First of all this is not defense. This is an offence, an economic war. But against whom? This
type of offence is known as
predatory pricing or
undercutting (Wikpedia) although in this particular case to establish that the price
are below the seller's cost in possible only indirectly, from the size of Saudis annual deficit of budget.
and in no way Saudis can replace other players as they control less then 10% of total world production:
Predatory pricing (also undercutting) is a
pricing strategy where
a product or service is set at a very low price, intending to drive competitors out of the
market, or create
barriers to entry for
potential new competitors. If competitors or potential competitors cannot sustain equal or lower
prices without losing money, they go out of business or choose not to enter the business. The predatory
merchant then has fewer competitors or is even a
de factomonopoly.
The typical MSM coverage of Saudis behavior is typically along those lines:
“The Saudis took a huge gamble last November when they stopped supporting prices and
opted instead to flood the market and drive out rivals, boosting their own output to 10.6m
barrels a day (b/d) into the teeth of the downturn….
If the aim was to choke the US shale industry, the Saudis have misjudged badly, just as they misjudged
the growing shale threat at every stage for eight years. “It is becoming apparent that non-OPEC
producers are not as responsive to low oil prices as had been thought, at least in the short-run,”
said the Saudi central bank in its latest stability report….
The word "flooding" used by MSM is a clear lie. The reality is quite different from MSM tales.
Saudis were clearly unable to flood market with oil in 2015, because they do not have enough oil to
export for to achieve this goal. The increase exports in 2015 was only around 0.2-0.3 Mb/d,
if we believe official figures. Where is the flood of cheap oil, I would ask our MSM honchos? You
have to realize that the US added a million barrels a day five years in a row... Five years --
One problem that Saudi faced is how to make room for Iran after sanctiones were lifted. Tensions
between the governments in Tehran and Riyadh are much worse now than they were in the late 1990s, when
both last cooperated in cutting supply. Saudi Arabia believed that by lowing oil price via predatory
pricing it can use US shale oil producers for swinging the volume of production, or at least a good
deal of it. Because of its relatively high operating costs, capital intensity, financing needs, and
steep decline rates, shale oil production was expected to react to price drop within months, instead
of the years associated with traditional projects. Those hopes did not materialize. Instead Wall Street
managed to drag Saudis into self-destructing spiral of oil prices decline. Oil price was down
to around $27 per barrel, the price level which is a death sentence for Saudis as they can't exist for
more then five years at this level of prices.
Saudi’s “invitation” for US shale producers to be the swing producers by no means amounts to a “war
on shale,” as it has been described by MSM. In a way it was invitation to became a quasi-member
of OPEC, a producer that has no choice but quickly adjust production in response to market imbalances.
That means that Saudi Arabia’s attitude toward shale is more nuanced that MSM depict. They do not see
shale only as a competitor but also as a welcome flexible source of supply. In a speech in Washington
in March 2013, Saudi oil minister Naimi said:
The US energy scene is witnessing a remarkable evolution. Newly commercial reserves
of shale oil or tight oil are transforming the energy industry in America. And that’s great news.
It is helping to sustain the US economy and to create jobs at a difficult time. I would like to put
on the record here today that I welcome these new supplies into the global oil market. I hope these
additional resources will add depth and bring increased stability to global oil markets.
I believe these reserves will lead the US into a much deeper engagement in world energy markets.
And this is good news.
In March of 2015, he stressed, “Some speak of OPEC’s ‘war on shale’…they are all wrong,” adding that
“new oil supply growth—much of it coming from the US—is a welcome development for world oil markets.”
Saudi officials want shale oil to survive and thrive, in large part because it can adjust relatively
quickly both up and down. Thus, when global oil oversupply developed in the late summer of 2014, Riyadh
expected shale to help to stabilize prices as it had in recent years when it helped counter global supply
losses, but this time by putting a floor under them with supply cuts. In September 2014, Saudi Arabia’s
Oil Ministry spokesman Ibrahim al-Muhanna soothingly predicted “the high cost of producing shale
oil has put a floor under oil prices…It means the price of oil will not go to less than $90, and even
if it goes below that for whatever reasons, it would be for a short time before going back to the level
of around $110.” They were very wrong.
But in a long run they were right. The current low oil price environment is not sustainable over
the medium term (through the end of the decade). It will quickly (in two year or less most shale oil
producers will be bankrupt). Shale oil production was hit first, but even conventional oil companies
are now canceling or delaying investment in other, longer lead time projects. In July, Wood Mackenzie
reported oil and gas companies have delayed some $200 billion of investment in more than forty-five
projects, exclusive of US shale, due to the price slump. More than half of affected reserves are in
deep-water projects, and nearly 30 percent are in Canadian oil sands. In September, Wood Mackenzie predicted
140 of the 330 fields in the UK North Sea could close in the next five years, even if oil prices recover
to $85 a barrel.
Saudi vice minister of oil Abdulaziz estimated some 5 million b/d of supply has been deferred or
canceled. This means supply that had previously been expected to become available in 2018 or 2019
will not be there. Project delays and cancelations will likely continue, and even accelerate, if oil
prices fall more
Thus, barring a deep global recession, global oil demand growth will eventually whittle away the
inventory surplus and then collide with meager, insufficient supply capacity growth. Should world GDP
grow anywhere close to the IMF’s medium-term forecast in the high 3 percent range, oil supply soon will
become insufficient. Moreover in low price environment world oil demand probably will rise by closer
to 2 million b/d than 1 million b/d.
The absence of an effective short-term price stabilizer will increase investor uncertainty about
longer-term prices that factor into major consumption, investment, and government planning decisions.
Prolonged oil price volatility will present new and significant challenges to industry, investors, consumers,
and governments. As we see under neiliberalism oil, bond, and currency markets are prone to violent
price moves; oil is the tail that is wagging several macroeconomic and financial dogs.
OPEC wins no popularity contests in the West. But we may be about to learn that the only thing worse
than OPEC managing the oil market is OPEC not managing the oil market. Energy companies and investors
will have to adapt their business models, as will industries heavily exposed to oil price fluctuations.
EIA data suggest that Saudi total petroleum liquids + other liquids production declined from 11.1 Mb/d
in the 4th quarter of 2008 to 10.2 Mb/d bpd in 2nd quarter of 2009, a decline of almost a million bpd.
From the 4th quarter of 2014 to the 2nd quarter of 2015, EIA data show that Saudi production increased
from 11.6 million bpd to 12.0 million bpd, an increase of 0.4 million bpd. At the same time annual Saudi
consumption for 2008 was around 2.2 Mb/d (EIA) which increased to 3.2 Mb/d in 2014. An increase around
1 Mb/d for six years. Or slightly less than 0.2 Mb/d per year. In other words Saudis are losing their
export capacity with alarming speed.
Optimal conditions for oil extraction are now less commonly congruent in the fields that Aramco must
now exploit to address the coming falls in production from the historic sources
The history of oil production from Saudi Arabia has largely come from individual wells that produced
in the thousands of barrels a day. In order to sustain that production over decades, it has been
necessary to ensure that
The pressure differential between the well and the rock are sustained;
That the rock has an adequate permeability to ensure that flow continues at a steady state;
That the oil itself is of relatively low viscosity and is thus able to easily flow through
the rock; and
That there is a sufficient thickness and extent in the reservoir to allow such sustained production.
All of those factors came together in the giant fields that provided high levels of production
over many decades, most particularly in the northern segments of Ghawar.
Yet those conditions are less commonly congruent in the fields that Aramco must now exploit to
address the coming falls in production from the historic sources. These best of the rest (as the
late Matt Simmons called them) must now increasingly carry the burden of sustaining Saudi production
fail, individually, on differing grounds from meeting those earlier parameters.
Collectively and in the face of Ghawars decline, they will only be able to sustain production
to their original targets and will not provide replacement production as the oldest and larger begin
to fade.
With total world consumption of around 95 Mb/d Saudi exports are just 2-3% of total. In no
way they are flooding world with oil. All they are doing is dumping their oil at artificially,
preselected predatory prices (putting explicit price with discount on each barrel) .
The only two countries which managed since 2008 significantly increase their production
are the USA and Iraq. That's it. Even even this increase was happening on the background of civil
war in Libya, unleashed by French which decimated production from this country and decline of production
in North Sea and several other oil fields. Normal rate of decline of old fields is around 5% a year
so unless there is additional findings and investment total production would decline around 5 Mb/y.
Global offshore oil production in ageing fields will fall by 10% in 2016 as producers abandon field
upgrades due to low prices.
It is important to note that in 2014 (the first year of "oil glut" era) Saudi exports actually fell
from the previous year (Bloomberg).
They recovered (and slightly exceeded 2013 level) only in 2015.
Due to the percentage of revenue in the budget from oil sales Saudi Arabia needs oil price at or
above $80per barrel. As oil price dropped to less then the half of that price they have approximately
100 billion deficit in 2015. So this is a pyrrhic victory for them, even if we assume that they
somehow were trying to preserve their market share understanding this share not in dollar buy in volume
metric. This way they are they exhausting their aging fields. why to do this just to show that they
can. such action typically mean economic war -- they are equvalent to the declation of war. And there
are two plausible targets -- Iran -- their archrival in the Gulf and Russia, which Obama administration
trying to undermine economically for non-compliance with rule dictated by the US neoliberal empire (and
Saudi, being a satellite state can be forced to support such policy as their existence depends on the
US political and military support).
The most plausible hypothesis is that being the client state they operate in concert with the USA
to achieve some geopolitical goals for Obama administration. And economic war has generally
nothing to do with the defense of their market share -- this is offence of geopolitical rival.
We also need to remember that oil is not a typical commodity. It is definitely a geopolitically important
commodity or geopolitical weapon, if you wish (see
Carter Doctrine - Wikipedia,
which is replica of an old Imperial Britain strategy for this region). On the other hand those
sheiks can't be that stupid.
If we assume that this is an "all out" economic war against Iran after lifting sanctions with full
support of Obama administration which has its own goal in decimating Russia economics and, if possible,
replacing "resource nationalist" President Putin with some neoliberal stooge like former president Yeltsin.
In this case the USA shale producers are just a collateral damage in a big geopolitical game. And
a lot of things that are happening in the USA shale patch (for example absence of difficulties with
refinancing junk bonds for shale producers in 2015 and surprisingly accommodative behaviour of the USA
banks toward indebted shale producers) became more logically explainable. The second part of this hypothesis
is that the spear of this attack is directed against Russia (with Iran and Venezuela as two are desirable
targets who got hit simultaneously) also correlates with explisti position of Obama administration with
its compulsive desire to punish Russia for not following neoliberal dictate from Washington.
At $30 per barrel and assuming Saudis export 7.5 Mb/d their total export revenue is just 82 billions.
And even with cut of budget they need approximately $100 billion a year to balance their budget. As
their foreign reserves are around $650 billions, they might well be bankrupt in less then a decade.
So this is definitely bold, war-style "all-in" move.
that also explains why they went "all out" as from purely economic point of view the most logical
strategy of defending their revenue stream from oil exports (aka "market share") would be to shrink
exports by 1 Mb/d (with other 1 Mb/d of cuts coming from other, pretty eager to support such move,
OPEC members) and let the USA shale self-destruct as they were not that profitable even at $100 per
barrel price. In other words the US shale production was never a large problem for Saudis even
when price was at or over $100 in 2010-2014. Why it suddenly became such a problem in July 2014 so that
they resort to such drastic measures?
A modest 10% cut of their output would increase the revenue from oil export to the budget and
let them wait and see how quickly other player exhaust their "sweet spots"t. Cutting 2Mb/d from all
OPEC, even taking into account cheating of individual members (which could make the cut 1.5 Mb/d instead
of 2.0 Mb/d ;-) probably would instantly restore prices at $70-80 bbl range. They choose not to do that.
So in no way Saudis are fighting for their market share which would involve negotiation of long term
contracts with major customers as only long term contracts protect parties from the the market
conditions. They are engaged in economic war and do dumping of the same amount of oil,
in order to decimate spot prices with full support of Wall Street. Please note that they
were unable to raise exports even by 1Mb/d -- the size of their exports for last years oscillates in
a narrow range between 7.1 and 7.54 Mb/d, so in best case they can only add to the market 0.4 Mb/d,
which is insufficient even to to compensate for the US shale output drop due to low price which is estimated
for 2016 between 0.6/Mb/d and 1Mb/d
Some people attribute this "super-aggressive" behaviour to "new Margaret Thatcher of
Saudi Arabia" a 30 years old deputy crown prince Mohammad bin Salman
who became the right hand of the new king (yes this is an
absolute monarchy, one of
the few remaining on the Earth). From Wikipedia:
On 23 January 2015, King
Abdullah died,
Salman took the
throne and Prince Mohammad was appointed minister of defense.[18]
He was also named as the secretary general of the Royal Court on the same date.[19]
In addition he retained his post as the minister of the state.[20]
In April 2015 King Salman appointed one of his nephews,
Mohammed bin Nayef,
as Crown Prince. At the same time King Salman appointed his son Prince Mohammed as deputy crown prince.
On 4 January 2016, Prince Mohammad gave his first on-the-record interview, while talking to
The Economist.[23]
In any case the last thing they are doing is defending their market share because in dollar revenue
their market share shrunk dramatically. A very strange strategy of defense of market share if you lose
100 billions a year and know that both Russia and the USA will outlast you in this game as they have
more diversified economies. Saudi oil fields are very old and instead of exhausting them
faster the proper strategy is saving as much oil as they can to leave some oil for future generation
(at least one, a single generation) as without oil the reason for existence of this monarchy is very
fuzzy (and without support of the USA it will be wiped out from the map pretty quickly, probably in
less then a decade).
What is the mechanism of maintaining low oil prices in the world with diminishing supply of cheap
oil
In reality low oil prices are probably result of interaction of three or more factors. Among them
Simultaneous coming on the market many new projects which were started in 2010-2013 when the
price of oil was above $100. That includes very risky growth of US shale and tight oil
production which can't survive a long period of low prices, growth of production in North Sea (an
expensive "deep water" oil), Russia Arctic oil (another above $80 per barrel oil). Rapid increase
of production of condensate also played a role, especially in the USA, before export restrictions
were lifted as the US refineries were not tuned to this type of oil and did not want to buy it.
Saudis political decision to dump its oil on the market at artificially low prices. Which
might be a declaration of economic war with Iran and/or in part was dictated by the USA interest
is reviving it economy. Please note that this decision was taken after the agreement to lift Iran
sanction was reached (July, 2014). And oil prices start sliding immediately after that.
Games in futures markets. Wall Street now if the marginal player in oil. And it does not
care one bit about real economy, or the USA as a country. Only about its own profits, everything
else be damned.
While much of the analysis of the recent OPEC+ disagreement has focused on why the UAE
refused to commit to the new export plan, there are other factors that have been largely
overlooked. A closer look at the ongoing investments by the UAE in its upstream and downstream
industry is one such example. Abu Dhabi's national oil company ADNOC has put in place a
production capacity increase that calls for a total reassessment of the underlying OPEC
production baselines, which were agreed in 2018. At present Abu Dhabi is allowed to produce
around 3.2 million bpd, based on the 2018 baseline, but has a capacity now of more than 3.8-4
million bpd. Looking at ongoing new projects and planned investments, production of more than 4
million bpd is possible in the coming years.
The aggressive investment strategy of ADNOC means that the UAE is plenty of incentives to
increase production. An extended and controlled OPEC+ export quota system would not only impact
the UAE's revenue streams but could even turn some of its multi-billion dollar investments into
stranded assets in the long term.
Recently, Crown Prince Mohammed bin Zayed has been pushing an independent geopolitical and
economic strategy for the UAE. After years of cooperating with Saudi Arabia on everything from
OPEC policy to regional geopolitical crises, the two powers are now beginning to diverge.
Former cooperation on issues such as the Yemen war and the Qatar blockade has weakened
drastically.
At the same time, Mohammed bin Salman has been aggressively pushing Saudi Arabia's regional
power. Saudi Arabia's Vision 2030, the Kingdom's economic diversification plan, has driven the
crown prince to take aim on other GCC countries as he attempts to force international investors
and companies to set up shop in Saudi Arabia rather than Dubai or Doha. This transformation in
the relationship between Saudi Arabia and the UAE certainly played a part in the recent OPEC+
conflict.
Riyadh is also targeting the logistics industry, an industry that the UAE has long
dominated, establishing itself as a regional hub for logistics and connecting EU-Asian
commodity and trade flows. In the last couple of months, Saudi Arabia has become increasingly
aggressive in this space. While there has no been a direct conflict in this area, it is
generally assumed that there is not enough space in the region for two supra-regional maritime
logistic hubs. MBZ and Dubai are clearly unimpressed with Saudi Arabia's attempts to muscle in
on the industry.
Another area of discord between the two nations is the UAE's increased cooperation with
Israel. UAE-Israel cooperation in logistics, technology, defense, and agriculture, is a
possible threat to Saudi Arabia's Vision 2030 projects. By bringing Israeli tech and know-how
to Abu Dhabi and Dubai, the UAE projects will compete with the Saudi Giga-Projects, such as
NEOM, for international investment. In response to these moves by the UEA, Riyadh has blocked
technology and products exports by the UAE that are linked to Israel.
This economic and geopolitical confrontation is normal in the Arab world and is unlikely to
cause a major rift between the two nations. The current cracks will likely be mended when one
of the two parties is calling for a Majlis in the Desert. MBS and MBZ have more to win from
cooperation than confrontation. A breakthrough in the OPEC discussions is certainly a
possibility, but first, some saber-rattling must be done. Ultimately, MBS understands that both
Aramco's and ADNOC's future revenues are important. Both NOCs will be able to gain a lot of
market share in the coming years if they play their cards right. By being flexible while not
losing face, both the nations could go on to cooperate in other fields. Emirati SWFs are still
a viable source of financing for major projects in Saudi Arabia, while energy-transition
projects in the Emirates thrive on Saudi cooperation and cash.
By showing a strong position in international and regional media, both Crown Princes aim to
boost their own positions. MBS's strong approach towards regional economic issues is clear and
will inevitably come into conflict with others. MBZ's more aggressive regional and
supra-regional power aspirations are also set out for all to see. OPEC's infighting is a
natural place for these tensions to play out. Both parties know that their long-term alliance
will be key in the future. A full confrontation between the two nations would only serve as an
advantage to the long list of regional adversaries for these two nations. By threatening
non-compliance, Abu Dhabi is showing its willingness to confront market developments head-on.
Saudi Arabia and Russia now need to understand that a Riyadh-Moscow agreement is not going to
be enough to placate the other members. ADNOC is unlikely to destabilize the market by opening
up its taps, but the symbolism of its resistance is important. Statements about the UAE's
willingness to leave OPEC are based purely on rumors, not on facts. Stability is key in oil and
gas, being part of the discussion inside of OPEC is more valuable to the UAE than being
independent. There is plenty of complexity to unpick behind the scenes, but this particular
disagreement is unlikely to cause any real problems for OPEC+
play_arrow
slokhmet 1 hour ago
I have another hypothesis: with covid lockdowns and restricted travel, UAE's income from
prostitution and laundering crashed. They needed to make it up somewhere else.
Simple, really.
jimmy12345 1 hour ago
An oil glut is coming. As electric vehicles get cheaper and better year by year, there
will a rapid adoption of EV's creating a glut in the oil market. In 2022, 10% of china's
vehicles sales will be electric and the auto industry has announce over 100 billion dollars
in investments in electric vehicles. The Russian cucks on here are screwed.
GregT 1 hour ago
Wrong. Ev's have been around for over a decade & still don't have 1% of the
automobile market. They're a novelty. Not a viable path to move billions of people around
in the world. Look at a previous article from today on ZH. China produced 225k this yr. If
you live to be a million they might catch up to combustion engine cars & trucks.
Ron_Paul_Was_Right 1 hour ago
I don't know about it taking a million years to get there, but to your point yes - EVs
just aren't competitive with fuel burning vehicles at this time. It just doesn't work to
drive 400 miles and have to wait an hour plus for a "fill up" to drive another 400 miles.
Not when it takes 5 minutes to fill a gas tank, it just isn't competitive.
Delusion Spotter 45 minutes ago
More Correct Analysis:
" Statements about the UAE's willingness to leave OPEC are based purely on rumors, not
on facts. Stability is key in oil and gas, being part of the discussion inside of OPEC is
more valuable to the UAE than being independent. "
UAE's going to stay in OPEC, and the latest OPEC sideshow will result in higher Oil
Prices, not lower.
radical-extremist 1 hour ago
How are world leaders allowing OPEC to produce or even exist at all...while Climate
Change threatens our very existence on earth? They seem to be sending mixed messages.
GregT 1 hour ago
Because world leaders know climate change is a hoax to scare people into paying
governments more taxes. They need & want oil as bad as everyone else.
When Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman announced that Saudi
Arabia was no longer an oil-producing country, he likely didn't mean literally.
"Saudi Arabia is no longer an oil country, it's an energy-producing country," the Energy
Minister told S&P Global Platts this week.
Saudi Arabia has high green ambitions that include gas production, renewables, and
hydrogen.
"I urge the world to accept this as a reality. We are going to be winners of all these
activities.
Saudi Arabia will surely benefit from the green transition. While the Exxons, Chevrons,
and Shells of the world are busy doing climate activists' bidding in the boardroom and
courtroom, NOCs–particularly in various OPEC nations–are all-too-eager to take
advantage of what will surely be increased oil prices.
Already Saudi Arabia has raised its official selling price for the month of July to
Asia.
But that doesn't stop Saudi Arabia from pursuing its green ambitions–the Saudi
Green Initiative–while funding those green ambitions through oil sales. Saudi Arabia
plans to generate 50% of its energy from renewables by 2030, in part to reduce its dependence
on oil. In 2017, renewables made up just 0.02% of the overall energy share in Saudi
Arabia.
Saudi sees the handwriting on the wall. They know damn well that their high production
numbers are limited, even if the rest of the world does not. I think they are actually hoping
for a green transition and they hope to be a part of it. After all, what choice do they have?
ANCIENTARCHER IGNORED
06/07/2021 at 5:51 am
Ron,
I have been following your posts for a while now. Thank you for sharing your knowledge.
You seem to be certain that the Saudis themselves can see the end of high production in their
oil fields. I understand that all the super-giants in Saudi are very, very old and that Aramco
is doing all sorts of things to keep production up and that is expected for old fields, even
these super giants. However, we also haven't seen Cantarell type field declines from the Saudi
super giants yet, or rather we don't know of any.
I can't understand why you believe Saudis are near their maxiumum production capacity and
from here on their production is going to decline (rather sharply?). Nothing that I read in
Aramco's annual report gave me that feeling. But I also understand that they will not divulge
bad numbers.
In short, please can you share your views on Saudi future production and the reasons?
However, we also haven't seen Cantarell type field declines from the Saudi super giants
yet, or rather we don't know of any.
Saudi announced in 2006, 15 years ago, that Abqaiq, (pronounced Abb -kay) was 74%
depleted and Ghawar was almost 50% depleted; Saudi Arabia's
Strategic Energy Initiative
They claimed, in 2006, that all Saudi was only 29% depleted. But that was a blatant
falsehood. Ghawar, at that time, was about 60 to 70% depleted and all Saudi was well past the
50% mark. Around 2000, Their decline rate was about 8% per year but they, around that time,
initiated an enormous infill drilling program that got their decline rate down to almost
2%:
• Without "maintain potential" drilling to make up for production,
Saudi oil fields would have a natural decline rate of a hypothetical
8%. As Saudi Aramco has an extensive drilling program with a
budget running in the billions of dollars, this decline is mitigated to
a number close to 2%.
The Saudi author of this piece then confuses decline rates with depletion rates:
• These depletion rates are well below industry averages, due
primarily to enhanced recovery technologies and successful
"maintain potential" drilling operations.
What anyone should realize is that when you decrease decline rates, by pumping the oil out
faster, you increase the depletion rates. They began creaming the top of their fields,
staying above the rising water, about 20 years ago. Really, what the hell would one expect
to be happening by now?
Saudi, in their IPO a few years ago, said production from Ghawar was 3.8 million barrels per
day. For the world's largest field, that is a Cantrell-style decline rate. Remember, the
smaller the field, the faster the natural decline rate. And they have admitted that they
brought old mothballed fields of Khoreis, Shaybah, and Munifa online, at massive expense, to
make up for the decline in their older fields. However, they have no more mothballed
fields.
I spent 5 years in Saudi and my son just retired from ARAMCO a couple of years ago after
spending about 23 years there. You must understand that exaggeration is part of their way of
life. They do it and they expect everyone else to do it. They will never admit that their total
production is in steep decline. No, Khoreis, Shaybah, and Munifa are not in decline but their
combined output is only around 2.5 million barrels per day. ANCIENTARCHER IGNORED
06/07/2021 at 1:25 pm
Very many thanks Ron.This is super.
Saudi has also been claiming that their proven reserves of oil are about 267bn bbl for the
last, what 20-30 years now, notwithstanding the 3bn bbl they take out every year! Must be
magic!
Cantarell is now at a bit more than 100kbpd down from 2.2mmbpd in the early 2000s. If any of
the Saudi super-giants, especially Ghawar, are following that trend, it's going to make an
impact. And it's a question of 'when' rather than 'if'.
There is also a rumour that their war in Yemen was because they wanted to get their hands on
the oil in the rub al-khali because they don't have much left within their territories.
Apparently, there's a lot of oil in the empty quarter and they don't want to share that with
Yemen.
I agree with your judgment – exaggeration is a part of their culture in much the same
way that every shopkeeper there expects you to bargain because prices are also exaggerated. You
can barely trust the financials of Western companies, so can't take the Saudis at their
word.
Very many thanks again for your comments. Your opinion informed by your experience is worth
its weight in gold (or should I say bitcoin! :-)!
REPLYRON PATTERSON IGNORED
ROGER IGNORED
06/07/2021 at 8:53 am
" Saudi sees the handwriting on the wall. They know damn well that their high production
numbers are limited, even if the rest of the world does not. "
Yep. Think about it every barrel they displace from (what I assume is) highly subsidized
domestic consumption, is a "new " barrel for export -- a new revenue stream. That is, since
they don't have the reserves to meet the anticipated future OPEC call, these additional export
barrels are essentially "free money" (after pay-out on the so-called renewable energy
investments) i.e., they do no defer any otherwise producible oil. Hence, expect SA to be a
"world leader" in so called renewable energy of course, done in the name of a greener world for
us all. 😉
Since 2005 they have averaged producing 3.43 billion barrels per year, crude only. That
comes to about 55 billion since the beginning of 2005. If you count total liquids it would be
well over 60 billion.
But as you say, they have "magic oil". For every barrel they pump out of the ground, another
barrel magically appears to replace it.
The 13-member Organization of the Petroleum Exporting Countries pumped 24.89 million
barrels per day (bpd) in February, the survey found, down 870,000 bpd from January.
Riyadh achieved about 850,000 bpd of that reduction in February, the Reuters survey
found.
Compliance with pledged cuts in February was 121%, the survey found, up from 103% in
January.
The few drilling rigs is (probably) located in Ghawar:
"Further work programs on fields such as Khursaniyah, and legacy assets like Khurais and
Abqaiq that need workovers and rehabilitation, are being delayed, the source said, whereas at
Aramco's low-cost giant fields such as Ghawar -- the world's largest -- production is
increasing.
"There isn't a place in Ghawar that doesn't have a drill, it is very dense. They're
beating the hell out of it.""
and contractors are not being paid in time:
"Aramco's tighter spending has resulted in several international contractor companies
working on pipeline and offshore projects not getting paid for several months, three sources
told S&P Global Platts. The payments are set to be delayed further, with Aramco not
intending to make any payments to these companies until 2021, a source added."
https://www.hellenicshippingnews.com/feature-saudi-aramco-faces-tough-2021-as-rivals-race-for-oil-capacity/
"Groundwater resources of Saudi Arabia are being depleted at a very fast rate," declared
the UN Food and Agriculture Organisation as far back as 2008. "Most water withdrawn comes
from fossil deep aquifers, and some predictions suggest that these resources may not last
more than about 25 years." Saudi Arabia leads the world in the volume of desalinated water it
produces, and now operates 31 desalination plants. Desalinated water, as distinct from
naturally occurring fresh water, makes up 50% of water consumed in Saudi Arabia. The
remaining 50% is pulled from groundwater."
https://www.theguardian.com/cities/2019/aug/06/oil-built-saudi-arabia-will-a-lack-of-water-destroy-it
So, what is done to solve the problem?
"According to Bin Salman, who is also the chairman of the Neom company board of directors,
construction of The Line will start in the first quarter of 2021.
The 100-mile-long (170 kilometres) mega-city will consist of connected communities –
which it calls "city modules" – and link the Red Sea coast with the north-west of Saudi
Arabia.
In a statement, The Line's developers said its communities will be "cognitive" and powered by
AI, which will "continuously be learning predictive ways to make life easier"." https://www.dezeen.com/2021/01/13/line-saudi-arabia-170-kilometres-long-city-neom/
Pollux , thanks for the info and update . What could possibly go wrong ? Answer 1 ;: More
days for some princes to spend at the Ritz Carlton . Answer 2 ; Heads roll for MBS and company
. :-0
REPLYPOLLUX IGNORED
02/09/2021 at 7:51 am
The situation is not better in Kuwait:
Economy is in bad shape:
"Source says government has transferred the last of its performing assets to wealth fund
in exchange for cash.
Years of lower oil prices have forced the Kuwaiti government to burn through its cash
reserves while a festering political standoff has prevented it from borrowing.
"It's a very immediate crisis now, not a long-term one like it was before," said Nawaf
Alabduljader, a business management professor at Kuwait University."
https://www.arabianbusiness.com/politics-economics/458217-kuwait-facing-immediate-crisis-as-it-seeks-cash-to-plug-deficit
And oil projects are getting canceled:
"KOC's Board of Directors has decided to cancel the heavy crude project that involves 11
oil wells although it has been awarded recently," the report said without naming the company
that had won that contract.
It said KOC and other local oil firms intend to freeze more projects in line with
instructions by the Kuwait Petroleum Corporation to slash capital expenditure " https://www.hellenicshippingnews.com/projects-kuwait-scraps-400mln-oil-project-report/
Pollux , do you have any info on Ghawar ? As they say " As goes Ghawar ,so goes the world "
.
REPLYPOLLUX IGNORED
02/09/2021 at 8:28 am
True, or as Matthew Simmons wrote in "Twilight in the Desert": "Ghawar is the king of Saudi
oilfields. There is no "crown prince" waiting to assume the throne. It is the same in an oil
basin as it is in chess: Once the king has fallen, the game is over."
Just a query for some old TOD carry overs . There use to be "Memmel" who use to post a lot
on KSA and stuff . Any info on him . Tks Pollux for your response . We are in agreement .
REPLYWEEKENDPEAK IGNORED
02/09/2021 at 4:44 pm
I loved that post on TOD on Ghawar by Joules.
Has anyone ever done an update on it – that would be fascinating. When I look at
google earth I see lots of dots but I can't tell injection wells from extraction wells so I
have frankly no clue what I am looking at
REPLYOVI IGNORED
02/09/2021 at 5:15 pm
HH
The latest data that was published on Ghawar came from the Aramco IPO. They included a table
which listed their primary oil fields along with their production. The following statement was
included:
The Ghawar field has accounted for more than half of the total cumulative crude oil
production in the Kingdom but still maintained MSC of 3.800 million barrels of crude oil per
day as at 31 December 2018.
In a presentation given by Nawaf Obaid in Nov 2006, the following statement was made:
Without "maintain potential" drilling to make up for production, Saudi oil fields would have a
natural decline rate of a hypothetical 8%. As Saudi Aramco has an extensive drilling program
with a budget running in the billions of dollars, this decline is mitigated to a number close
to 2%.
This raises the question of whether with today's reduced income, can Aramco maintain its
extensive drilling program to reduce the natural decline rate to 2%.
"... "There isn't a place in Ghawar that doesn't have a drill, it is very dense. They're beating the hell out of it." ..."
"... Around 2005, speculation was that Ghawar was producing somewhere between 5 Mb/d and 5.5 Mb/d. To get to 3.8 Mb/d by 2018, implies a roughly 2% annual decline rate. This turns out to be consistent with what some SA spokesperson said around 2005. Something along the lines of "The natural decline rate of Ghawar was 8% per annum but continuous drilling reduced that to 2%." ..."
Further work programs on fields such as Khursaniyah, and legacy assets like Khurais and Abqaiq that need workovers and rehabilitation,
are being delayed, the source said, whereas at Aramco's low-cost giant fields such as Ghawar -- the world's largest -- production
is increasing.
"There isn't a place in Ghawar that doesn't have a drill, it is very dense. They're beating the hell out of it."
When Saudi Aramco went public, this statement was in their IPO.
"The Company believes that the Ghawar field is the largest oil field in the world in terms of conventional proved reserves,
totaling
58.32 billion barrels of oil equivalent as at 31 December 2018 for the Concession term, including 48.25 billion barrels of liquids
reserves.
