Yves here. One of the leading stories tonight is how furious the Biden Administration is over the OPEC+ agreement to cut oil production by 2 million barrels a day. Team Biden is taking it personally, depicting it as a surprise, maliciously timed so as to hurt Democratic party prospects in the midterms, and proof that the Saudis, one of America’s long-standing allies in the Mideast, is working in concert with Russia.
What is striking about this temper tantrum is that it comes off as yet another demonstration of US geopolitical immaturity.
First, Mr. Market was not surprised and oil prices moved little on the news, raising questions as to how the Biden crew missed what investors saw as obvious. Undue confidence in the power of the hegemon? However, the tepid market response appears also due to the cut not being fully met. From the Financial Times:
The actual fall in output from the Opec+ group’s lowered target is likely to be closer to 1mn b/d, rather than the headline of 2mn b/d, as many of its weaker members have struggled to hit production targets in recent months.
Yet Biden officials claimed that the Saudis didn’t warn them that this might be coming. From Bloomberg:
Top Biden energy adviser Amos Hochstein said Thursday on Bloomberg Television that after a meeting with Saudi Crown Prince Mohammed bin Salman less than two weeks ago, he did not have the impression that OPEC+ was poised for its most dramatic cut since the beginning of the pandemic.
That may be accurate, but why should the Saudis have to spell out what the Biden Administration has made clear it not want to hear, that the Saudis are not going to refrain from lowering production just to save Biden’s bacon? As as the heavyweight in an oil cartel, they are going to manage production as they see fit to manage prices.
Remember that Saudi crown prince Mohammed bin Salam refused to take a call from Biden last March to discuss the oil price crisis triggered by US sanctions on Russia. That is a very strong signal that MbS does not see Riyadh as taking marching orders from Washington.
Also remember, that despite the Administration whinging that this production cut is a dastardly Russian plot (everything bad that can’t be attributed to Trump must be due to Putin), as Alexander Mercouris pointed out in his video on Thursday, the Kremlin was opposed to the modest production cut last month.
In keeping, the Saudi energy minister dressed down a Reuters reporter yesterday over the new agency’s claims of Saudi-Russian collusion and said it had not happened in the recent claimed instances or now:
NOW – Saudi Energy energy minister refuses to answer questions from #Reuters at OPEC+ press conference. pic.twitter.com/Kyi5a5bWur
— Disclose.tv (@disclosetv) October 5, 2022
Scott Ritter gave a good recap of the reasonableness of the US position in June, before Biden was set to meet with MbS, at 1:29:15:
A second sign of geopolitical immaturity is making threats on threats on which you cannot deliver, which is what this fulminating amounts to. Again from Bloomberg:
Furious congressional Democrats urged retaliation against Riyadh, a government seen as an increasingly unreliable ally. Many aired suspicions that the timing of the announcement was intended by the crown prince, whose country Biden once vowed to make a “pariah,” to have maximum impact on the election.
Yet Biden and his team have no good options to respond to the OPEC+ move and would see little benefit from an extended dispute highlighting the president’s inability to influence the cartel.
Third, Team Biden appears not to be bright enough to work out that the G7 oil price cap scheme that it sponsored and still apparently plans to implement despite lack of buy-in outside the “collective West” sphere, is tantamount to trying to break OPEC. So it is possible that the timing was deliberate and retaliatory, and not merely a response to “prices lower than we like for too long.”
Fourth, some of the Biden Administration statements confirm the US-as-colonialist attitude that Putin described pointedly in his speech last week. Notice this section from a Wall Street Journal story:
In Washington, lawmakers focused their attention on Saudi Arabia, saying the country has aligned with Russia despite its attack on Ukraine, making the kingdom unfit for U.S. support.
They are pitching bills that would potentially seize the assets that OPEC member countries own in the U.S., or mandate the removal of U.S. armed forces from Saudi Arabia and the U.A.E.
“The royal Saudi family has never been a trustworthy ally of our nation,” Sen. Dick Durbin (D., Ill.), the No. 2 Democrat in the Senate, tweeted Thursday. “It’s time for our foreign policy to imagine a world without their alliance.”
As Lambert would put it, this is wonderfully clarifying. The US thinks it’s reasonable to steal from countries that won’t bend to its will.
By Tsvetana Paraskova, a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. Originally published at OilPrice
- Secretary Blinken has described the decision by OPEC+ to cut production by 2 million bpd as both “disappointing and short-sighted”.
