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The US-Saudi war with OPEC to prolong oil’s dying empire
The US-Saudi war with OPEC to prolong oil’s dying empire
Whoever controls the price of oil can play god with the global economy – that’s why the US and Saudi Arabia are leading the way to smash OPEC and re-create a new global oil cartel
“No one can set the price of oil,” said Saudi oil minister Ali al-Naimi earlier this week. “It’s up to Allah.”
Which is an interesting comment given Saudi Arabia’s insistence on boosting high levels of production since last year. The strategy has maintained a global supply glut, playing a key role in the dramatic lowering of oil prices.
Although the Saudis have recently increased official selling prices in response to stronger demand, al-Naimi made clear that they have no plans to curb production.
Make no mistake – the global oil glut is not just a result of market-driven supply demand dynamics, but an intended consequence of an evolving US-Saudi strategy to use oil as a weapon.
That is not to suggest that the US and Saudi Arabia are in complete agreement over the strategy, or even that it is being hatched and executed in total coordination. Rather, an uneasy convergence of mutual interests has given rise to a strategic accommodation between the two allies.
The targets of the strategy include their chief geopolitical rivals, climate change activists and renewable energy advocates.
Playing god with oil
The idea of using oil to play god is hardly new, but for the Obama administration it dawned with the US shale gas boom.
In the summer of 2013, Obama’s then national security adviser Tom Donilon, explained in Foreign Affairs, that the surge in US domestic energy production “allows Washington to engage in international affairs from a position of strength”.
– See more at: http://www.middleeasteye.net/columns/us-saudi-war-opec-prolong-oil-s-dying-empire-222413845#sthash.JYZfA68W.dpuf
Who’s To Blame For The Oil Price Crash?
Who’s To Blame For The Oil Price Crash?
When we think of the recent drop in oil prices, the question is not only who started it, but who’s responsible for keeping the prices falling.
Probably no one would dispute that the price plunge began with the eager and copious production of oil from shale formations in the United States. From the American perspective, that was beneficial because it was bringing energy self-sufficiency to a country with the reputation as the world’s largest importer of oil.
Despite unproven concerns about hydraulic fracturing, or fracking, a common way to extract oil and gas from underground shale rock, the practice has proven extremely productive. And that’s the source of the oil glut that began driving down prices in late June 2014.
Related: Oil Rebound May Come Sooner Than Expected
Even one of fracking’s biggest supporters, legendary oil man T. Boone Pickens, blames the US shale boom for triggering the price slough that’s been hammering the energy industry. He’s doesn’t subscribe to the environmental concerns about fracking, but he says he can also recognize when his industry has latched on to too much of a good thing.
“I’ve fracked over a thousand wells,” Pickens, the chairman of BP Capital Management, said March 23 at a panel discussion in Monterey Calif. “I’ve never had a failure on one of them. … Texas, Oklahoma lead in fracking wells and it has been a great success for both those states.”
Yet Pickens thinks it’s time for US companies to take a break from their frantic production to allow oil prices to achieve some balance. In an interview with theFinancial Times published March 18, he said shale companies have “overproduced,” and that it’s up to them to rein in output to help restore oil prices to a more profitable level.
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