The Kingdom's original reserves of the Ghawar field increased from 19.0 billion barrels of crude oil in 1951G, when production
began at the field, to 127.7 billion barrels of
crude oil in 2018.
The Ghawar field has accounted for more than half of the total cumulative crude oil production in the Kingdom
but still maintained MSC of 3.800 million barrels of crude oil per day as at 31 December 2018."
Around 2005, speculation was that Ghawar was producing somewhere between 5 Mb/d and 5.5 Mb/d. To get to 3.8 Mb/d by 2018, implies
a roughly 2% annual decline rate. This turns out to be consistent with what some SA spokesperson said around 2005. Something along
the lines of "The natural decline rate of Ghawar was 8% per annum but continuous drilling reduced that to 2%."
"An ambitious leader never lets a crisis go to waste, and MBS is nothing if not ambitious.
During the early days of the pandemic, he increased the kingdom's value-added tax from
five percent to 15 percent, and the government earmarked $1 billion in stimulus payments to
Saudi businesses struggling with the economic downturn. MBS directed his sovereign wealth fund
to shop for bargains on global stock markets. He even went nose to nose with Russian President
Vladimir Putin on oil prices: when Russia refused to respect production limits set in 2017,
Saudi Arabia opened the spigot, driving the price of oil down, very briefly, into
negative territory . Even with oil prices back around $40 per barrel, the Saudis are left
with only half the revenue they need to balance the government's books. " FA
--------------
Well pilgrims, Trumpy and Jared may love the Saudis and the murderer MBS, but I do not. I
was the Defense Attaché there for three years. It was one of the most unpleasant
experiences of my army career. The level of social and legal restriction imposed by the
theocracy was stifling. Normal life was simply impossible. Even as a diplomat I felt imprisoned
in the embassy. For a foreigner to speak Arabic in public was most unwise because the immediate
suspicion, often voiced, was that the foreigner was a SPY!
The one thing the Saudis have historically had "going for them" was the money that flooded
the country from the ever flowing oil and gas stream. Now, that is largely finito. Good!
That means less money to use in spreading the Wahhabi cult, and less money to spend on futile
fantasies like the war against the Zeidi mountaineers in Yemen.
A million gastarbeiters have left the country? Good! Perhaps the Saudis will learn
how to do actual work. Perhaps. pl
What's your opinion on the dynamics that could lead to the fall of the House of Saud?
I'm sure in an insular country like that there must be much palace intrigue and suspicions
on loyalty among those that bear arms. How does MbS insure his survival?
With "friends" like KSA and Israel, who needs enemies? These two have driven US foreign
policy for decades and the smouldering wreakage of MENA is the legacy of these miguided
corrupt alliances. Between the fed and Treasury we'll be bailing out both of these
monstrosities.
Unfortunately the 2 presidential candidates promise us of more of the same. I was so
hopeful that Trump might make a break, but he seems to have been a weak leader with little
follow through. Biden, of course, will put these misguided alliances on steroids administered
by proven losers.
There's a positively classic scene at the beginning of the movie "A New Leaf." Walter
Matthau's character is visited on the golf course by his accountant who's come to tell him
that there's no more money in his trust account. Matthau is bewildered by this news uttering
something along the lines of "But I still have plenty of checks." It's hilarious and someone
in Saudi will also soon be visiting the Wahhabi loons to tell them the party is over. Life
imitates art.
Saudi Arabia has been in the news lately and none of them is good. One is WSJ's report on
the quasi-secret China-Saudi nuclear cooperation and the 'Yellow-cake' production in a secret
desert facility in the country's NW. I can already see the heat the Saudi's will be getting
from this!
Two, is the story of the 'Tiger Squad' assassins who were ordered by MbS personally to
pull off a Khashoggi on a former Saudi intelligence officer for his refusal to get back to
the country.
The idea of the Saudi's march to nuclear weapons development is a terrifying idea, but the
rumor is that they already have (at least) one in Pakistan. I particularly find it very
strange that the Trump admin was positively 'nudging' the Saudis toward nuclear energy
development until very recently, when Rick Perry was still in the administration! But a few
days ago the official at the State Dep's arms control and non-proliferation desk poured cold
water on Saudis and made it clear that the U.S. would not let them to do funny stuff wit
uranium behind their backs.
Also of note is the part in the WSJ's report that caught my attention and where it
mentions the involvement of an Argentinian energy firm that recently set up a nuclear reactor
for the Saudis and that they were very keen on developing the enrichment cycle supposedly for
'research' purposes and under secrecy. This reminded me of the 'colorful' history of
Israeli-Argentine secret nuclear weapons development cooperation in the 60's, in which Israel
got its'yellow-cake' it needed from Argentina to develop its nukes. Which begs the question
that are Saudis going the same route as Israel did back in the early 60s? Why not working
with Japan, Germany, France, U.S. then if it is all peaceful?
I have had my fair share of interactions with the Saudi people. while the culture is
pretty medieval with regards to social and religious matters, but when it comes to
hospitality and alike they are welcoming, especially during the month of Ramadan and after
Iftar, that is when they break their fasts at dusk. For the Saudis it is like a custom to be
'extra' generous and they donate free meals frequently to everyone.
Years ago, I suggested a cyber operation to drain the royal family of their disposable
wealth for the sole purpose of depriving the jihadists of further material support. Glad to
see that the "invisible hand of capitalism" and the royal's own stupidity are doing just
that. I don't want to see the royals toppled. Who knows what would replace them. But if they
were weakened enough so that all their remaining resources and concentration are focused on
keeping their people from rising up and ripping them to shreds, it would be fine by me. Let
the jihadis be reduced to angry men in the mosque without the resources to turn their anger
into meaningful action.
BTW, this idea of a cyber operation was from SST not from my time in DIA.
While MBS's Tiger Squad assassins were denied entry into Canada to whack former Saudi
Intel type/MBS critic Saad Aljabri, MBS succeeded in obtaining a fatwa directed against Saad
Aljabri.
pat - i think your personal experience of ksa reflects what most people in ksa probably
feel on some level.. i can't know this for a fact, but i would say if there was any place
where the usa was into doing a regime change, i would go along with this one.. anything would
be better then what they have wrought.. the export of wahabbism - salafist ideology has also
been a plague on the planet... at what point does this transfer of oil money into crazy
religious ideology indoctrination bite the dust? it can't happen soon enough as i see
it..
The Salafist approach to Islam is not crazy, i.e. insane. It is very much like
Protestanism in as much as it rejects even the theoretical possibility of a Legitimate
Central Religious Authority, it rejects Tradition, it rejects the possibility of sainthood -
Olya allah -, it posits that any fool can read and interpret the Scriptures, and it rejects
Theoretical Reason.
I think behind both Salafism and Protestanism appeals is a yearning for a simple moral and
intellectual order that does not put too much strain on the believers' cognitive faculties;
live under these black tents, follow these rules, and you are granted redemption in this life
as well as the next.
"No need to trouble your pretty little brains to grapple with the world as you find it and
not as you think it ought to be."
Felsafa is not highly regarded among the Sunnis because of the ancient closure of the Gate
of Ijtihad. Felsafa is much more highly regarded among you Shia because you still have widely
and highly regarded mujtahideen. Khomeini was a philosopher.
babak... thanks... i have a hard time understanding the distinctions... i don't know
enough of protestant ideology to appreciate the comparison.. as i understand it salafist
ideology adopts sharia and sharia is handed down from 'religious authorities'.. do you agree
in general with the description wikpedia gives on the salafi movement?? or is this slanted
too much from your point of view? https://en.wikipedia.org/wiki/Salafi_movement
is it too much to say that without philosophy there is just literalism? literalism seems
to reflect the bare minimum of understanding when everything boils down to this...
Sunni Islam does not admit of hierarchy except within consensus groups (Ijma'). Some are
large and some are small. 12er Shiism effectively is hierarchical through mechanism of the
"Hawza" schools of mujtahids (Ayatollahs). i will be surprised if you understand that. Ask
for clarifications.
Sharia is just the Laws of Islam, the concept is common to all Muslim sects and schools,
the content is common.
In my opinion, Seyyed Jamal Al Din Qazwini was not a Salafi as the worf is understood
today. He was a Shia Muslim who was campaigning for a unified Muslim response to the
ascendancy of the Western Diocletian civilization as well as the Russian Empire.
He was, in the final analysis, only partly successful in his effort, in as much as they
could only make sense among the Seljuk Muslims.
Salafi ideas, in my opinion, are best understood as a response of Non-Seljuk Muslims to
the Western Diocletian civilization. It reminds me of the Deobandis, another Muslim response
to the Western Diocletian civilization, exemplified by Great Britain, in India.
Both Salafis and Deobandis consider Shia Muslims to be heretics. The Wiki omits that.
babak
"the content is common" Untrue. There are many different collections of hadith and
jurisprudence that make it obvious that the content is not common among the different
sects.
pat... thanks for the additional comments... yes, i am confused by it all and think i am
in way over my head here! maybe i ought to just bow out of the conversation...
babak.. thank you as well...as i said to pat, i believe i am in over my head on the
topic... i have a viewpoint - a very subjective one again - generally all religion - the
orthodox kind anyway - have all struck me as not all that religious.. it is more like a
system where the so called authorities or leaders get to dictate how it is and the followers
have to go along with it... the whole spirit of religion seems overlooked or upside down.. i
was naive and thought religion was about love and kindness to others and basic tenets like
that, but i believe in the upper echelons of these religious systems, it is one big power
game... i don't know that chrisitianity is all that different from islam in this regard.. i
don't know enough about buddhism to comment, but i have heard similar stories in this
religion as well... call me agnostic...
i hope for the best for everyone, but in the case of saudi arabia - i personally think the
ksa-uae and etc leadership exporting wahabbism and really whacked out ideologies around to
places like pakistan and etc have not done the world or themselves any favours.. i hope it
ends soon.. it reminds me of the christian evangelicals exporting christianity to far off
places round the globe... it is a lot like that and i don't think it does much of any good..
all the generousity has serious strings attached as i see it..
and finally - i agree with pats comment at the top and would like to repeat that.. i can't
see any good coming out of ksa and think it would be better gone, or replaced with something
more tolerant..
"..all of these tin pot dictatorship oil rich countries are really a sick bunch.... i guess it is the byproduct off having too
much money and not enough brains..
@james@ 3
karlofi beat me to it james - or were you referring to Alberta?
WASHINGTON/LONDON/DUBAI - As the United States pressed Saudi Arabia to end its oil price war
with Russia, President Donald Trump gave Saudi leaders an ultimatum.
In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the
Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he
would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the
kingdom, four sources familiar with the matter told Reuters.
The threat to upend a 75-year strategic alliance, which has not been previously reported,
was central to the U.S. pressure campaign that led to a landmark global deal to slash oil
supply as demand collapsed in the coronavirus pandemic - scoring a diplomatic victory for the
White House.
Trump delivered the message to the crown prince 10 days before the announcement of
production cuts. The kingdom's de facto leader was so taken aback by the threat that he ordered
his aides out of the room so he could continue the discussion in private, according to a U.S.
source who was briefed on the discussion by senior administration officials.
The effort illustrated Trump's strong desire to protect the U.S. oil industry from a
historic price meltdown as governments shut down economies worldwide to fight the virus. It
also reflected a telling reversal of Trump's longstanding criticism of the oil cartel, which he
has blasted for raising energy costs for Americans with supply cuts that usually lead to higher
gasoline prices. Now, Trump was asking OPEC to slash output.
A senior U.S. official told Reuters that the administration notified Saudi leaders that,
without production cuts, "there would be no way to stop the U.S. Congress from imposing
restrictions that could lead to a withdrawal of U.S. forces." The official summed up the
argument, made through various diplomatic channels, as telling Saudi leaders: "We are defending
your industry while you're destroying ours."
Reuters asked Trump about the talks in an interview Wednesday evening at the White House, at
which the president addressed a range of topics involving the pandemic. Asked if he told the
crown prince that the U.S. might pull forces out of Saudi Arabia, Trump said, "I didn't have to
tell him."
"I thought he and President Putin, Vladimir Putin, were very reasonable," Trump said. "They
knew they had a problem, and then this happened."
Asked what he told the Crown Prince Mohammed, Trump said: "They were having a hard time
making a deal. And I met telephonically with him, and we were able to reach a deal" for
production cuts, Trump said.
After riffing on the theme of MBS's doomed attempt to play with the big boys over oil, Andrei
Martyanov goes on to suggest a possible way for superpowers to cooperate:
Can't completely agree with Tyler Durden here on his
wide-ranging postulation, "Putin Launches 'War On US Shale' After Dumping MbS & Breaking
Up OPEC+" mainly because it consists of too much speculation and not enough on facts and
statements of those involved in the decisions. The
Bloomberg story on which this is mostly based is almost 100% speculation. IMO,
this is yet another attempt to bash Russia for the massive mistakes made by the Outlaw US
Empire--for years, fracking's been known as a Ponzi Scheme to those closely watching, and it
was already set to implode.
This Sputnik article calls the Bloomberg item Bantha Pudu and offers a
completely different explanation that looks at Saudi behavior which all the Western BigLie
Media outlets omitted from their coverage.
Additional opinions and analyses were provided in
this Sputnik article that tend to back the analysis from the previous article. But
with the internal turmoil within Saudi over what's clearly an ongoing power struggle surly
contributed to Saudi's choices. As with almost all reports coming from the West about
anything Russian or Chinese, they must be treated with much skepticism. This makes at least
the third time lowering the price of oil through increased production aimed to harm Russia
and is likely the genuine reason at work again.
As for the Outlaw US Empire's fracking corps, we shall see if today's rebound is merely a
dead cat bounce, as it's now close to impossible to further hide their Enron Accounting as
their bonds descend to Junk status.
Alexander Mercouris at the Duran also recently posted his take, saying he felt the oil
market meltdown was almost entirely the doing of MbS. Essentially he posits that MbS was
getting more and more panicky, and Russia was in effect so preoccupied with the antics of
Erdogan that they weren't paying MbS the attention he thought he deserved...and it isn't
impossible that there was indeed a CIA plot to take him out. At any rate, Mercouris believes
he was basically just firing one across the bow of Russia to get their attention, but of
course by taking a demanding tone with Putin he almost guaranteed that he would receive the
lesson in manners for which the Russians are becoming more and more well known. Mercouris
feels after letting him sweat it a bit to learn his lesson, they will work out something with
the Saudis, but their return demands may be stiff.
While I do tend to agree this was probably all precipitated by MbS and his mental
instability, I can easily see the Russians long-range planning having long known that this
day--for one reason or another-- would eventually come, and deciding to bask in the glow for
just a bit more than Mercouris anticipates. After all, US fracked gas prices will now be
massively greater than Russia can provide its gas for, which with Merkle on the ropes anyway
Putin might feel is a very good time to send the Germans a reminder of what they risk if they
don't consummate the Nordstream 2 project. And after the years of illegal sanctions, it must
feel very good to be in Russia's position, where they know they can weather the storm far
better than their antagonists. So while I don't think this was Russia's doing, I can easily
see them taking their sweet time to come to a new deal, and even then at a price level that
will keep the Saudis and US frackers on their back foot...and maybe try to put more distance
between MbS and the US, too.
Regarding Putin and MBS on the oil. Who funds and supports HTS al qaeda in Idlib. I am
guessing the Saudi's have a big input there. Reports some time back that the drones AQ was
using to attack the Russian airbase used high tech US components.
I recall ex UK ambassador Peter Ford saying somewhere last year that the Saudis were outspent
by an order of magnitude by Qatar in Syria. That Qatar is funding like 80% of it all. Things
may have shifted a bit since.
Regarding KSA and their oil gamble - if I were Houthi strategist, I would wait for a while
for KSA to get knee deep into this experiment, then launch missile attack on their biggest
refineries and pipes. With one salvo whole KSA statehood could be shattered. Sweet sweet
revenge and guarantee not to get oppressed by KSA genocidal maniacs in future.
and regarding how much oil is left in Saudi even here they are calling them liers..
"the Kingdom will desperately need another primary energy source in the relatively near
future because it has nowhere near the amount of oil remaining that it has stated since the
early 1970s"
and regarding how much oil is left in Saudi even here they are calling them liers..
"the Kingdom will desperately need another primary energy source in the relatively near
future because it has nowhere near the amount of oil remaining that it has stated since the
early 1970s"
It could crash Mr Market oil stocks and wipe out fracking and such, creating possible
liquidity issues and bankruptcies which could spread. But honestly I'm not up on the details
if this could even cause any domino affects with bankruptcies, or not.
But to the Fed, Mr Market is the whole economy and nothing but the economy, Fed job #1
being to make stocks always go up.
Saudi Arabia is far more dependent on oil and tourism (also being hit) than Russia. Hence
Russia's reserves I think would last far longer that SA's can.
Saudi Arabia is already in the hurt locker and has run down their financial reserves under
Mohammad Bin Salman Al Saud. In addition, their little expedition to Yemen is costing them
billions of dollars per month which is not helping. With international tourism
fading away, the threat of some two million pilgrims not being able to travel to Mecca and
spending their money there as well as plummeting oil prices, 2020 is not going to be a good
year for Saudi Arabia. Just to make things worse, they have their own problems with
Coronavirus which may knock out important links in the Royal family.
Indeed. A pattern with Salman seems to be emerging, of him rashly starting wars or
policies he can't win/finish. Makes you wonder if others in the royal family are seeing this
and noticing SA is burning thru it's reserves and the solution might be a change in
leadership?
I was just reading an article saying how Saudi Arabia need $60 a barrel for their budget
but that now it is heading towards $20 a barrel. If they wanted to achieve a massive
cost-saving, they could give their Royal Family the chop – perhaps literally so. Last I
heard there were over 6,000 of them-
SA would have more problems with reserves than Russia, that's definite – if nothing
else, Russia exports/has other things than oil, SA doesn't.
Oil stock crash would not cause Western recession. It could well cause recession in Texas
and similar, but I very much doubt it would cause even US recession, as the problems in Texas
& co would be offset by the much lower prices at the pump.
Oil debt crash would be much worse, but still I suspect brunt of it would be borne by
investors, not banks.
Thanks for this excellent analysis! When oil consumption permanently plateaus, as it's
about to, the stock and debt value of the industry . . . flatlines.
That's the good news from Grow or Die.
It is believed that the investments will be made through contracts signed between Aramco
and the US government, whose armed forces have steadily been increasing
their military presence in terms of manpower and equipment around the oil fields. Despite
initially claiming to
scale back troops from Syria, US President Donald Trump announced in October that
America had " secured " and
taken control of the oil in the Middle East.
The sad reality is that the Washington Post, New York Times and most of the mainstream TV
and radio media are worse liars and better propagandists for the US Military-Industrial
Complex than Pravda was for the Soviet Communist Party. There is no and never was an fair and
balanced journalism. There's even no professional journalism!
My Russian opponents and Latin friends now laugh that I don't believe anything coming from
US media today and I'm hoarding hard and untraceable assets just like they do in the Eastern
Bloc, Middle East and Cuba. The 21st Century might yet be the century of dictators and their
storm troopers who learned their lessons from Hitler and Stalin.
If populism and Trump don't survive the coup it'll be pretty grim times for the non-elites
in America. The revenge from the weirdos and the leftist globalist Marxists will definitely
start US Civil War 2.
Yes and thank you for stating fundamental and obvious truths ..
on the other hand ,
"The Washington Post performed a service to the country by shedding light on the
disinformation used to sustain endless war. But the Post's intentions are also political,
seeking to undermine Trump's electoral chances by damaging Trump's military credentials as
well as his standing amongst military personnel. What Washington's elite and the Post do not
know, or perhaps prefer to ignore, is that such media investigations directed against
political opponents actually end up doing irreparable damage to the political and military
prestige of the United States."
The Washington Compost May well have an ax to grind with and motive for publishing
newfound truthiness, it's a miracle ! I fail to see however, just how Trump takes credit in
the bull **** fog, of the longest running war, motivations department.
other than that ...
And so in closing, I would be more inclined to believe sir, propagandizing, the
propaganda, with such an opinion, is just another kin to, let's say, the impeachment farce in
example. Or in the words of "The father of modern day marketing", an obvious attempt at
further shaping public opinion, for the masses, an opinion that grows more weary, more
suspicious, more distrustful, and divergent from government and their various mouth pieces,
by the day.
Stating obvious points such as you have, and blowing it with flawed analysis, is not a
good look ..
Washington Compost, has a much more simple, damaging ,and nefarious agenda.
Truth is being revealed, regarding the mountain of year on year lies, spoon fed to the
bewildered, inflamed, dispassionate, and cowed citizenry, as the bull **** gets harder to
peddle, more impossible to digest whole.
And is happening with or without the post, and likewise, various other "main stream" mouth
pieces and government hacks (in the interests of national security, of course.)
There is trouble underlying when the US military does something because of good partner
relations rather than obvious contribution to a clearly defined strategy. See Vietnam and
dominoes.
US is sending more "deterrent" equipment and military personnel [as targets also to
improve ARAMCO IPO oil assets] into the kingdom of Saudi Arabia.
New SecDef says Saudi princes have been "good partners", especially as the ARAMCO IPO is
coming on. If you and I protect the ARAMCO facilities in the kingdom the IPO may go based on
$2T instead of $1.5T, as some investment bankers might suggest.
Two fighter squadrons (likely F-15's, F-35 too slow, F-16 too low cost), two more Patriot
missile batteries, a THAAD warning and control system (the H in THAAD is high altitude, not
so good on drones and cruise missiles), etc. And prince bone Saws may pay the freight to keep
them in the kingdom.
Most obvious and least reported is 1800 more US soldiers and airmen to be
tripwires/excuses if they are harmed.
Deterrent and escalation; terms that go together when the new SecDef speaks.
The recent attacks on Saudi oil facilities by Yemeni Houthi forces demonstrate once again
that an aggressive foreign policy often brings unintended consequences and can result in
blowback. In 2015 Saudi Arabia attacked its neighbor, Yemen, because a coup in that country
ousted the Saudi-backed dictator. Four years later Yemen is in ruins, with nearly 100,000
Yemenis killed and millions more facing death by starvation. It has been rightly called the
worst humanitarian catastrophe on the planet.
But rich and powerful Saudi Arabia did not defeat Yemen. In fact, the Saudis last month
asked the Trump Administration to help facilitate talks with the Houthis in hopes that the war,
which has cost Saudi Arabia tens of billions of dollars, could finally end without Saudi crown
prince Mohammad bin Salman losing too much face. Washington admitted earlier this month that
those talks had begun.
The surprise Houthi attack on Saturday disrupted half of Saudi Arabia's oil and gas
production and shocked Washington. Predictably, however, the neocons are using the attack to
call for war with Iran!
Sen. Lindsay Graham, one of the few people in Washington who makes John Bolton look like a
dove, Tweeted yesterday that, "It is now time for the US to put on the table an attack on
Iranian oil refineries " Graham is the perfect embodiment of the saying, "when all you have is
a hammer, everything looks like a nail." No matter what the problem, for Graham the solution is
war.
Likewise, Secretary of State Mike Pompeo – who is supposed to represent US diplomacy
– jumped to blame Iran for the attack on Saudi Arabia, Tweeting that, "Iran has now
launched an unprecedented attack on the world's energy supply." Of course, he provided no
evidence even as the Houthis themselves took responsibility for the bombing.
What is remarkable is that all of Washington's warmongers are ready for war over what is
actually a retaliatory strike by a country that is the victim of Saudi aggression, not the
aggressor itself. Yemen did not attack Saudi Arabia in 2015. It was the other way around. If
you start a war and the other country fights back, you should not be entitled to complain about
how unfair the whole thing is.
The establishment reaction to the Yemeni oilfield strike reminds me of a hearing in the
House Foreign Affairs Committee just before the US launched the 2003 Iraq war. As I was arguing
against the authorization for that war, I pointed out that Iraq had never attacked the United
States. One of my colleagues stopped me in mid-sentence, saying, "let me remind the gentleman
that the Iraqis have been shooting at our planes for years." True, but those planes were
bombing Iraq!
The neocons want a US war on Iran at any cost. They may feel temporarily at a disadvantage
with the departure of their ally in the Trump Administration, John Bolton. However, the sad
truth is that there are plenty more John Boltons in the Administration. And they have allies in
the Lindsay Grahams in Congress.
Yemen has demonstrated that it can fight back against Saudi aggression. The only sensible
way forward is for a rapid end to this four-year travesty, and the Saudis would be wise to wake
up to the mess they've created for themselves. Whatever the case, US participation in Saudi
Arabia's war on Yemen must end immediately and neocon lies about Iran's role in the war must be
refuted and resisted.
Casting itself once again as the world's judge, jury and executioner, US imperialism is
recklessly hurtling toward yet another war in the Middle East, with catastrophic
implications. This time, Washington has seized upon Saturday's attacks on Saudi installations
as its pretext for war against Iran.
The reaction of US Secretary of State Mike Pompeo to these attacks, which have cut the
kingdom's oil production by almost half and slashed global daily output by 6 percent, was as
noteworthy for its haste as for its peculiar wording.
"Iran has now launched an unprecedented attack on the world's energy supply," Pompeo
tweeted late Saturday, adding, "There is no evidence the attacks came from Yemen."
This
image provided on Sunday, Sept. 15, 2019, by the U.S. government and DigitalGlobe and
annotated by the source, shows damage to the infrastructure at Saudi Aramco's Abaqaiq oil
processing facility in Buqyaq, Saudi Arabia. (U.S. government/Digital Globe via AP)
The indictment of Iran for attacks that set off a series of fires which devastated two oil
facilities in eastern Saudi Arabia came without a shred of supporting evidence, outside of
the bald assertion that there was "no evidence" that they were launched from Yemen.
Yemen had to be discounted, according to the secretary of state's predatory logic, because
the Houthi rebels, who control most of the country, had claimed responsibility for the
attacks and had a clear motive -- given the kingdom's near-genocidal war against Yemen's
civilian population -- for carrying them out. The US mass media has by and large echoed
Pompeo's allegations as absolute truth. On Monday night, television news broadcasts quoted
unnamed intelligence sources, citing unspecified evidence, claiming Iranian responsibility
for the attacks. No doubt this "evidence" will prove just as compelling as that of the Gulf
of Tonkin in Vietnam and "weapons of mass destruction" in Iraq. These same media outlets have
made virtually no mention of Saudi crimes in Yemen.
For the last four and a half years, Saudi Arabia has waged a near-genocidal war against
Yemen, the Middle East's poorest country. The violence has claimed the lives of nearly
100,000 Yemenis outright -- the greatest share through a relentless bombing campaign against
civilian targets -- while pushing some 8 million more to the brink of starvation.
Washington is a direct accomplice in this bloodbath, providing the warplanes, bombs and
missiles used to carry it out, along with logistical support and, until the end of last year,
mid-air refueling that allowed Saudi bombers to carry out uninterrupted carnage. Meanwhile,
the US Navy has helped enforce a blockade that has starved Yemen of food and medicine.
If what the Yemeni Houthis say is true, that they sent a swarm of 10 weaponized drones to
attack the Saudi facilities, then the action was clearly an act of self-defense, far less
than proportionate to the slaughter inflicted by the Saudi regime against Yemen.
Meanwhile, Washington's new ambassador to the United Nations, Kelly Craft, repeated the
charges against Iran on Monday before a United Nations Security Council meeting on Yemen.
Providing no more proof than Pompeo did two days earlier, merely repeating the formulation
that "there is no evidence that the attacks came from Yemen," she described the damage to the
Saudi oil installations as "deeply troubling."
Like the government she represents, the UN ambassador -- the wife of billionaire Kentucky
coal baron Joe Craft and a top Republican donor -- clearly finds the spilt oil of the Saudi
monarchy far more upsetting than the spilt blood of tens of thousands of Yemeni men, women
and children.
On Saturday night, President Donald Trump made a call to Crown Prince Mohamed bin Salman,
the kingdom's de facto ruler, offering his condolences and unqualified support to a man
exposed as a cold-blooded murderer. Bin Salman is responsible not only for the grisly
assassination and dismemberment of the Washington-based journalist Jamal Khashoggi at the
Saudi consulate in Istanbul nearly a year ago, but also the beheadings of at least 134 people
in just the first half of this year, 34 of them political activists slaughtered en masse on
April 23.
Trump subsequently announced that the US was "locked and loaded" to avenge Saudi oil with
military force. (This was a variation on his assertion in June that the Pentagon had been
"cocked and loaded" when he came, by his own account, within 10 minutes of launching
devastating attacks on Iran after it shot down an unmanned US spy drone over its
territory.)
If there is, as Washington claims, "no evidence" that the attacks were launched from
Yemen, one could, with equal if not greater justification, observe that there is likewise "no
evidence" that they were not launched by the US itself, or by its principal regional ally,
Israel.
If one proceeds from the age-old detective maxim of Cui bono? or "Who benefits?",
Tehran is the least likely suspect. There is clearly more to Washington's rush to judgment
than meets the eye.
The attack on the Saudi oil facilities provides a casus belli desired by a major
section of the US ruling oligarchy and its military and intelligence apparatus, which is
determined to prosecute a war for regime change in Iran. Such a war would be the latest
installment in Washington's protracted drive to reverse by military means the decline of US
imperialism's global hegemony, in particular by claiming unfettered US control over the
world's energy reserves and the power to deny them to its rivals.
The thinking within these layers was expressed in an editorial published Monday by the
Wall Street Journal, the mouthpiece of US finance capital. The Journal
warned that Iran was "probing Mr. Trump as much as the Saudis." It continued, "They are
testing his resolve to carry out his 'maximum pressure' campaign, and they sense weakness."
It pointed disapprovingly to Trump's failure to launch airstrikes in June following the
downing of the US drone.
The Journal approvingly cited calls by Republican Senator Lindsey Graham for
bombing Iranian oil refineries in order to "break the regime's back" and suggested that Trump
"apologize to John Bolton, who warned repeatedly that Iran would take advantage of perceived
weakness in the White House." Bolton, a long-time advocate of bombing Iran, resigned as
Trump's national security adviser last week, reportedly over differences on policy toward
Tehran.
The attack on the Saudi oil facilities also provides leverage for Washington in corralling
the Western European powers -- the UK, France and Germany -- behind US war aims. Signatories
to the Iranian nuclear accord that the Trump administration renounced, they have made feeble
gestures toward countering Washington's "maximum pressure" sanctions regime in an attempt to
salvage their own imperialist interests. While thus far failing to endorse US charges of
Iranian responsibility, they could, by means of the attack on Saudi Arabia, be swung behind
the US drive to war.
Israel and its beleaguered Prime Minister Benjamin Netanyahu also have ample motive to
stage a military action aimed at provoking war with Iran. On the eve of Tuesday's Israeli
election, the threat of a major war with Iran serves the political interests of Netanyahu,
whose political fortunes are inextricably tied to the escalation of military conflict in the
Middle East. The Israeli state, moreover, had become increasingly concerned over an apparent
cooling of the appetite of the ruling monarchies in both Saudi Arabia and the United Arab
Emirates for a confrontation with Iran.
Recent drone strikes against Shia militias in Iraq that had allegedly received Iranian
weapons were, according to a report by the web site Middle East Eye, staged by Israeli drones
operating out of bases controlled by the so-called Syrian Democratic Forces (SDF), the main
US proxy force in Syria. A similar covert US-Israeli collaboration could easily have produced
the attacks on the Saudi oil installations.
Whatever the exact circumstances of the attacks on the Saudi oil facilities, they are
being exploited for the purpose of dragging the American people and all of humanity into a
war that can rapidly escalate into a regionwide and even global conflagration.
US strikes against Iran carried out under the pretext of retaliation for the attacks on
Saudi Arabia can trigger Iranian counterstrikes, sending US warships to the bottom of the
Persian Gulf and wreaking havoc on American military bases throughout the region.
The prospect of thousands of US soldiers and sailors dying as a result of Washington's
conspiracies and aggression carries with it the threat of the US government assuming
emergency powers and implementing police-state measures in the US itself in the name of
"national security."
This would, by no means, be an unintended consequence. The buildup to war is driven in
large measure by the escalation of social tensions and class struggle within the United
States itself, which has found fresh expression in the strike by 46,000 autoworkers against
General Motors. There is a powerful incentive for the US ruling class to direct these
tensions outward in the eruption of military conflict, while creating the pretext for mass
repression.
The threat of a US assault on Iran paving the way to a third world war must be answered
through a politically conscious and independent intervention of the working class to put an
end to imperialism and reorganize society on socialist foundations.
Iran Rejects US Accusation It Is Behind
Saudi Attacks https://nyti.ms/30iNte7
NYT - Michael Wolgelenter - September 15
Iran on Sunday forcefully rejected charges by Secretary of State Mike Pompeo that it was
responsible for drone attacks that caused serious damage to two crucial Saudi Arabian oil
installations, with the foreign minister dismissing the remarks as "max deceit."
The attacks on Saturday, which hold the potential to disrupt global oil supplies, were
claimed by Houthi rebels in Yemen. Mr. Pompeo said that Iran had launched "an unprecedented
attack on the world's oil supply," although he did not offer any evidence and stopped short
of saying that Iran had carried out the missile strikes.