- The Secretary of State said that the U.S. is reviewing its “response options” and consulting closely with Congress.
- President Biden has directed another 10-million-barrel release from the SPR in November and will continue to direct releases as appropriate.
The United States is considering “response options” in its relations with OPEC+ members and its de facto leader Saudi Arabia after the group announced a large 2 million bpd nominal cut in its collective oil production target earlier this week, U.S. Secretary of State Antony Blinken said.
“As to the relationship going forward, we’re reviewing a number of response options. We’re consulting closely with Congress,” Secretary Blinken said at a press conference in Peru late on Thursday.
“We will not do anything that would infringe on our interests – that’s first and foremost what will guide us – and we will keep all of those interests in mind and consult closely with all of the relevant stakeholders as we decide on any steps going forward,” Secretary Blinken added.
Asked to comment on the OPEC+ production cut, he said, “We see the decision as both disappointing and short-sighted, especially as we have a global economy that is dealing with the implications of recovering from COVID, as well as the aggression from Russia in Ukraine, the consequences that’s having.”
“We’ve said all along that supply needs to meet demand, and we’ve been clear about that and we’ve been working on that,” Secretary Blinken said.
Following the OPEC+ decision, U.S. National Security Advisor Jake Sullivan and National Economic Council (NEC) Director Brian Deese said in a statement, “The President is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine.”
“In light of today’s action, the Biden Administration will also consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices,” Sullivan and Deese added.
President Joe Biden has directed the Department of Energy to deliver another 10 million barrels from the Strategic Petroleum Reserve (SPR) to the market next month, they added.
“The President will continue to direct SPR releases as appropriate to protect American consumers and promote energy security, and he is directing the Secretary of Energy to explore any additional responsible actions to continue increasing domestic production in the immediate term.”
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The pump price of gasoline, the modern American dole.
It is quite clear that the Dems fear a massive shift in congress unless the public is isolated from international events. And to do so they need to keep the gasoline price low. This thanks to how dependent on car travel the US has become.
If Biden wanted to do what’s best for the country he wouldn’t have run in the first place. For him it’s all about him including draining the SPR for political advantage. I’m half convinced the only reason Biden ran last time was to keep Hunter out of jail.
The other takeaway from the above is that Congress is just as bad as he is. And Trump is no better given that he said we should go into Syria and take their oil.
A recent poll said that sixty percent of Americans think it’s time for a third party. Me too.
Only 60? What the hell is wrong with the other 40?
The other 40 are with Stupid.
Bingo. Biden is a narcissistic, mediocre politician incapable of grasping or caring that their ‘leadership’ is a farce, one that weakens the country and inflames its neighbors. When he announced his candidacy he couldn’t articulate a single reason why he was running, or a single policy he intended to pursue — evidently he’d figure that out later after a good nap — the only thing he could offer amounted to, ‘Donald Trump bad, Joe Biden good’. But like Trump, only ‘he alone’ could save the nation. Right.
Please do not underestimate his greed as a reason along with his narcissism. You don’t think seeing his former boss and his wife raking in the bucks didn’t make him wonder where his part of the take was? It hasn’t been about the job for decades, if ever.
Greased palms, always.
+++
Yup.
Pat, yes I see your point. And I can’t recall exactly when it dawned on naïve me that Obama, for all his hopey-changey rhetoric, simply wanted to get rich, and shrewdly saw that gaining the presidency, despite his inexperience, was the way to do so. In the end, Obama was probably as much an opportunist as Trump, but Trump was always critically addled by enormous insecurities.
Sadly, that is really all there is to Obama.
There is no long-term vision, no policy, just craven bullshit.
Reactive nonsense, no history, no learning, no Talleyrand, etc.
His old VP takes it to new depths.
Much as I would like to see a third party the clamor for a third party has actually dropped recently according to The Hill yesterday at any rate.
the mindset that came into power in 1993, the clinton/blair type are not reasonable logical stable types, they are fascists ideologues, biden had to run to keep out even moderates like sanders or a corbyn who would not change all that much.
trump actually did in a couple of that fascist mindset policies, and was not reliable, even though he was one of them.
just look at the names in bidens government, they stretch back to bill clinton.
even carter or reagan would never be that stupid, and they were stupid.
but 1993 changed all of that.
