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The US-Russia gas pipeline war in Syria could destabilise Putin
The US-Russia gas pipeline war in Syria could destabilise Putin
Military solutions are not the answer to the perfect storm of climate, energy, food, economic and geopolitical crises facing Russia
For the last few years, the Saudi kingdom’s insistence on pumping oil at high capacity has dramatically depressed oil prices. The result has undermined Saudi’s major oil rivals in OPEC – like Iran and Venezuela.
It has also hit Russia, hard.
Rating agency Standard & Poor forecasts that Russia’s budget deficit is set to swell to 4.4 per cent of GDP this year. Russia’s own finance ministry concedes that if expenditures continue at this rate, within sixteen months – by around the end of next year – its oil reserve funds will be exhausted.
Meanwhile, over the last year real incomes have dropped by 9.8 per cent, and food prices have spiked by 17 per cent, heightening the risk of civil unrest.
System failure
Rumbling along beneath the surface of such financial woes are deeper systemic issues.
A report from the Swedish Defence Research Agency notes that “prolonged dry periods in southern Russia are having the effect of reducing the level of food production”.
Most of Russia’s wheat imports come from Kazakhstan, “where climate change is expected to exacerbate droughts. These impacts would make farming harder and food more expensive,” observe Dr. Marina Sharmina and Dr. Christopher Jones of the Tyndall Centre for Climate Change Research.
Russia’s looming energy crisis is the other elephant in the room. In 2013, HSBC forecasted that Russia would hit peak oil between 2018 and 2019, experiencing a brief plateau before declining by 30 per cent from 2020 to 2025.
That year, Fitch Ratings came to pretty much the same conclusion. And last year, Leonid Fedun, vice-president of Russia’s second largest oil producer, Lukoil, predicted that the production could peak earlier due to falling oil prices and US-EU sanctions.
…click on the above link to read the rest of the article…
Einsteinian Insanity: US, Saudi Arabia Pledge To Provide More Guns, Ammo To Syrian Proxy Armies
Einsteinian Insanity: US, Saudi Arabia Pledge To Provide More Guns, Ammo To Syrian Proxy Armies
You have to hand it to Washington. When it comes to foreign policy blunders, the US certainly isn’t afraid to double and triple down.
As a leaked diplomatic cable from 2006 definitively shows, the US has actively sought to stoke sectarian violence in Syria for at least the last ten years and part of that effort has involved coordinating with Saudi Arabia, Qatar, and Turkey to support Sunni extremists.
That support led directly to what has to be considered the most absurd foreign policy outcome in the history of modern statecraft and we never tire of calling it out: Washington, Ankara, Riyadh, and Doha trained and equipped a group of fighters, told them to go and destabilize the Assad regime, and somewhere along the way, that group of fighters went rogue and metamorphosed into a insane band of black flag-waving, sword-wielding, white Nike-wearing, desert bandits hell bent on establishing a medieval caliphate.
Whether or not ISIS is still getting support now that they have gone completely native we’ll never know for sure, but what we do know is that despite the sheer ridiculousness of that “train and equip” exercise, the US and its regional allies went on to arm and fund still more Sunni extremists hoping against hope that they might manage to find the rebel Goldilocks zone and finally back a group that is all at once effective at fighting to overthrow the regime and not prone to going absolutely nuts in the process.
And if the original efforts to arm and train Syrian “freedom fighters” ended in tears of sorrow, more recent efforts have ended in tears of laughter. The Pentagon’s latest foray into building a Syrian proxy army began back in May with a completely ridiculous press release that attempted to explain the rebel “vetting” process.
…click on the above link to read the rest of the article…
“Proxy” War No More: Qatar Threatens Military Intervention In Syria Alongside “Saudi, Turkish Brothers”
“Proxy” War No More: Qatar Threatens Military Intervention In Syria Alongside “Saudi, Turkish Brothers”
Earlier this week, Saudi foreign minister Adel al-Jubeir had the following message for Tehran:
“We wish that Iran would change its policies and stop meddling in the affairs of other countries in the region, in Lebanon, Syria, Iraq and Yemen. We will make sure that we confront Iran’s actions and shall use all our political, economic and military powers to defend our territory and people.”
In short, Riyadh and its allies in Doha and the UAE are uneasy about the fact that the P5+1 nuclear deal is set to effectively remove Iran from the pariah state list just as Tehran is expanding its regional influence via its Shiite militias in Iraq, the ground operation in Syria, and through the Houthis in Yemen.
Thanks to the fact that Tehran has more of an arm’s length relationship with the Houthis than it does with Hezbollah and its proxy armies in Iraq, the Saudis have been able to effectively counter anti-Hadi forces in Yemen without risking a direct conflict with Iran, but make no mistake, Sana’a is not the prize here. Yemen is a side show. The real fight is for the political future of Syria and for control of Iraq once the US finally packs up and leaves for good. Iran is winning on both of those fronts.