The Houthis are part of a complex regional dynamic in the Middle East, receiving support
from Iran while the Saudis, Tehran's chief rival for supremacy in the region and the leader
of a coalition that is fighting the Houthis in Yemen, are aligned with the United States.
Seyed Abbas Mousavi, a spokesman for the Iranian Foreign Ministry, castigated the Saudis
for their role in the war in Yemen, where the Saudis have directed airstrikes that have
caused heavy civilian casualties and exacerbated a humanitarian crisis. He also ridiculed Mr.
Pompeo's comments.
The semiofficial Fars news agency reported on its English-language website that Mr.
Mousavi described Mr. Pompeo's allegations as "blind and fruitless remarks" that were
"meaningless" in a diplomatic context.
Saudi Arabia has yet to publicly accuse Iran of involvement in the attack. On Sunday, its
Foreign Ministry urged international action to preserve the world oil supply in response to
the attack, but it said nothing about assigning blame or striking back.
The developments come at a moment of rising tensions between Iran and the United States,
which have mounted since President Trump pulled out of the 2015 accord in which Iran agreed
with the West to restrict its nuclear program. Since the American withdrawal, Iran has
gradually pulled away from its some obligations under the agreement. ...
... "US & its clients are stuck in Yemen because of illusion that weapon superiority will
lead to military victory," Mr. Zarif wrote on Twitter. "Blaming Iran won't end disaster.
Accepting our April '15 proposal to end war & begin talks may.
The attack on Saturday, which the Houthis said involved 10 drones, represented the rebels'
most serious strike since Saudi Arabia inserted itself into the conflict in Yemen four years
ago. That the rebels could cause such extensive damage to such a crucial part of the global
economy astonished some observers. ...
It's Monday September 16th, 2019 and the weeks starts off like this:
GM's UAW Strike
Yemeni Houti Rebels Drones wipe out 50% of Saudi Arabia's oil production
Trump tweets in response is "locked and loaded" implying a new US war in the ME
One of Trump's White House flunky's declared "it is better if Trump does not study an
issue" before making decisions (oh yea,"Stupid is what Stupid does")
Biden and S. Warren tied in the DEM race for 2020
Piketty's new Economics tome is out
PM Netanyahu is losing his re-election bid in Israel, to be determined by tomorrow's
Election
We live in interesting times...
...the question I pose for the times is 'Are the People are better lead by businessmen,
politicians, academics, or intellectuals?
"... Then the question arose whether drones had been used at all, or whether the attack might in fact have been a missile strike ..."
"... But regardless, the game has escalated up one more rung up the ladder. How many more will it take for the world to put its interests ahead of Israel's? ..."
"... Next escalation rung: a loading dock for supertankers: either the port of Yanbu or Ra's Tanura. Followed by desalination facilities, if Western politicians still pretend to turn a blind eye and prefer to follow the dictates of their Israeli masters. Nuff Sed. ..."
"... In asking the question, qui bono, you do have to include Netanyahu, who is up for reelection tomorrow. There's nothing like striking fear into the heart of the electorate on the eve of an election for firming up support for a proven incumbent. And if the US attacks Iran before tomorrow, so much the better for Netanyahu. ..."
"... That said, I don't think that Netanyahu's buddies in Riyadh would be amused if this were proven. However, poking a friend in the eye never seemed to stop Israel before think USS Liberty. ..."
"... Israel has the means, plus the motive (Bib's reelection), and might have taken the opportunity to attribute the attack to Iran and force Trump's hand. ..."
"... I am assuming, myself, personally, this action was taken to prevent a meeting in NYC between Trump and the President of Iran. That is my guess. ..."
"... There was never going to be a meeting between Rouhani and Trump. I expect to be dead of old age before there would be any substantive meetings between Iran and the United States. ..."
"... Supreme Ayatollah Khamenei has said there will be no meeting until the U.S.ends sanctions. ..."
"... I do not for a moment believe Bolton would have stood for it, and even though he's gone, neither will Pompeo or Pence. Both appear to be fanatically devoted to Israel. There may be meetings between low level functionaries, and Trump seems to want one very much, but Rouhani has said there is no way to trust America, so no point to talking. The situation may change if Netanyahu loses the election, although I have no reason to believe Avigdor will be any better. ..."
"... However, if Trump DOES cut a deal, he will not try and fluff it off as an "Executive Agreement"....if Trump cuts a deal he knows he will have to bring it to Congress. Thee Lobby may kill it there...or not. We'll see. ..."
"... It's not just Yemen. People forget there is an oppressed Shiite minority near the Aramco HQ (dispossessed of the oil fields, located in their ancestral area & treated like sub-sub-citizens); they get periodically beheaded" ..."
"... The Al Saud gang, under the Clown Prince Muhammad Bone Saw, can not count on those Shiite inhabitants of the oil rich region, not necessarily because of the latter's sympathy for Iran but because they were brutalized for almost a century. ..."
"... One to benefit from it that I see so far is Saudi's Aramco IPO which is critical to Saudi . According to WSJ they were considering delaying it because of low oil prices, they needed oil to reach $80 barrel to make it viable. The attack sent prices up but now market is talking about risk if there are 'on going attacks'. What could we deduce if there are no on going attacks and the IPO proceeds? ..."
"... We know Yemen has the Quds-1 and has surprised us before with their technical capability. Combine that with the video of Yahya Sari claiming full responsibility for the attack and I'm not sure there is any reason to speculate about conspiracies involving other actors. ..."
"... In addition, the specificity of the targets hit suggests good intel. I would suspect that Houthi's have linked with disaffected groups in SA (lots!) and improved their Humint. It seems highly unlikely that Iran would do something like this AND leave their fingerprints behind - at least based on recent events. ..."
"... Never underestimate the feckless laziness of the Saudis. In my experience they turn off all ATC and air defense systems that require manning or watch keeping when they find them inconvenient as on the weekend. IMO if Ansarallah did this they will do something similar soon to prove they are responsible. ..."
"... israel gets a lot of press and speculation on this board as well as everywhere else for all their conspiracies and supposed omnipotent power and control but in this writers opinion THEY have been punching way above their actual weight for years and current reality has exposed how feckless and puny they really are in the scheme of things. ..."
"... ''i suspect the whole 'jew' thing regarding israel is what animates people so much. if israel were all zoroastrians i doubt the world would credit them with all the machinations israel is viewed as responsible for.'' A Cult is a Cult regardless of it members makeup. And Israel is looking more like a Jim Jones farm every day. ..."
"... And Iran has demonstrated that they can cause months worth of damage on the KSA, the UAE, and Kuwait. I can't believe the number of Congressman who simultaneously believe that Iran was able to glide over U.S. made air defenses without detection and also believe that we can simply carpet bomb their refineries without any repercussion. How can one believe both things at the same time? That Iran is responsible for a sophisticated ghost attack and that they are incapable of retaliating in a target rich environment. ..."
"... Not only did Graham say this but the loon from Maryland repeated it. These people are insane but MSM hosts encourage it, just saw Cavuto snear at Ron Paul because he actually made sense. We are so messed up. ..."
"... Everyone keeps misunderestimating the Yemenis. The Houthis are fighting as part of a coalition that includes a large part of the Yemeni military and intelligence services. This coalition is carrying out a war under guerrilla conditions, but that war is led by professional military men. ..."
"... It is the benefit of being a perfumed prince or fop or neo-con that history has no meaning because history ended sometime in the 90's. Somehow I hear the voice of a Rove lecturing: ..."
"... "That's not the way the world really works anymore." He continued "We're an empire now, and when we act, we create our own reality. And while you're studying that reality -- judiciously, as you will -- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors and you, all of you, will be left to just study what we do." ..."
"... Yes indeed. Dave deserves hearty congratulations though we might add a caveat. The said "valves" could have been blown out in advance via software or person throwing a switch (humint or cyber component to one attack vector). ..."
"... It cries out "sure, it's bad, but it is reversible." ..."
"... Houthis have every reason to utilize their advanced weapons systems against Saudi targets to bring the war to an end. As for Iran, seems they have been on a semi-successful diplomatic campaign to counter US maximum pressure with their own maximum pressure on Europeans, Russia and China to deliver on the economic benefits that are as important in JCPOA as the curtailing of Iran's nuclear program. ..."
"... Trump talking about meeting Rouhani in New York, Zarif in China getting at least $50-100 billion in pledged economic support, Russia suggesting $10 billion investment in the Iranian energy sector: Why would Iran at this moment make a direct move to turn the world fully against them? Perhaps a rogue faction of IRGC out to stop any diplomatic action, but even that would have to come with OK from Khamenei--or there would be strong action against the rogues. ..."
"... Pressure on Trump to maintain the hardline against Iran following Bolton ouster? Pompeo has been leading the diplomatic back channels and repeating Trump's goal of forcing Iran to the table. Even the Saudis are for the moment hesitant to blame Iran, actually calling for a UN investigation into the source of the attacks. ..."
"... "The Iran did it" narrative as an attempt to keep on undermining the pro-Syrian government coalition. ..."
What made this attack different from other recorded Houthi drone attacks was not only the
unprecedented amount of material damage caused but also lingering doubt about the nature and
the attribution of the attack. First,
a video allegedly showing flying objects entering Kuwaiti airspace led to speculation that
like a
previous "Houthi" drone attack this strike might actually have originated in Iraq or even
Iran. While the video remains unverified, the fact that the Kuwaiti government
launched a probe into the issue lends some credence to the idea that something might have
happened over Kuwait that day. Speculation about the origins of the attack was further fueled
by a tweet
by Mike Pompeo in which he claimed that there was no evidence the attacks came from
Yemen.
Then the question arose whether drones had been used at all, or whether the attack might in
fact have been a missile strike. Previous Houthi drone strikes against oil facilities tended to
result in quite limited damage which could be an indication that a different weapons system was
used this time. Indeed, Aramco
came to the conclusion that its facilities were attacked by missiles. Even more curious,
several pictures began to emerge on social media purportedly showing the wreckage of a missile
in the Saudi desert. While the images appear real, neither the date the photos were taken nor
their location can be verified.
Social media users quickly claimed the images showed a crashed
Iranian-made Soumar cruise missile. The Soumar and its updated version, the Hoveyzeh, are
Iran's attempts at reverse-engineering the Soviet-designed KH-55 cruise missile, several of
which the country
illegally imported from Ukraine in the early 2000s . Others claimed it was the Quds 1, a
recently unveiled Houthi cruise missile often claimed to be a rebranded Soumar."
armscontrolwonl
---------------
TTG raised the issue of whether or not this wave of strikes was done by UAVs or cruise
missiles. IMO this cruise missile could be built in Yemen with Iranian assistance. I am very
interested in the question of what the actual vector of the attacks was in this case. pl
The accuracy of the strikes in the spherical pressurized gas storage containers all being in
the same place relative to each target is the place to start for those who, unlike me, are
capable of analyzing these things.
But regardless, the game has escalated up one more rung up the ladder. How many more will
it take for the world to put its interests ahead of Israel's?
Next escalation rung: a loading dock for supertankers: either the port of Yanbu or Ra's
Tanura. Followed by desalination facilities, if Western politicians still pretend to turn a
blind eye and prefer to follow the dictates of their Israeli masters. Nuff Sed.
In asking the question, qui bono, you do have to include Netanyahu, who is up for reelection
tomorrow. There's nothing like striking fear into the heart of the electorate on the eve of
an election for firming up support for a proven incumbent. And if the US attacks Iran before
tomorrow, so much the better for Netanyahu.
That said, I don't think that Netanyahu's buddies in Riyadh would be amused if this were
proven. However, poking a friend in the eye never seemed to stop Israel before think USS
Liberty.
"The Israeli military is armed with the latest fast jets and precision weaponry, yet it has
turned to its fleet of drones to hit targets in Iraq. Deniability has played a big factor
– the ability of drones to elude radar and therefore keep targets guessing about who
actually bombed them is playing well for Israeli leaders who are trying to prevent an
increasingly lethal shadow war with Iran from developing into an open conflict."
The Samad 3 is laden with explosives that allow it to detonate a shaped charge which
explodes downwards towards its target. Footage provided to MintPress by Yemen's Operations
Command Center shows the Samad landing on an asphalt runway, confirming that the drone is
now capable of conducting operations and then returning to base.
There is a huge sea water desalination plant not far away that provides all the treated water
via pipeline for injection into the oil reservoirs to improve recovery of oil. Target that
and not only have you already impacted the processing of the oil produced but would then
impact the total volume of oil available for processing.
I can see no happy ending short of
negotiation between interested parties. MBZ looks to have already reached that conclusion in
respect of the UAE. what will be the self preservation response for the House of Saud
Could the Committee speculate on possible 'steps of retaliation' operating, for theoretical
purposes, at the moment, on the assumption that regardless of where the 'bullets' were fired
from, or from what 'gun' they were fired, Iran paid for deed. What steps are open for action?
I am assuming, myself, personally, this action was taken to prevent a meeting in NYC between
Trump and the President of Iran. That is my guess.
There was never going to be a meeting between Rouhani and Trump. I expect to be dead of old age before there would be any substantive meetings between Iran
and the United States.
Supreme Ayatollah Khamenei has said there will be no meeting until the U.S.ends sanctions.
I
do not for a moment believe Bolton would have stood for it, and even though he's gone,
neither will Pompeo or Pence. Both appear to be fanatically devoted to Israel. There may be
meetings between low level functionaries, and Trump seems to want one very much, but Rouhani
has said there is no way to trust America, so no point to talking. The situation may change
if Netanyahu loses the election, although I have no reason to believe Avigdor will be any
better.
With all due respect, I think one of us fails to grasp the true nature of Trump. If he puts
his mind to it, and thinks it will benefit him, nobody, not Bolton, not Pompeo, not the whole
Neocon cabal, Israeli govt, the present one or the next one, will stop him if he is President
and alive. He will do what is best for Trump.
And trust has nothing to do with this. Why in the hell should I trust Iran? Hell, why
should I trust the UK? I trust that people and nations have interests. That's all I trust.
But that does mean I could not reach a deal with them. Now, as to whether that deals
holds...that is another question. However, if Trump DOES cut a deal, he will not try and
fluff it off as an "Executive Agreement"....if Trump cuts a deal he knows he will have to
bring it to Congress. Thee Lobby may kill it there...or not. We'll see.
Babak, I value your input here. However, I hope you are wrong and that a meeting or meetings
(substantive or not) will start as soon as the dealbreaker is out of office, and the
sanctions are called off. But I would never wish you an early death. May you live a hundred years.
Thank you very kindly.
I would like to ask the following questions:
Will the United States restore sovereign immunity to Iran?
Will the United States Congress rescind all the laws against Iran that form the basis of
economic war against Iran?
Will the United States rescind the sanctions against Ayatollah Khamenei, Dr. Zarif,
General Soleimani, etc., etc. etc.?
Will the Protestant Christians in the United States ever tire of their unrequited love for
all things Old Testament?
In my opinion, the answer to all of these are "no". Unfortunately, even if a man with the caliber of an FDR or a Nixon is elected to the US
Presidency, he will not be able to accomplish much because of the difficulty, nay the
impossibility, of untangling the rules and regulations that US has woven against Iran.
In my opinion, all of that was predicated on the strategic defeat of Iran and her
surrender.
If I WERE ANSWERING. I got some demands of my own..but we can put them aside for the moment.
In general, I would be inclined to respond: Yes, to the "sovereign immunity" question.
Certainly. Regarding "economic warfare", you would have to give me your legal definition of
such a broad phrase, but in principle, yes. Whole heartedly yes. Sanctions against Iran, and
it individuals officers? Yes, absolutely. Sick of sanctions, in general. It is not in my
power to answer the "unrequited love" issue, but I do solemnly state that I would agree to
stop laughing--in public, anyway, at the question. Wanna meet?
Nassim Nicolaas Taleb, author of "Black Swan":
"SAUDI FIELDS It's not just Yemen. People forget there is an oppressed Shiite minority near the Aramco HQ
(dispossessed of the oil fields, located in their ancestral area & treated like
sub-sub-citizens); they get periodically beheaded"
The Al Saud gang, under the Clown Prince Muhammad Bone Saw, can not count on those Shiite
inhabitants of the oil rich region, not necessarily because of the latter's sympathy for Iran
but because they were brutalized for almost a century.
Why would Iran have done it? Just to show they can or to provoke a attack on Iran?
One to benefit from it that I see so far is Saudi's Aramco IPO which is critical to Saudi
. According to WSJ they were considering delaying it because of low oil prices, they needed
oil to reach $80 barrel to make it viable. The attack sent prices up but now market is
talking about risk if there are 'on going attacks'. What could we deduce if there are no on
going attacks and the IPO proceeds?
Only other beneficiary would be Israel if the attack actually does and likely has killed
any Trump-Iran meeting.
Yemenis claimed credit for it, Iran and Iraq said they didn't do it. First word out of US
mouth is Iran did it. The mouth I am least likely to believe is the US. I remember Iraq has
WMDs propaganda....and those it came from.
Oh well, if Iran says they did not do it.......the US govt lies. The Iranian govt lies, the
Saudis surely lie. This is not about innocents. That search is for children and mighty young
ones at that.
The Quds-1 cruise missile is a UAV (unmanned aerial vehicle). The remotely piloted aerial
vehicles, which are more commonly referred to as drones are also UAVs. The difference is in
the degree of autonomy in flight control. On board autonomous flight control negates the need
for LOS radio or satellite communications with the cruise missile. Cruise missiles, with
their autonomous control, were always characterized by their high degree of accuracy.
I've
started looking a little closer at the Arduino/RasberryPi and model aircraft hobbyist groups.
With the availability of affordable microcontrollers and sensors, along with the massive
library of open source software, I am convinced a hobbyist could put together a guidance
system in his garage workshop capable of doing what the Quds-1 just did in SA. I also agree
with Colonel Lang that an airframe like the Quds-1 could easily be built in war-torn Yemen. A
cave would make an outstanding workshop.
Even if Iran exported dual use components or even blue prints; it should be counted as part
of the unfortunate world weapons market & wouldn't be illegal.
Your point TTG was nicely illustrated in b's video of the Russian guy building in his
workshopa turbofan engine that flew . Providing there is a set of plans it can be constructed
and it only has to have a one time reliability.
Evidence for what delivered the strike will be found within the complex and there will be a
lot of skills on the ground looking for those answers. The projectiles that struck the
spheres looked to have had penetrating qualities rather than high explosive, putting a hole
in a pressure vessel is sufficient to destroy its usefulness. I would be interested to know
if the projectiles that struck the train were explosive to maximise damage there. Do we need
to be considering what could deliver multiple targeted projectiles or were there simply
multiple independent units or some combination as there were more strikes logged over two
target complexes than the ten delivery platforms mentioned in the Al Ansar press release. Was
there a flight controller and if so where were they located also comes to mind.
There is also the TJ200 built bij Polaris from Brazil with the following description::
"Turbine TJ200:
TJ200 was specially designed to be used in either small cruise missiles or small high
performance UAVs. The most important advantage of TJ200 engine is small diameter and a
relatively low SFC (Specific Fuel Consumption) when compared to other engines of the same
thrust, what makes TJ200 perfect to be used in long range small missiles."
http://www.polaristec.com.br/products.html
That's a pretty specific description. So there are a number of COTS engines out there.
I'd have more confidence in the reporting if I could match it up better with what I can see
in Google Maps/Earth.
The only two satellite pictures I've seen of "burning oil plants" disticntly show a large
plume of black smoke centered a little ways away from the actual refinery area, in some kind
of rectangular area outside the actual "plant". Are those wellheads burning? or adjacent
underground storage? or what?
And the pictured of a burning plant labeled "Haradh Gas Plant" is actually (according to
Google Maps & my eyeballs) the Hawiyah Gas Plant, about 60 miles NNE of Haradh.
In Google Maps/Earth, the Abqaiq facility is on the East side of the city/town of Buquaiq,
and the details match the recent pix. The plume lines up with an empty square patch of desert
at the end of a pipeline running SSE out of the plant.
I've looked all around Khurais, and haven't found anything which could possibly be the
"Oil/Gas Infrastructure at Khurais", as the pictures of the damaged facility there are
labeled.
Elkern, I was referring to the pictures of the cruise missile parts in the sand. Seems to me
they are old from previous attacks.
As far as I can tell the pics of damage at Buqaiq and Khurais are valid. With the
exception of the eleven spherical tanks, which I believe were NOT hit. But I've been wrong
before and am no expert on imagery analysis.
We know Yemen has the Quds-1 and has surprised us before with their technical capability.
Combine that with the video of Yahya Sari claiming full responsibility for the attack and I'm
not sure there is any reason to speculate about conspiracies involving other actors.
The Houthis are not an Iranian "proxy" and I highly doubt they would accept responsibility
for something they didn't do.
Moon of Alabama links some photos and has discussion that suggests very high precision
5-10 m. That is not easily achievable with commercial GPS absent a lot of additional
correction hardware. On the other hand, drones can easily do so. Further, it would be
negligent for SA not to have GPS jamming around such facilities.
In addition, the specificity of the targets hit suggests good intel. I would suspect that
Houthi's have linked with disaffected groups in SA (lots!) and improved their Humint. It
seems highly unlikely that Iran would do something like this AND leave their fingerprints
behind - at least based on recent events.
Never underestimate the feckless laziness of the Saudis. In my experience they turn off
all ATC and air defense systems that require manning or watch keeping when they find them
inconvenient as on the weekend. IMO if Ansarallah did this they will do something similar
soon to prove they are responsible.
imo, the saudi's and washington are going to have to take one for the team. the team being
the global oil based world economy and all the notional value FOR THE present ONLY oil
derivatives and interest rate derivatives burdening the western banking system.... think the
insolvent deutsche bank et al.
a war on iran will do every bit as much damage or MORE to the west as it does to iran
which both russia and china can not.. will not allow to die.
israel gets a lot of press and speculation on this board as well as everywhere else for
all their conspiracies and supposed omnipotent power and control but in this writers opinion
THEY have been punching way above their actual weight for years and current reality has
exposed how feckless and puny they really are in the scheme of things.
i suspect the whole 'jew' thing regarding israel is what animates people so much. if
israel were all zoroastrians i doubt the world would credit them with all the machinations
israel is viewed as responsible for.
''i suspect the whole 'jew' thing regarding israel is what animates people so much. if israel
were all zoroastrians i doubt the world would credit them with all the machinations israel is
viewed as responsible for.'' A Cult is a Cult regardless of it members makeup.
And Israel is looking more like a Jim Jones farm every day.
Only one tank appears to have minor sooting or scorching. As though they were emptied after
an initial strike then targeted in a second strike, but no reports of a second strike.
In the sat pic showing targets in red boxes, top square, the target appears to be smaller
spheres which do look darkened.
Several correspondents here, including Adrestia and b, seem to lack faith in an autonomous
navigation and terminal guidance system for these cruise missiles. They do not need a radio
or cell phone communication link. This could have been even without a GPS signal. Given that
the strikes appear to come from the west, the smartest route would be to fly north to the
pipelines and then east to the targets. Once the missiles are close to the target either a
visual terminal guidance system could take over or the targets are marked and the missiles'
terminal guidance systems just home in on the marked targets. The marks could be laser
illumination, small IR strobes or offset targeting devices. These offset targeting devices
are emplaced with the exact azimuth and distance to the desired target programmed into the
missiles' terminal guidance system. As I said before, we did this in the early 80s. In the
90s, I used the IR strobes. These were tiny lights snapped to the top of a 9V battery. You
could carry a dozen in your pocket. I personally like the idea of emplacing small IR strobes
on target or a set distance and azimuth from the target. The missiles could home on a spot
say due east and 100 meters from the strobe. I'm sure there are other methods I haven't
thought of yet. My educated guess is that this strike was well thought out with both
intelligence and operational support on and near the target site. Anyone who thinks the
Houthi and their Yemeni allies are incapable of planning and executing this is magnificently
ignorant.
GPS is not accurate enough for the last 10-30 feet. Another possiblity that doesn't need
any human terminal guidance could be a creative use of sensors.
Using CARVER select suitable targets. Pick something that is hot, big or fumes gas.
Then use a combination of gas-sensing, parking-sensors, heat-sensing sensors for the last
few feet.
I'm reading the manual for an FY41AP autopilot right now. About $250, made in china.
As for optical guidance, the attacks happened about 0400 - night or dawn?
This autopilot has a video link as well as autonomous and ground based control modes I think.
If the Yemenis had a guy with a transceiver near abqaiq, then maybe they could send these
things over from yemen using gps and a guy with transceiver provided terminal guidance. If
that were to happen the drones would need to be launched at set intervals.
Your last sentence is true enough as far as it goes, but also, if Israel were all
Zoroastrians (or any other group) the world would have dealt with their paranoid and
psychopathic behavior decades ago. The only reason they get away with everything is because
they are Jewish.
Bacevich in NYT op ed. Behind a paywall, here is a copy. Please do not post if it is too long or off topic
Iran Might Be America's Enemy, but Saudi Arabia Is No Friend
After last week's refinery attack, Trump should be careful about throwing America's weight
behind an unreliable "ally."
By Andrew J. Bacevich
Mr. Bacevich is president of the Quincy Institute for Responsible Statecraft.
Sept. 16, 2019
Image The American frigate Stark, which was hit by two missiles fired from an Iraqi fighter
plane during the Iran-Iraq war in 1987. The American frigate Stark, which was hit by two missiles fired from an Iraqi fighter
plane during the Iran-Iraq war in 1987.
In 1987, an Iraqi warplane attacked an American Navy frigate, the Stark, on patrol in the
Persian Gulf. Accepting Saddam Hussein's explanation that the attack, which killed 37
sailors, had been an accident, American officials promptly used the incident, which came at
the height of the Iran-Iraq war, to ratchet up pressure on Tehran. The incident provided the
impetus for what became a brief, and all but forgotten, maritime war between the United
States and Iran.
Last week, someone -- precisely who remains to be determined -- attacked two oil
refineries in Saudi Arabia. American authorities have been quick to blame Iran, and the
possibility of a violent confrontation between the two countries is once again growing.
Before making a decision on whether to pull the trigger, President Trump would do well to
reflect on that 1987 episode and its legacy.
Back then, the United States had become involved in the very bloody and seemingly
interminable Iran-Iraq war, which Hussein had instigated in 1980 by invading Iran. As that
war turned into a brutal stalemate, President Ronald Reagan and his advisers persuaded
themselves that it was in America's interests to come to Iraq's aid. Iran was the "enemy" so
Iraq became America's "friend."
After the Stark episode, American and Iranian naval forces in the Gulf began jousting, an
uneven contest that culminated in April 1988 with the virtual destruction of the Iranian
Navy.
Yet the United States gained little from this tidy victory. The principal beneficiary was
Hussein, who wasted no time in repaying Washington by invading and annexing Kuwait soon after
his war with Iran ground to a halt. Thus did America's "friend" become America's "enemy."
The encounter with Iran became a precedent-setting event and a font of illusions. Since
then, a series of administrations have indulged the fantasy that the direct or indirect
application of military power can somehow restore stability to the Gulf.
In fact, just the reverse has occurred. Instability has become chronic, with the
relationship between military policy and actual American interests in the region becoming
ever more difficult to discern.
In 2019, this now well-established penchant for armed intervention finds the United States
once more involved in a proxy conflict, this time a civil war that has ravaged Yemen since
2015. Saudi Arabia supports one side in this bloody and interminable conflict, and Iran the
other.
Under President Barack Obama and now President Trump, the United States has thrown in its
lot with Saudi Arabia, providing support comparable to what the Reagan administration gave
Saddam Hussein back in the 1980s. But American-assisted Saudi forces have exhibited no more
competence today than did American-assisted Iraqi forces back then. So the war in Yemen drags
on.
ImageSmoke billowing from one of the oil facilities hit by drone attacks on two Saudi Aramco
oil facilities in Abqaiq, in Saudi Arabia's eastern province, on Saturday.
Smoke billowing from one of the oil facilities hit by drone attacks on two Saudi Aramco oil
facilities in Abqaiq, in Saudi Arabia's eastern province, on Saturday.CreditAgence
France-Presse -- Getty Images
Concrete American interests in this conflict, which has already claimed an estimated
70,000 lives while confronting as many as 18 million with the prospect of starvation, are
negligible. Once more, as in the 1980s, the demonization of Iran has contributed to a policy
that is ill advised and arguably immoral.
I am not suggesting that Washington is supporting the wrong side in Yemen. I am
suggesting, however, that neither side deserves support. Iran may well qualify as America's
"enemy." But Saudi Arabia is not a "friend," regardless of how many billions Riyadh spends
purchasing American-manufactured weaponry and how much effort Crown Prince Mohammed bin
Salman invests in courting President Trump and members of his family.
The conviction, apparently widespread in American policy circles, that in the Persian Gulf
(and elsewhere) the United States is compelled to take sides, has been a source of recurring
mischief. No doubt the escalating rivalry between Saudi Arabia and Iran poses a danger of
further destabilizing the Gulf. But the United States is under no obligation to underwrite
the folly of one side or the other.
Supporting Iraq in its foolhardy war with Iran in the 1980s proved to be strategically
shortsighted in the extreme. It yielded vastly more problems than it solved. It set in train
a series of costly wars that have produced negligible benefits. Supporting Saudi Arabia today
in its misbegotten war in Yemen is no less shortsighted.
Power confers choice, and the United States should exercise it. We can begin to do so by
recognizing that Saudi Arabia's folly need not be our problem.
Andrew J. Bacevich is president of the Quincy Institute for Responsible Statecraft and the
author of the forthcoming "The Age of Illusions: How America Squandered Its Cold War
Victory."
"a war on iran will do every bit as much damage or MORE to the west as it does to iran"
And Iran has demonstrated that they can cause months worth of damage on the KSA, the UAE,
and Kuwait. I can't believe the number of Congressman who simultaneously believe that Iran
was able to glide over U.S. made air defenses without detection and also believe that we can
simply carpet bomb their refineries without any repercussion. How can one believe both things
at the same time? That Iran is responsible for a sophisticated ghost attack and that they are
incapable of retaliating in a target rich environment.
Not only did Graham say this but the loon from Maryland repeated it. These people are
insane but MSM hosts encourage it, just saw Cavuto snear at Ron Paul because he actually made
sense. We are so messed up.
use the pic released by USG of the damage to get an idea of the orientation of the incoming
projectiles, I used that rectangularish pond behind as an aid,
Everyone keeps misunderestimating the Yemenis. The Houthis are fighting as part of a coalition that includes a large part of the Yemeni
military and intelligence services. This coalition is carrying out a war under guerrilla
conditions, but that war is led by professional military men. Yemen had a serious air force
consisting mostly of missile systems before the war. Much of it was destroyed by the bombing
campaign carried out for Saudi Arabia, but the military organization survived. They have now
reconstituted the Yemeni air forces under fire and in the midst of famine, blockade and
invasion.
Stock up on popcorn, the show has only just begun.
Using my CAD and graphic tools and Google Earth along with the photo showing the four
perforated pressure tanks, I have estimated the four vectors as:
E1 280W. E2 279W, E3 281W and E4 273W. I have numbered the tanks from the most eastwards (the
furthermost away in the photo). Angles from true north (0/360 deg). This averages as 278N
with a STDEV of 3 degrees. Its almost due west. Must be very difficult for autopilots (or
real pilots) could perform more than one group-turning maneuver and still maintain final-run
accuracy to what was achieved.
p.s. I'm not specialist in this field apart from terrestrial navigation and drafting
experience.
RobW
The Czech company which produces the TJ100 does have strong links with Iran.
"2005 TPP Iranshahr Iran, the largest project in the company's history, a turnkey project
- four power plant units." But then again. Creating a crash site in the desert with some COTS components in it is
also easy to do. I would be surprised if Iran is launching missiles now. That would be pretty
stupid to do.
I know. I was attempting a comparison between the way most Americans perceive the desert
peoples and the way most Americans fail to extrapolate from their beliefs of one groups
capabilities and motivations and another group closer to home. The perfumed fops in Ryadh and
the Perfumed Princes in DC are very similar under the perfume.
I remember in the mid sixties how the "benighted" Vietnamese and VC were on their last legs,
unable to do anything militarily significant, that the war would be over in 67. This was that
generations perfumed princes attitude towards a people who had been fighting against invaders
since the 1850s. I remember 68 and the most unexpectedly successful operational and strategic
level victory by the NVA and the VC that was TET.
From an infotainment/Cronkite perspective
the important thing was that the Saigon embassy was broached. From and operational
perspective a "defeated" enemy launched several hundred simultaneous attacks all over South
Vietnam while holding down as a diversion the Dien Bien Phu look alike that was Khe San. 51
years 2 and 1/2 generations and today we make the exact same mistakes in evaluating the
current situation.
It is the benefit of being a perfumed prince or fop or neo-con that history has no meaning
because history ended sometime in the 90's. Somehow I hear the voice of a Rove lecturing:
"That's not the way the world really works anymore." He continued "We're an empire now, and
when we act, we create our own reality. And while you're studying that reality --
judiciously, as you will -- we'll act again, creating other new realities, which you can
study too, and that's how things will sort out. We're history's actors and you, all of you,
will be left to just study what we do."