I always felt that Biden ran to keep Sanders from getting nominated. And he was the choice of Clyburn and Obama and etc.
I hoping the juvenile delinquents in Washington decide their response will be to seize Saudi USD accounts and assets. Nancy can sponsor an amendment these assets be given to Taiwan and Ukraine, and our “partner” Liz Truss could be put in charge of figuring out where Saudi Arabia and Taiwan are on a map so she and Kwasi Kwarteng can handle the details of distributing the funds. This would help to make it all like a “woke” trans-something or other project. There must be a quicker way to end USD reserve currency status but it hasn’t come to me yet. Plus it might be interesting just for kicks to see oil priced in Yuan or Ruble or Rupee or combination of such.
I think they will need to draft in Baroness dido harding to help make all that money disappear.
If she could find 37bn great british pounds to pour into a few ropy call centres, she obviously has the right stuff.
Wasn’t removing US military bases from Saudi Arabia one of the actual demands of bin Laden? When did the Democrat party join Al Qaeda?
Clowns to the left of me, jokers to the right…
Saudi must be telling them to leave.
There are only 5,000 fighting age (14 to 60) Saudi tribesmen who can’t aford to bug out. The US isn’t there to protect against foreign invaders or the occasional Wahaabiist who didn’t get the memo. They are there to stop a Cadre of colonels from knowing out a few high profile royals and announcing a transition of a new Arab Republic. The Saudis hate Baathist style parties for a reason. The don’t want it catching on.
They need an army to protect them from the religious nuts the foster, but they need protection from their army and ambitious Sauds who could handle a constitutional monarchy role.
Several years ago, I dealt with many inner-city bodegas that were run by Arabs, many of whom were congenial and talkative after they got to know you. I recall some of them explaining to me that Saudi Arabia had a serious problem with the Shiites, who were apparently a majority in one of the oil producing provinces — thus the enthusiasm the Saudis displayed for attacking Houthis in Yemen. (one of the guys who explained this to me back in early 2000s was Yemeni).
Also, the Saudis had a deterrent installed in their oilfields, namely dirty bombs — so if push comes to shove, nobody will be using those resources if the ruling group is overcome militarily. See Saudi Arabia’s Doomsday Plan (George Washington University – History News Network). The book referred to Secrets of the Kingdom: The Inside Story of the Secret Saudi-U.S. Connection by Gerald Posner was published in 2005.
Yes pulling out the US troops was meant as a threat, but what if MbS believes that Russians could move into that role? I don’t want to think about it.
https://www.globalresearch.ca/bill-clinton-worked-hand-in-glove-with-al-qaeda-helped-turn-bosnia-into-militant-islamic-base/5474094?print=1
Twenty years ago. NATO’s War on Yugoslavia: Bill Clinton Worked Hand in Glove with Al Qaeda: “Helped Turn Bosnia into Militant Islamic Base”
And just to drive the point home about Saudi Arabia’s displeasure with the Biden administration they did this –
Saudi Arabia lowers oil prices for Europe but raises them again for the US as White House says OPEC+ is siding with Russia
Important catch! Sure looks like an effort to break the G7 price cap. Although it could be argued to give the EU a break for their currencies being weak v. the dollar,
Since the Saudis have left oil prices largely unchanged for the Asian market, would that indicate that this is a measure aimed at the US or that the Asian market are having their currencies hammered so the Saudis gave them a break too?
Isn’t Russian product being sold at a ‘discount’ in Asia? Is the Saudi pricing a reflection of that reality? Or as I think Yves has written before, perhaps the ‘market’ price in the West isn’t really reflective of the market?
Well, if a certain segment of buyers refuse to buy from the cheapest producer(s), that segment will end up paying more for the product.
And at the same time higher price producers may have to adjust their prices for the segment that accepts cheaper product just to remain competitive in that segment. Especially so if cheaper product is available in high quantities due to previously mentioned segment refusing it.
To me, it’s almost what one would expect from the markets.
In the grand scheme of things, the US doesn’t import that much from OPEC. OPEC will keep its prices low to India and Asian refineries to maintain their market share there.
OPEC+ influences the global price, which DOES affect prices of US oil. Brent and Cushing are not terribly far apart.
The article says that prices for US petroleum products will go up by $0.25 per barrel and E.U. and Mediterranean prices down by $0.20 per barrel.