Over the last several weeks, we and others have suggested that one should not simply expect Washington, Riyadh, Ankara, and Doha to go gently into that good night in Syria after years of providing support for the various Sunni extremist groups fighting to destabilize the regime. There’s just too much at stake.
…click on the above link to read the rest of the article…
Russia “Confirms” It Has Plans To Restore Assad Government In Syria
Russia “Confirms” It Has Plans To Restore Assad Government In Syria
Watching the US attempt to explain to the public why Washington can’t join the Russians in targeting extremists in Syria has been entertainment gold. The fundamental PR problem revolves around the fact that the West has gone out of its way to hold up ISIS as the quintessential example of pure, unadulterated evil that must be eradicated at all costs and yet when Moscow began bombing ISIS targets and publicly implored the US to join in, Washington said no.
If you’re the public that seems strange. To be sure, everyday Westerners are accustomed to Russophobic propaganda in the news and in cinema and the public is thoroughly conditioned to think of The Kremlin as a weird, multi-colored palace complex staffed with hundreds of James Bond villains in a country where it’s always dark, and always snowing. That said, Western leaders have had a difficult time explaining why that’s somehow worse than ISIS, whose slickly-produced videos have so far depicted a series of beheadings, a Jordanian pilot being burned alive, “spies” being drowned in a cage, and four men being packed into a Toyota Corolla which is then destroyed at close range by a rocket launcher.
The answer, of course, is that ISIS and the various other extremist groups battling for control of Syria have almost all received training and funding from the US and its regional allies at one point or another and at the end of the day, destroying ISIS nets nothing for Washington in terms of geopolitics. In fact, were the group to go the way of the dinosaurs, it would help to restore the Assad regime which is the worst possible outcome in the eyes of the US, Saudi Arabia, and Qatar.
…click on the above link to read the rest of the article…
Secret Cable Reveals US Plan To Overthrow Assad By Exploiting “Extremist Groups”
Secret Cable Reveals US Plan To Overthrow Assad By Exploiting “Extremist Groups”
Now that Europe’s worsening refugee crisis and Russia’s stepped up support for the regime of Bashar al-Assad have (finally) focused the world’s attention on Syria’s four-year, bloody civil war, inquiring minds want to know: how did it happen that the country, which is now at risk of becoming a failed state, descend into chaos?
Of course when we speak of “inquiring minds” we mean those of the general public which, to this point, has remained largely ignorant of the fact that hundreds of thousands of people are dying in a place that shares a border with the country the US supposedly just got done “liberating.”
Generally speaking, the line you’ll get from the mainstream media is that Syria is just one more example of a Mid-East country where the populace finally reached its breaking point with the injustices created by the brutal regime of an evil autocrat. The resultant chaos, the narrative continues, created a breeding ground for terror which explains why Raqqa has become the de facto capital for ISIS, the Western media’s boogeyman par excellence.
Not to put too fine a point on it – and this won’t surprise anyone who frequents these pages – but that narrative is pure, unadulterated garbage. The real story (again, generally speaking), is that Syria is pivotal for the existing balance of power – and not only the regional balance of power, but the global balance of power as well. The alliance between Bashar al-Assad’s Syria and Moscow, Tehran, and Hezbollah serves as a kind of counterbalance to cooperation among the US, Saudi Arabia, Qatar, and Turkey (among others). Should the Assad regime be allowed to fall and the West allowed to influence the post-regime political outcome, the scales would tip, Russia would lose its naval base at Tartus, and Iran’s access to Hezbollah, not to mention the scope of its regional influence would be severely constrained. Assad’s move to support the Islamic Pipeline while rejecting the Qatar-Turkey pipeline was a manifestation of the situation described above.
…click on the above link to read the rest of the article…
Migrant Crisis & Syria War Fueled By Competing Gas Pipelines
Editor’s note: This article has been updated to reflect recent Wikileaks revelations of US State Department leaks that show plans to destabilize Syria and overthrow the Syrian government as early as 2006. The leaks reveal that these plans were given to the US directly from the Israeli government and would be formalized through instigating civil strife and sectarianism through partnership with nations like Saudi Arabia, Turkey, Qatar and even Egypt to break down the power structue in Syria to essentially to weaken Iran and Hezbolla. The leaks also reveal Israeli plans to use this crisis to expand it’s occupation of the Golan Heights for additional oil exploration and military expansion.
MINNEAPOLIS — Images of Aylan Kurdi, the three-year-old Syrian boy who washed up dead on Mediterranean shores in his family’s attempt to flee war-torn Syria, have grabbed the attention of people around the world, sparking outrage about the true costs of war.