I have seen articles over the last month or so (sorry, no links) saying that because they are
not able to send large amounts of material aid through the Saudi and U.S. Navy blockade of
Yemen, the Iranians sent blueprints and a few engineers and the Ansar Allah have been
building them in Yemen.
What looks like missile hits at identical positions on those spherical tanks are not.
They are the locations of pressure relief valvaes that blew when the towers hit, venting gas
up out and away.
I am in full agreement with your assessment Dave. I don't see any penetrations on those 11
spherical tanks. Look at the complete devastation on the three smaller spherical pressure
tanks.
Unless we get higher resolution pics that definitely show those tanks were pierced there
is no way I am going to believe those tiny scorch marks are UAV or missile hits. Much too
symmetrical! No amount of geometrical explaining of drone tracks will account for that
symmetry.
Yes indeed. Dave deserves hearty congratulations though we might add a caveat. The said
"valves" could have been blown out in advance via software or person throwing a switch
(humint or cyber component to one attack vector). Yes, tremors or shakes triggering sensor
which blows valve is possible, I suppose. But the thing that had me up at night was the
nagging sense that this was a prearranged message of sorts.
It cries out "sure, it's bad, but
it is reversible." So I had been wondering about invitation for pow-wows given UN upcoming
meeting in NY. I'm tending to lean toward an advance blowout rather than blowout in reaction
to stress. Why damage such delicate, custom equipment as those beautiful tanks? As you say,
it has to be something intrinsic/internal to the construction of the tanks. So - before or
after remains to be discussed. Assuming the pics are legitimate. But that's why I thought
especially there was a subtle message sent. If they are legit - see above. If not legit -
then it is howling reversibility or caution at the very least.
The processor trains are a linear series of stabilizer columns that help separate the sour
hydrogen sulfide gas from the crude oil. They are at the heart of the process and probably
the highest value target. They are to the left of the 11 pressure tanks in the pictures
shown, or perhaps just NNW of those tanks.
I buy the idea of HUMINT assets having collected target informatoin but the idea of
mini-strobes, etc. seems to me to be too difficult to do given the separation of the missile
force and the HUMINT assets. Very hard to coordinate.
Houthis have every reason to utilize their advanced weapons systems against Saudi targets to
bring the war to an end. As for Iran, seems they have been on a semi-successful diplomatic
campaign to counter US maximum pressure with their own maximum pressure on Europeans, Russia
and China to deliver on the economic benefits that are as important in JCPOA as the
curtailing of Iran's nuclear program.
Trump talking about meeting Rouhani in New York, Zarif
in China getting at least $50-100 billion in pledged economic support, Russia suggesting $10
billion investment in the Iranian energy sector: Why would Iran at this moment make a direct
move to turn the world fully against them? Perhaps a rogue faction of IRGC out to stop any
diplomatic action, but even that would have to come with OK from Khamenei--or there would be
strong action against the rogues.
Pressure on Trump to maintain the hardline against Iran following Bolton ouster? Pompeo
has been leading the diplomatic back channels and repeating Trump's goal of forcing Iran to
the table. Even the Saudis are for the moment hesitant to blame Iran, actually calling for a
UN investigation into the source of the attacks.
2) a general redirection of attention is achieved from 2 points:
- from Syria
In the issue of National Geographic Bulgaria of 04.2019, April 2019 number 4 (162),on p.29
there is a map of the migratory route of a bird - Ethiopia, Yemen, Saudi Arabia, Iraq,
Turkey, Bulgaria. BUT the name of Syria is missing, just an empty space within its current
borders.
Maybe, I sincerely hope not, it was just a part of a campaign of mass indoctrination - the
"former Syria" to be divided between neighbors with a US military base here and there or to
turn onto a No Man's land of lawlessness right there, flanking the EU, Russia's Muslim areas,
China's silk road etc
"The Iran did it" narrative as an attempt to keep on undermining the pro-Syrian government
coalition.
- from the temptation to mix with West's "rivals" internal issues
A strange coincidence that there was such a recent burst of "opposition" activity first in
Russia, then in China. The velvet revolution recipe of the Arabian spring, Ukraine, etc (if
it was such) didn't quite work however.
And the "empires strike back" - subtly and not so subtly. China offers for the London
stock exchange (let's not forget that the Chinese take-over of the London metal exchange went
without a fuss). Saudi Arabia next.
Maybe the message is "Just stay out of your ex-colonies"
Richard Gill, managing director of the UK company Drone Defence:
"But [drone defence is] military-grade technology and it's massively expensive. To install a
defensive system is extremely complex and the threat is evolving at such a rate that it's
very hard to keep up to date, because the adversaries change the type of technology they use
in a way that almost renders the defence moot."
Small, precise bombs do small precise damage which is mostly easy to fix.... sort of like
US in Vietnam doing large imprecise bombing doing in consequential damage outside of the
selling by the US airplane builders.
If the attack was "low flying cruise missiles" from a land site somewhere near Kuwait.....
someone near Kuwait is technically very sophisticated.
"... I guess America does not need Saudi oil any more, cause it looks like Israel is about to be made king of the Oil Kingdoms in the middle east.? ..."
I think you are correct there maybe many Americans in the USA.. It may take the few Americans who have been
allowed to see the big picture at the USA...
"... USA has been doing nearly everything in the Yemen war except pilot the planes. That Yemen can sneak some drones into sensitive Saudi areas would seem to raise some questions... ..."
"... Strategically what this means is that after wantonly bombing and attacking woefully poor Yemen for years, rich Saudi Arabia is not capable of protecting almost the entire source of its wealth. ..."
It's Monday September 16th, 2019 and the weeks starts off like this:
GM's UAW Strike
Yemeni Houti Rebels Drones wipe out 50% of Saudi Arabia's oil production
Trump tweets in response is "locked and loaded" implying a new US war in the ME
One of Trump's White House flunky's declared "it is better if Trump does not study an
issue" before making decisions (oh yea,"Stupid is what Stupid does")
Biden and S. Warren tied in the DEM race for 2020
Piketty's new Economics tome is out
PM Netanyahu is losing his re-election bid in Israel, to be determined by tomorrow's
Election
We live in interesting times...
...the question I pose for the times is 'Are the People are better lead by businessmen,
politicians, academics, or intellectuals?
Personally, I choose to be lead by people that do the right thing long term for the People,
not the most politically expedient or the one that makes the most money in the short run or
the smartest, etc.
USA has been doing nearly everything in the Yemen war except pilot the planes. That Yemen can
sneak some drones into sensitive Saudi areas would seem to raise some questions about USA
capability. Have not yet seen any press questions in that direction.
USA has been doing nearly everything in the Yemen war except pilot the planes. That Yemen can
sneak some drones into sensitive Saudi areas would seem to raise some questions...
Strategically what this means is that after wantonly bombing and attacking woefully poor
Yemen for years, rich Saudi Arabia is not capable of protecting almost the entire source of
its wealth.
The Americans have gotten themselves in a real bind with their maximum pressure campaign on Iran. This latest attack on Saudi
Arabia's oil production looks like an escalation of the previous attacks on shipping and the spy drone. It is not evident how
the Americans can respond to this latest attack.
As I see it their options are:
1. To let KSA respond to the Houthi attack and continue with their campaign to shut down Iranian oil production, without any
direct U.S. response to the attack. However this will achieve nothing, as next month Iran will up pressure again with another
attack on Middle-East oil assets, and we'll be back to the same place.
2. To bomb Iran's oil industry, as Pompeo and Graham suggest. However this risks blowing up the whole Middle East, as well
as the World's oil market and their own (Western) economies.
3. Forget about Iran and move the fight to maintain U.S. global hegemony to another front: back to Venezuela? Serbia? Hong
Kong? Taiwan? However the end result of such a move would more than likely be another humuliating defeat for the U.S.
4. Do as Stephen Wertheim / New York Times suggest and sue for peace. This will end the dream of U.S. World dominance, Globalization
and the current western based financial system. The U.S. will become no more than a heavily indebted regional power in a 'Multi-polar
World Order' led by China and Russia.
As I see it, the U.S. is out of options to continue their war for global dominance. #4 is the only viable option. But, as one
author argued in a recent paper (I don't have the reference), wars continue long after the victor is clear, because the loser
can't admit defeat (at heavy additional costs to the loser). I think that this is the position that the U.S. finds itself in now.
What the attack on Saudi oil infrastructure shows us, is that now Iran has united her proxys into one united front.
While they were cautious to not leave evidence of their involvment with the Houtis before, they now are putting their support
more and more into the open.
The attack seemed to have involved not only Houti drones (already build with help from Iran), but also Iranian backed forces
in Iraq, AND pro Iranian forces in Saudi Arabia itself. And maybe even other actors.
This is a major new development. Not only for the war on Yemen, but also in the context of Iran providing a credile detterence
against US+Saudi aggression.
They excalated with increasing levels, and one wonders, what could top this last attack off.
And i am pretty sure, we will find out sooner rather than later.
@ 27
WaPo: Abqaiq . .damaged on the west-northwest sides
That's it! It was Hezbollah for sure. (not)
Actually there were two targets, the Buqaiq (Abqaiq) oil processing plant and the Khurais oil field, both in the Eastern Province.
These attacks are not the first -- from longwarjournal:
Last month, the Houthis claimed another drone operation against Saudi's Shaybah oil field near the United Arab Emirates. At
more than 1,000 miles away from it's Yemen territory, that strike marked one of the Houthis farthest claimed attacks.
The Houthis also claimed a drone strike on the Abu Dhabi airport last year, but that has been denied by Emirati officials.
Additionally, a drone strike on Saudi's East-West oil pipeline near Riyadh earlier this year, which the Houthis claimed responsibility,
was allegedly conducted by Iranian-backed Iraqi militants. If accurate, that means the Houthi claim of responsibility acted
as a type of diplomatic cover for the Iraqi militants.
Since beginning its drone program last year, the Houthis have launched at least 103 drone strikes in Yemen and Saudi Arabia
according to data compiled by FDD's Long War Journal. . .
here . . .and more
here .
Really appreciated the write up on the Houthis attack.
Sounds like the attack left substantial damage. Another bigger issue underlying all of this, aside from Saudi inability to get
what it wants now from it's IPO, is the fact that the US Patriots did not detect this attack.
The Saudis spent billions last year on this defense system. Sounds like the clown Prince better give Russians a call about their
S-400.
But the US wouldn't appreciate that much, would they?
Update 2 : In a sharp, if perhaps not unexpected, escalation, US Secretary of State - now
without John Bolton by his side - tweeted at 4pm on Saturday, that contrary to earlier reports,
"there is no evidence the attacks came from Yemen" and instead accused Iran of launching
today's "unprecedented attack on the world's energy supply" which has now indefinitely taken
offline as much as 5mmb/d in Saudi crude production.
In a follow up tweet, Pompeo said that he calls "on all nations to publicly and
unequivocally condemn Iran's attacks" which is odd as not even Saudi Arabia accused Iran of
today's aggression (which many speculated could have been a Saudi false flag in hopes of
sending the price of oil soaring ahead of the Aramco IPO). Pompeo concluded that "the United
States will work with our partners and allies to ensure that energy markets remain well
supplied and Iran is held accountable for its aggression."
Will this pivot away from Houthis to Iran as the "origin" of the attack be sufficient
grounds to re-inflame tensions between the US and Iran, especially following last week's news
that one of the reasons Bolton was fired was due to his hard-line stance on Iran even as Trump
was willing to sit down with the Tehran regime for negotiations. Since the deep state stands to
make much more money from war rather than peace, our guess is that the answer is a resounding
"yes." Update: The WSJ is out with an update hinting at just how much the price of oil is set
to soar when trading reopens
late on Sunday after the Saudi Houthi false-flag drone attack on the largest
Saudi oil processing plant:
Saudi Arabia is shutting down about half of its oil output after apparently coordinated
drone strikes hit Saudi production facilities, people familiar with the matter said, in what
Yemen's Houthi rebels described as one of their largest-ever attacks inside the kingdom.
The production shutdown amounts to a loss of about five million barrels a day , the people
said, roughly 5% of the world's daily production of crude oil . The kingdom produces 9.8
million barrels a day.
And while Aramco is assuring it can restore output quickly, in case it can't the world is
looking at a production shortfall of as much as 150MM barrels monthly, which - all else equal -
could send oil soaring into the triple digits. Just what the Aramco IPO ordered.
What appears to be the most devastating Yemen Houthi rebel attack on Saudi Arabia to date,
took place overnight on the world's largest oil processing facility as stunning videos emerged
of massive explosions rocking the major Aramco Buqyaq facility .
Fires burned into the morning daylight hours, with explosions also reported at the Khurais
oil field, in what the Houthis said was a
successful attack involving ten drones . "These attacks are our right, and we warn the
Saudis that our targets will keep expanding," a rebel military spokesman
said on Houthi-operated Al Masirah TV .
Saudi authorities -- initially slow or reluctant to identify the cause of the major blaze --
on Saturday issued a confirmation via the Saudi Press Agency: "At 4.00am (01:00 GMT) the
industrial security teams of Aramco started dealing with fires at two of its facilities in
Abqaiq and Khurais as a result of... drones," an interior ministry statement
said , which further claimed the fires were "under control" .
However, the Saudis have stopped short of acknowledging the Houthis were behind the attack,
which Riyadh is also likely to blame on Iran , which has lately promised that if it can't
export its oil then "no one will".
It remains unclear according to early statements whether there were injuries or casualties
in the twin oil facility attacks.
The impact on global oil markets - closed for the weekend - could be significant given the
Khurais field produces about 1% of all the world's oil (estimated at over 1M bpd and reserves
of over 20BN bpd) and more importantly Abqaiq, which based on the stunning local footage bore
the brunt of the drone attacks, remains the most crucial of the kingdom's processing
plants.
Located 37 miles southwest of Aramco's Dhahran headquarters, it controls all the flows from
fields like the giant Ghawar field to coastal export terminals like Ras Tanura. Saudi Aramco
describes the Buqyaq facility as "the largest crude oil stabilization plant in the world."
Meanwhile, the United States was quick to "strongly condemn" the attack amid already soaring
tensions in the gulf after a summer of "tanker wars" and Iranian threats of walking away
altogether from the 2015 nuclear deal (JCPOA).
The U.S. envoy to Saudi Arabia issued
a statement saying , "The U.S. strongly condemns today's drone attacks against oil
facilities in Abqaiq and Khurais. These attacks against critical infrastructure endanger
civilians, are unacceptable, and sooner or later will result in innocent lives being lost."
According to Reuters reports the drone attacks will impact up to 5 million bpd of oil
production, which suggests that the price of oil - already severely depressed by the recent
news that John Bolton is out, making de-escalation with Iran far more likely - is set to soar
when trading reopens late on Sunday, just what the upcoming Aramco IPO desperately needs ,
which in turn has prompted some to wonder if the "Yemen" attack on Saudi Arabia wasn't in fact
orchestrated by Saudi interests. 18 years after Sept 11, this shouldn't sound all that
outlandish...
Oil companies want higher prices. Israel wants US to war with Iran. Jews want Bolt-on to
be proven right. Hmm, how can we get all those things with one shot. Oy-vey, I have an
idea.
If the U.S. attacks Iran, it will only raise oil prices even more. If the Houthis have the
ability to destroy Saudi oil infrastructure, then Iran has the ability to wipe it out for
years to come. How can the U.S. protect Saudi oil production? If there was a simple way to do
it, you'd think it would have already been implemented. It's looking like Iran wasn't kidding
when they said if they can't sell their oil then neither will the Saudis.
$100 oil might get people more interested in electric vehicles that all manufacturers have
been forced to invest billions in that the public dont want.
What appears to be the most devastating Yemen Houthi rebel attack on Saudi Arabia to
date
What is missing from that article is the fact that actually this attack was not performed
by the Houthi rebels themselves, and not from Yemen. This attack was actually performed by
another Iranian proxy, the PMU, and the drones were sent into Saudi Arabia's territory from
Iraq, North West of the country, not from Yemen.
This just underscores the way Iran's ring of proxy terror militias are all connected and
acts in tandem under the control of Iran,
Out of its twisted interpretation of Islam's Quran, Iran's mission is to bring about a
regime change to moderate Islamic countries (including allies of the US), forcing them into
its extremist, US hateful, Shia Islam. The way they do it is by arming and financing
terrorist proxy militias in various regions, spreading death and destruction. Iran arms and
finances the Houthis in Yemen, The Islamic Jihad in Gazza, Hashd Al-Shaabi in Iraq, Hezbollah
in Lebanon, Fatemeyoun Brigades in Syria, various terrorist groups in Africa, and more.
Iran has perfected the art of gradually conquering a country without replacing its flag by
planting cancer cells in the form of terror proxy militias.
Iran spends billions of Dollars on those militias, at the expense of the well being of
common Iranian people. All this money is deprived from their own people, cutting food and gas
subsidies. Iran has abundance of oil reserves but a large chunk of the oil revenues goes to
support insurgent groups in other countries while Iran's citizens live in misery and hunger.
Heck, just on Lebanon's Hezbollah, Iran spends one Billion Dollars each year.
Iran's aim is to directly hurt our national interests by turning friendly Muslim countries
against the US. Iran is not shy of demonstrating its hatred to the US. Iran states openly,
and with great force, "Death to America!" They burn American flags in their parliament.
Half of Saudi Arabia's oil production has gone offline following a surprise drone strike.
Drones attacked Abqaiq facility in Saudi Arabia and the Khurais oil field run by Saudi Aramco early Saturday morning, the
kingdom's interior ministry
said
,
sparking a massive fire at a crude processing plant essential to global oil supplies.
The closure will impact nearly
5
million barrels of crude processing per day
, affecting 5 percent of the world's daily oil production. And while Aramco is
confident that it can recover quickly, if it can't, however, the world could face a production shortage of as much 150MM
barrels per month. An outcome which could send oil prices into the triple digits.
Houthi rebels-- who are backed by Iran in a yearlong Saudi-led battle in Yemen-- have apparently asserted responsibility for
the strikes and pledged that more assaults can be expected in the future.
A Houthi spokesperson explained, "We promise the Saudi regime that our future operations will expand and be more painful as
long as its aggression and siege continue," adding that the attack involved ten drones.
The Iran-backed Houthis have recently been behind a number of assaults on Saudi pipelines, vessels and other energy
infrastructure as tensions grow in the region.
There have been no details on the severity of the damage but Agence France-Presse quoted interior ministry spokesperson
Mansour al-Turki as saying that there were no human casualties as a result of the attack.
This latest strike highlights the risk posed by the Houthis to Saudi Arabia's
oil
infrastructure
as tensions between the groups continues to escalate.
The growing power of the Houthis' drone operations is likely to reignite the debate on where the militant group is securing
these weapons. It could very well be that the group has weaponized noncombatant drones, or in a darker scenario, they are
receiving the militarized drones from Iran.
A Saudi-led coalition has been at
war
with
the Houthi movement in Yemen since March 2015. The Iranian-backed rebels hold the funding, Sana'a, and other areas in the Arab
world's most impoverished nation.
The battle has created one of the world's worst humanitarian crisis. The violence has pressed Yemeni citizens to the brink of
starvation. And the death toll has soared to more than 90,000 individuals since 2015, according to the US-based Armed Conflict
Location & Event Data Project, which tracks the conflict.
(Bloomberg) -- Middle East geopolitics have come back with a vengeance to hit the oil
market. What everybody feared has happened. An attack has penetrated the defenses of Saudi
Arabia's massive Abqaiq oil processing facility, the heart of the kingdom's oil production and
export infrastructure, causing an unknown amount of damage. Crude prices will react and
emergency stockpiles will be tapped.
Fires at the plant were brought under control within hours, but the flow of crude from Saudi
Arabia, the world's biggest exporter, will almost certainly be affected, although we don't yet
know by how much or for how long. Traders who have shrugged off tensions in the Middle East for
months will respond to this attack when markets open on Monday.
The height of the price spike will depend on how much we know about the extent of the damage
and how long it will take to repair. An absence of information will lead traders to assume the
worst.
The Abqaiq crude processing plant is the single most important facility in the Saudi oil
sector. In 2018 it processed about half of the kingdom's crude oil production, according to a
prospectus published in May for the state oil company's first international bond. That's
roughly 5 million barrels a day, or one in every 20 barrels of oil used worldwide.
Abqaiq is more important to the Saudi oil sector than the kingdom's Persian Gulf export
terminals at Ras Tanura and Ju'aymah, or the Strait of Hormuz that links the Gulf to the Indian
Ocean and the high seas. Crude can be diverted away from the Persian Gulf and Hormuz by pumping
it across the country to the Red Sea through the East-West oil pipeline. But it cannot bypass
Abqaiq. The East-West pipeline starts at Abqaiq and output from the giant Ghawar, Shaybah and
Khurais fields is all processed there, so an attack on the facility will impact crude flows to
export terminals on both coasts.
The latest attack comes just months after drones, allegedly launched from Iraq by Yemen's
Houthi rebels, targeted pumping stations on the oil pipeline. The damage caused by that earlier
attack was minimal, but highlighted the vulnerability of Saudi Arabia's oil infrastructure,
even when located hundreds of miles from the country's borders.
So what happens now?
Saudi Arabia will probably seek to maintain export levels as much as possible by supplying
customers from stockpiles. It holds crude in storage tanks in the kingdom, as well as at sites
in Egypt, Japan and the Netherlands. But it has been running its crude hoard down since the
beginning of 2016 and it is now back at levels not seen since 2008, according to data from the
Joint Organisations Data Initiative. That means the kingdom has much less to draw on than it
did three years ago.
The attack will also test stockpiles in oil-consuming countries. Members of the
International Energy Agency are required to hold 90 days' worth of oil imports in emergency
stocks and those will be pressed into service if the outage at Abqaiq is prolonged. Non-member
countries like China and India have also been building up their own emergency reserves. Those,
too, will be pressed into service.
Neighboring countries who, just days ago, were being exhorted to stick to output quotas
agreed in December will now pump as much as they can to make up for any losses from Saudi
Arabia. The United Arab Emirates, Kuwait and Iraq will all boost output as much as they are
able. But the one country with lots of spare capacity, Iran, won't see any easing of the
restrictions placed on its oil sales by the U.S. Quite the opposite. Its support for the Houthi
rebels in Yemen, who have claimed responsibility for the attack on Abqaiq, will ensure that any
easing of the pressure being exerted on it remains a distant prospect.
To contact the reporter on this story: Julian Lee in London at [email protected]
To contact the editors responsible for this story: Alaric Nightingale at
[email protected], Steve Geimann
This attack was 750 miles from Houthi territory.
Round trip would be 1,500 miles.
A Predator has a published range of 1,150 miles.
My guess is they are infiltrating Saudi Arabia, attacking from much closer than 750 miles out
and maybe sacrificing the drone. Sort of like the Jimmy Doolittle raid on Tokyo in WWII, for
similar purpose. With a similar result. Message sent, message received.
It's a one way trip. The drones used by houthis don't fire a missile and then fly home, they
are the missile. The drone is mounted with a 30kg warhead and it is flown into the target,
usually in a swarm attack.
"... The field's distance from rebel-held territory in Yemen demonstrates the range of the Houthis' drones. U.N. investigators say the Houthis' new UAV-X drone, found in recent months during the Saudi-led coalition's war in Yemen, likely has a range of up to 1,500 kilometers (930 miles). That puts Saudi oil fields, an under-construction Emirati nuclear power plant and Dubai's busy international airport within their range. ..."
"... The outcome was a forgone conclusion. The smash, destroy, and destabilize campaign in the region could have only come from the most powerful lobby in the US. We all know who that is. ..."
Today Saudi Arabia finally lost the war on Yemen. It has no defenses against new weapons
the Houthis in Yemen acquired. These weapons threaten the Saudis economic lifelines.
This today
was the decisive attack:
Drones launched by Yemen's Houthi rebels attacked a massive oil and gas field deep inside
Saudi Arabia's sprawling desert on Saturday, causing what the kingdom described as a
"limited fire" in the second such recent attack on its crucial energy industry. ... The Saudi acknowledgement of the attack came hours after Yahia Sarie, a military spokesman
for the Houthis, issued a video statement claiming the rebels launched 10 bomb-laden drones
targeting the field in their "biggest-ever" operation. He threatened more attacks would be
coming.
New drones and missiles
displayed in July 2019 by Yemen's Houthi-allied armed forces bigger
Today's attack is a check mate move against the Saudis. Shaybah is some 1,200 kilometers
(750 miles) from Houthi-controlled territory. There are many more important economic targets
within that range:
The field's distance from rebel-held territory in Yemen demonstrates the range of the
Houthis' drones. U.N. investigators say the Houthis' new UAV-X drone, found in recent
months during the Saudi-led coalition's war in Yemen, likely has a range of up to 1,500
kilometers (930 miles). That puts Saudi oil fields, an under-construction Emirati nuclear
power plant and Dubai's busy international airport within their range.
Unlike sophisticated drones that use satellites to allow pilots to remotely fly them,
analysts believe Houthi drones are likely programmed to strike a specific latitude and
longitude and cannot be controlled once out of radio range. The Houthis have used drones,
which can be difficult to track by radar, to attack Saudi Patriot missile batteries, as
well as enemy troops.
The attack conclusively demonstrates that the most important assets of the Saudis are now
under threat. This economic threat comes on top of a seven percent budget deficit
the IMF predicts for Saudi Arabia. Further Saudi bombing against the Houthi will now have
very significant additional cost that might even endanger the viability of the Saudi state.
The Houthi have clown prince Mohammad bin Salman by the balls and can squeeze those at will. There is a lesson to learn from that. But it is doubtful that the borg in Washington DC
has the ability to understand it.
The outcome was a forgone conclusion. The smash, destroy, and destabilize campaign in the
region could have only come from the most powerful lobby in the US. We all know who that
is.
I'm afraid the only lesson the Borg in Washington will learn is to continue squandering US
resources and manpower on pursuing and inflicting chaos and violence in the Middle East.
Clown prince Mohammed bin Salman will not learn anything either other than to bankrupt his
own nation in pursuing this war.
Israel has driven itself into its own existential hell by persecuting Palestinians over
70+ years and doing a good job of annihilating itself while denying its own destruction. If
Israel can do it, the Christian crusaders dominating the govts of the Five Eyes nations
supporting Israel will follow suit in propping up an unsustainable fantasy. Samson option
indeed.
I am sure that the Suads will be looking to their zionist allies to supply them with the Iron
Dome system that the US military just wasted millions of tax payer dollars and purchased
several days ago. The irony of that system is that is was overwhelmed several times when the
Palestinian freedom fighters launched a wave of home made rockets at Occupied Palestine. I
hope the Sauds learn a lesson..doubt it though.
let me throw something out there. Israel has entrenched itself in the US political and media
systems. There is no logical path to eliminate or reduce that influence, and thus perhaps the
plan that has been hatched is to strengthen Iran to the point that it can confront Israel.
I anticipated just this sort of event 2+ months ago to go along with the tanker sabotaging to
expand on b's thesis about Iran having the upper hand in the current hybrid Gulf War. The
timing of this new ability dovetails nicely with the recent Russian collective security
proposal, with the Saudis being the footdraggers in agreeing about its viability due to its
pragmatic logic. So, as I wrote 2 days ago, we now have an excellent possibility of seeing an
end to this and future Persian Gulf Crises along with an idea that can potentially become the
template for an entire Southwest Asian security treaty, whose only holdout would be Occupied
Palestine. The Outlaw US Empire is effectively shutout of the entire process. And as I also
wrote, it's now time for the Saudis to determine where their future lies--with Eurasia or
with a dying Empire.
So the U.S. bought the Iron Dome stuff from Israel? I guess that means we paid for it
twice, eh? Glad to know my tax dollars are hard at work "keeping us safe."
Wonder what they might be planning for with that one?
The Yemenese military had lots of technological capabilities remaining from the Cold War
along with factories, technicians and raw materials. For example, Yemen's aerospace forces
allied with the Houthi and are the ones producing and shooting the missiles and drones. One
doesn't need to import a complete drone; technical blueprints on a floppy, CD-ROM, DVD,
thumb-drive, are all that's required. The humanitarian crisis due to food and medicine
shortages played on the minds of people such that an image of a poor, backward,
non-industrial capable society was generated that wasn't 100% correct.
And of course, this makes the threat by Iran to hit back against military and industrial
installations on the other side of the Persian Gulf that much stronger.
It would be rich indeed if Iran were to be the entity that ultimately manages to loosen
the stranglehold that the Zionists have on the USA Congress, media, president, donors to
political parties, etc.
I can imagine the shale oil producers smiling right now...100 a barrel oil will be just
what they need! Cost-push inflation leading to a return of bell bottoms and leisure suits. No
wonder all these 70's band retreads are touring again :)
So, poor Yemen wasted via siege warfare waged by NATO since 2015 though its Saudi, UAE and
terrorist proxies that came very close to success, finds the initiative to counterattack with
what little it has at its disposal--All accusations of Iranian help have never been
proven --and thanks to the Outlaw US Empire's threats against Iran force UAE to
withdrawal and seek peace with Iran with Saudi soon to follow. And the situation is all
Iran's fault?! Note the date above--it precedes Trump's election, his illegal withdrawal from
the JCPOA and institution of the illegal sanctions regime against Iran.
Europe is on board with Russia's collective security proposal. Europe had representatives
at the meet between Khamenei and the Houthi negotiator. Europe--even the UK--still working to
salvage the JCPOA via the non-dollar trade conduit. And you conclude that the Outlaw US
Empire "might actually get European support to attack Iran."
First Afghanistan, then Yemen. Maybe the western media's imaging of these people as towel
headed, sandal wearing primatives is just a tad misguided......
A Saudi royal, Ahmed Bin Abdul Aziz, yesterday warned against "the kingdom's involvement in a
war with Iran."
"I'd oppose the Saudi Crown Prince Mohammed Bin Salman if he decided to join a US-British
military alliance to confront Iran," The New Khalij quoted Abdul Aziz as saying.
The brother of the Saudi King added that it was important for Riyadh to take measures to
unify the Gulf Cooperation Council (GCC) instead of responding to US President Donald Trump's
plans, which he described as "pushing the region to the brink of war."
Saudi Arabia has gone nuclear, threatening the
petrodollar
.
Or has it?
The report from Zerohedge via Reuters
that Saudi Arabia is angry with the U.S. for considering
a bill exposing OPEC to U.S. antitrust law is a trial balloon.
The chances of the U.S. bill known as NOPEC coming into force are slim and Saudi Arabia would
be unlikely to follow through, but the fact Riyadh is considering such a drastic step is a sign
of the kingdom's annoyance about potential U.S. legal challenges to OPEC.
If these things are so unlikely then why make the threat public? There are a number of
reasons.
First, one must remember that the Saudis are hemorrhaging money.
Their
primary budget deficit in 2018 was around 7% of GDP. Since the 2014 crash in oil prices it has
gone from almost zero sovereign debt to $180 billion in debt to finance its spending, or around
22% of GDP.
2019's budget will be even bigger as it tries to deficit spend its way to growth. It's needs
for a higher oil price are built into their primary budget not their production costs, which are
some of the lowest in the world.
Second, the Saudis finally opened up t
he
books on Saudi-Aramco this week.
And it revealed the giant is far more profitable
than thought. It has is eye on acquiring stakes in some of the biggest oil and gas projects out
there these past couple of years. It's floating its first public bond to buy a stake in SABIC to
get into the mid and downstream petroleum markets.
Third, the Saudis budget deficit is tied directly to its having pegged the Riyal to
the U.S. dollar which leaves them at the mercy of the dollar price of oil.
It doesn't
have the flexibility of Russia who free-floated the ruble back in late 2014 to pay local
expenses in devalued local currency when oil prices drop.
This is why the Saudis are struggling financially and why Aramco is looking to use its
financial might to finally begin making friends and influencing people around the world.
Saudis should flip Trump the bird and start selling their
oil in yuan or euro, and buy weapons from Russia. America's
stranglehold over global economics is coming to an end, all
because of Donald Trump.
"Rome" is burning, and that's just what it deserves. Decades of
endless wars and it's "clipping" of the currency, will end with
collapse. Many of its citizens can't raise $400. for an emergency
but they can have their Netflix and Prime subscriptions to pay
for. Hey, War Inc. is reaching its end.
The Saudis are trapped. They have All US military equipment and
have to have US hands to operate their air force and who knows
what else. Plus they have too many skeletons that the US can hurt
them with.
"Peace for Israel" would include outside businesses or
investors sticking to BDS actions. Other than the United States
and Europe, natural law would suggest no of law should instruct
any counterparty as to what Israel entity one should or should not
engage in commerce.
In another time it was called
free market
capitalism.
Israeli lobbies shouldn't be able to squelch the First
Amendment by requiring public servants to sign agreements not to
condemn Israel-related foreign policy or domestic decisions.
The empire of paper currency and oil supported by bankers and
their wars is coming to an end.