A barrel is 40 gallons.
This will not be noticed and may easily reflect some actual logistics like shipping or insurance.
The fact that it gets headline treatment by Business Insider is an indication of how sensitive the US is at any perceived slight, real or imagined.
This could get bad real quick unless the Democrats decide to get a grip. Sure the US could seize Saudi assets – but then the Saudis could announce that their oil will from then on be sale for any currency in the world – any except the US dollar. Maybe you might have a few oil fields blowing up in Saudi Arabia. And then the media would ask why the Saudis are blowing up their own oil fields or maybe they will say that the source of those explosions is so mysterious and the whole thing is such a wonder. Maybe the Saudis will, if attacked by the US, will go full Soup Nazi and say ‘No oil for you!’ And then you might have ships of the US Navy seize oil ships at sea like they have done for Iranian ships and tried to do recently with a ship full of Russian oil in Greece.
The Saudis reckon they need oil at about $80 a barrel for their own budget and do not appreciate the idea of western countries seeking to cap oil prices. Yes, I know that it is for Russian oil but the Saudis are not stupid and know that they are next. The big danger is that some powerful people in Washington will say to themselves that it is time to remind the Saudis who is the boss. But having seen the US blown up and deindustrialize the European economy for generations to come, they are under no illusions that they would gladly see the same happen to Saudi Arabia and the Gulf State by getting them into a war with Iran. As all those countries are having a financial bonanza – including Iran – at the moment, they may have decided that their interests and those of Washington have irrevocably diverged. Looks like choppy waters ahead.
Trying to get my vin diagram to puzzle through ‘Democrats’ and “get a grip’.
Goggle-eyed: I see no intersection.
Well…Jeffrey Toobin….
Is he going to interview Zelensky’s wife?
yes, via zoom…
Well, let’s see.. the Biden administration could could go after the Saudi sovereign wealth fund with about $600 billion in assets and FX reserves of about $450 billion (not sure how much of that is in actual US$). What are they waiting for?
Someone should adjust their meds (and Z’s).
If the Saudis end up having to buy US Dollars after selling their oil in, say, Pesos, it would make no difference. If they end up not exchanging the Pesos, what will they do will they do with them? They are surely not selling oil just so that they can hoard a pile of worthless currency indefinitely.
Except that this assumes only things of value in the world can be bought with US dollars.
Which is patently false.
What about euros, or swiss francs, or british pounds or japanese yen, or chinese yuan, or russian rubles, or saudi rials?
To both urdsama and Kouros:
Any country that wishes to have other countries hold large amount of their currency must be willing to run large, persistent trade deficits. In a world where there is a surplus of production and a dearth of consumption, no country is currently willing to allow such conditions except for perhaps the Anglo countries (put overly simplistically, allowing such conditions basically forces unemployment upwards or significantly reduces wages).
Canada and Australia are obviously far too small to absorb too much of the capital, and the UK is also (perhaps less obviously) too small to do so. Ergo the US is the only game in town.
I second this. Probably the clearest guy out there to understand this is Micheal Pettis. For the same reason (the need to be a large market with a persistent trade deficit), the Chinese can’t stop buying US dollar assets and can’t threaten the US treasury market.
Don’t the Saudis know what’s happening in Ukraine??
OPEC’s move to raise oil prices is all about Russia –LA Times
[…]Pushing up oil prices at this moment is an expression of support for OPEC+ member Russia, presumably aiming to build a deeper relationship between this major oil producer and core OPEC member states, most of which are in Africa and the Middle East.
That strategy already appears thoroughly wrongheaded. The likelihood of Russian defeat in Ukraine, increasing daily with Ukrainian advances, will change the global picture for oil considerably, and OPEC members need to decide whose side they are on for what comes next.
If you question Russia’s fate on the battlefield, look carefully at reports from the front lines from Russian military bloggers on Telegram and other messaging channels. It is an interesting irony that Ukraine, a free country with a free press, has strong operational discipline when it comes to the use of social media close to the conflict — and it’s from Russia, an authoritarian country with tightly state controlled and censored media, that we see a flood of videos, text updates and maps that show what is really going on.
If OPEC’s leaders were paying attention, they would see that Russian forces are in the process of being defeated in several regions in the air and on the ground. The Ukrainians have more drones, better armor, longer-range artillery and higher morale. Russian forces are greatly depleted and increasingly in danger of becoming trapped and overwhelmed on multiple fronts.