The heart-wrenching refugee crisis unfolding across the Middle East and at European borders has ignited a much needed conversation on the ongoing strife and instability that’s driving people from their homes in countries like Syria, Libya and Iraq. It’s brought international attention to the inhumane treatment these refugees are receiving if — and it is a major “if” — they arrive at Europe’s door.
…click on the above link to read the rest of the article…
In Major Escalation, Washington Demands Greece Blocks Its Airspace For Russian Flights To Syria
In Major Escalation, Washington Demands Greece Blocks Its Airspace For Russian Flights To Syria
Last week, when reporting that at least according to the White House,Russian presence in Syria is no longer disputed, we said that regardless if Russian troops are indeed on the Syrian ground, this admission that the current Syrian state of play “effectively ends the second “foreplay” phase of the Syrian proxy war (the first one took place in the summer of 2013 when in a repeat situation, Russia was supporting Assad only the escalations took place in the naval theater with both Russian and US cruisers within kilometers of each other off the Syrian coast), which means the violent escalation phase is next. It also means that Assad was within days of losing control fighting a multi-front war with enemies supported by the US, Turkey and Saudi Arabia, and Putin had no choice but to intervene or else risk losing Gazprom’s influence over Europe to the infamous Qatari gas pipeline which is what this whole 3 years war is all about.”
Moments ago, following ever louder hints – if still unconfirmed by the Kremlin – that Russian forces are either en route to Syria or already there (Russian soldier’s VK post stating troops are in Syria, interceptedcommunication from a Russian An-124 military cargo plane en route to Latakia, Russian Roll-on/roll-off shipallegedly carrying military equipment to Syria), the US made a dramatic diplomatic escalation ahead of what is now assured to be the second major showdown between the US and Russia in Syria, over a Qatari gas pipeline no less, when according to Reuters, it asked Greece to deny Russia the use of its airspace for supply flights to Syria, a Greek official said on Monday, after Washington told Moscow it was deeply concerned by reports of a Russian military build up in Syria.
…click on the above link to read the rest of the article…
Fallout From Petrodollar Demise Continues As Qatar Borrows $4 Billion Amid Crude Slump
Fallout From Petrodollar Demise Continues As Qatar Borrows $4 Billion Amid Crude Slump
Early last month in “Cash-Strapped Saudi Arabia Hopes To Continue War Against Shale With Fed’s Blessing,” we noted the irony inherent in the fact that Saudi Arabia, whose effort to bankrupt the US shale space has blown a giant hole in the country’s fiscal account, was set to tap the debt market in an effort to offset a painful petrodollar reserve burn.
“Saudi Arabia is returning to the bond market with a plan to raise $27bn by the end of the year, in the starkest sign yet of the strain lower oil prices are putting on the finances of the world’s largest oil exporter,” FT reportedat the time.
The reason this is so ironic is that at various times, we’ve characterized persistently low crude prices as essentially a battle between the Fed and the Saudis. Many struggling US producers would likely have been out of business months ago were it not for the fact that ZIRP has kept capital markets wide open, allowing otherwise insolvent drillers to stay afloat. Obviously, that works at cross purposes with Riyadh’s efforts to “preserve market share”, and so ultimately, the Saudis are betting their FX reserves can outlast ZIRP.
There are other factors at play here that weigh on Saudi Arabia’s financial situation including two proxy wars and the defense of the riyal peg which is why turning to the bond market is an attractive option especially considering that capital markets are so favorable thanks to – and here’s the irony – the very same Fed policies that are keeping US shale producers in business.
But Saudi Arabia’s “war” with the US shale space isn’t unfolding in a vacuum and now Qatar is looking to borrow to alleviate the financial strain. Here’s more from Bloomberg:
…click on the above link to read the rest of the article…
Gulf Markets Melting Down: Saudi Arabia Plunges 7%, Dubai Sold
Gulf Markets Melting Down: Saudi Arabia Plunges 7%, Dubai Sold
Following the end of a horrible week for petroleum importers (not to mention shale producers) despite WTI briefly dipping under $40 (wasn’t this supposed to be great news for the US economy?) we have the start of a just as ugly week for the Persian Gulf oil exporters, whose Sunday market open can be described as a continuation of last week’s broad risk carnage, and where Saudi Arabia, until recently the region’s best performing market, is now down 10% for the year and down 30% compared to 12 months ago.
Appropriately enough following our overnight article lamenting the death of the Petrodollar, the WSJ opens with a description of “stock markets in the petrodollar-dependent Persian Gulf tumbled Sunday to multi-month lows, spooked by sharply lower oil prices and a global equities selloff on growing concerns about China’s economy.”
Some examples:
Saudi Arabia, the Middle East’s biggest market, led the regionwide decline to finish the day nearly 7% lower. Dubai stocks dropped by a similar percentage, while regional peers Abu Dhabi and Doha’s markets both fell 5% each to extend recent losses.Dubai stocks lost 7% to end at 3451.48, while its neighbor in the United Arab Emirates, Abu Dhabi’s market, dropped 5% to 4286.49. Qatar’s main stocks benchmark finished down 5.3% at 10,750. The Gulf stock markets are open for trading Sunday through Thursday.