Fracking is a desperate attempt
at keeping internal oil production going, it's akin to burning the
roof shingles of your house to keep warm. The costs to get the oil
outweigh the usefulness of the endeavor, the only ones benefiting
are the bankers loaning the money to the frackers.
Rome did the same it self destructed, and rotted internally,
meanwhile the cost of empire drained resources and the vassals
began to act in their own self-interests. The Khazarian bankers
remained the host drained, and they began to leech the new
fledgling empires.
Where do you see bankers in that history? Rome devalued its own
gold coins by mixing tin in with it. The soldiers felt cheated.
Meanwhile, Rome allowed mass migration to Rome and southern
Italy prompting real Romans to move to Gaul (northern Italy was
"Cisalpine Gaul"). Rome wasn't even the capitol when it was
sacked--Ravenna was. Get your history straight. Real Romans
were not willing to fight for city that wasn't their own
anymore.
So too, what will bring down the US is mass
migration from the third world--just what the Comintern wanted
90 years ago.
The US petrodollar reserve currency status has been a disaster for
middle class Americans much to their ignorance. It has allowed
the financial-political cabal elite to enrich themselves at the
expense of deficit and debt expansion while impoverishing the
middle class and bringing in replacement labor serfs. Time to rip
this band-aid off and the American middle class to reclaim their
country, that will probably ultimately lead to revolution.
Suure, blame Saudi Arabia for the "betrayal". But of course
overlook the fact that the US Congress passed a law that put 9/11
squarely on SA's shoulder when
Israhell
is the one that did 9/11
.
Operation Northwoods redux; the Mossad may have had a big role,
but it could not have been pulled off without complete
acquiescence from the DIA. It is all part of the long game.
{See Donald Rumsfield handling empty gurney on Pentagon
grounds}
I would place about as
much credibility in the Aramco books as I would in Bernie Madoff's
books.
Aramco pumps oil, that's about all we really know for sure.
Given the intertwining with the saudi state, it's not a
conventional oil company in any manner, it's much more a PDVSA
then a StatOil.
Buys oil how? You fuckers have been printing paper and
buying resources with it. You guys simply lack the ability
to extrapolate, because if you did, the current lifestyle of
the USSA, without dollar world reserve status and the
petrodollar perk, is utterly ******* horrendous.
Never
will the axiom
"I never knew how good I had it, until it
was gone"
be more apt, when the USSA faces her date with
reality. $22 trillion in debt, world reserve currency,
petrodollar, Wall Street a cesspit of financial fraud, no
adverse market reaction to continuous money printing and has
the audacity to complain trade deficits and OPEC? lol
Death to the USSA cannot come soon enough. A parasite
nation of resource theives and the world knows it.
Donald Trump is ramping up his attack on oil prices as US crude hit a 5-month high today. While up to now the US president
has been focused on denouncing high energy costs via Twitter, it appears he now is looking to do more than merely bash OPEC online.
As CNBC reported, the US wants to ensure "dominance" in this sector through a blockbuster executive order designed to boost pipeline
infrastructure. In reality, Trump walks a dangerous tightrope when it comes to crude.
Of course the Saudis are laughing at Trump. The world is laughing at Trump. He is an ignorant baffoon.
Of course the Saudis are laughing at Trump. The world is laughing at Trump. He is an ignorant baffoon.
May be ignorant bully, not only (or so much) baffoon ? He practices what is called “gangster capitalism” on international arena
for some time. Totally ignores international law. Does not even use a fig leaf as previous administrations. Trump is “Full Spectrum
Dominance” in action
In view of the Saudi role of the guarantor of the “dollar as the reserve currency” system his behavior might well be a reckless
move, which totally contradicts Trump’s behavior in Khashoggi case. Kind of direct pressure is Soprano style: “Do what I want,
or…”
If Saudi stop selling oil for dollars that will be a very bad news for the USA. Hopefully they can’t do this being a Washington
vassal, but to insult a vassal is not the best diplomacy, anyway.
Why Trump can’t understand that oil is limited and higher prices might well be the best strategy as they helps to find alternatives,
develop infrastructure (for example for EV passenger cars) and prepare to inevitable shortages, or even the Seneca Cliff in oil
supply.
Why he wants to propel/sustain the US stock market at any cost?
Low oil prices can help to kick the neoliberal can down the road, but they can’t save the USA from the “secular stagnation”
and might not be able to save the USA from the recession too because consumption is low: credit card debt reached 0.87 trillion
in the fourth quarter of 2018 On other words the bottom 80% of the USA population might well be debt slaves of the US banks.
On March 25, 2019 yields curve inverted the first time since mid 2007: The yield on the U.S. 10-year Treasury note dipped below
the yield on the 3-month paper.
In other words secular stagnation is the result of the crisis of neoliberalism both as the ideology and as the social system
dominant in the world. Neoliberalism entered “zombie” stage in 2008 and it continues to exist (and even counterattack, as in Argentina
and Brazil) only due to the fact that there is no acceptable alternative and the return to the New Deal capitalism (which many
wish) is difficult or impossible because management now is allied with the capital owners, not with workers (as was temporary
the case after the Great Depression; that alliance ended in 70th).
Or he is a “naturally stupid” bully, who does not care to learn diplomatic etiquette and some elements of diplomacy, while
on the job.
In both cases he is a real embarrassment for the nation, is not he?
While I do not support Russiagate witch hunt, his behavior really raises questions about fitness for the office.
Also Bush II style (as in Iraq WDM fiasco ) bunch of crazy warmongers, neocons that control Trump administration foreign
policy (Haley in the past, Pompeo, Bolton now ) is not what his voters expected based on his election promises.
In a sense, he proved to be Republican Obama, another master of “bait and switch” maneuver.
Looks like we are living during what Chinese call “interesting times”, aren’t we ?
Ghawar in Saudi Arabia, the world's largest conventional oil field, can produce a lot less
than almost anyone believed It was a state secret and the source of a kingdom's riches. It was
so important that US military planners once debated how to seize it by force. For oil traders,
it was a source of endless speculation.
Now the market finally knows: Ghawar in Saudi Arabia, the world's largest conventional oil
field, can produce a lot less than almost anyone believed.
When Saudi Aramco on Monday published its first ever profit figures since its
nationalization nearly 40 years ago, it also lifted the veil of secrecy around its mega oil
fields. The company's bond prospectus revealed that Ghawar is able to pump a maximum of 3.8
million barrels a day - well below the more than 5 million that had become conventional wisdom
in the market.
"As Saudi's largest field, a surprisingly low production capacity figure from Ghawar is the
stand-out of the report," said Virendra Chauhan, head of upstream at consultant Energy Aspects
Ltd. in Singapore.
Three year ago
- almost to the day - Saudi Arabia rattled its first sabre
towards the United States, with an
implicit threat to dump US Treasuries
over Congress' decision to allow the Saudis to be
held responsible for the 9/11 attacks.
In a stunning
report at the time by the NYTimes
, Saudi Arabia told the Obama administration and members of
Congress
that it will sell off hundreds of billions of
dollars' worth of American assets held by the kingdom
if Congress passes a bill that would
allow the Saudi government to be held responsible in American courts for any role in the Sept. 11,
2001, attacks.
Then,
six months ago
, the Saudis once again threatened to weaponize their wealth as
the biggest importer of arms from America in the world.
And now
,
Reuters
reports, citing three unidentified people familiar with Saudi energy policy,
Saudi
Arabia is threatening to drop the dollar as its main currency in selling its oil if the U.S. passes a
bill that exposes OPEC members to U.S. antitrust lawsuits
.
While the death of the petrodollar has long been predicted (as the petroyuan gathers momentum),
this is the most direct threat yet to the USDollar's exorbitant privilege...
"The Saudis know they have the dollar as the nuclear option,"
one of
the sources familiar with the matter said.
"The Saudis say: let the Americans pass NOPEC and it would be the U.S. economy that
would fall apart,"
another source said.
Riyadh reportedly communicated the threat to senior U.S. energy officials
, one
person briefed on Saudi oil policy told Reuters
As Reuters details,
NOPEC, or the No Oil Producing and Exporting Cartels Act, was first
introduced in 2000 and aims to remove sovereign immunity from U.S. antitrust law, paving the way for
OPEC states to be sued for curbing output in a bid to raise oil prices.
While the bill has never made it into law despite numerous attempts, the legislation has gained
momentum since U.S. President Donald Trump came to office. Trump said he backed NOPEC in a book
published in 2011 before he was elected, though he not has not voiced support for NOPEC as
president.
Trump has instead stressed the importance of U.S-Saudi relations, including sales of U.S.
military equipment, even after the killing of journalist Jamal Khashoggi last year.
A move by Saudi Arabia to ditch the dollar would resonate well with big non-OPEC oil
producers such as Russia as well as major consumers China and the European Union, which have been
calling for moves to diversify global trade away from the dollar to dilute U.S. influence over the
world economy.
Russia, which is subject to U.S. sanctions, has tried to sell oil in euros and China's yuan but
the proportion of its sales in those currencies is not significant.
Venezuela and Iran, which are also under U.S. sanctions, sell most of their oil in other
currencies but they have done little to challenge the dollar's hegemony in the oil market.
However, if a long-standing U.S. ally such as Saudi Arabia joined the club of non-dollar
oil sellers it would be a far more significant move likely to gain traction within the industry.
And why China suddenly admitted to increased gold reserves...
And why there has been a spike in yuan buying by reserve managers last year, as the IMF pointed out
in a recent report.
So the next time you hear an analyst on CNBC categorically dismiss the notion that the loss of the
dollar's reserve currency status isn't something that markets should take seriously (even as
several credible
voices
have warned that it should be), you'd do well to remember this chart.
.Saudi Arabia
Quota 10,311
.Feb. Production 10,087
.Difference -224
Saudi Arabia produced 224,000 barrels per day less than their quota. Did not anyone
notice this and wonder why? The rest of OPEC was 179,000 barrels per day over their quota.
Iraq was the largest violator being 121,000 bpd over their quota.
Also, Saudi Arabia was the absolute driving force behind these quota cuts implemented in
January.
Noticed, and you could argue that they are showing the way and taking the larger part of the
burden since they want to be so nice to the rest of the opec members ;-).
Or perhaps the level they have been producing at is unsustainable and they are really glad
to officially have an excuse to cut back on production.
This is neoliberal/neocolonial analysis of the situation. Reader beware. But it catches some
interesting interdependencies. For example the need for revenue intensifies with the growth of
the population. This creates problems for KSA. As of March 2019 oil price per barrel did not
return to $90 level yet.
The article was written in 2015 but still has value. So it is interesting to read what
neoliberal thought at this time is not that different from what they think now...
The idea that Saudi Arabia is an independent player is too simplistic... It never was. It
just hides the key role of the USA in engineering oil prices slump and the fact that Saudi Arabia
is a vassal of Washington is ignored.
"... The Saudi miscalculation has several sources. One is the negative feedback loop between
oil production, GDP, and national budgets that plagues many non-Western oil producers. Their GDP
and national budgets depend significantly on the revenues from their oil exports. As a result,
the revenue shortfalls incentivize them to produce as much oil as possible to mitigate the
shortfall. ..."
"... Asian customers are taking advantage of the competition. They are reducing the share of
long-term contracts in favor of spot purchases. For example, as the Wall Street Journal reported
, some Japanese refiners are cutting the proportion of oil purchased through long-term contracts
to around 70 percent from more than 90 percent, while some South Korean refiners are reducing the
proportion from 75 to 50 percent. Furthermore, several national oil companies, Venezuela's among
them, are building refineries with local partners in Asia, which will use their crude. ..."
"... Third, Saudi refusal to act as price guarantor undercuts the confidence foreigners need
to invest in, or loan to, oil projects. ..."
"... Fourth, in terms of political risk, Saudi Arabia with its Gulf allies, Iran, and Iraq,
and the Middle East in general, is at the epicenter of global tension, turmoil, and tumult.
..."
"... Fifth, its influence within OPEC, and therefore its ability to manage OPEC output and
prices, is diminished ..."
"... Saudi officials apparently viewed $90 or even $80 per barrel oil for "one or two years"
with equanimity. Can they maintain the composure they have displayed thus far as they incur in a
single year the revenue losses they expected to take four years (at $90 oil) or two years (at $80
oil)? ..."
"... Yet, in effect, these countries are engaged in the oil equivalent of mutually assured
destruction. The sharp drop in oil revenue damages each of these countries economically and
financially, while the wars they wage directly and indirectly against each other drain resources
from vital domestic projects. ..."
The Saudi miscalculation has several sources. One is the negative
feedback loop between oil production, GDP, and national budgets that plagues many non-Western
oil producers. Their GDP and national budgets depend significantly on the revenues from their
oil exports. As a result, the revenue shortfalls incentivize them to produce as much oil as
possible to mitigate the shortfall.
According to the IEA ,
daily output in June 2015 increased 3.1 million barrels over 2014, with 60 percent (1.8 million
barrels) coming from OPEC. At 31.7 million barrels per day, OPEC output reached a three-year
high.
This increase in output occurs with the context of a narrow global demand opportunity.
Growth in demand in 2015, which the IEA forecasts to average around 1.4 million
barrels per day, comes primarily from Asia and North America. In other major export markets,
demand is stagnant. That has oil exporting countries, including OPEC members, Russia and
others, focusing
their sales on Asia, particularly China. North American demand is growing now that oil
prices are low, but due to high levels of domestic production, the U.S. is no longer a growth
market for oil exporters.
Each producer, therefore, is incentivized to undercut other producers directly (price per
barrel) or indirectly (absorbing shipping cost or delivery risk) to win sales in Asia (or
displace incumbent suppliers in other major markets). National oil producers can and are
shifting the cost of the lowered prices to other sectors of the economy. The U.A.E., for
example, has ended fuel subsidies, thereby essentially, increasing its budget revenues, while
Saudi Arabia recently
floated a $4 billion domestic bond offering to help finance its budget.
Asian customers are taking advantage of the competition. They are reducing the share of
long-term contracts in favor of spot purchases. For example, as the Wall Street Journal
reported
, some Japanese refiners are cutting the proportion of oil purchased through long-term
contracts to around 70 percent from more than 90 percent, while some South Korean refiners are
reducing the proportion from 75 to 50 percent. Furthermore, several national oil companies,
Venezuela's among them, are building refineries with local partners in Asia, which will use
their crude.
Given this environment, it is not surprising that the revenue elasticity of production is
highly sensitive, and negative. Saudi Arabia increased production by 6.8 percent in the first
quarter of 2015 but saw export revenues shrink by 42 percent.
Any Saudi Victory Will Be Pyrrhic
Saudi confidence in their financial wherewithal is proving misplaced.
Their need for
revenue is intensifying rather than moderating. They are fighting a multi-front war with
Iran directly (in Yemen) and indirectly (in Syria, Lebanon, and Iraq). ISIS, Al Qaeda, and
disaffected Shias present a significant domestic security threat. Countering external and
internal threats demands increased spending (including, perhaps, a very expensive future
nuclear weapons program), as does placating the fast growing male and female youth demographic,
which requires substantial spending on education, training, employment, and support. Hence, the
budget deficit equal to 20 percent of GDP, noted above. Increased production does not offer a solution.Saudi Arabia doesn't have the capacity
to increase production sufficiently to reduce the shortfall significantly in any meaningful
timeframe. They currently do not have the spare capacity-to make up for the $291 million in
export revenue lost in Q1 , 5.4 million more barrels a day would have been necessary at
$53.92 a barrel. Of course, such a drastic increase in output would have driven prices even
lower. It is doubtful they can increase capacity substantially even in the medium- to long
term. They won't be able to spend significantly more than other major national oil companies.
First, low prices reduce Aramco's cash flow and therefore its ability to fund investment.
Second, the Saudi government likely will increase its draw from this cash flow to fund higher
priority national security and domestic security needs. Third, Saudi refusal to act as price guarantor undercuts the confidence foreigners need to
invest in, or loan to, oil projects. What might be attractive at $75 per barrel oil isn't
at $50 oil, and even less attractive if the price of oil is thoroughly unpredictable. Fourth, in terms of political risk, Saudi Arabia with its Gulf allies, Iran, and Iraq, and
the Middle East in general, is at the epicenter of global tension, turmoil, and tumult. Fifth, its influence within OPEC, and therefore its ability to manage OPEC output and
prices, is diminished . Their underestimate of the impact of their policy change on prices,
their indifference vis-à-vis the financial damage to other OPEC members, and their
willingness to take market share at the expense of other OPEC members undercut their
credibility within OPEC (particularly since it derived from Saudi willingness to protect the
interests of all members (and sometimes to endure disproportionately).
While Saudi financial reserves are substantial (
circa $672 billion in May ), drawing on them is little more than a stop-gap measure. If its
major competitors (Russia, Iraq, Iran, and North America) maintain or even increase output (and
they have the incentive to do so), prices could stay lower far longer than the Saudis
anticipated.
Saudi reserves have decreased some $65 billion since prices started to fall (in November),
so ~$100 billion to ~$130 billion at an annual rate. The longer prices stay low, the faster
their reserves fall, and, as reserves plummet, the greater the pressure to prioritize spending,
to the disadvantage of some Saudis.
Saudi Arabia Caused The Problem, Can It Engineer A Solution?
Saudi officials apparently viewed $90 or even $80 per barrel oil for "one or two years"
with equanimity. Can they maintain the composure they have displayed thus far as they incur in
a single year the revenue losses they expected to take four years (at $90 oil) or two years (at
$80 oil)?
And if they can't-and surely, though they are loath to admit it, they can't - can they
engineer a durable increase in prices - i.e., a durable decrease in output? At first glance, it
seems impossible. Daily output from Saudi
Arabia (10.5 million), and its allies, UAE (2.87), Kuwait (2.8), and Qatar (.67), is
roughly equal to the daily output from countries with which it is in conflict, directly or
indirectly, Russia (11.2), Iran (2.88), and Iraq (3.75), and therefore have an incentive to
take advantage of any unilateral Saudi output concessions.
Yet, in effect, these countries are engaged in the oil equivalent of mutually assured
destruction. The sharp drop in oil revenue damages each of these countries economically and
financially, while the wars they wage directly and indirectly against each other drain
resources from vital domestic projects.
Moreover, given the sensitivity of prices to changes in volume, it is possible, if not
likely, that holding output steady or matching a Saudi
Saudi
Arabia's crude oil exports to U.S. are falling sharply, with shipments so far this month at
just 1.6 million barrels, according to data compiled by
Bloomberg , versus 5.75 million barrels a year ago.
For the whole of January, Saudi Arabia exported just 2.69 million barrels of crude to the
United States. The decline follows Saudi Arabia's decision to cut its crude oil production --
primarily heavy crude grades -- by more than it agreed to at the December OPEC+ meeting as it
seeks higher oil prices.
One analyst told Bloomberg oil exports from the Kingdom to U.S. refiners could even fall to
zero but that was unlikely to happen.
"We could see Saudi oil imports declining to zero into the U.S. Gulf Coast," Andy Lipow from
Lipow Oil Associates said. "OPEC and non-OPEC members feel prices are too low, and they will do
what it takes to put the market back in balance."
My understanding is that there are proved undeveloped reserves, those require new
wells.
Dennis, I need to know just how you arrived at this understanding? It is my understanding
that these are infill wells. The word "infill" implies developed, not undeveloped.
1. n. [Enhanced Oil Recovery]
The addition of wells in a field that decreases average well spacing. This practice both
accelerates expected recovery and increases estimated ultimate recovery in heterogeneous
reservoirs by improving the continuity between injectors and producers. As well spacing is
decreased, the shifting well patterns alter the formation-fluid flow paths and increase sweep
to areas where greater hydrocarbon saturations exist.
Infill drilling does increase the ultimate recovery as it gets gaps near the top of the
reservoir that otherwise might be missed. But mostly it just pulls the oil out faster. That
is most of the oil recovered by infill drilling is not oil that would otherwise be
missed.
There are no longer any undeveloped fields in Saudi Arabia. These wells are in the very
well developed Ghawar, and I assume the field to the west is Khurais. Both fields are not
just developed, but overly developed. They have been doing infill drilling in Ghawar for
almost two decades. I assume these new Ghawar wells will be in the very southern two
fields.
From what I understand it was also stated by Schlumberger that they are in-fill (infill?)
wells Just sticking more straws in an almost empty bucket. It seems to me that that will
bring forward future production(to sustain a plateau) and the eventual decline rate in the
future will necessarily be steeper, like a bell curve vs a Seneca Cliff type curve.
I would suggest infill drilling is a good indicator of what KSA feels it's oil development
priorities are. One could make an assumption about why they feel that way. I assume it's
because they don't have anything better to do with the drilling rigs.
Ron, what is your opinion on Saudi Arabia? A I have said here before, I think that the Ghawar
could water out at any time, reducing Saudi output by somewhere in the region of 3 mbpd in
short order. It could happen tomorrow, next week, next year, who (outside of Aramco) knows?
Islandboy, Ghawar is not one field, it is five fields. From north to south there is Ain Dar,
Shedgum, Uthmaniyah, Hawiyah and Haradh. Ghawar was developed from north to south.
Ghawar is currently estimated to account for about six percent of the world's total
daily crude oil output. The field's production peaked at 5.7million barrels per day in 1981
and later slipped below the five million mark. The development of the southern Hawiyah and
Haradh areas during 1994 and 1996, however, raised the production to five million barrels per
day again.
Ain Dar, Shedgum, and Uthmaniyah are all in decline and likely in steep decline. Hawiyah
and Haradh likely have not yet peaked. However, it is production from Khurais and Manifa and
Shaybah that is keeping the decline in Saudi production from becoming obvious. All other
fields, other than the bottom two Ghawar fields, and these three latest developed fields, are
in steep decline.
Khurais and Manifa were in mothballs for decades. Then they were brought on line, at great
expense, to counter the decline in all the other super-giant fields. But the decline in these
old super-giants is getting steeper.
Why on earth would Saudi stocks be falling at such a rate? If Saudi is concerned about low
oil prices, they do not need to cut production, they only need to cut exports.
Saudi has 266 billion barrels of oil in the ground, and in the dead of winter, their
lowest crude burn season, their stocks are falling? Something just don't add up here.
Saudi Crude Exports Slump to 6.2M B/D in 1H February: Kpler
Shipments tumble by 1.34m b/d in 1H February, compared with same period in January,
consultant says in report.
BBG #OOTT
Are there any (public) estimates of how much SA produce vs. draw from inventory to cover
their exports or are all these charts based on their own reported figures?
There are several issues with the reported numbers that appears odd to me.
I found, back when I was reporting JODI data, that for OPEC, they used the "direct
communication" data rather than the "secondary sources" data for their OPEC production data.
But that was several years ago.
It's just their own reported figures. I know that the secondary sources quoted in OPEC MOMR
use tanker tracking and reported refinery runs to check OPEC production but beyond that I
don't know.
In summary, while I have not proven that Saudi has 270 billion barrels of proved oil
reserves, I think the evidence points in that direction. And if you accept a much lower
number, you essentially accept that there is a vast conspiracy involved in hiding the real
numbers.
An old post by me, maybe I got the idea from Robert Rapier. I hadn't realized he had
written something on this at the time. (If so I apologize to Mr. Rapier for the lack of
citation.)
I don't find Mr. Rapier's logic even close to impeccable.
Mr Rapier does not address a number of issues which concern Saudi reserves in his article.
For instance, KSA reserves are known to consist mostly of a relatively small number of giant
fields, as compared to the USA which has a much larger geographic area, many small fields and
perhaps close to a million wells drilled.
In KSA most of its oil resources are concentrated in about a fifth of its 830,000 square
mile geographic area. It has conducted a systematic and thorough search using seismic,
drilling and other tools to explore for other resources. I believe their best undeveloped
findings have been deeper gas in the known oily areas. The Shaybah oil field, said to be the
last of the elephants, was discovered in 1968. Remote and relatively expensive, it was not
developed until 1998. Likewise, the development of Ghawar also proceeded slowly, with the
last southern parts not being developed until around 2000.
The manner in which the country's resources have been developed has not been addressed. In
the USA every promoter with access to OPM has drilled, including many wells of questionable
economics. Would the LTO currently developing here be brought on at all, or very slowly
anywhere else? Is LTO really economic at today's prices?
In KSA the government owned oil company has systematically developed their resources, and
by most accounts they have been thorough, methodical, and have used cutting edge technology.
In the early 2000's they combined advanced seismic, drilling, and completion technologies to
create multi-lateral super wells which have been used to develop Shaybah as well as to
rejuvenate many older worn out fields such as Abqaiq. These super wells have allowed KSA to
maintain its massive production but when these traps have been depleted there is not likely
to be an encore.
The nature of the giant Saudi fields is different from the USA. Ghawar has been described
as the perfect trap. With high perm and porosity KSA expects to produce a large percentage of
original oil in place. The old reserve reports Rapier referenced also expected to recover
high percentages of original oil. Technology has certainly increased the amount of oil KSA
will recover but I believe they are looking at increasing recovery by a few, maybe up to 10
percentage points in each field. Their best result, is pulling forward production with their
super wells, not creating recoverable oil from resources such as shale which were previously
considered uneconomic.
Rig counts in KSA were around 10 for much of the 90's. They have increased sharply since
with the push to maintain their production around 10 million bpd. Current levels of around
130 rigs seem needed to maintain 10, not 25.
Of course, the underlying problem comparing USA reserves with KSA is the geology, and I am
not a geologist, but my understanding is that the persian gulf area is unique and not
comparable to USA.
EIA used to publish stats regarding number of US oil wells, gas wells and average TD per
well.
I guess there are over one million active oil/gas wells in US, including Alaska and GOM.
There are over 100K "shale wells already and US is adding 10K +/- per year.
Schlumberger had a graphic awhile back comparing the drilling intensity of the US to both
Russian and the Middle East. Was an eye opener.
After reviewing recent comments, I see an additional area to address, that of the D&M
reserve review. As one who used to do audits, I can tell you that auditors rely heavily on
management to present them with a basis for their opinion. Auditors cannot review everything,
and most are familiar with some of the noted failures such as Enron and Billie Sol Estes.
One of the old standard auditor jokes goes like this.
A prospective client interviews three firms and asks each the same question: What is 2
plus 2.
First firm answer is : We pride ourselves on our expertise, the answer is 4. They do not get
the job.
Second firm: We would like to research this question and provide you with a suitable answer.
No job.
Third firm: What did you have in mind? Job!
A bigger question is why would KSA want to overstate its reserves. At its face value, the
answer is they would not, lower reserves should lead to higher prices realized from their
oil. I don't think it is that simple. The Saudi regime is an oppressive dictatorship that
oddly relies on extensive welfare type payments to maintain power. They do have a national
interest in overstating their reserves, its sort of an Emperor's new clothes thing.
And if you accept a much lower number, you essentially accept that there is a vast
conspiracy involved in hiding the real numbers.
That sentence is total nonsense. In 1980 ARAMCO suggested that quotas would be allocated
on the amount of proven reserves each country has. That is, the greater their proven
reserves, the higher their quota would be. Within the next few years, every OPEC nation
started increasing their "proven reserves" with a pencil. And their reserves just kept
growing and growing and growing. They never did allocate quotas based on proven reserves, but
that did not deter any of them from continually increasing their numbers.
But it is just downright silly to suggest that there is a conspiracy to hide their true
reserves. Of course their true reserves, like those of Iran, Iraq, Kuwait and the UAE are
closely garded secret while their published reserves are published everywhere. But no
conspiracy is needed to keep their true reserves a secret. All they have to do is deny all
other published numbers. Besides, most OPEC officials really believe those numbers. It is not
really hard to believe something you really desire to believe.
I find it astonishing that you Dennis, or Robert, thinks a conspiracy is needed to claim
those absurded numbers. No, no, no. It's just a gross exaggeration, nothing more. A gross
exaggeration does not require a conspiracy and it is just absurd to claim it does.
Saudi Arabia published the first audit of its vast oil reserves since it nationalized its
energy industry about 40 years ago, saying its reserves total 268.5 billion, slightly more
than the 266.3 billion figure that the government published previously.
The audit, conducted by Dallas-based consultant DeGolyer & MacNaughton Corp., is the
first since Riyadh fully nationalized Saudi Aramco between 1976 and 1980, and it comes as the
kingdom tries to generate interest in Aramco ahead of a potential initial public
offering.
"This certification underscores why every barrel we produce is the most profitable in the
world, and why we believe Saudi Aramco is the world's most valuable company and indeed the
world's most important," Saudi Energy Minister Khalid Al-Falih said in a statement posted on
the state news agency's website.
This is a link from DeGolyer & MacNaughton about their audit on Saudi oil reserves. There
is no field by field split of the reserves or the quality – heavy, light, sweet etc
Feb 12, 2019
https://www.demac.com/dm-confirms-independent-assessment-of-reserves-in-saudi-arabia-for-the-saudi-arabian-oil-company/
DeGolyer and MacNaughton is pleased to acknowledge the recent completion of the first
contemporary independent assessment of reserves in Saudi Arabia for the Saudi Arabian Oil
Company. The study encompassed a highly detailed independent analysis of a massive dataset
and onsite review. More than 60 geophysicists, petrophysicists, geologists, simulation
engineers, reserves engineering specialists, and economists were involved in the 30-month
effort.
In 1943, one of our founders, Everette DeGolyer, surveyed the Middle East and Persian Gulf
area as part of the war effort. Mr. DeGolyer was quoted at the time as declaring, "The oil in
this region is the greatest single prize in all history." At the time of this survey, Mr.
DeGolyer's estimates and predictions that the Middle East would become the center of the
world's oil production were considered by some to be massive exaggerations, but his work has
since been found to be quite conservative. DeGolyer and MacNaughton's work in the Kingdom of
Saudi Arabia continues Mr. DeGolyer's legacy of knowledge and integrity, and the firm remains
at the forefront of the petroleum consulting services industry.
Below is a compilation of article links where you can find further information regarding
our most recent work in Saudi Arabia. At this time, DeGolyer and MacNaughton will make no
further comments on this extensive project.
More than 60 geophysicists, petrophysicists, geologists, simulation engineers, reserves
engineering specialists, and economists were involved in the 30-month effort.
All audits are paid for, so I guess that means we cannot believe any of them.
A reputable firm does not lie when they make these evaluations, they make their best
estimate as their reputation for honesty is the core of their business.
Just like tobacco danger audits funded by the tobacco industry were entirely credible
because the analyzing firms had to be so very careful about their reputation.
I also recall the brain cancer/cellphone linkage study was funded by Motorola and
challenging it on that basis never really got traction.
Why do they want to produce from the neutral zone – not really necessary the next 50
years with that reserves?
Why do they produce the expensive off shore fields? They could wait for a few decades more
before spending this money.
Normally, a tapped giant field produces for 50-60 years – so with an original 4-500
GB ressources(this survey + everything they produced already) they should have capacity for
up to 20 or 25 mb / day. They have erverything tapped they have, not some giant fields
untapped as reserve.
Russia produces 11 mb/day from reserves of round about 100GB.
Exactly, why would you develop more expensive and complicated offshore if you have
"unlimited" resources left in cheap and easily accessible already developed areas?
Dont they need that money to pave the streets with gold, balance the budget, keep people
happy? What king or politician would make that desicion? Lets develop the more expensive
stuff we dont need so i have less money to throw around.. makes sense?
Schlumberger mentioned in their q3 in the q&a they had contact for drilling 400 infill
wells for saudi during the next 3 years think starting year was 2019. Why is that needed if
these unlimited reserves are there?
Or should we look at it the different way, 400 new holes unlocks these reserves or perhaps
even more future reserves?
The Saudis have had 270B barrels of oil since the 80s even though they've been producing
3-4B/yr. An independent audit found, miraculously, that they still have 270B barrels of oil.
As a small business owner I can tell you that my books can be audited and deemed in good
order, and the auditor will never have gone back in the warehouse to see if there is actually
any of the stock that I have listed in the books. The Saudis will have 270B barrels of oil,
until, one day, they have none.
It's the 270 GB that implies they are lying – how much is unknown.
Reserve growth and production never is hand in hand – it would be slowly decrease to
200 during the 90s, increase to 300 with higher oil prices for reclassifying marginal fields
or introduction of new recovery technic, and reducing again.
Or a bump up with the discovery of a new field (this is always good for propaganda
reasons).
Instead it was constant 270 over almost 40 years – not believable. And the audit was
too near at this 270 – a 300 or a 250 would have been more believable.
So we still know nothing yet – perhaps it's 150, perhaps even 300.
Mamdouh G Salameh's Response to Robert Rapier's article
Jeffrey J. Brown
9:35 AM
From Oilprice.com (Dr Mamdouh G Salameh):
In a paper titled:"Saudi Proven Crude Oil Reserves: The Myth & the Reality Revisited"
I gave at the 10th IAEE European Energy Conference in Vienna, 7-10 September 2009, I reached
the conclusion that Saudi proven crude oil reserves actually range from 90-125 billion
barrels (bb) and not the 264 bb the Saudis were claiming then. That was 2009.
