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Oil War on Russia: Ridiculous People and Unintended Consequences




The once rather ordered world we knew even a decade ago is becoming more and more dis-ordered. That’s not to say it’s chaotic because chaos is merely the emergence of new patterns we do not yet understand. This is dis-order. And it is being fostered by ridiculous power-addicted people in the West who are flailing around to try to hold on to their eroding power over our world and over us. I say ridiculous because we need only look at the initiatives they have launched in recent months to advance their power agenda.

First these power-addicted very rich oligarchs through their neo-conservative networks in the US State Department and in the CIA initiated what was foolishly dubbed the Arab Spring. That was in Tunisia in December 2010. By all accounts an utter and complete flop, their Arab Spring caper, even by oligarch calculations.

They have largely lost Egypt by their stupid attempt to shove the Muslim Brotherhood death cult down the throats of Egypt’s citizens.

Then their war in Libya, where their fig leaf of “democracy” Color Revolution couldn’t work, they bombed Qaddafi and Africa’s most stable and most prosperous tribal monarchy back to the stone age and unleashed dis-order there that still is a disaster by all measures.

Then the same stupid oligarchs, advised by their ridiculous neo-con think-tankers and Obama Administration neo-cons such as the loveless National Security Adviser Susan Rice, Obama’s putative psychological “Rasputin,” rolled out of Libya directly into Syria in January 2012.

They did so to apparently run a repeat of the Qaddafi fiasco. Only in Syria the stakes were global and far different from Libya. It involved national security issues for Russia, for Iran and indirectly, for China. Today, nearly three years on, despite the CIA and Mossad efforts to use their creation, ISIS, or the self-proclaimed Islamic State (IS) to terrify the American war-weary public to agree to yet another war in the Middle East, after the fiasco of Iraq and Afghanistan the trillions of US tax dollars and destroyed lives of US servicemen and women, Bashar al Assad remains in power. Granted he presides over a land devastated by death and destruction, thanks to those loveless, ridiculous western Oligarchs. But the oligarchs and their partner-in-crime, Netanjahu, Brooklyn’s least-honorable son, have not got what they wanted in Syria.

More recently, they have tried to panic us into agreeing to mass vaccination with untested, likely toxic medications to try to justify Obama’s War on Ebola. Only no one seems to believe them. The increasingly ridiculous Dr Margaret Chan, the Director General of WHO, who was guilty of criminal mis-conduct five years ago when she bowed to Big Pharma wishes and declared a non-existent Swine Flu as global “Pandemic Level 6,” tries to utter terrifying statements about Ebola, but nobody much is paying attention.

They Oligarchs of destruction unleashed neo-con artist Victoria Nuland at the State Department along with documented liar, CIA Director John Brennan, to turn Ukraine over to a gaggle of criminals and self-styled neo-nazis, complete with Swastika tattoos and black ski masks. The hope was it would make Putin and the Russians go berserk and invade Ukraine as civil war against ethnic Russian-speakers in east Ukraine raged, targeting women, elderly, children, anyone who walked.

That Ukraine State Department coup too has blown up in their faces as Russia turns to her East and the South, making a dazzling array of strategic agreements with China for energy and military cooperation, with India, with Brazil and the list continues.

Then the same ridiculous Oligarchs unleashed the drones of their National Endowment for Democracy in Hong Kong in a vain effort to spread their dis-order to China, which was becoming far too independent of the Oligarchs’ New World Order agenda. That too has flopped.

Old Saudi Arabia vs New Saudi Arabia

Now the same ridiculous American Oligarchs hovering around such loveless characters as David Rockefeller, have come to the brilliant strategy of unleashing their “super-weapon” against Putin’s Russia—full-scale oil price war. Backed by The US Treasury’s neo-con David S. Cohen, whose title is aptly named as Under Secretary for Terrorism and Financial Intelligence, the John Kerry State Department in September came up with the bright idea to rerun the 1986 State Department-Saudi operation to collapse Russia by getting the Saudis to collapse oil prices.

The execution of the oil collapse has so far been technically flawless. Oil prices on average have plummeted almost 30% since September. The only problem is that the power-addicted Oligarchs and their ridiculous neo-con hired thinkers overlooked the fact that, in the process, they would bankrupt their very vulnerable shale oil bonanza.

For the past several years, the United States Government has bought on to the shale oil bonanza myth. It has shaped US foreign policy decisions, given people in Washington the false illusion they can risk blowing up much of the world’s Middle East without threatening global oil supplies, or Ukraine, because The United States of America is becoming the New Saudi Arabia.

But now the knife cuts the other way. John Kerry’s brilliant Saudi plan is being used by those same Saudis, not only to bring Russia to her knees, which it hasn’t managed to do. It is being used by the Old Saudi Arabia to cripple the shale oil basis of the New Saudi Arabia. The Saudis clearly, as was seen in the recent OPEC meeting, want to burst the US shale oil bubble in order to reassert control of the Old Saudi Arabia over world oil markets.

On November 27 following an indecisive OPEC meeting where the Saudis refused various pleas to reverse and stop the price fall, the traded price for the marker crude that US shale oil is priced at, West Texas Intermediate, fell below $66 a barrel, a five year low with no bottom in yet sight. The sharp rise in US shale oil output in the past three years has enabled the US to take over the decisive leverage role once held by the Saudis, that of Swing Producer. That means if the powers that be in Washington decide world oil prices are too high, it can cut supply one way or another. If too low, restrict supply.

That did not make the Saudi royals happy. Perhaps when Kerry proposed to the Saudi King, with Prince Bandar in the room last September, that Saudi Arabia help Washington break Russia by collapsing Russian oil revenues, King Abdullah and Bandar happily agreed. But now it seems the Saudi focus is less to hurt Russia and more to shoot down the US shale oil competition. Shale oil is unconventional and expensive to drill compared with conventional oil.

Only extraordinary, sustained prices above $100 a barrel the past five years made shale profitable. In 2014 and by present estimates 2015 shale oil will account for an extra 2 million barrels of US domestic oil output, the largest output since 1970. Now Wall Street banks with billions lent to US shale producers are re-examining their portfolio and considering calling in those loans or at the very least not lending further to a losing game. However, shale oil, unlike conventional, requires an escalating investment to drill ever new wells as the old deplete far faster than conventional. That is the Ponzi core of the shale oil mirage.

Unconventional shale oil costs from $50 to $100 a barrel just to produce. Conventional US oil by contrast costs from $10 upwards. By calculations of leading US shale oil bankers, “If prices go to $80 or lower, which I think is possible, then we are going to see a reduction in drilling activity.”ii That was said in October when prices hovered around $90. Come this spring, we can expect numerous US shale oil companies to hit the hard wall of bankruptcy or insolvency.

The Russians are apparently not as alarmed as they were in 1986, the previous time Washington and the Saudis ran such a price collapse operation. Lukoil part-owner Leonid Fedun told the press recently, “The shale boom is on a par with the dot-com boom. The strong players will remain, the weak ones will vanish.” According to a report on RT, Russian Economic Development Minister Aleksey Ulyukaev told a meeting of cabinet ministers after the OPEC decision that the government had cut its oil price estimate for its 2015 Budget from $100 to $80 a barrel. ö Low oil prices will not ruin the economy the Russian Economic Development Minister Aleksey Ulyukaev has said, adding that the oil price estimate for the 2015 budget has been slashed to $80 a barrel from $100 a barrel. “We aren’t going to collapse,” he said.

So much for the Oligarchs’ ridiculous plans to make USA into the New Saudi Arabia and bankrupt Russia in the process.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics,


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