The Kremlin’s recent “mobilization” has pulled men into recruitment centers, but there are widespread complaints about the lack of food, clothing and particularly weapons. Russian industry is incapable of equipping these forces effectively in the near term. ETC.
–Simon Johnson, professor at MIT Sloan and former chief economist at the International Monetary Fund.
Oh please. I used to like Simon Johnson.
He seems to have learned well at the IMF. Way to go Simple Simon!
A news story today (ABC Australia) stated that two Russians crossed the Bering Strait to Alaska in a small boat in their desperation to avoid Putin’s draft. Unless they accidentally come across Sarah Palin they should be safer there….
Along with many other news reports of Russian evacuation attempts this suggests that Putin’s attempt to bludgeon Ukrainians into submission is not popular with those he is despatching to the sharp end of the conflict.
Considering that there are already ice and freezing temperatures in the Bering Strait, they probably took a much bigger risk by crossing it than waiting for their possible draft, possible acceptance and possible deployment.
I saw news how the shops selling military kits and uniforms in Russia are running out of stocks, because some mobilized men want to have their “own” stuff (canteens, vests, winter caps), the army apparently can’t provide everything (like second set of middle wear) and also because many men not mobilized yet are preparing to be mobilized later.
Alexandre Mercouris was reporting that the first wave of mobilized men are not doing their training in Russia but are being sent to Zaporizhzhia Oblast in new camps to do their training there. Not only will they train then in the region that they will be fighting in, but when they are ready to go they will be right where they will be needed. Also, they will form a handy reserve in case the Ukrainians try for a breakthrough in the coming weeks. Finally, they will have access to combat vets who will give them the real deal on how and what they should be training for.
And they are all veterans with combat experience and some kind of specialty, according to the reported qualifications for the reserve call up.
US soldiers were known to buy their own gear in Iraq. That and the armor fiasco resulted in Rummy’s line about the “army you have.” Russian propaganda has shown troops performing laundry and food preparation, so they are likely more prepared for the current force, but I don’t know about a larger force. The former separatist units have gripe about gear at times.
During the Falklands war, British soldiers were also buying their own kit as commercial gear was often better and lighter than the British Army issue. This was particularly true of the British Army boots issued at the time as I believe that they fell apart and lots of guys got trench foot because of them. So lots of British soldiers brought ones from camping stores as they were much better designed and durable. Mind you, the Argentinian troops were not that much better off as with winter approaching, the Argentinian Army issued their men with jungle boots instead of winter boots.
Right; didn’t it take Bush several years to harden the humvees?
They’re still not, if you watch the “up armored” ones get taken apart in Ukraine.
But yes, in the second gulf war the first marines into Iraq were riding thin skins, and “hobo armor” became quite popular. I believe this is all in Generation Kill. It was several years before official armor kits became widely available.
There was also drama about the gunner position that was a hole in the roof, it took years for them to get shields, then wraparound shields, then fully enclosed turrets. Prior to that the gunner was easy meat for snipers and just general flying lead.
And I recall several different instances of NGO’s and charities running donation campaigns to supply the ceramic shock plates that go inside the body armor, which the US military was not providing to the troops in sufficient quantity to go round the front lines.
Numbers matter
Not that the US doesn’t have problems, but the desertion among the most peaceful status in 20 years is a message about how desperate people are on get away from Biden. There should be estimates of the nunber who famously left based on air traffic. Given the other “numerous news stories” repeating the same story versus being original reporting, skepticism of this story should be warranted. It’s like the story of the cosmonauts.
Ukraine, a free country with a free press
Where did this come from? Can he actually believe it?
If he does it seems the US elites are even more poorly informed than I thought.
Hmn….
Is this Ukraine the “free country” that imprisoned the leader of the largest opposition party, banned the left opposition, and has given great attention in wartime, to abolish the laws covering employment conditions for workers in small enterprises?
Some “freedom”, that…….
Sibiryak: Simon Johnson is truly allowed to publish a sentence this blazingly stupid?
I note that the “torture chamber and bucket of gold teeth” meme produced by Ukrainian “strong operational discipline” has been debunked.
And the U.S. media, which are seeing Russians trying to escape mobilization just about everywhere, don’t seem to have noticed the million or more draft-age Ukrainians wandering around Poland and Western Europe.