However, there has recently been claims that an independent audit has put Aramco's Oil
Reserves at $270 billion Barrels". It transpired that the audit was neither independent nor
unbiased since some of the companies that conducted the audit (DeGolyer, MacNaughton, and
Baker Hughes' Gaffney, Cline, and Associates) have or have had service contracts with Saudi
Aramco, so it can't truly be classified as an independent audit.
Still, I decided to make a new estimate of Saudi proven reserves by adding Saudi
production since the discovery of oil in 1938 till now (for which we have figures) and then
deducting them from Saudi claimed proven reserves along with an annual depletion rate of
Saudi aging fields averaging 5%-7% for the same period. My calculations came to around 70-74
bb of remaining reserves compared with the figure in 2009 allowing for production since
2009.
The fact that Saudi Arabia's proven reserves remained virtually constant year after year
despite sizeable annual production and a lack of major new discoveries since 1965 is due to
the Saudis increasing the oil recovery factor (R/F) and the oil initially in place (OIIP) to
offset the annual production. The Saudis have been declaring an R/F of 52% or even higher
when the global average is 34%-35%. They have also increased the OIIP from 700 bb to 900 bb
on the basis of Saudi Aramco projecting new discoveries which are yet to be discovered.
Venezuela does have the world's largest proven reserves estimated at 303 bb and growing.
However, the United States Geological Survey (USGS) estimates that there may be more than 513
bb of extra-heavy crude oil and bitumen deposits in Venezuela's Orinoco belt region. The fact
that the bulk of the reserves consists of extra-heavy oil doesn't detract from the fact that
they are proven and have been refined in Venezuela's own refineries in Texas and sold in the
United States as gasoline and diesel. Moreover, it is virtually no different from Canada's
tar sand oil.
Your argument that the rise of oil prices to triple digits has made Venezuela's extra
heavy oil economical to produce applies also to Canada's tar sand oil and US shale oil
(though shale oil is light).
Your argument that Saudi barrels were deemed to be economical to produce even before oil
prices spiked is a valid one but it misses the point about reserves. Irrespective of whether
crude oil reserves consist of light or medium or heavy or extra-heavy crude, once they are
proven they are all categorized as oil reserves. Of course, cost of production is a very
important factor in the economics of oil and the profitability of production. In this regard,
the production of Venezuela's extra-heavy oil at current prices is not different from an
economic point of view from US shale oil production or Canadian tar sand oil production.
Finally, the claimed audit about Saudi reserves smacks of a blatant attempt by Saudi
Aramco abetted by foreign oil companies which are beneficiaries of Saudi Aramco largess to
resurrect the IPO of Saudi Aramco. The IPO is dead and buried. We now know that the
withdrawal of the IPO was because of risk of American litigation related to the 9/11
destruction of the World Trade Centre in New York and question marks about the true size of
Saudi proven oil reserves. However, when Saudi King Salman called off the IPO, he justified
his decision by saying that he didn't want to expose Saudi Aramco's finances or reserves to
be scrutiny. His words speak volumes about Saudi reserves.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
The data suggest that on a net exports basis, after subtracting out rising domestic
liquids consumption, Saudi Arabia has been supply constrained since 2005.
Their net exports of total petroleum liquids (BP data base) increased from 7.1 million bpd
in 2002 to 8.7 million bpd in 2005, but their net exports have been below the 2005 level for
12 straight years, through 2017, averaging only 7.9 million bpd for 2006 to 2017
inclusive.
Note the large increase in Saudi net exports from 2002 to 2005 as annual Brent crude oil
prices approximately doubled from $25 in 2002 to $55 in 2005.
However, as annual Brent crude oil prices doubled again, from $55 in 2005 to $110 for 2011
to 2013 inclusive, Saudi net exports averaged only 8.0 million bpd during this three year
period of triple digit oil prices, versus 8.7 million bpd in 2005.
"... The unplanned shutdown takes out another 1 million barrels a day of heavy oil from the market, Alex Schindelar, executive editor of content & strategy at Energy Intelligence Group tweeted Thursday, adding that the heavy crude oil market was already tight because of the OPEC output cuts and U.S. sanctions on both Iran and Venezuela. ..."
Saudi Aramco halts oil output at the world's largest offshore oilfield: report
Saudi Aramco halted oil output this week at Safaniyah, the world's largest offshore
oilfield, Energy Intelligence reported Thursday, citing sources familiar with the matter,
according to a tweet from Amena Bakr, senior correspondent at the news and research service
provider. Further information was only available through subscription-based Energy
Intelligence.
The potential impact on oil prices depends on how long output at the oilfield is down,
said Phil Flynn, senior market analyst at Price Futures Group.
"The thinking is that the field produces heavy crude, and the world is short of that [type
of] oil."
The unplanned shutdown takes out another 1 million barrels a day of heavy oil from the
market, Alex Schindelar, executive editor of content & strategy at Energy Intelligence
Group tweeted Thursday, adding that the heavy crude oil market was already tight because of
the OPEC output cuts and U.S. sanctions on both Iran and Venezuela.
In electronic trading, March WTI oil CLH9, +1.06% was at $54.51 a barrel, after settling
at $54.41 on the New York mercantile Exchange.
Okay, you will have to read the article to see how Robert arrived at his conclusion. But
his conclusion is:
So, I have no good reason to doubt Saudi Arabia's official numbers. They probably do
have 270 billion barrels of proved oil reserves.
I find his logic horribly flawed. Robert compares Saudi's growing reserve estimates with
those of the USA.
First, the US Securities and Exchange Commission have the strictest oil reporting laws in
the world, or did have in 1982. Also, better technology has greatly improved reserve
estimates. And third, the advent of shale oil has dramatically added to US reserve
estimates.
Saudi has no laws that govern their reserve reporting estimates.
From Wikipedia, US Oil Reserves: Proven oil reserves in the United States were 36.4
billion barrels (5.79×109 m3) of crude oil as of the end of 2014, excluding the
Strategic Petroleum Reserve. The 2014 reserves represent the largest US proven reserves since
1972, and a 90% increase in proved reserves since 2008.
Robert says US reserves are 50 billion barrels. I don't know where he gets that number but
it really doesn't matter. Oil production, along with reserve estimates, are growing in the US
for one reason and one reason only, the advent of shale oil. Reserve estimates before 2008
were based on conventional oil. Onshore conventional oil production in the USA is in steep
decline.
Robert Rapier is brillant oil man, but a brilliant downstream oil man. Refineries are his
forte. He should know better than the shit he produced in that article.
100 percent of Saudi Arabia's reserves are based on conventional oil. Their true reserves
are very likely somewhere in the neighborhood of 70 billion barrels.
DUBAI/LONDON (Reuters) - Saudi Arabia, the world's top oil exporter, cut its crude output in
January by about 400,000 barrels per day (bpd), two OPEC sources said, as the kingdom follows
through on its pledge to reduce production to prevent a supply glut.
Riyadh told OPEC that the kingdom pumped 10.24 million bpd in January, the sources said.
That's down from 10.643 million bpd in December, representing a cut that was 70,000 bpd deeper
than targeted under the OPEC-led pact to balance the market and support prices.
The Organisation of the Petroleum Exporting Countries, Russia and other non-OPEC producers -
an alliance known as OPEC+ - agreed in December to reduce supply by 1.2 million bpd from Jan.
1.
The agreement stipulated that Saudi Arabia should cut output to 10.311 million bpd, but
energy minister Khalid al-Falih has said it will exceed the required reduction to demonstrate
its commitment.
"... That works out to be 320,000 barrels per day. Saudi production increased by 384,000 barrels per day during November. So Saudi's November increase was mostly just emptying their storage tanks. ..."
That works out to be 320,000 barrels per day. Saudi production increased by 384,000 barrels per day during November. So
Saudi's November increase was mostly just emptying their storage tanks.
And from looking at your chart, it looks like the 135,000 barrel per day increase in October was from the same source.
Saudi cuts start from a base of 10,633,000 barrels per day. That is almost their exact production in October. And your chart
shows Saudi inventories had been dropping for months. Saudi had obviously been preparing to "cut" production from a level of production
they reached by emptying their storage tanks.
"... It makes sense for Saudi Arabia to focus its cuts on sales to the U.S., the only country that publishes detailed weekly data on oil imports and inventory levels -- traders watch the reports closely. This means the reductions will be evident more quickly than would similar cuts to other destinations, so a drop in American imports should have a much more immediate impact on price expectations. ..."
There's already less Saudi crude oil getting loaded for export.
The list of things that President Donald Trump criticizes in his tweets varies from one day to the next. He may soon have to direct
his ire to oil prices and the actions of his ally, Saudi Arabia, once again.
The desert kingdom is already making good on its promise to slash supply, and the initial evidence suggests that the biggest cut
is being made in deliveries to the U.S. On top of that, the price it charges American buyers of its crude has been raised to near
record levels for cargoes to be shipped in February. That could be bad news for a president who just celebrated falling gas prices.
The OPEC+ group of countries met in December and,
after Russia took the reins
, eventually agreed to cut supplies by 1.2 million barrels a day from January. For Saudi Arabia,
that meant cutting production to just over 10.3 million, but it pledged to go further -- oil minister Khalid Al-Falih told reporters
and analysts that it would be slashed to 10.2 million barrels a day in January.
The first job was to unwind the output surge made in November that had helped to deliver the price drop hailed by Trump. That
was done last month. Saudi production in December was back below the October baseline used for its (and most other countries') promised
cuts.
Saudi Cuts
Saudi crude production was cut to 10.65 million barrels a day in December from a record 11.07 million in November
That couldn't have been what Trump wanted, given what he tweeted the day before OPEC began its meeting in Vienna -- at the time,
crude prices were in the midst of their worst quarterly decline in four years.
Bloomberg's tracking of crude exports from
Saudi Arabia indicates that the biggest drop in flows from the kingdom was in the volume heading for the U.S. Shipments to ports
on the Atlantic, Gulf and West coasts fell by nearly 60 percent between November and December to just over 350,000 barrels a day.
That's the lowest since Bloomberg started tracking these flows in January 2017.
Cutting Shipments
The flow of Saudi crude heading to the U.S. slumped last month, as the kingdom slashed output
The size of the drop isn't set in stone -- a small number of ships signaling that they are heading for the Suez Canal or Singapore
could eventually go to the U.S. Even so, a decline in Saudi crude shipments to American ports should start to show up in lower deliveries
after about six weeks. By mid-February, U.S. imports of the kingdom's oil could fall to the lowest in more than 30 years, according
to data from the Department of Energy. The last time the flow from Saudi to the U.S. fell below half a million barrels a day was
in the mid-1980s, after the kingdom slashed its production by 80 percent over four years in an ultimately unsuccessful attempt to
prop up oil prices.
Slowing The Flow
Imports of Saudi crude into the U.S. could soon fall to their lowest in more than 30 years
It's not just this volume decline that is going to rile Trump. The price of that oil isn't going to make him happy either.
Saudi Arabia sets its crude prices a month in advance of it being loaded at its export terminals, so it has just published its
price list for February. In common with other producers, it does not set an outright price, but rather a differential to regional
benchmarks for each export grade and each market area.
Price differentials for U.S. buyers have been going up since August and for most grades are now close to record levels. Saudi
heavy crude, which is the closest alternative to dwindling supplies from Venezuela and Mexico, is the most expensive it's been since
2009 in relative terms.
Price Rises
Saudi crude prices for U.S. buyers have risen to near record levels against the regional benchmark
It makes sense for Saudi Arabia to focus its cuts on sales to the U.S., the only country that publishes detailed weekly data on
oil imports and inventory levels -- traders watch the reports closely. This means the reductions will be evident more quickly than
would similar cuts to other destinations, so a drop in American imports should have a much more immediate impact on price expectations.
There is no reason to doubt that Al-Falih will do what he said in Vienna. It was only after slashing exports to the U.S. in July
2017 that oil prices really began to recover, and Saudi Arabia will be hoping for a similar impact this time, too. But don't be surprised
if that also unleashes angry tweets from the U.S. president.
Julian Lee is an oil strategist for Bloomberg First Word. Previously he worked as a senior analyst at the Centre for Global Energy
Studies.
Trump lost control of foreign policy, when he appointed Pompeo. US voters might elect Hillary with the same effect on foreign policy
as Pompeo.
Notable quotes:
"... It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel. ..."
"... Energy dominance, lebensraum for Israel and destroying the current Iran are all objectives that fit into one neat package. Those plans look to be coming apart at the moment so it remains to be seen how fanatical Trump is on Israel and MAGA. MAGA as US was at the collapse of the Soviet Union. ..."
"... As for pulling out of the Middle East Bibi must have had a good laugh. Remember when he said he wanted out of Syria. My money is on the US to be in Yemen before too long to protect them from the Saudis (humanitarian) and Iranian backed Houthis, while in reality it will be to secure the enormous oil fields in the North. ..."
"... The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF. ..."
Pompeo is a Deep State Israel-firster with a nasty neocon agenda. It is to Trump's disgrace that he chose Pompeo and the abominable
Bolton. At least Trump admits the ME invasions are really about Israel.
Pompeo is a Deep State Israel-firster with a nasty neocon agenda. It is to Trump's disgrace that he chose Pompeo and
the abominable Bolton. At least Trump admits the ME invasions are really about Israel.
Trump, Israel and the Sawdi's. US no longer needs middle east oil for strategic supply. Trump is doing away with the petro-dollar
as that scam has run its course and maintenance is higher than returns. Saudi and other middle east oil is required for global
energy dominance.
Energy dominance, lebensraum for Israel and destroying the current Iran are all objectives that fit into one neat package.
Those plans look to be coming apart at the moment so it remains to be seen how fanatical Trump is on Israel and MAGA. MAGA as
US was at the collapse of the Soviet Union.
As for pulling out of the Middle East Bibi must have had a good laugh. Remember when he said he wanted out of Syria. My money
is on the US to be in Yemen before too long to protect them from the Saudis (humanitarian) and Iranian backed Houthis, while in
reality it will be to secure the enormous oil fields in the North.
Perhaps this was what the Khashoggi trap was all about. The importance of oil is not to supply US markets its to deny it
to enemies and control oil prices in order to feed international finance/IMF.
"... Trump won't fire his son-in-law, so if Jared doesn't have the decency to resign on his own, he may well be responsible for Trump's downfall in addition to his own. Trump's silly daughter, Ivanka, needs to go to. ..."
"... Time for Bolton to send for the clairvoyant Theresa May who has managed to accuse Russia, and Mr. Putin personally, in the Skripals' poisoning n the absence of any evidence ..."
Comment section (David Wooten): "According to the crown prince himself, Trump's [Jewish]
son-in-law gave him a secret list of his enemies -- the ones like Al Aweed who were
tortured and shaken down for cash. Khashoggi might even have been on that list.
One or more of the tortured ones likely tipped off Erdogan, which is why Turkey only
needed to enter the consulate, retrieve the recorded audio device they planted, and walk out
with the evidence. Turkey also has evidence that puts MbS' personal doctor and other staff
arriving in Turkey at convenient times to do the job -- and probably more. Khashoggi was
anything but a nice person but Trump cannot say that or he'll likely be accused of
involvement in his murder.
Dissociation is made far more difficult by the fact that Jared is a long time friend of
Netanyahu who, like Jared, hasbefriended MbS .
Trump won't fire his son-in-law, so if Jared doesn't have the decency to resign on his
own, he may well be responsible for Trump's downfall in addition to his own. Trump's silly
daughter, Ivanka, needs to go to.
Were it not for the Khashoggi affair, fewer Republican seats would have been lost in the
election."
-- Time for Bolton to send for the clairvoyant Theresa May who has managed to accuse
Russia, and Mr. Putin personally, in the Skripals' poisoning n the absence of any
evidence .
These people -- Bolton, May, Gavin Williamson and likes -- are a cross of the ever-eager
whores and petty brainless thieves. To expose themselves as the willing participants in the
ZUSA-conducted farce requires a complete lack of integrity.
Of course, there is no way to indict the journalist's murderers since the principal
murderer is a personal friend of Netanyahu and Jared.
Jump, Justice, jump, as high as ordered by the "chosen."
By the way, why do we hear nothing about Seth Rich who was murdered in the most surveilled
city of the US?
@annamaria A 1st
grader can see that MbS was behind the murder of Kashoggi.
Trump won't fire his son-in-law, so if Jared doesn't have the decency to resign on his
own, he may well be responsible for Trump's downfall in addition to his own. Trump's silly
daughter, Ivanka, needs to go to.
I've been hoping for this since they moved to Washington with 'big daddy'.
@Anon " crappy
bedtime reading the woolyheadedness "
Hey, Anon[436], is this how your parents have been treating you? My condolences.
If you feel that you succeeded with your "see, a squirrel" tactics of taking attention
from the zionists' dirty and amoral attempts at coverup of the murder of the journalists
Khashoggi, which was accomplished on the orders of the clown prince (the dear friend of Bibi
& Jared), you are for a disappointment.
One more time for you, Anon[436]: the firm evidence of MbS involvement in the murder of
Khashoggi contrasts with no evidence of the alleged poisoning of Skripals by
Russian government.
The zionists have been showing an amazing tolerance towards the clown prince the murderer
because zionists need the clown prince for the implementation of Oded Yinon Plan for Eretz
Israel.
The stinky Skripals' affair involves harsh economic actions imposed on the RF in the
absence of any evidence , as compared to no sanctions in response to the actual murder
of Khashoggi, which involved MbS according to the availableevidence . Thanks
to the zionists friendship with the clown prince, the firm evidence of Khashoggi murder is of
no importance. What else could be expected from the "most moral" Bibi & Kushner and the
treasonous Bolton.
The stinky Skripals' affair involves harsh economic actions imposed on the RF in the
absence of any evidence, as compared to no sanctions in response to the actual murder of
Khashoggi, which involved MbS according to the available evidence. Thanks to the zionists
friendship with the clown prince, the firm evidence of Khashoggi murder is of no
importance. What else could be expected from the "most moral" Bibi & Kushner and the
treasonous Bolton.
Is this Kashoggi that has been butchered allegedly related to the biggest arms dealer in
the world, Adnan Kashoggi? Who had the biggest super yacht in the world, and did he sell said
super yacht to Donald back in the day?
Your super research skills could help me out this morning.
I have just been told by the secretary of the Prof. at the Beatson in Glasgow that the
Secretary of State's new rules on cancer treatment with Medical Cannabis oil which is
supposed to come into effect on the 1st of November does not apply to me. But will not tell
me why I am excluded.
Is this another con by the Tory Gov. to make themselves look like a caring Gov. treating
young children only?
I can't find the criteria anywhere. Mind you I have difficulty focusing on anything at the
moment while steam is coming out my ears in anger.
Maybe I should move to Israel to get a Medical Cannabis cure? NAE CHANCE!!!
If anybody had any doubts about the Washington's determination to
give Saudi Crown Prince Mohammad bin Salman a pass over allegations that he was involved with
the killing of Saudi journalist Jamal Khashoggi, President Trump put them to rest earlier this
week when he
released a statement praising Saudi Arabia, openly
questioning the CIA and stressing the importance of the US-Saudi relationship (while also
portraying Khashoggi as a suspicious and untrustworthy figure with ties to terror groups).
And while rumors about a possible intra-family coup in Riyadh have been simmering since
Khashoggi disappeared inside the Saudi consulate in Istanbul on Oct. 2 (with
the latest reports surfacing earlier this week ), the notion that MbS's spurned relatives
might rise up and exact their revenge for last year's brutal
"corruption crackdown" at the Riyadh Ritz Carlton is looking increasingly improbable. In
other words, as long as the international response to the Khashoggi incident is limited to
countries that don't sell weapons to Saudi Arabia ending arms sales to the kingdom, then MbS
will almost certainly survive.
And in the latest indication that the royal family - not to mention nearly all of the
Saudis' regional allies - remains firmly behind the Crown Prince, even as the return of his
uncle from exile has set tongues wagging about MbS' impending ouster, one senior prince
recently told
Reuters that the CIA's findings are "not to be trusted."
"... You would not consider as viable the hypothesis that Trump is using the assassination, and evidence of MbS' ordering of it, as leverage to achieve various objectives that MbS wasn't on board with (a resolution of the Yemen situation? Oil pricing? toning down jihadi support in the MENA? Other?). ..."
What do people make of the fact that it seems Khashoggi apparently was recently married,
the picture of him with his supposed fiancée was clearly photoshopped (used the
same photo from his WaPo profile), and his family has indicated they knew nothing of this
new fiancée?
It also seems interesting how the US has a tape of MBS ordering his silencing when we
apparently knew little at the outset. Seems this turd is starting to stink a bit.
Automated SIGINT collection produces such volumes of material based on standing targets
that it often takes a while to sift through it. MBS's phone would be such a target. In
any event Trump doesn't want to hear it.
You would not consider as viable the hypothesis that Trump is using the assassination,
and evidence of MbS' ordering of it, as leverage to achieve various objectives that MbS
wasn't on board with (a resolution of the Yemen situation? Oil pricing? toning down
jihadi support in the MENA? Other?).
TheRealNews
Published on 20 Nov 2018
CIA officials are signaling Saudi Crown Prince Mohammed bin Salman must be replaced. Is this all about the killing of Jamal
Khashoggi? Professor Asad AbuKhalil says there are other political reasons.
Fear not! I heard on the news on my way home that Trump has decided Saudi Arabia will not be
punished for the killing of Khahsoggi with termination of current arms contracts. The Donald
reasons that if that happens, the KSA will just buy its weapons elsewhere. And nobody in the
military-industrial complex wants that. I am very confident Justin Trudeau will interpret
that as a signal that Canada likewise should not cut off its nose to spite its face, and so
Canada will not 'punish' its good friend, either. Therefore, Saudi Arabia will experience no
punishment whatsoever for its admitted murder of an inconvenient American journalist. There
are limits to western indignation, after all. So the west will content itself with revoking
the KSA's invitation to the Spring Strawberry Social, and double down on its insistence that
Crimea is Ukraine and must be returned to Kiev's control, and the west will never accept its
'annexation'. Never, never, never. There are some issues on which the west has spine to
spare. So if you want a noisy western journalist removed, slip the Saudis a few bucks, and
they can probably make it happen with no recriminations.
The recognition of Crimea as part of Ukraine by Washington and its minions is totally
worthless. It is not based on law and justice, it is based on self-interest (as in the USA
had big plans to acquire Crimea and build a massive naval base there). The use of the word
annexation is propaganda drivel.
Ukraine annexed Crimea in 1991 and the ICJ has ruled that
local ethnic majorities have a right to self determination. If independence is good enough
for Kosovo, it is good enough for Crimea. No amount of special pleading by Washington and its
bootlicks about Kosovo being "special" has any merit.
I'm afraid you are wrong about the ICJ Kirill. The ICJ dodged the actual issue. They ruled
that making a declaration of independence is not against international law, not
whether anyone/whatever/blah blah blah actually has the right to independence. Possibly
because they did not want to cross Pandora's Rubicon Box
the adoption of the declaration of independence of the 17 February 2008 did not violate
general international law because international law contains no 'prohibition on declarations
of independence
####
Some call it 'unique', others call it a precedent , therefore 'not unique'. If the
West argues that the ICJ said it was ok, then it is also ok for Crimea to declare
independence. Or, if they claim that Crimea is not independent, that Kosovo cannot be either,
hence, as you point out the use of the word ' annexation ' and other creative
circumlocutions to avoid mentioning that secession was first and the clear comparison with
Kosovo which would not serve them well at all.
The International Court of Justice today held that
international law did not prohibit Kosovo's
declaration of independence, while sidestepping the
larger issue of Kosovo's statehood
####
But, this is not the first time the West has decided what international law is for itself
when back in 1991 the European Council ministers themselves appointed the Badinter Commission
to give it a legal figleaf for recognizing the administrative borders of Yugoslavia as
international. I've posted this link before, but once more with feeling:
Thanks for the clarification. But it is all a house of cards. Given that empires and
countries have continually fissioned into pieces through the whole of relevant history, the
notion of "territorial integrity" is bogus and a corollary of "might makes right". As long as
the country can suppress secessionists it has territorial integrity, when it becomes too weak
everything falls apart. There is no international law. And if ware to assume a common law
regime that is not maintained by legislatures, then secession is fully legal if the local
majority wants it hard enough.
We know it is nothing but the Law of the Jungle. It's just that the fancy dress shop
has expanded and has a lot more more costumes on offer to its clients.
when the west trots out its I-never-said that-exactly smokescreen, it is helpful to read
what various western countries wrote as legal opinions, and the arguments they used to
support their reasoning. Where Kosovo is concerned, a classic is the Polish opinion, written
by (or more likely for) its then-Foreign Minister, Radek Sikorski. He wrote, in part;
" a state is commonly defined as a community which consists of a territory and a
population subject to an organized political authority; that such a state is characterized by
sovereignty the existence of the state is a question of fact, the effects of recognition by
other states are purely declaratory. A declaration of independence is merely an act that
confirms these factual circumstances, and it may be difficult to assess such an act in purely
legal terms."
Legal opinions are usually replete with bafflegab to confuse the easily-bored and the
pressed-for-time readers. But Mr. Sikorski made what he must have believed was a very
convincing case that a sovereign state-within-a-state is characterized by an ethnic
population, a pre-existing degree of autonomy (so that the entity demonstrates the capability
to function autonomously), and its own functioning institutions such as banks and
infrastructure.
Which of those is not descriptive of Crimea? It was even called "The Autonomous Republic
of Crimea", for Christ's sake. Sikorski doubtless had an inkling that the Kosovo precedent
might come back to bite NATO, and so tried to duck a justification which might read like a
precedent, but it was unavoidable.
"... The CIA disliked MbS since he replaced Mohammed bin Nayef as crown prince. MbN is a longtime U.S. asset with a proven record of cooperation. ..."
"... Khashoggi's projects were allegedly financed by Qatar but probably also had CIA support. MbS got wind thereof. He told his private office chief Bader Al Asaker to send his bodyguards to kill Khashoggi. They did so on October 2 in the Saudi consulate in Istanbul. But it was a much too large and too complicate mission. They Saudi agents made too many mistakes. They also underestimated the Turkish intelligence service. ..."
"... Sounds like, for all of MbS's recklessness and all the regime's existential dependency on the US military, the Saudis aren't willing to place all their bets on one US pony but, like most of the rest of the world, are trying to diversify if not detach from the tottering US empire. ..."
"... funny thing.. why is it that those who call for free and open elections in the middle east countries where the us/uk/west military industrial complex have murdered countless innocent people in iraq, libya, syria and now yemen - never complain about the absence of free and open elections in saudi arabia??? i know these same people are hypocritical liars.. what their real interests are is money off military sales and nothing more.. ..."
"... Trump is essentially doing all of Israel's talking points... iran this and that, hezbollah, or hamas this and that.. ..."
"... they sure aren't busy getting their head out of the military industrial complex's ass ..."
"... "Trump's priorities in the Middle East are: the 'deal of the century' for Israel, the forging of a united Arab front against Iran, weapon sales, cheap oil and minor issue like financing the U.S. occupation of Syria and ending the unsavory war on Yemen. Delivering on the deal of a century is not the priority, the promise is. United Arab front is not a priority because it's not needed. Most of all, stopping the war in Yemen is not. ..."
"... Is it too late for MbS to finally spit out the truth? "Khasshoggi was an Enemy of the Kingdom fomenting the mechanism for a coup, and I ordered him liquidated." ..."
"... "The Erdogan machine has sensed a once-in-a-lifetime opportunity to simultaneously bury the House of Saud's shaky Islamic credibility while solidifying Turkish neo-Ottomanism, but with an Ikhwan framework." ..."
"... We have seen oil prices plummet since the Khashoggi event although that may be due to insider trading of those knowing Trump was backing off on Iran oil sanctions which accelerated after being announced in November ..."
"... MBS is anti Iran and pro Israel. Trump is in Bibis pocket. More important MBS is a counter to Turkey and the Muslim Brotherhood. More conflicts in the region are desirable . He is also willing to bomb US civilian targets in Yemen so they can pretend to have no involvement, and as such will buy more weapons ..."
"... If MBS gets the message and follows orders, he stays. If he doesn't and makes Lockheed Martin disappointed, he goes. Also that Saudi Aramco IPO has to happen before 2020. The list is long. ..."
"... There is another angle to the Khashoggi killing and that is that the US or UK organized the killing to embarrass Trump and remove MBS. ..."
"... The CIA also fear Trump; and they have shown that they are not and never will be a friend to him. So I am inclined to agree with john mason 28 when he suspects the US or UK organized the killing to embarrass Trump and remove MBS. ..."
Against the advise from his intelligence services U.S. President Trump decided to leave the effective Saudi ruler, clown prince
Mohammad bin Salman, in place. That move is unlikely to help with his larger policy plans.
The stability of Saudi Arabia is becoming more fragile as the young crown prince's judgment and competence are increasingly
in doubt. Mohammed bin Salman has a track record of impulsive and reckless decisions at home and abroad that calls into question
the kingdom's future.
Riedel warned that the Trump administration, by betting on Mohammad bin Salman, put everything on one dubious card. MbS is
unstable and made himself many internal enemies. If King Salman suddenly dies
there will probably be a leadership crisis . Saudi Arabia could end up in chaos. U.S. Middle East policy, largely build around
MbS, would then fall apart.
The CIA disliked MbS since he replaced Mohammed bin Nayef as crown prince. MbN is a longtime U.S. asset with a proven record
of cooperation. MbS came from nowhere and the CIA has no control over him. That he is indeed impulsive and reckless only adds
to that. That the CIA feared that MbS meant trouble even before the Khashoggi disaster, explains why it sabotaged Trump's attempts
to exculpate MbS over the murder of Khashoggi.
While Riedel was writing about the Saudi danger, Jamal Khashoggi, a longtime Saudi intelligence agent who had aligned himself
with the wrong prince, went to Istanbul to build
the public relation infrastructure for regime change in Saudi Arabia:
Jamal Khashoggi, a prolific writer and commentator, was working quietly with intellectuals, reformists and Islamists to launch
a group called Democracy for the Arab World Now. He wanted to set up a media watch organization to keep track of press freedom.
He also planned to launch an economic-focused website to translate international reports into Arabic to bring sobering realities
to a population often hungry for real news, not propaganda.
Part of Khashoggi's approach was to include political Islamists in what he saw as democracy building.
...
Khashoggi had incorporated his democracy advocacy group, DAWN, in January in Delaware, said Khaled Saffuri, another friend.
.. The project was expected to reach out to journalists and lobby for change, representing both Islamists and liberals, ...
Khashoggi's projects were allegedly
financed by Qatar but probably also had CIA support. MbS got wind thereof. He told his private office chief Bader Al
Asaker to send his bodyguards to kill Khashoggi. They did so on October 2 in the Saudi consulate in Istanbul. But it was a
much too large and too complicate mission. They Saudi agents made too many mistakes. They also underestimated the Turkish intelligence
service.
The Turks had bugged the Saudi consulate and have records of all phone calls. When they learned from Khashoggi's fiancee, a
well connected daughter of a co-founder of Erdogan's AK Party, that Khashoggi was missing, they wound back the tapes and unraveled
the story. The killers had made four phone calls to Al Asaker to report back. In one of the calls the mission leader
told him
: "Tell your boss" that "the deed was done." The Turkish president Erdogan was delighted to receive such a gift. It allowed him
to cut his strategic competitor down to size.
The Saudis were too slow to recognize the danger. They came up with all sorts of unbelievable claims over what happened in
their consulate. Trump sent Secretary of State Pompeo who told them to
find a sufficiently high ranking scapegoat ...
XXX
Interesting times. Sounds like, for all of MbS's recklessness and all the regime's existential dependency
on the US military, the Saudis aren't willing to place all their bets on one US pony but, like most of the rest of the world,
are trying to diversify if not detach from the tottering US empire.
But I suspect the Saudi regime is too far committed on its prior US-dependent path to survive in any other way. They're going
down too.
Never Mind the Bollocks , Nov 21, 2018 1:06:21 PM |
link
Trump is openly and proudly accepting blood for money, so what? It's just business as usual for the US whom are running all and
any of their global businesses and operations on that premise since decades. But Karma is a bitch and will haunt back, and we're
getting closer to the day of reckoning while already witnessing the loss of power and influence of the US and their allied western
powers and vassals.
The close future will see China, Russia, India, Asia and Eurasia ruling the global affairs, and soon it's check mate concerning
the new great chess game, e.g. game over for the US. The only remaining question: do we get there with or without an all-out nuclear
war, because the US won't accept their loss of power? Time will tell ...
thanks b... good overview.... as we noted - the kashoggi murder is the gift that keeps on giving to erdogan and the cia...
funny thing.. why is it that those who call for free and open elections in the middle east countries where the us/uk/west
military industrial complex have murdered countless innocent people in iraq, libya, syria and now yemen - never complain about
the absence of free and open elections in saudi arabia??? i know these same people are hypocritical liars.. what their real interests
are is money off military sales and nothing more..
well, this is what the usa-uk and poodles have come down to... military arms sales... and they now have competition with russia
who appears to make better weapons..
mbs is not going to last... he might hang in for another year, but i doubt much longer, if that.. meanwhile, trump is standing
naked for all to see what his priorities are... make america great again, lol... yeah, right.. making the usa look like shit again
is more like it..
here is a
link to caitlin johnstone's comments on trumps response to the kashoggi murder...
