore the ‘unseen’ effects of their policies, selling them to voters on that basis alone. This is the first rule of economic analysis.

The great Frederick Bastiat described this in his seminal work of 1850, ‘That Which is Seen, and That Which is Unseen”

No discussion of the secondary or tertiary effects is allowed.

Even though those effects are often far worse. But because they are harder to predict and more pernicious and diffuse they are ultimately ignored.

President Trump is no different in this than any other politician. In fact, he may be one of the worst examples of a politician doing too much in history. To Trump nothing cannot be fixed without his direct application of the weight and force of the U.S. government.

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9/11 Truth: Under Lockdown for Nearly Two Decades, by Max Parry

Posted on April 10, 2020 | Leave a comment

Someday the truth about 9/11 may emerge. Max Parry tracks down some of the loose ends. From Parry at unz.com:

“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary” — H.L. Mencken

As the global pandemic grips world attention, completely unnoticed by mainstream media was the release of a final report of an academic study pertaining to another previously calamitous event of international significance. On March 25th, the conclusion of a four year investigation by researchers at the University of Alaska Fairbanks was published which determined that the collapse of World Trade Center Building 7 on September 11th, 2001 was not caused by fire. The peer-reviewed inquiry was funded by Architects & Engineers for 9/11 Truth, a nonprofit organization composed of more than 3,000 building architects and engineers who are a signatory to the group’s formal appeal calling for a new investigation into the three — not two — WTC skyscrapers destroyed on 9/11. The researchers infer that the collapse of Building 7 was actually the result of a controlled demolition:

“The principal conclusion of our study is that fire did not cause the collapse of WTC 7 on 9/11, contrary to the conclusions of NIST (National Institute of Standards and Technology) and private engineering firms that studied the collapse. The secondary conclusion of our study is that the collapse of WTC 7 was a global failure involving the near-simultaneous failure of every column in the building.”

With or without a pandemic, it is likely corporate media would have ignored the study anyway, just as they have anything that contradicts the official story of 9/11. However, it is notable that many have drawn parallels between the COVID-19 outbreak and the 9/11 attacks based on the widespread changes to daily life as a result of the crisis going forward. Already there is talk of nationwide lockdowns as a “new normal” with many rightly expressing concerns over civil liberties, press freedoms, the surveillance state, and other issues just as there were following 9/11. By the same measure, a false dichotomy is being established by political gatekeepers in order to silence those who dare challenge the official account as to how the coronavirus began. It is a stigmatization that is all too familiar to those who have never believed the conventional narrative that 19 Arab hijackers loyal to Osama bin Laden armed only with box-cutters were solely responsible for the attacks on the World Trade Center and the Pentagon on that fateful day.

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OPEC++ Or A Dead Shale Industry? by Moon of Alabama

Posted on April 9, 2020 | 2 comments

Vladimir Putin has the world oil industry by the balls, particularly the US shale producers, whose costs are far higher than Russia’s. From Moon of Alabama at moonofalabama.org:

Today there is a meeting by video of the OPEC states and Russia. Tomorrow the energy ministers of all G-20 states will likewise meet. Their discussions will be about the sinking global oil price caused by a lack of demand due to the novel coronavirus pandemic and record oil output from Saudi Arabia and Russia. ‘Western’ media have been optimistic that an agreement will be found:

The Organization of the Petroleum Exporting Countries and other producers including Russia, a group known as OPEC+, are expected to discuss record cuts equivalent to 10% to 15% of global supplies, although demand has plunged by up to 30%.

It is unlikely that OPEC will agree on any cut unless the U.S. and other large producers join the deal. The U.S. is, for now, unlikely to do that.

Until the end of the last OPEC+ agreement this month and the onset of the pandemic demand slump, the three top producers were the U.S. with 12.7 million barrels per day, Russia with 10.9 mbpd and Saudi Arabia with 9.8 mbpd.

Since 2016 OPEC and Russia had reduced their production to keep the oil price in the $60/b range. This effectively subsidized the U.S. shale industry. U.S. production kept growing while production by Russia and Saudi Arabia was artificially limited. It allowed the U.S. to grab more global market share at profitable prices.

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Putin: Oil Glut Is Really About Saudi Desire To Crush US Shale, by Tyler Durden

Posted on April 5, 2020 | 2 comments

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 meantime oil 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.”

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The Inevitable Outcome Of The Oil Price War, by Simon Watkins

Posted on March 21, 2020 | Leave a comment

MBS is playing tiddlywinks; Vladimir Putin is playing nine-dimensional chess. From Simon Watkins at oilprice.com:

Putin MBS

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.

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Saudi Arabia: The Crown Prince in His Labyrinth, by Daniel Lazare

Posted on March 18, 2020 | Leave a comment

People have been predicting the end of Saudi Arabia as we know it for quite some time. Clown prince Muhammad bin Salman may be the man to make that happen.From Daniel Lazare at antiwar.com:

As Crown Prince Muhammad bin Salman arrests his nearest relatives on treason charges, Saudi Arabia is bracing itself for a new reign of terror. But rest assured, it’s only temporary. At the end of the line lies something even worse: full-scale collapse.

Yeah, yeah, we’ve heard it all before from Chicken Littles who have long predicted a fiery Saudi denouement. But just because it hasn’t happened doesn’t mean they’re wrong. All it means, rather, is that while they’re on the right track, they’re taking longer than expected to reach their final destination. But they’ll get there soon enough.

Any one of the problems Saudi Arabia faces would be crippling in itself, but in combination they’re nothing short of devastating. One is a grim and oppressive religious establishment that is down for the moment but far from out. Another is over-reliance on a commodity whose price was trending downward even before the coronavirus sent it crashing through the floor. The third is a political structure that gives new meaning to the term “dysfunctional.”

Muhammad bin Salman’s remedy for the first has been simple: repression. Any mullah who dares speak up against royal liberalization in the form of Hollywood movies or US-style sporting events is fully aware that MBS, as he’s widely known, will swat him down quicker than he can say “Mullah Muhammad ibn Abd al-Wahhab,” the name of the eighteenth-century founder of the ultra-intolerant form of Sunni Islam that is the official Saudi faith.

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Putin Unleashes Strategic Hell on the U.S., by Tom Luongo

Posted on March 16, 2020 | 1 comment

Maybe demonizing Vladimir Putin, groundlessly blaming him for conspiracies to interfere in US politics, moving huge NATO forces to Eastern Europe’s border with Russia, abrogating long-standing arms control treaties, and trying to throw monkey wrenches into the Nord Stream 2 pipeline weren’t such good ideas after all. From Tom Luongo at tomluongo.me:

I am an avid board game player. I’m not much for the classics like chess or go, preferring the more modern ones. But, regardless, as a person who appreciates the delicate balance between strategy and tactics, I have to say I am impressed with Russian President Vladimir Putin’s sense of timing.

Because if there was ever a moment where Putin and Russia could inflict maximum pain on the United States via its Achilles’ heel, the financial markets and its unquenchable thirst for debt, it was this month just as the coronavirus was reaching its shores.

Like I said, I’m a huge game player and I especially love games where there is a delicate balance between player power that has to be maintained while it’s not one’s turn. Attacks have to be thwarted just enough to stop the person from advancing but not so much that they can’t help you defend on the next player’s turn.

All of that in the service of keeping the game alive until you find the perfect moment to punch through and achieve victory. Having watched Putin play this game for the past eight years, I firmly believe there is no one in a position of power today who has a firmer grasp of this than him.

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