The propaganda. It’s so thick that one can cut it with the cliché of a knife, and Johnson is yelling to be propagandized even more.
Time will tell if Simon Johnson created his own future “Clark Clifford” regret moment.
from https://en.wikipedia.org/wiki/Clark_Clifford
“Clifford, who prided himself on decades of meticulously ethical conduct, summed his predicament up when he sadly told a reporter from The New York Times, “I have a choice of either seeming stupid or venal.”
It is a big exercise of “taming of the shrew” at population level accomplished by the intelligence agencies that run the west. Black is white and night is day…
Careful now … the Saudis might activate the second coming of Osama Bin Laden soon. Now that will bring oil prices SKY HIGH. Or perhaps that’s the plan all along as in Biden will have carte blanche to expand oil drilling in the United States.
Several years ago, sometime during the Trump regime and before the Khashoggi murder, I clearly remember seeing ABC News footage in Australia of a meeting between Putin and MBS at some international conflab or other. Their greeting was a joyous sideways high five, as you would expect perhaps between two very close old friends.
Even to my (international diplomatically speaking) untrained eye, this body language was an enormous red flag for the West. In hindsight this appears to be a massively blind oversight by the US State Dept. (or breathtaking arrogance, or both of the above).
US response options are tangled in a self-reinforcing loop with the loss of American hegemonic power. The dastardly act of countries acting in their own interest is seen by the US as an affront warranting a “response” (issuing threats of consequences, sanctions, asset freezes and now the new frontier being contemplated here, kicking so-called allies out of the US security umbrella), every response exposes Washington as an unreliable partner, driving allies to double down on prioritizing their own interests, which is seen as an affront warranting a response, which further erodes the trust allies had until the whole thing tips over into an extinction spiral for diplomatic relations between the US and its “partners”. The loop reinforces with each successive response until an inflection point is reached and the loss of hegemonic power accelerates. In everyday parlance this is referred to as “counterproductive measures” but hubris and exceptionalism are like cataracts obscuring this obvious reality from the vision of US policymakers.
PS: The above doesn’t apply to the EU, afflicted as it is with chronic case of Stockholm Syndrome in its relationship with the US.
Not so much Stockholm Syndrome as Battered Wives Syndrome.
Me: Well, I think Biden and Blinken should show that they’re not wimps and should treat Saudi Arabia like they treated Venezuela: Confiscate all the Saudis’ gold and U.S. investments! That’ll show them for violating U.S. anti-trust law (fixing oil prices) and not whoopying it up for the Cold War.
Anti-trust law and price fixing… OPEC was modeled on the Texas Railroad Commission: somewhere I’m thinking that it might have been pushed by the US, but I don’t know of such a reference off the top of my head (if not correct in fact, then correct in spirit- pretty much served the purpose up until…).
the Saudis are not going to lower production just to save Biden’s bacon?
or should it be ‘raise’?
Thanks, fixing. I thought I had a double negative there.
““We’ve said all along that supply needs to meet demand, and we’ve been clear about that and we’ve been working on that,” Secretary Blinken said.”
In what universe ever must supply meet demand? Is Blinken really an arrogant entitled pri …. umm, white male, or is he just pretending to be one ’cause he thinks the job demands it of him.
Where did Byedone scare up Blinken? Blinken is dumber than a rock, and an embarrassment to boot!
He may be dumber than a rock, but I don’t think he actually threatened Saudi or OPEC–the quotes more or less made a bunch of empty statements that said absolutely nothing (“Disappointing”? “Short-sighted”? “Balancing supply and demand”? WTF does that even mean?)
Rather, it is the “furious congressional Democrats” who uttered stupid threats, and they also really said nothing actionable (unless somebody believes that creating more instability in the Middle East or increasing Russian influence there will lower oil prices and strengthen NATO’s hand against Russia)
This is all just grandstanding, or, better expressed, Blinken’s statements are
but a walking shadow, a poor player
That struts and frets his hour upon the stage,
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.
I don’t agree, not with respect to Blinken specifically but the Administration generally. It has been leaking/planting stories like crazy about how pissed it is. You don’t do that unless you are going to act or want the offending party worried you will act.
Well, IQ-wise he’s on par with Liz Truss. You propagandize with the tame sychophants you have, not the tame sychophants you’d want, to paraphrase Rummy. Late Imperial USA has a diplomatic corps similar in quality to Napoleon III’s apparatchik. And believes (perhaps rightly) that the US public is dumb enough to swallow what they’re feeding them.