Trump is essentially doing all of Israel's talking points... iran this and that, hezbollah, or hamas this and that..
. why can't the usa gets it's head out of israels ass?? they sure aren't busy getting their head out of the military industrial
complex's ass either...
CasualObserver , Nov 21, 2018 1:53:54 PM |
linkPeter AU 1 , Nov 21, 2018 1:54:14 PM |
link
"The Turks had bugged the Saudi consulate and have records of all phone calls. When they learned from Khashoggi's fiancee,
a well connected daughter of a co-founder of Erdogan's AK Party, that Khashoggi was missing, they wound back the tapes and
unraveled the story."
Turks bugged the embassy but only listen to the tapes after something happens .. unlikely.
With the animosity or competition between KSA and Turkey prior to the killing, it is more likely that KSA embassy calls were monitored
in real time.
Risk-taker king + S-400/Bastion/GLONASS = switch from 100% dollar oil sales to something like 40% yuan, 30% euro, 30% dollar.
Others follow suit, American manipulation of world economy lessens. I'll take it.
"When [the Turks] learned from Khashoggi's fiancee, a well connected daughter of a co-founder of Erdogan's AK Party, that
Khashoggi was missing, they wound back the tapes and unraveled the story."
This is ficion, as there is every likelihood the Turks knew perfectly well ahead of time that Kashoggi was walking into trouble.
And it is very likely they had an agent on scene, part of the crime. As for the tapes, it is still unknown whether the real leverage
in the tapes is what Kashoggi said.
The notion the CIA has sabotaged Trump with its assessment is wrong. If the CIA had given the tapes to Erdogan or is funding
plots within KSA against MbS, that's sabotaging Trump's support. Nobody believed Trump before the assessment, and nobody believed
Trump would change his mind for any reason whatsoever. The assessment just lets the CIA pretend to be competent and objective,
rather than producing cooked intelligence in service of predetermined policy goals. The actual covert operations are under presidential
control, and only presidential control. No deep state, much less Congress, has any say on those. That's why presidents like the
CIA so much.
"Trump's priorities in the Middle East are: the 'deal of the century' for Israel, the forging of a united Arab front against
Iran, weapon sales, cheap oil and minor issue like financing the U.S. occupation of Syria and ending the unsavory war on Yemen.
Delivering on the deal of a century is not the priority, the promise is. United Arab front is not a priority because it's not
needed. Most of all, stopping the war in Yemen is not.
always odd when the (relatively) "good guys" in a story are the CIA and their bloggers at the WaPo. but then they object to MbS
for the same reason they are mortified by trump: his style and not his substance.
as for trump, he's always been a spoiled and petulant rich kid and that type only change course when it's "their idea".
on oil: it's been a pain in the ass for Iran and Russia to some degree but also here in Canada's Texas aka the oil sands. the
usual ayn rand-reading "get rid a' the gubmint" rednecks are panicked and suddenly want said government to force production cuts
in the sector. when it comes to iran, china and others have made it clear that they care as much about sanctions as the US does
about climate and nuclear treaties. not hard to guess what russia and venezuela would like the saudis to do since they've both
been suffering (probably intentional) pain from the petrol glut. russia has weathered it incredibly well but the timing for maduro
and the chavism experiment couldn't be better with the usual pack of US-aligned wolves fomenting trouble in the continent.
I see that the Magnitsky Act had been slapped on some KSA usual suspects several days ago. Has anyone asked Ben Cardin, godfather
of the act, why MbS has escaped the same fate?
Of course the CIA isn't trying to sabotage Trump. They just came to the same painfully obvious solution any other intelligence
operation worth its salt arrived at.
Erdogan required no help from them. His people just connected the dots like everyone else. The CIA does not have to try and
"appear" competent. Like 'em or hate 'em, they're as competent as hell.
Trump has chosen to wobble om MsM's culpability so he can pursue his tortured agenda throwing numbers about with abandon on
the reams of cash that the Saudis will come supposedly up with whether it's imaginary arms deals or production numbers that will
keep the price of oil low.
Nobody believes Trump. Nobody except his hardcore base and they will never change. If their faith remains solid after two years
of total skullduggery, lies and ill-considered deals with batshit-crazy dictators then what could he possibly do or say that would
change things now? They're like those lunatic Baptists that play with rattlesnakes during their services.
The US needs the KSA for a number of reasons and Trump has decided to forfeit any moral high ground or any appearance of sanity
or reason to achieve his aims.
Well, MBS staying in charge for a bit longer is good news for many. Were he to be replaced, someone half-competent might take
his place. With him at the helm, we're sure he's going to bumble and make a mess of his next endeavours, weakening the Saudis
and being all around counter-productive to Saudi Arabia's long-term interests. Of course, his days are numbered, yet he can still
do a lot of damage to the kingdom.
Is it too late for MbS to finally spit out the truth? "Khasshoggi was an Enemy of the Kingdom fomenting the mechanism for
a coup, and I ordered him liquidated." IMO, that's less awkward than continuing the other charades, shuts-up Erdogan and
wrong-foots his detractors. Now, I don't particularly care for MbS, but IMO he's no worse than Erdogan, Sisi, Trump, or May, all
of whom are Capital Criminals. And I'd prefer to see someone independent of the CIA in charge of Saudi, although that's probably
his only redeeming asset.
Perhaps, MbS will send a body-double to G-20, and the CIA will crash his plane only to see MbS alive and well, taunting Haspel
and Trump as he personally beheads arrested CIA assets.
'Keeping Bin Salman In Place Will Hurt Trump's Middle East Policies', but removing him will hurt Trump's mid-east policies even
more.
If he is removed, he will be replaced by a 'Globalist' puppet. The 'Globalists' will then use Saudi as an additional lever
to try to drag Trump into a war with Russia, which so far Trump has desperately tried to avoid. I also don't think that MBS will
go easily. The same fate as Gaddafi and Saddam Hussein is what awaits him. However, I think Trump is too weak to save MBS. Look
for MBS to turn Saudi towards Russia to look for salvation.
Pepe Escobar
reminds us of another issue at stake: Leadership of the Umma, which was Ottoman for centuries prior to the artificial elevation
of Saudi by Ottoman's European rivals. Pepe smartly invokes
Alastair Crooke's take that if Saudi was to lose that distinction, it "would strip the Gulf of much of its significance and
value to Washington." Pepe:
"The Erdogan machine has sensed a once-in-a-lifetime opportunity to simultaneously bury the House of Saud's shaky Islamic
credibility while solidifying Turkish neo-Ottomanism, but with an Ikhwan framework."
Iran, Syria, Iraq, Qatar, Russia, and China all seem to be okay with that. IMO, most here will agree with Pepe's conclusion:
"Expect major fireworks ahead."
Thanks. This clarifies the contradictions. The USA has only one Middle East ally left; Israel, which also influences American
politics. With the main goal in life to make more money. Morality and decency have disappeared in the West. All that is left is
a mercenary force illegally occupying Eastern Syria for a paltry 100 million dollars surrounded by professed enemies. Basically,
MbS isn't delivering the cash the oligarchs want. He must go. This is highly unstable. Ignoring reality is a sure-fire way to
ignite the prophesied Abrahamic Apocalypse.
Trump is doing nothing out of the ordinary by a POTUS. If it was a Democrat POTUS in the same situation, it would also ultimately
support Saudi Arabia (the NYT and WaPo would, obviously, be silent, but Fox News would propagate the scandal).
I stick to my hypothesis: Trump's only sin to the liberal eyes is that he erodes America's soft power among its First World
allies. If you take out his image, he's a normal POTUS doing normal POTUS things.
(1) Nobody has yet figured that the Turks must have listened to what was going on in the Consulate if not before K's first visit
then at least from the time K first stepped into the building, the Turks knew what was coming, could have waned K, but didn't.
Does it not make them complicit in the murder?
(2) MbS cannot be kicked out, the decision to promote him was made by the King for a reason, the old man thinks ahead, he sees
the Republic losing its grip on things worldwide, he wants to make a move towards the coming powers of the East, Russia and China,
hence the King's visit to Moscow last December. What did the King and Putin talk about?
(3) Bibi backs the King, the Israeli lobby in Washington will buy anyone opposing MbS, the atrocity will be swept under the
carpet, the Donald will be OK the American unwashed don't give AF about the Saudis, most of them probably don't know where the
country is.
Since when has US and Israel goals has been about stability in the region. Chaos makes waves and rock the boat to the delight
of the baby in the cradle. Wheeee.
Besides, MBS may have went a bit rogue but the Khashoggi event, set up or what not, was meant to reign him in and show him
who is boss. We have seen oil prices plummet since the Khashoggi event although that may be due to insider trading of those
knowing Trump was backing off on Iran oil sanctions which accelerated after being announced in November
MBS is anti Iran and pro Israel. Trump is in Bibis pocket. More important MBS is a counter to Turkey and the Muslim Brotherhood.
More conflicts in the region are desirable . He is also willing to bomb US civilian targets in Yemen so they can pretend to have
no involvement, and as such will buy more weapons
The Event was probably also meant to get him to back off his investment efforts that would compete with US efforts to do the
same, and to back off Russian and China military/economic cooperation.
If MBS gets the message and follows orders, he stays. If he doesn't and makes Lockheed Martin disappointed, he goes. Also
that Saudi Aramco IPO has to happen before 2020. The list is long.
There is another angle to the Khashoggi killing and that is that the US or UK organized the killing to embarrass Trump and
remove MBS.
Can't see that the Saudis are that naive to believe that their Embassy wouldn't be under surveillance and the
mention of "tell your boss...." is too convenient. One assumes that the boss is MBS but it could be anyone else also.
The problem with Trump's plan ... is Trump's plan. It makes no sense for the United States as a nation to destroy Iran. That is
only for Israel-firsters. Perhaps their power is just too great for Trump to resist, but what would have worked well would have
been rapprochement with Iran.
"With regard to #SaudiArabia, as with #Israel, #US foreign policy is entrenched, it cannot change, nor adapt. It rather tries
to change the politics in the region according to its rigid framework. There must be a breaking point to this approach and it
might come under #Trump."
Trump's also about to forfeit what remaining influence he has with Lebanon
as Magnier posits .
At least we won't need to wait long to see what happens next as the G-20 begins November 30--Will MbS undergo an assassination
attempt before, during, after, or constantly if he does attempt to attend.
John Mason @ 28: Another possible angle is that while Jamal Khashoggi's killing is real enough, the narrative that the Turks are
feeding out is being fabricated continuously, and in response to whatever the Saudis are doing to deny or excuse any possibility
that the Crown Prince ordered it. The recordings being parceled out could be complete fakes or the original recording may have
had other, fabricated recordings added to it.
I'm with Clueless Joe @ 16 and Karlof1 @ 17 in keeping MbS as Crown Prince: he is no more if no less sociopathic and vicious
than the current crop of Western political leaders. If Gavin Williamson and his guru / mentor (in the form of his pet tarantula)
were to replace Theresa May as British Prime Minister, then British-Saudi leadership relations need a voice of relative sanity
and MbS would be that voice.
Meanwhile Tulsi Gabbard tweeted "Hey @realdonaldtrump:
being Saudi Arabia's bitch is not "America First.""
And various Republican morons popped out of the woodwork rehashing that crap that Assad had murdered 500,000 Syrians while
fine upstanding Americans like Jimmy Dore and Stephen Linzer are backing her.
BTW, I'm surprised the trash with learning disabilities at the Washington Post haven't accused her of being ISIS (see second
picture in article credited to the Washington Post)
b- you pointed out that: "..the CIA feared that MbS meant trouble even before the Khashoggi disaster, explains why it sabotaged
Trump's attempts to exculpate MbS over the murder of Khashoggi."
The CIA also fear Trump; and they have shown that they
are not and never will be a friend to him. So I am inclined to agree with john mason 28 when he suspects the US or UK organized
the killing to embarrass Trump and remove MBS.
I am further inclined to take this reasoning a bit further and suggest that the CIA facilitated this murder; probably by telling
their reporter asset he could safely go to Turkey and by telling SA when he would arrive. For how else could anyone purportedly
as clever as this fellow think they would be safe on SA defacto soil?
The CIA want their own guy in SA and they want Trump on his knees, so far they don't have what they want. Which leads me to
also wonder if the CIA is possibly responsible for the misadventures Bibi is having. If the CIA and its masters can dethrone Bibi
and the Prince, Trump's ME strategy would be toast, significantly diminishing or even wiping out his US/Israeli support and possibly
destroy his shot at a second term. For all his flaws he did and has overturned a lot of apple carts; the Deep State wants their
damn carts back.
"... [*] Marios Evriviades is a former Cyprus diplomat and presidential advisor. He is a professor of international relations at universities in Greece and Cyprus. ..."
Can a man gasping for breath as he is forcibly suffocated with a plastic bag over his head,
articulate his survival problem multisyllabically with a medicalized request to which he
invited his killers to consent? "I'm suffocating Take this bag off my head, I'm
claustrophobic".
These are the alleged last words of Saudi politician and journalist Jamal Khashoggi,
according to the latest leak from the Turkish intelligence agencies. If you are keeping count,
this may be the 22nd in the series since Khashoggi's disappearance in Istanbul on October 2.
The last words come from the audio tape of a recording system installed, unsuspected and
undetected in the Saudi consulate, by some of the finest electronic equipment the Turkish
services have received from their western allies.
Before the new last words leaked into the press, there was no plastic bag. The previous
Turkish version was that Khashoggi was attacked within minutes of entering the Saudi
consulate at 13:14 on the fateful day; strangled by the bare hands of at least one, possibly
two attackers, as he fought and screamed for his life. Those screams, according to an even
earlier Turkish leak, were recorded on a device Khashoggi was wearing undetected on his wrist,
primed to transmit to his Turkish fiancée standing outside the building.
Then there is the crucial matter of the corpus delicti. For without that, in a police or
coroner's court in a country other than Turkey, there is only the case of a missing person.
That person's body is missing, the world was originally told, because it had been cut into
pieces with a bone-saw.
In disclosures to the press which have followed, the body pieces were taken in packages by
car to the nearby house of the Saudi Consul-General. There they were either buried in the
backyard, or thrown in a garden well, or carried off in another vehicle by a local Turkish
subcontractor and disposed of in a nearby forest. Because Turkish investigators have found no
trace of any of these things, we are now told that none of them happened. In addition, no
explanation has been given by the Turkish services, which had earlier provided photographs of
body parts, including a scalped head, allegedly Khashoggi's, which have been circulating in
Turkey and other countries.
The version which has followed in the more squeamish western press is that the body parts of
Khashoggi were dissolved in acid at the home of the consul, and that is the reason we are now
told the body could not be found. Strangely, no traces of acid were reported to have been found
in the house or its well or waste system, after the Turks entered and searched it thoroughly
days before the story of the acid appeared. The acid traces were reported to have been found in
the house of the consul days later, once the earlier versions of Khashoggi's "disappearance"
had ceased to be plausible or possible.
The world has been asked by the Turkish President Recep Tayyip Erdogan to believe all of
this in sequence, and forget each story as the Turks released new ones. Also, the world was
requested to share in the Turks' moral outrage at the dastardly act. Turkish morality is the
reason Erdogan's subordinates threw a temper tantrum when the French Foreign Minister,
Jean-Yves Le Drian, accused Erdogan of "playing a political game" https://af.reuters.com/article/worldNews/idAFKCN1NH0O5
with the Khashoggi murder. The evidence Erdogan has been releasing makes this plain to
everyone.
But not to the righteous Turks. Did not their president say to an international audience on
October 23, and in an editorial he arranged with the Washington Post
https://www.washingtonpost.com/gdpr-consent/?destination=%2fnews%2fglobal-opinions%2fwp%2f2018%2f11%2f02%2frecep-tayyip-erdogan-saudi-arabia-still-has-many-questions-to-answer-about-jamal-khashoggis-killing%2f%3f
on November 2, that he will move "earth and heaven" to get to the bottom of the Khashoggi case;
have the Saudi perpetrators punished no matter how high-ranking they are -- Crown Prince
Mohammed bin Salman's photograph is placed in illustration of Erdogan's words, but he himself
doesn't dare name him. Erdogan has also promised to serve justice; give Khashoggi a muslim
funeral; and ensure that nothing of this kind will ever again occur in a NATO member state.
(These are not assurances Erdogan has offered the families of the fourteen Turkish journalists
also still missing in Erdogan's jurisdiction; seven of them confirmed dead, including the
famous Hrant Dink. https://en.wikipedia.org/wiki/Hrant_Dink )
How dare anyone question Erdogan's integrity? is the unanimous cry out of Turkey.
Let me tell you why. The Turks do not have to move "earth and heaven" now to get to the
bottom of the Khashoggi murder. They could have done that within hours – repeat hours --
of the reported disappearance of Khashoggi, by arresting the eighteen alleged Saudi murderers;
by searching the premises of the Istanbul consulate and the residence of the Saudi consul; and
by arresting him as a co-conspirator in the homicide. Within hours, the Turkish authorities
reporting to Erdogan had all the prima fac ie evidence they needed to establish that a
crime had been committed. But act they did not. Instead, they – that means Erdogan --
allowed the alleged murderers to leave Istanbul on the evening after the crime was committed.
They allowed the Saudi Consul, Mohammed al-Otaibi, to take his time – two weeks -- before
he departed on October 16.
On what the Turks did or did not do in their prosecution of the Khashoggi case, let
Yasar Yakis tell us. Yakis is a retired career diplomat, a former Turkish Foreign Minister
and member of Erdogan's Islamist party. In a subtle article, "What Turkey did and didn't do
about the Khashoggi murder", published on October 24 in the English-language
By citing the official time frame of Khashoggi's disappearance, Yakis shows that the
authorities had ample time to decide they were holding enough evidence that a serious crime had
been committed on the premises of the Saudi Consulate and at the home of the Saudi consul in
Istanbul; by a group of Saudi nationals carrying diplomatic passports who had flown into the
country in two private jets and a commercial airline early on October 2. Since Turkish laws had
been violated, the authorities knew they had the legal right, in line with the 1963 Geneva
Convention on Consular Relations, to search the Saudi diplomatic premises, and arrest the
suspects, including the Consul-General. Their diplomatic status, the Turkish authorities knew
at the time and Yakis has repeated, guaranteed immunity from search and arrest only in the
Saudi performance of diplomatic duties. Committing murder, as the evidence immediately
suggested, was not one of them.
Yakis does argue that the relevant articles of the Geneva Convention limited the right of
Turkish entry and search at the consulate and the consul's home, putting off-limits the
Saudi
office archives and documents related to the diplomatic activities routinely carried out at
the mission.
Additionally in his Ahval article Yakis discloses a crucial detail. Whether Yakis intended
it or not, he reveals the deliberate and manipulative behaviour of the Turkish authorities.
Fifteen of the alleged culprits departed in two private planes at 18.20 and 22.50 hours
respectively, after going through regular customs clearance. Even if as Erdogan revealed in his
October 23 statement the Turkish authorities did not learn the fate of Khashoggi until 17:50 on
October 2 -- a time that is patently false if the timeline leaked by Turkish intelligence is
accepted as the truth – there was still plenty of time for the Turks to arrest the
fifteen, plus another three of the conspirators who left on a commercial flight.
What is reported by Yakis is that "the plane carrying part of the Saudi team was stopped in
the skies above Nallihan (a rural district in the Ankara Province) and ordered into a holding
pattern, before being allowed on its way. If the plane had been forced to land, and
itspassengers put under questioning, a great deal of now unknown information would have been
obtained".
Yakis reveals that it wasn't necessary for the Turks to move "earth and heaven" – all
they had to do on the evening of October 2 was to prevent the alleged culprits from fleeing the
scene of the crime, or stopping them at the airport, or in their airplanes before they left
Turkish airspace. At that time, even if the Consul had been left untouched, the case would have
been wrapped up in no time.
But Erdogan and his associates had other, more ambitious plans. It is those plans unfolding
which have dictated each new leak. Had Erdogan decided to hold the eighteen fleeing Saudis,
that would have meant rupturing relations with the Saudi kingdom, but this is something Erdogan
and his officials repeat they do not want to do. However, such behaviour is exactly what the
French foreign minister meant when he accused Erdogan, directly and personally, "that he has a
political game to play in these circumstances."
And what is this game? Foremost, the Turks are attempting to concoct an image of themselves
and of their Great (Buyuk) Leader as defenders of justice and of international law and order,
while extracting rewards for this pretence from all those, primarily the West
and Israel, who have a stake in the stability of the present Saudi regime. If Khashoggi's
death was Saudi state murder, Erdogan's game is Turkish state extortion. That makes two
crimes.
This Saudi regime does not deserve sympathy. It must be held accountable, not only for the
fate of Khashoggi, but for much more which the regime is responsible for in promoting war,
terrorist violence and sectarian extremism from Syria to Yemen and further afield. Holding the
Saudis accountable for Khashoggi's murder is one thing. It's not the only thing. Allowing
Erdogan's Turkey to prevail as source and judge of the truth of this case serves faking and
falsehood, not justice. End+
[*] Marios Evriviades is a former Cyprus diplomat and presidential advisor. He is a
professor of international relations at universities in Greece and Cyprus.
"... The Treasury declaration blamed MbS advisor Saud al-Qahtani as mastermind behind the Khashoggi murder, while the Saudis carefully avoided that. We now learn that the person in the U.S. National Security Council who put al-Qahtani on the list was fired : ..."
"... Fontenrose had played a key role in the administration's decision about which Saudis to sanction in response to Khashoggi's killing, these people said. ..."
"... I suspect that MbS tried, via Trump's son-in-law Kushner, to save al-Qahtani (and himself). Trump clearly wanted to do that, but Fontenrose blew the plan by pushing for al-Qahtani to be sanctioned. The CIA also sabotaged the planned exculpation of MbS by 'leaking' its judgment about MbS' personal responsibility to the press. ( WaPo published the CIA conclusion in Arabic , another point the Saudis will hate.) ..."
We were first to point out that the NYT's characterization of an old North Korean
missile site as "deception" was pure nonsense. Newsweek
, 38north.org , NKNews.org ,
The Nation and others now also condemned the neo-conned NYT propaganda.
The war let to the loss of Netanyahoo's majority in the Knesset. He is now trying to stall new
elections in which he could lose his job.
Trump's Middle East policy is in total disarray. Nothing is working as planned. Netanyahoo
will probebaly fall. Saudi Arabia will not make nice with Qatar. There will be no Arab NATO or
anti-Iran alliance. MbS is despised but will stay on the job. Yemen is starving. The U.S. is at
odds with Turkey over support for the Kurds. Trumps knows and
hates this :
The adviser who talks to Trump said: "If the president had his way, he would stay entirely
out of the Middle East and all of the problems."
The piece was the first to point out the difference between the Saudi investigation, which
put blame on Major General Ahmed al-Asiri, and the names on the U.S. sanction list published at
the same time. The Treasury declaration blamed MbS advisor Saud al-Qahtani as mastermind
behind the Khashoggi murder, while the Saudis carefully avoided that. We now learn that the
person in the U.S. National Security Council who put al-Qahtani on the list was fired :
On Friday evening, Kirsten Fontenrose, the National Security Council official in charge of
U.S. policy toward Saudi Arabia, resigned, administration officials said. The circumstances
of her departure weren't clear. But Fontenrose had previously been placed on administrative
leave, according to people familiar with the matter.
Fontenrose had played a key role in the administration's decision about which Saudis to
sanction in response to Khashoggi's killing, these people said.
I suspect that MbS tried, via Trump's son-in-law Kushner, to save al-Qahtani (and
himself). Trump clearly wanted to do that, but Fontenrose blew the plan by pushing for
al-Qahtani to be sanctioned. The CIA also sabotaged the planned exculpation of MbS by 'leaking'
its judgment about MbS' personal responsibility to the press. ( WaPo published the CIA
conclusion
in Arabic , another point the Saudis will hate.) Trump is furious that the CIA (again)
sabotaged his policy:
Asked about reports that the CIA had assessed involvement by Mohammed, the president said:
"They haven't assessed anything yet. It's too early."
Colonel Salam , what do you think of retired general Abizad becoming new US' ambassador to KSA. To me installing an Arabic speaking
Arab American general as the new ambassador to the kingdom sounds like the Borg is becoming concerned with kingdom' stability
when changes come. They probably don't want to repeat the mistake of keeping Sullivan during IRI. So sorry for OT.
My guess is that much of KSA will look a lot like the shabby end of Yemen before too long. This will perhaps strand some assets.
Once the House of Saud fragments further among competing clans/factions (Faisal, Sudairi, Abdullah, Bin Sultans) things will hasten.
Collapse is preceded by intra-elite rivalry over a shrinking pie, so to speak.
Caspian Report has a nice set on KSA if you look for them. Here's one- https://youtu.be/9tHwvZ9XDLU
And another- https://youtu.be/hh8isVX3H9w
Hightrekker once commented something quite apt, along the lines of~ 'And all this is probably like the Austrians in 1913 arguing
about who their next Habsburg Ruler is going to be'.
From what I understand there are 4000 Saudi princes (a suspiciously round number, so likely an approximate). It all should
make for a very bloody affair. Hopefully Iran will do the right thing and kick 'em while they're down.
"... A writer in Okaz, a daily in Jeddah, accused him of meeting with the Emir of Qatar at the Four Seasons Hotel in New York and of having ties to "regional and international intelligence services." If true it may have sealed his fate. Qatar is now the number one enemy of the Saudi regime -- arguably worse than Iran. ..."
...Khashoggi was a loyal member of the Saudi propaganda apparatus. There is no journalism
allowed in the kingdom: there have been courageous Saudi women and men who attempted to crack
the wall of rigid political conformity and were persecuted and punished for their views.
Khashoggi was not among them.
...
By historical contrast, Nasir As-Sa`id was a courageous secular Arab Nationalist writer who
fled the kingdom in 1956 and settled in Cairo, and then Beirut. He authored a massive (though
tabloid-like) volume about the history of the House of Saud. He was unrelenting in his attacks
against the Saudi royal family.
For this, the Saudi regime paid a corrupt PLO leader in Beirut (Abu Az-Za`im, tied to
Jordanian intelligence) to get rid of As-Sa`id. He kidnapped As-Sa`id from a crowded Beirut
street in 1979 and delivered him to the Saudi embassy there. He was presumably tortured and
killed (some say his body was tossed from a plane over the "empty quarter" desert in Saudi
Arabia). Such is the track record of the regime.
...
Khashoggi distinguished himself with an eagerness to please and an uncanny ability to adjust
his views to those of the prevailing government. In the era of anti-Communism and the promotion
of fanatical jihad in Afghanistan and elsewhere, Khashoggi was a true believer. He fought with
Osama bin Laden and promoted the cause of the Mujahideen.
The Washington Post's David Ignatius and others want to embellish this by implying that he
was an "embedded" reporter -- as if bin Laden's army would invite independent journalists to
report on their war efforts. The entire project of covering the Afghan Mujahideen and promoting
them in the Saudi press was the work of the chief of Saudi intelligence, Prince Turki,
Khashoggi's principal patron-prince.
Western media coverage of Khashoggi's career (by people who don't know Arabic) presents a
picture far from reality. They portray a courageous investigative journalist upsetting the
Saudi regime. Nothing is further from the truth: there is no journalism in Saudi Arabia; there
is only crude and naked propaganda.
...
Khashoggi was a reactionary: he supported all monarchies and sultanates in the region and
contended they were "reformable." To him, only the secular republics, in tense relations with
the Saudis, such as Iraq, Syria and Libya, defied reform and needed to be overthrown. He
favored Islamization of Arab politics along Muslim Brotherhood lines.
Khashoggi's vision was an "Arab uprising" led by the Saudi regime. In his Arabic writings he
backed MbS's "reforms" and even his "war on corruption," derided in the region and beyond. He
thought that MbS's arrests of the princes in the Ritz were legitimate (though he mildly
criticized them in a Post column) even as his last sponsoring prince, Al-Walid bin Talal, was
locked up in the luxury hotel. Khashoggi even wanted to be an advisor to MbS, who did not trust
him and turned him down.
... A writer in Okaz, a daily in Jeddah, accused him of meeting with the Emir of Qatar at the Four
Seasons Hotel in New York and of having ties to "regional and international intelligence
services." If true it may have sealed his fate. Qatar is now the number one enemy of the Saudi
regime -- arguably worse than Iran.
Khashoggi was treated as a defector and one isn't allowed to defect from the Saudi
Establishment. The last senior defections were back in 1962, when Prince Talal and Prince Badr
joined Nasser's Arab nationalist movement in Egypt.
Khashoggi had to be punished in a way that would send shivers down the spine of other
would-be defectors.
US whistle-blower Edward Snowden yesterday claimed that Saudi Arabia used Israeli spyware to
target murdered Saudi journalist
Jamal Khashoggi .
Addressing a conference in Tel Aviv via a video link, Snowden claimed that software made by
an Israeli cyber intelligence firm was used by Saudi Arabia to track and target Khashoggi in
the lead up to his
murder on 2 October inside the Saudi Consulate in Istanbul.
Snowden told his audience:
"How do they [Saudi Arabia] know what his [Khashoggi's] plans were and that they needed to
act against him? That knowledge came from the technology developed by NSO," Israeli business
daily Globes
reported.
Snowden accused NSO of "selling a digital burglary tool," adding it "is not just being
used for catching criminals and stopping terrorist attacks, not just for saving lives, but
for making money [ ] such a level of recklessness [ ] actually starts costing lives,"
according to the
Jerusalem Post .
Snowden – made famous in 2013 for leaking classified National Security Agency (NSA)
files and exposing the extent of US surveillance – added that "Israel is routinely at the
top of the US' classified threat list of hackers along with Russia and China [ ] even though it
is an ally".
Snowden is wanted in the US for espionage, so could not travel to Tel Aviv to address the
conference in person for fear of being handed over to the authorities.
The Israeli firm to which Snowden referred – NSO Group Technologies – is known
for developing the "Pegasus" software which can be used to remotely infect a target's mobile
phone and then relay back data accessed by the device. Although NSO
claims that its products "are licensed only to legitimate government agencies for the sole
purpose of investigating and preventing crime and terror," this is not the first time its
Pegasus software has been used by Saudi Arabia to track critics.
In October it was
revealed that Saudi Arabia used Pegasus software to eavesdrop on 27-year-old Saudi
dissident Omar Abdulaziz, a prominent critic of the Saudi government on social media.
The revelation was made by Canadian research group
Citizen Lab , which found that the software had been used to hack Abdulaziz' iPhone between
June and August of this year. Citizen Lab's Director Ron Deibert explained that such actions by
Saudi Arabia "would constitute illegal wiretapping".
A separate
report by Citizen Lab in September found a "significant expansion of Pegasus usage in the
Gulf Cooperation Council (GCC) countries in the Middle East," in particular the United Arab
Emirates (UAE), Bahrain and Saudi Arabia. Citizen Lab added that in August 2016, Emirati human
rights activist Ahmed Mansoor was
targeted with the Pegasus spyware.
Snowden's comments come less than a week after it
emerged that Israeli Prime Minister Benjamin Netanyahu asked the United States to stand by
Saudi Crown Prince Mohamed Bin Salman (MBS) in the wake of the Khashoggi case. The revelation
was made by the
Washington Post , which cited information from US officials familiar with a series of
telephone conversations made to Jared Kushner – senior advisor to President Donald Trump
and Trump's son-in-law – and National Security Adviser John Bolton regarding the
Khashoggi case. The officials told the Post that:
In recent days, Egyptian President Abdel Fatah Al-Sisi and Israeli Prime Minister Benjamin
Netanyahu have reached out to the Trump administration to express support for the crown
prince, arguing that he is an important strategic partner in the region, said people familiar
with the calls.
Bin Salman has come under intense scrutiny in the month since Khashoggi first
disappeared , with many
suspecting his involvement in ordering the brutal murder. Yet while several world leaders
have
shunned the crown prince, it is thought
that Israel would suffer from any decline in Saudi influence in the region in light of its
purportedly central role in the upcoming "
Deal of the Century ".
"... The key point from my POV was the immediate MSM blanket coverage with every detail explained. No investigation, research, doubts or questions. ..."
"... The US MSM is a propaganda tool and they were pre-prepared, so some US deep state group knew that Bin Salman's bodyguard was heading to the consulate and what they planned to do there (and maybe even set them up to do it). ..."
The Saudis also support the system of petrodollars, which basically requires nearly all
international purchases of petroleum to be paid in dollars. Petrodollars in turn enable the
United States to print money for which there is no backing knowing that there will always be
international demand for dollars to buy oil.
I would emphasize this aspect, except that MbS doesn't so much support the PetroDollar as
the PetroYuan, and this is more than troubling for the US since the PetroDollar is essential to
the dollar's world reserve currency status.