Investors took a lead from Saudi Arabia, the region’s biggest economy. Its stocks closed 6.9% lower at 7463.32 after Fitch Ratings on Friday downgraded its outlook for the kingdom to negative from stable because of weaker oil prices.
The Saudi economy is heavily dependent on oil, which accounts for 90% of fiscal revenues, 80% of current account revenues and 40% of the gross domestic product, analysts at Fitch noted.
…click on the above link to read the rest of the article…
Oil Producers Could See “Regime Change”: Bloomberg
Oil Producers Could See “Regime Change”: Bloomberg
As we’ve noted previously, the US-Saudi joint effort to force the Kremlin into cutting Assad loose (the end goal of course being to install a government that will acquiesce to mainlining Qatari natural gas through Syria straight into Europe thus breaking Gazprom’s stranglehold), has resulted in a bit of collateral damage for the world’s less geopolitically important oil producing countries (take Venezuela for instance, where collapsing crude prices have exacerbated an already abysmal scenario, leading to, among other tragic outcomes, a shortage of soap and condoms).
Bloomberg suggests that the destabilization of already fragile political and economic situations could lead, in short order, to “regime change” across oil producers:
The large petrostates are varying degrees away from the Weberian ideal of the rule of law. That could spell trouble. Low oil prices threaten the ability of these inefficient, sometimes corrupt states to service their debts and may curtail the government spending that keeps the masses content. This may in turn ignite demands for a fairer distribution of these dwindling oil proceeds and, possibly, regime change.
From Bloomberg, utilizing Worldwide Governance Indicators’ measures of corruption and rule of law:
…and an update on oil producers’ currencies since peak oil…
…click on the above link to read the rest of the article…
How Russia Plans To Retaliate To The Saudi-Driven Collapse In Oil
How Russia Plans To Retaliate To The Saudi-Driven Collapse In Oil
A week ago we explained that yet another conspiracy theory, one involving virtually every geopolitical hotzone, from Saudi Arabia, to Russia, the United States, Qatar, Syria, ISIS, and Ukraine, has become fact when our speculation from last September, namely that the plunge in oil was an choreographed move between the US and the Saudis (even if Kerry realized – we hope – that it meant a recession for the US energy producing states and a collapse in the only vibrant US industry of the past decade: shale), one seeking to dislodge Russian control over the Syrian government and to facilitate the passage of a Qatar pipeline under Syrian territory.
This is what the NYT said: “Saudi Arabia has been trying to pressure President Vladimir V. Putin of Russia to abandon his support for President Bashar al-Assad of Syria, using its dominance of the global oil markets at a time when the Russian government is reeling from the effects of plummeting oil prices.”
The NYT added:
Saudi Arabia and Russia have had numerous discussions over the past several months that have yet to produce a significant breakthrough, according to American and Saudi officials. It is unclear how explicitly Saudi officials have linked oil to the issue of Syria during the talks, but Saudi officials say — and they have told the United States — that they think they have some leverage over Mr. Putin because of their ability to reduce the supply of oil and possibly drive up prices.
That’s the quo. As for the quid, it is as we predicted:
…click on the above link to read the rest of the article…
Petrodollar Panic? China Signs Currency Swap Deal With Qatar & Canada | Zero Hedge
Petrodollar Panic? China Signs Currency Swap Deal With Qatar & Canada | Zero Hedge.
The march of global de-dollarization continues. In the last few days, China has signed direct currency agreements with Canada becoming North America’s first offshore RMB hub, which CBC reports analysts suggest “could double maybe even triple the level of Canadian trade between Canada and China,” impacting the need for Dollars.But that is not the week’s biggest Petrodollar precariousness news, as The Examiner reports, a new chink in the petrodollar system was forged as China signed an agreement with Qatar to begin direct currency swaps between the two nations using the Yuan, and establishing the foundation for new direct trade with the OPEC nation in the very heart of the petrodollar system. As Simon Black warns, “It’s happening… with increasing speed and frequency.”
Authorized by China’s central bank, the deal will allow direct business between the Canadian dollar and the Chinese yuan, cutting out the middle man — in most cases, the U.S. dollar.
Canadian exporters forced to use the American currency to do business in China are faced with higher currency exchange costs and longer waits to close deals.
“It’s something the prime minister has been talking about. He wants Canadian companies, particularly small- and medium-sized businesses, doing more and more work in China, selling goods and services there,” said CBC’s Catherine Cullen, reporting from Beijing.
Sovereign Man’s Simon Black has some ominous thoughts on Canada’s move…
…click on the above link to read the rest of the article…