I am curious about all the hubub because doesn’t the U.S. actually import most of its oil from Canada and Mexico or is that more fake news?
Oil prices are a global market. Not a lot of the oil the US actually uses is from Saudi Arabia, but prices here still go up if they cut production.
There are other forces at play here as well. Saudi is likely having a hard time meeting quotas on their own. This same fight happened during the early days of the Iraq war (during the last peak oil madness), Saudi could not get more production though they tried, they likely have a production cap from a physical stand point. At some point they will be begging for American frack technology when it is clear their fields are in decline. There is no comparison the US has the most skilled industry (out of necessity) and eventually these OPEC players will need the help. Unless the Chinese can reverse engineer that too…
All of the African OPEC countries are in decline while Libyan and Venezuelan oil infrastructure is ruined… OPEC is not what they used to be, I can only figure Russia is interested because of geopolitics, the real player in the background is China who desperately needs more oil regardless of their insane build out of Nuclear infrastructure.
Hopefully the US remembers the invasion of Iraq for oil was one of the worst investments ever.
And where will the Saudis find all that water from fracking?
Can you frack with seawater?
salting the earth
Saudis rely heavily on desalination. No idea whether it’s even a requirement for fracking: I’d thought they were just pumping sea water (maybe corrosive concerns?).
Haha that’s good, hadn’t thought of that… Qatar/Yemen have a ground water crisis due to pumping too much for Khat farming, I wonder if Saudi has aquifers. As for Texas we have a water pipeline that takes the juice from Mexico at a discount.
Poking around it looks as if you can use seawater for fracking, so queue the trucking like we have for American wells (~1200 trucks/well). I am going to ask a friend about the seawater question.
Some years ago, petroleum analyst Matt Sims wrote a book called Twilight In The Desert about how Saudi Arabia probably did not have all the oil it pretended to have, and would never find that much oil ever again.
https://energyskeptic.com/2014/matt-simmons-twilight-in-the-desert/
At this point Joe Biden should say to Blinken and the rest of his Blob foreign policy advisers what Andrei Bonovia said to Captain Tupolev in The Hunt for Red October, “You arrogant ass. You’ve killed us!”
https://youtu.be/pzzyq5E8Gg4?t=447
Umm, isn’t Joe Biden Captain Tupolev in this case?
I’m honestly not sure.
Here is the excellent Saudi oil minister politely telling Reuters what he thinks of deceitful Western journalism and that he won’t answers his questions. Could this have happened even five years ago?
https://twitter.com/disclosetv/status/1577685721401462788
That is already in the post. Please see the embedded tweet.
Oops! Mea culpa.
Still, so good it is worth watching twice. :-)
“We will not do anything that would infringe on our interests – that’s first and foremost what will guide us – and we will keep all of those interests in mind and consult closely with all of the relevant stakeholders as we decide on any steps going forward,” Secretary Blinken added.
I do not think Blinken is inclusive in the ‘our interests” to mean US interests but I speculate the MIC interests and, what is meant by relevant stakeholders is beyond me in its vague, doublespeak way and recipe.
It is statements like these that require so much infill and interpretation by the reader that any meaningful discussion is mute.
Its like saying the high cost of oil is due to Russian belligerence without mentioning the small bit about the ruble to rubbish backfire Sanctions that the blinkered Biden Admin or any admin will never admit of it’s failure. Or the rubbish that raising interest rates will lower inflation by reducing demand for items like food, shelter, health and energy – you know, those things ya can’t live without. But, I guess, after years of broad deregulation and tax changes that allowed predatory finance capitalism to achieve larger and easier profits than one could achieve by running a standard industrial capitalist company producing tangible things people want and, further allowing the finance to speculate in areas critical for living – well here we are.
The tale about how are pull out from Afgan was such a failure without the acknowledgement that we had 20 years a failure before. Or the fantasy that Police are in an extraordinarily dangerous occupation and that they need special treatment under law to carry out their special duties. Or that we need to keep out people across the boarder because they steal American Jobs.
Dems or Repubs … it don’t matter with all the insiders shading the truth to continue the great American Grift.
And we have male politicians wanting to insert their flaccid ideology into the body of female reproductive health – good grief
Sorry for my drifting rant – AAAAArgh
“All of the relevant stakeholders”= the Blob, MIC, the NeoCon ghouls. Garbage In Garbage Out!
If you have to ask, you’re not part of the club.
It is pretty wonderful to see the US-Saudi alliance that has caused so much harm for so many years crumbling in real time. Biden and co are a bit late to the party in terms of understanding that the US has not been getting anything out of that relationship for a long time, but better late than never. We can only hope that this leads to a permanent rift and rather than just being a brief spat.
KING $ rules – get used to it!
First, and most obviously, the US is energy self-sufficient when it wants to be. This shouldn’t be an issue in the first place. That’s a woefully simplistic version of a very complex story, but the overarching message is clear enough. The US doesn’t need the Saudis.
Second, the Saudi riyal is pegged to the dollar. Nothing irritates an oppressed populace more than a currency crisis. And nothing scares a monarchy more than a restive populace. (You can make of that what you will.)
Third, the Saudis need US security guarantees. The White House and Congress aren’t obliged by any divine dictate to provide them.
Fourth, there are likewise no stone tablets that declare the US must accept Mohammed bin Salman’s farcical self-conferred Prime Minister designation, which grants him immunity in proceedings tied to the murder of Jamal Khashoggi.
Fifth, Janet Yellen could sanction Mohammed bin Salman and the Saudi central bank. Trust me: US intelligence could put together a (long) list of OFAC-ready offenses if prompted.
Look up petro-dollar recycling.
US is NOT energy self-sufficient. Well, for a period of time it could rely only on its own production, but as it’s a limited resource it will EVENTUALLY run out. And while abiotic oil is a thing, it cannot keep up with our rates of extraction/consumption (not by a mile).
That said, the US is still a lot better off than most other countries (though no one stay “self-sufficient” forever when relying on limited resources).
What hegemon? According to that prophet the late Giovanni Arrighi, hegemons decline after a bout of financial hypertrophy, when it is easier to skim than make things in the core. The globe then experiences about 3 decades of chaos and war until a new hegemon emerges. Starting date of our slo-mo 30 years war was what, 2001?
Also, give some credit to Napoleon III for recognizing Bessemer’s genius when the Brits ignored him. He also played a positive role in Italy.
After reading this post I think I need to get another glass of wine. I cannot absorb this level of u.s. stupidity while even partly sober. We usians can only hope the u.s. might grow more feet to shot — if affairs are to continue as they have
The irony of this situation is that the Biden administration is likely to only drive oil prices higher if they do something rash.
Seizing Saudi oil assets would be an example. The other consideration is that with the US Strategic Reserve running low, they have very limited means to flood the oil market with oil.
The oil sector is not pleased:
“Now, White House and congressional leaders are eyeing several responses to protect U.S. consumers, ranging from an effort to wrest market control away from OPEC, limiting U.S. companies’ energy exports, and easing sanctions on unfriendly oil-producing nations — each of which carries serious potential downsides for American interests.”
“The rest of the menu of options under discussion range from the imperfect to the disastrous, market analysts tell POLITICO….Their consensus opinion is that policy measures that would actually bring down gasoline prices will require long-term planning, so the best thing lawmakers could do for the energy markets now is to shut up.”
“Biden might be better served by playing things cool when it comes to OPEC and accentuating the positive when it comes to moving the country away from oil, some analysts said…. “In the absence of good measures, I think it might be better not to say too much,” Rachel Ziemba, adjunct senior fellow at the think tank Center for a New American Security, said in an interview.”
“Absent donning a muzzle , these are steps that Biden and other Democrats have floated as potential ideas so far for responding to the cartel:…”
And so on and so forth. A pretty good rundown of the options, from what I have seen of them, and none of them bode well in the short term.
https://www.politico.com/news/2022/10/07/opec-payback-the-6-actions-the-u-s-could-take-00060854
Well, of course business interests want the politicians to do as they’re told when they’re told, what else is new?
There is no easy solution to the US loosing hegemon status, and a distinct lack of any of the actual power brokers willing to compromise (extant “squeeze the poor” but there’s not that much blood left there, inside the US). Thus, decline and kleptocracy ahoy!
About the “wonderfully clarifying” comment – it would be, if we didn’t already learn that the US will seize assets of designated baddies after it seized Citgo from Venezuela and directed the Bank of England to steal their gold.