Many American economists have expressed alarm at Saudi Arabia's willingness to borrow in
Chinese yuan, as Riyadh's decision could cause other oil-exporting countries to abandon the
U.S. dollar in favor of the "petro-yuan." A marked decline in the use of the U.S. dollar as
the preferred credit-issuing currency by oil-producing countries would greatly weaken the
U.S. dollar's long-term viability as a global reserve currency.
As the United States views its alliance with Saudi Arabia as the lynchpin of its Middle
East strategy, Washington will likely react strongly if Riyadh uses its influence within OPEC
to strengthen the Chinese yuan. As Saudi Arabia remains dependent on U.S. arms sales to
pursue its geopolitical objectives in the Middle East and counter Iran, intense U.S. pressure
would likely cause Riyadh to distance itself from Beijing, limiting economic integration
between the two countries.
It is no coincidence that these statements from the Crown Prince come days after the
official launch of China's Petroyuan. As every historical trend indicates, the world's most
powerful economy dictates which currency will be used in most international transactions.
This continues to be the case with the US in respect of Dollar, but as China gets set to
fully overtake the US as the world's leading economy, the Dollar will inevitably be replaced
by the Yuan.
China's issuing of oil futures contracts in Petroyuan is the clearest indication yet that
China is keen to make its presence as the world's largest energy consumer known and that it
would clearly prefer to purchase oil from countries like Saudi Arabia in its own currency in
the future, quite possibly in the near future.
Saudi Arabia's Crown Prince appears to understand this trajectory in the global energy
markets and furthermore, he realises that in order to be able to leverage the tremendous
amount of US pressure that will come down on Riaydh in order to force Saudi Arbia to avoid
the Petroyuan, Riyadh will need to embrace other potential partners, including China.
More than anything else, the Petroyuan will have an ability to transform Saudi Arabia by
limiting its negative international characteristics that Muhammad bin Salman himself
described. As a pseudo-satellite state of the US during the Cold War, Muhammad bin Salman
admitted that his country's relationship to the US was that of subservience. China does not
make political let alone geopolitical demands of its partners, but China is nevertheless keen
to foster de-escalations in tensions among all its partners based on the win-win principles
of peace through prosperity as articulated on a regular basis by President Xi Jinping.
Thus one could see China's policies of political non-interference rub off on a potential
future Saudi partner, in the inverse way that the US policies of ultra-interventionism are
often forced upon its partners. Thus, whatever ideological views Muhammad bin Salman does or
does not have, he clearly knows where the wind is blowing: in the direction of China.
If the Khashoggi Affair was planned as a warning to Crown Prince Mohamed bin Salman, then
the US knew exactly what was going to happen in the consulate. It was coupled with an immediate
and orchestrated MSM reaction that was curiously detailed, and delivered at high volume.
Yeah, the US will never get rid of the Saudi regime but will always be dangling the sword
right above their necks, and not just figuratively.
Besides the tangible benefits of the 'strategic' control of oil resources, which the US
believes it needs to control in order to dominate Western Europe and its Asian allies, the
Saudis also function as the CIA's private slush fund for off-the-books operations like
Iran-Contra and many others which surface in the news from time to time. Thus, the CIA
controls such vast sums through the Saudis as to make their budgets effectively
limitless.
During his triumphant tour of the US earlier this year, the Saudi King said something
which I found shocking and incredibly revealing in the way the story dropped like a stone
making absolutely no ripples anywhere in the MSM, nor in the alternative media for that
matter.
When asked about Saudi funding of Wahhabism around the world, he said that 'the allies
(presumably US and UK) had 'asked' the Saudis to 'use their resources' to create the
Madrassas and Wahhabi centers to prevent prevent inroads in Muslim countries by the Soviets
(a premise which is very questionable in the ME context after the fall of Nasser).
Now that seems to be the story of the century because it reveals the operating method of
the CIA wrt the Saudis. And even though MBS was trying to only reveal the distant roots of
the system they put in place, there is absolutely no logical reason why any part of this
system would have been subsequently dismantled; 911 notwithstanding. The continuing
US/Israeli support for and generous use of jihadis in Libya, Syria, etc. only reinforces this
point.
This is ultimately the greatest impediment to anything changing the status quo.
If the consulate was bugged , the Turks must have known the plan to abduct kashooggi.
They let it happen, and now that the abduction turned into a murder, they are accomplice.
US knew exactly what was going to happen in the consulate.
I doubt the US knew "exactly", but they likely knew something bad (a kidnapping
perhaps?) was a strong probability. Alas I wish Khashoggi had been warned. Too it seems
very odd he was willing to set foot in a Saudi embassy anywhere? Maybe Director Haspel can
explain.
Supposedly Khashoggi's smart phone picked it all up and filmed his own murder ??
More likely the room was prepared, and Khashoggi was following US instructions/assurances
in going there. The key point from my POV was the immediate MSM blanket coverage with
every detail explained. No investigation, research, doubts or questions.
The US MSM is a propaganda tool and they were pre-prepared, so some US deep state
group knew that Bin Salman's bodyguard was heading to the consulate and what they planned to
do there (and maybe even set them up to do it).
One question is whether the Halloween show was aimed at removing Bin Salman or just
getting him back in line.
Sibel Edmonds has been following this story from Turkey (she speaks Turkish) and posting her
thoughts and findings on twitter. She seems to think this is about some kind of soft coup
(get rid of MBS b/c getting too cozy with Russia/China, Euroasia). Sibel also says Khashoggi
was actually in Istanbul working with some kind of Soros NGO, maybe for future Color
Revolution/Arab Spring in the Middle East.
Sibel Edmonds @sibeledmonds As Predicted (OnRecord) One Of 3 Objectives in #Scripted
#Khashoggi Case: Get #Trump- Replace BS #RussiaGate with #SaudiGate. (Screenshot Coming In
Reply)- – "Khashoggi fiancee hits at Trump response, warns of 'money' influence"
Sibel Edmonds @sibeledmonds Oct 27
Very Important #Khashoggi Continued: #Khashoggi Relocated To #Turkey To Be a Part of a
Business-ThinkTank-NGO. He set up a business here. He opened Bank Accounts. He bought a
house/expansive Flat. He traveled to #London from #Istanbul paid handsomely by #Neoliberal
#DeepState
Jamal Khashoggi did not die for nothing. His murder was part of the plot to push current
de-facto ruler of the Saudi royal crime family aside.
On the moral side, considering who Khashoggi was, one can only say "serves him right".
However, all the other players involved, the Saudis, Israel, Turkey, and the US, are by no
means morally superior to him. His murder and essential non-reaction by others are useful, as
these events unmasked the hypocrites, who are showing their true colors even as we speak.
Should have added that the Kashoggi murder & extremely strange aftermath, dulled US
political response, smacks of a scene from the film "V for Vendetta."
"There is every indication that the U.S. is not in fact seeking to punish the Saudis for
their alleged role in Khashoggi's apparent murder but instead to punish them for reneging on
this $15 billion deal to U.S. weapons giant Lockheed Martin, which manufactures the THAAD
system.
S-400 gamechanger. / Saudi Plan to Purchase Russian S-400:
@Colin
Wright Thanks for the link. Now we can see that Empire had previously turned against MbS,
and that the scripted Khashoggi affair conveniently arrived on cue – with MbS getting
the full MSM treatment.
In other words the deep state knew exactly what was going to happen in the consulate that
day, set it up and recorded it themselves (nothing to do with Khashoggi's smart phone).
Prince Ahmad bin Abdulaziz, the younger brother of King Salman, has returned to Saudi
Arabia after a prolonged absence in London, to mount a challenge to Crown Prince Mohammed
bin Salman or find someone who can.
The source said that the prince returned "after discussion with US and UK officials",
who assured him they would not let him be harmed and encouraged him to play the role of
usurper.
Meanwhile, in Washington disquiet grows.
Writing in the New York Times, former national security advisor to the Obama
administration and US ambassador to the UN Susan Rice said: "Looking ahead, Washington must
act to mitigate the risks to our own interests. We should not rupture our important
relationship with the kingdom, but we must make clear it cannot be business as usual so
long as Prince Mohammed continues to wield unlimited power.
"It should be United States policy, in conjunction with our allies, to sideline the
crown prince in order to increase pressure on the royal family to find a steadier
replacement," she added.
@Miro23
The mainstream narrative has had "Psyop" written all over it from the first. It wouldn't
surprise me to learn that Khashoggi is still alive and languishing in an undisclosed location
with only the Skripals for company.
@Bill
Jones An interesting bullet-sentence, Bill Jones said to me: "The strange and dulled
aftermath in the US is, I believe, because the lesson was not really meant for US audiences."
Greetings, Bill!
Lessons on dramatic world events are cunningly spun to insouciant &
government-trusting Americans. The weird Jamal Kashoggi murder is an excellent example among
hundreds to choose from!
Fyi, along with FDR administration's cooperation, Zionists helped gin-up war fervor in
order to get the US into World War 2. Such deception resulted in unnecessarily sending-off
another round of American "doughboys" into world war.
Fyr, as recovered from America's Memory Hole Knowledge Disposal / Sewer System," below is
a great Pat Buchanan article titled, "Who forged it?"
It's interesting that Jamal Khashoggi, who wrote that Jews will have to die by force, is a
media darling. Robert Bowers said something very similar today, and is rightly demonized. We
could do with a lot less hagiography of Khashoggi, as well.
(Now in case you made the mental leap to thinking I don't wan't Khashoggi's killers held
accountable, let me be clear: they should be held accountable.)
Two disappearances, and two very different responses from Western governments, which
illustrates their rank hypocrisy.
When former Russian spy Sergei Skripal went missing in England earlier this year, there was
almost immediate punitive action by the British government and its NATO allies against Moscow.
By contrast, Western governments are straining with restraint towards Saudi Arabia over the
more shocking and provable case of murdered journalist Jamal Khashoggi.
The outcry by Western governments and media over the Skripal affair was deafening and
resulted in Britain, the US and some 28 other countries
expelling dozens of Russian diplomats on the back of unsubstantiated British allegations
that the Kremlin tried to assassinate an exiled spy with a deadly nerve agent. The Trump
administration has further tightened sanctions
citing the Skripal incident.
London's case against Moscow has been marked by wild speculation and ropey innuendo. No
verifiable evidence of what actually happened to Sergei Skripal (67) and his daughter Yulia has
been presented by the British authorities . Their claim that President Vladimir Putin
sanctioned a hit squad armed with nerve poison relies on sheer conjecture.
All we know for sure is that the Skripals have been disappeared from public contact by the British authorities for more than
seven months, since the mysterious incident of alleged poisoning in Salisbury on March 4.
Russian authorities and family relatives have been steadfastly refused any contact by London with the Skripal pair, despite
more than 60 official requests from Moscow in accordance with international law and in spite of the fact that Yulia is a citizen
of the Russian Federation with consular rights.
It is an outrage that based on such thin ice of "evidence", the British have built an edifice of censure against Moscow,
rallying an international campaign of further sanctions and diplomatic expulsions.
Now contrast that strenuous reaction, indeed hyper over-reaction, with how Britain, the US, France, Canada and other Western
governments are ever-so slowly responding to Saudi Arabia over the Khashoggi case.
After nearly two weeks since Jamal Khashoggi entered the Saudi consulate in Istanbul, Turkey, the Saudi regime is this week
finally admitting he was killed on their premises – albeit, they claim, in a "botched interrogation".
For most of the guys, killings got to be accepted. Murder was the only way that everybody
stayed in line. You got out of line, you got whacked. Everybody knew the rules. But
sometimes, even if people didn't get out of line, they got whacked. I mean, hits just became
a habit for some of the guys. Guys would get into arguments over nothing and before you knew
it, one of them was dead. And they were shooting each other all the time. Shooting people was
a normal thing. It was no big deal.
We had a serious problem with Billy Batts Jamal Khashoggi. This was really a
touchy thing. Tommy'd MbS killed a made guy. Batts Khashoggi was part
of the Gambino Neocon crew and was considered untouchable. Before you could touch
a made guy, you had to have a good reason. You had to have a sitdown, and you better get an
okay, or you'd be the one who got whacked.
Khashoggi was a made man in DC. Nobody in Yemen is.
Stephen J.
October 26, 2018 at 11:19 am
The "power structure" is filled with:
-- -
"The Horrified Hypocrites"
Anybody with a spark of human decency is surely horrified at the latest murderous Saudi
atrocity. But to see the so-called international community, the corporate media, business
leaders and all the other political elites and establishment members all rightly upset over the
horrific murder of Jamal Khashoggi is, I believe, to see selective hypocrisy in action.
Where were these "pillars of society" when the Saudis murdered schoolchildren travelling in
a school bus in Yemen? Did that get blanket coverage in the newsrooms of the "investigative
media"? Did any of them speak out daily? Oh, I forgot, some of these "honourable people" sell
arms to the Saudis, do sword dances with them, kiss their cheeks, [1] and call them "allies."
Now they pretend to be outraged at their Saudi friends. Therefore, I ask:
What kind of "people" slaughter children in a school bus in Yemen?
What kind of army guides the missiles into the school bus?
What kind of "democratic governments" support this slaughter?
What kind of governments sells weapons to the killers of children?
What kind of politicians call selling weapons "creating jobs"?
What kind of politicians vote for illegal wars?
Furthermore, what kind of media covers up the crimes of the war criminals [1a] [1b] in our
midst that have supplied the weapons to the Saudis and joined their "Coalition of Carnage" [2]
that is destroying and committing "Genocide in Yemen"? [2a]
[read more at link below] http://graysinfo.blogspot.com/2018/10/the-horrified-hypocrites.html
comments
Submitted by dkmich on Sat, 10/27/2018 - 7:44am Thanks for the link. Thanks
for the link. Interesting news. Good to know those ruling elites are all alike. Greedy as all
hell and indifferent to how they murder people and how many. Some just like to hide their
atrocities, others don't.
But if the Saudi power structure were ever to crumble in the wake of the Khashoggi scandal,
there would likely be chaos because there is no alternative to replace it.
Since when do we care about that? All we care about is oil and money. It is very possible that
it could be a good thing. Maybe the globe would dump oil for energy, and bomb makers would have
to blow up the US or build our infrastructure instead. up 6 users have voted. --
"Religion is what keeps the poor from murdering the rich."--Napoleon
"From 2016 to 2017, foreign direct investment in Saudi Arabia plummeted by an astonishing 80
percent, from about $7.5 billion to about $1.4 billion, according to the U.N. Conference on Trade
and Development. Net capital outflows were also way up -- largely because wealthy Saudis were
moving money abroad, noted Phillip Cornell, an expert in the Saudi economy at the Atlantic
Council ."
"...both savvy outside investors and many Saudi businessmen no longer had faith in the
kingdom, considering "the crown prince's authoritarian tendencies" and "capricious economic
policy choices," Cornell said."
Since obviously authoritarianism abounds, and neither the Atlantic Council nor anybody else in
real power in this country gives a shit, I'm guessing the real problem lay in the "economic
policy choices."
Digging through the article to find actual information on those policy choices, I come up with
this:
"For example, the swift outflow of money has forced Mohammed bin Salman's government to put in
some informal capital controls -- but that only made foreign money even more reluctant
to come in. The Saudi government has cost itself credibility by promising to balance the
budget and reduce unemployment to 9 percent only to back away from those pledges."
Anybody know what those "informal capital controls" are?
Any reason the elites would give a shit whether Saudi Arabia's governmental budget was
balanced, or how many of their people are unemployed?
EDIT: On re-reading, the "informal capital controls" seem to have followed the exodus of
foreign money, not preceded it, so, although clearly the elites don't like those controls (as Mr.
Cornell of the Atlantic Council said), that couldn't have been the impetus for the global
financial elites to try to spank bin Salman and stand him in a corner.
What did he do (probably in late 2016 or 2017) that pissed them all off?
What did he do (probably in late 2016 or 2017) that pissed them all off?
MBS was appointed crown prince/heir in June 2017, but then the article doesnt say exactly when
the dropoff happened either. I can certainly see the Saudi royals seeing the writing on the wall
and moving their money out before MBS' appointment, but did MBS have enough power to make
decisions affecting external investors then (or would they know that he was a future tyrant,
given how the west fawned over him then)? My understanding is that his primary responsibilities
in 2016 were Vision 2030, which doesn't seem to me to have a bearing on this.
In short, more information is needed before accepting this article's conclusions.
t comments
Submitted by Cant Stop the M... on Sat, 10/27/2018 - 2:21pm @sny Given that its main@sny
Given that its main (read only) source is that guy from the Atlantic Council, your point is well
taken.
They're just rich, and only as "powerful" as people believe they are.
It should go without saying that the measure of a man cannot possibly be determined in dollars
and cents.
Gods and heroes do walk among us - but they're not these macro-mediocrities.
Everyone's got to stop validating what is nothing more than, shall we call it, 'grand theft
ego.'
I keep thinking of the Shift the Ape from The Last Battle , the final book of The
Chronicles of Narnia - people can't (or won't) see past the various specific offensive
allegories, but if one does, that character actually strikes me as one of the most underrated
villains in all of English literature: A contemptible mediocrity who, in a benighted age,
presumes to hijack a mantle of greatness he doesn't understand, only to sour people on the very
idea of greatness, when that is precisely what the world needs most. When the cats are away, the
mice will play.
#2#2#2
Apparently bin Salman has done something that fiddled with the elite's plans.
Huh. I googled "bin Salman" and look at one of the first things that came up:
How Mohammed bin Salman Turned Saudi Arabia Into an Investment Wasteland
"From 2016 to 2017, foreign direct investment in Saudi Arabia plummeted by an astonishing
80 percent, from about $7.5 billion to about $1.4 billion, according to the U.N. Conference
on Trade and Development. Net capital outflows were also way up -- largely because wealthy
Saudis were moving money abroad, noted Phillip Cornell, an expert in the Saudi economy
at the Atlantic Council ."
"...both savvy outside investors and many Saudi businessmen no longer had faith in the
kingdom, considering "the crown prince's authoritarian tendencies" and "capricious
economic policy choices," Cornell said."
Since obviously authoritarianism abounds, and neither the Atlantic Council nor anybody
else in real power in this country gives a shit, I'm guessing the real problem lay in the
"economic policy choices."
Digging through the article to find actual information on those policy choices, I come up
with this:
"For example, the swift outflow of money has forced Mohammed bin Salman's government to
put in some informal capital controls -- but that only made foreign money even
more reluctant to come in. The Saudi government has cost itself credibility by promising
to balance the budget and reduce unemployment to 9 percent only to back away from those
pledges."
Anybody know what those "informal capital controls" are?
Any reason the elites would give a shit whether Saudi Arabia's governmental budget was
balanced, or how many of their people are unemployed?
EDIT: On re-reading, the "informal capital controls" seem to have followed the exodus of
foreign money, not preceded it, so, although clearly the elites don't like those controls (as
Mr. Cornell of the Atlantic Council said), that couldn't have been the impetus for the global
financial elites to try to spank bin Salman and stand him in a corner.
What did he do (probably in late 2016 or 2017) that pissed them all off?
Submitted by Cant Stop the M... on Sat, 10/27/2018 - 10:48am My question's not rhetorical; I hope
somebody on here knows more about foreign policy than I do. Nobody's been more surprised
than me that the Saudi Arabians have begun to be actually held accountable for anything, given
that we accepted it without a murmur when a bunch of Saudis came over here and murdered a few
thousand of our civilians.
comments
Submitted by Linda Wood on Sat, 10/27/2018 - 11:32am I'm hoping@Cant
Stop the Macedonian Signal
all the disconnects are happening now because the 9/11 Victims' lawsuit may finally be allowed to
take place against the Saudi princes named in the suit, one of whom is the current king.
One of the last things to happen in the Obama administration was JASTA, The Justice Against
Sponsors of Terrorism Act, passed by Congress, narrowing the scope of the legal doctrine of
foreign sovereign immunity.
For most of the guys, killings got to be accepted. Murder was the only way that everybody
stayed in line. You got out of line, you got whacked. Everybody knew the rules. But sometimes,
even if people didn't get out of line, they got whacked. I mean, hits just became a habit for
some of the guys. Guys would get into arguments over nothing and before you knew it, one of
them was dead. And they were shooting each other all the time. Shooting people was a normal
thing. It was no big deal.
We had a serious problem with Billy Batts Jamal Khashoggi. This was really a
touchy thing. Tommy'd MbS killed a made guy. Batts Khashoggi was part of
the Gambino Neocon crew and was considered untouchable. Before you could touch a
made guy, you had to have a good reason. You had to have a sitdown, and you better get an okay,
or you'd be the one who got whacked.
Khashoggi was a made man in DC. Nobody in Yemen is.
"... If the United States imposed sanctions on Saudi Arabia, other major arms exporters such as Britain would probably also be forced to take similar measures. ..."
"... Who knew this would happen? This should be an example for all the neocons and hyper-nationalists in the US. The wahabbiyeen ..."
"... So can the rest of NATO. If the Russians and/or the Chinese really want to be stuck with this Tar Baby, let them try it on! But! But! The Iranian threat! The Iranian threat! Threat to what? Israel? ..."
"... It's not the petro, but the "petrodollar" system. Now if India, Japan, China, or most any country, I suppose, want to buy Saudi oil it must use US Dollars. This goes back to deals made by Simon & Kissinger with the K of Saudi Barbaria when Nixon took the US off the gold standard and the Near East was awash with money after the oil shock following the Arab Oil Embargo. ..."
"... First of all, the system of petrodollars, which basically requires nearly all purchases of petroleum to be paid in dollars, is underwritten by the Saudis. ..."
"... Petrodollars in turn enable the United States to print money for which there is no backing knowing that there will always be international demand for dollars to buy oil. The Saudis, who also use their own petrodollars to buy U.S. treasury bonds, could pull the plug on that arrangement ..."
"... Whenever a medium size country has taken steps to wean itself from the petrodollar, it has been taken out: Saddam Hussein taking steps to move to the Euro; Qaddafi talking about creating a pan-African currency for trade. It was no accident that Obama had to ship hundreds of millions of dollar bills to Iran for his nuke deal. It was their own money in T bills and bank deposits that had been frozen and because of sanctions they wanted cold hard cash. ..."
"... If the Saudis attempt to carry out their threat to move away from the petrodollar or start seriously liquidating their US treasury holdings, the KSA government would be de-legitimized, overthrown, the oil fields seized, and the country carved up. This is what Nixon would have done in 1973 if they hadn't agreed to the petrodollar deal ..."
"... There are pros & cons in having the reserve currency. The pro is naturally the ability to exchange paper for real goods. The con is that we have to run trade deficits to export dollars and then provide deep & liquid asset markets for those dollars to return. There's many reasons why the Chinese Yuan can't easily supplant the USD as a reserve currency. First, they don't have a fully convertible currency. Then their asset markets are neither open nor deep & liquid. China would also have to reverse their mercantilist policy to have the Yuan as a world reserve currency. ..."
"... China & Russia have sold hundreds of billions of Treasury bonds over the past few years. For crying out loud, the Fed is selling $600 billion annually now to normalize their balance sheet. Add to the over $1 trillion in fresh borrowing by the Treasury and you can see interest rates edge up to attract buyers. In any crisis most investors around the world still prefer US government backed securities. ..."
"... Two problems w Afghanistan. First, We shouldn't have interfered w the Soviets bringing modernity to them. That was the beginning of weaponized Wahhabism and the worldwide spread of Saudi financed madrassas. It pushed out Sufi and secular minded Muslims in favor of Takfiri Jihadists. Second, we should have declared victory after the fall of Kabul and left. ..."
"... Problem w/Iraq. It was the wrong country to invade, none of the 9/11 Islamist thugs on the airplanes were from secular Iraq ..."
"... Nixon provoked the 73 oil embargo with his resupply of the Israelis w/ Operation Nickel Grass ..."
"... I speculate he went off the gold standard in order to print enough money to finance the Vietnam war -- just speculation. ..."
"... FB Ali had a link to an article on the extent of Saudi money flowing into Silicon Valley. ..."
"In the United States, a bipartisan group of senators triggered global Magnitsky Act sanctions procedures two weeks ago, forcing
Trump to determine possible punishments against Saudi Arabia or Saudi officials over Khashoggi's killing.
If the United States imposed sanctions on Saudi Arabia, other major arms exporters such as Britain would probably also be forced
to take similar measures.
But in Berlin, top officials hope that their move to suspend future sales could pressure other European allies into following
suit, even if the United States refrained from doing so. Germany's export stop will have little impact "if at the same time other
countries fill this gap,"
Merkel's ally Altmaier acknowledged Monday."
--------------
Germany has gone "anti-medieval" on Saudi Arabia.
Who knew this would happen? This should be an example for all the neocons and hyper-nationalists in the US. The wahabbiyeen
are playing them for suckers over the promised contracts. So far the "contracts" are just promises of contracts. That is not an unusual
way to proceed in big business contracting; first the promise, then the contract, but nevertheless, the contracts do not exist as
yet. We can survive without Saudi money.
So can the rest of NATO. If the Russians and/or the Chinese really want to be stuck with this Tar Baby, let them try it on!
But! But! The Iranian threat! The Iranian threat! Threat to what? Israel? pl
It's not the petro, but the "petrodollar" system. Now if India, Japan, China, or most any country, I suppose, want to buy
Saudi oil it must use US Dollars. This goes back to deals made by Simon & Kissinger with the K of Saudi Barbaria when Nixon took
the US off the gold standard and the Near East was awash with money after the oil shock following the Arab Oil Embargo. PHILIP
M. GIRALDI explains it better than I could:
"Saudi Arabia, for its part, has a couple of cards to play also even if it did kill and dismember Khashoggi under orders from
the Crown Prince. First of all, the system of petrodollars, which basically requires nearly all purchases of petroleum to
be paid in dollars, is underwritten by the Saudis.
Petrodollars in turn enable the United States to print money for which there is no backing knowing that there will always
be international demand for dollars to buy oil. The Saudis, who also use their own petrodollars to buy U.S. treasury bonds, could
pull the plug on that arrangement. "
Whenever a medium size country has taken steps to wean itself from the petrodollar, it has been taken out: Saddam Hussein
taking steps to move to the Euro; Qaddafi talking about creating a pan-African currency for trade. It was no accident that Obama
had to ship hundreds of millions of dollar bills to Iran for his nuke deal. It was their own money in T bills and bank deposits
that had been frozen and because of sanctions they wanted cold hard cash.
If the Saudis attempt to carry out their threat to move away from the petrodollar or start seriously liquidating their
US treasury holdings, the KSA government would be de-legitimized, overthrown, the oil fields seized, and the country carved up.
This is what Nixon would have done in 1973 if they hadn't agreed to the petrodollar deal.
"...if India, Japan, China, or most any country, I suppose, want to buy Saudi oil it must use US Dollars."
Wrong. It is whatever Saudi Arabia is willing to accept for its crude. It could be Euro, Japanese Yen, Chinese Yuan or Russian
Rubles. Or even soybeans, wheat or coffee. Note that most crude are sold on long-term bilateral agreements and not on spot markets.
There are pros & cons in having the reserve currency. The pro is naturally the ability to exchange paper for real goods.
The con is that we have to run trade deficits to export dollars and then provide deep & liquid asset markets for those dollars
to return. There's many reasons why the Chinese Yuan can't easily supplant the USD as a reserve currency. First, they don't have
a fully convertible currency. Then their asset markets are neither open nor deep & liquid. China would also have to reverse their
mercantilist policy to have the Yuan as a world reserve currency.
The petrodollar analysis that many promote including the article you linked by Phil Giraldi show they don't know much about
trade finance. Saudi Arabia doesn't have to hold dollars that they gain from selling their oil in dollars. They can sell those
dollars to those that want it like a Cayman Island hedge fund that wants to go long dollars. The USD fx markets are deep and very
liquid.
China & Russia have sold hundreds of billions of Treasury bonds over the past few years. For crying out loud, the Fed is
selling $600 billion annually now to normalize their balance sheet. Add to the over $1 trillion in fresh borrowing by the Treasury
and you can see interest rates edge up to attract buyers. In any crisis most investors around the world still prefer US government
backed securities.
I lunched with Giraldi the day before his article on this was published. i questioned his economic argument. As you say, he says
that the need for enough US dollars in foreign circulation to make foreign transactions for petroleum possible under the present
system and that, as you say, that causes the US to create enough dollars for that system to work. That is essentially unconnected
from most functions of the US economy since the dollars stay overseas.
This is not true when the petrodollars are used by Saudi Arabia as funny money to buy US securities or US government sales
of heavy equipment like civilian or military aircraft. The Saudis now have their surrogate "Zillim" (slaves) on TV making preposterous
claims that a move away from denominating petro currency sales in dollars would collapse the US economy. Are you buying into that?
I am not and told Giraldi that.
The obverse of that argument is what you are advocating which is that if the Saudi try to tank our economy by selling their
US assets, then we should "coalition" them out of existence. Know that this would result in an occupation for decades accompanied
by incessant guerrilla war in what is now Saudi Arabia. This would be another Afghanistan or Iraq. Perhaps it would e worth it.
The Holy Cities are in the Hejaz. Hussein of Jordan would love to get them back and the Turks would back him. The oil fields are
in the Shia East. (Shades of the NeoCon Lt Col Ralph Peters Blood Map. Zykes!) The KSA and UAE have been making enemies all over
the place. Even Kuwait is afraid of a Saudi invasion.
Two problems w Afghanistan. First, We shouldn't have interfered w the Soviets bringing modernity to them. That was the
beginning of weaponized Wahhabism and the worldwide spread of Saudi financed madrassas. It pushed out Sufi and secular minded
Muslims in favor of Takfiri Jihadists. Second, we should have declared victory after the fall of Kabul and left.
Problem w/Iraq. It was the wrong country to invade, none of the 9/11 Islamist thugs on the airplanes were from secular
Iraq. No, not advocating an invasion, but believe the House of Saud would be overthrown if they start messing with the petrodollar.
Nixon provoked the 73 oil embargo with his resupply of the Israelis w/ Operation Nickel Grass
I guess he figured if they were on the ropes they would break out their nukes? I speculate he went off the gold standard
in order to print enough money to finance the Vietnam war -- just speculation.
I would not be surprised if the Saudis and Gulfies don't hold an amount of US debt in the order of Trillions. I read that foreigners
own some 47% of the US public debt of some $13 trillion or so. But others here surely have more expertise on this matter.
You really want the US to invade Saudi Arabia. What an awful idea! Do you think the populace would greet us with open arms? They
would not! American son and daughters would fight there for generations. Who would govern the place, the Israeli agent neocons?
Would Kushner be governor of the Eastern Province? The Hashemites could only govern the Hijaz (Mecca and Medina) as agents
of Turkey. Hussein is long dead.
You are correct. We, the USA as a nation can easily survive even prosper without the Saudi and Gulfie oil and money. But can
our political, governmental and media classes survive the loss of their easy path to riches?
FB Ali had a link to an article on the extent of Saudi money flowing into Silicon Valley. What would Masayoshi Son
and his Softbank Vision Fund do without the $45 billion committed by the Saudis. Just the management fees on this gigantic venture
fund pays some hefty salaries and expenses.
Does bring to mind Stalin's observation that "The death of one man is a tragedy, the death of millions is a statistic." The
Saudi's have been using precision guided munitions in a most imprecise manner to murder thousands of men, women and children in
Yemen too a very muted western outcry.
It has taken the, albeit particularly gruesome, murder of Mr Khashoggi to elicit widespread outage. The arms deals that Trump
talks about are not producing weapons to kill the Mr Khashoggi's of this world, but rather to render wholesale destruction of
a mass enemy.
The killing was outrageous, but so many commenters seem as if they don't know that Saudi executions are beheadings by sword
carried out in public (after Friday prayers) before hundreds of onlookers. Videos are available everywhere. The condemned are
forced to kneel on the ground, no blind fold, having seen the swordsman standing a few feet away.
This country has been "our best Arab friend" dating back to FDR. Knowing all this, both Bushes, Clinton, Obama and now Trump
have all embraced the royal Saudis.
top U.S. universities. Back in 2005, the Saudi gov't gave $20 million each to Harvard and Georgetown (
https://abcnews.go.com/International/story?id=1402008)
.
I've read no outraged pundits calling on these schools to return the money. Matter of fact, I haven't heard any Harvard denunciations
of this horrendous act of murder. Wonder why?
Why did Mr. Khashoggi risk his life, and lose it, by entering that Consulate knowing he was "an enemy of the state "with a
price on his head? It makes no sense. Certainly not over some routine paperwork that could have been done in, say, The Washington
D.C. Embassy with security!
Why are people and the press pretending that the US is a paragon of virtue and morality. Do people believe that US bodies don't
"neutralise" people, even their own citizens, who represent threats? Executions still happen in certain states; the "humaneness"
of it is merely a distraction, as if the penalty for murder would be any less severe if the victim was treated well before the
action.
Tangentially, if you think that the US isn't violating its own nuclear proliferation treaties, I have a bridge in London to
sell you...
Unfortunate for Ms Cengiz, but the timing of their meeting May 2018 & quick decision to marry is a bit suspicious. Qahtani
and several others have been trying to lure Khashoggi to Saudi since past several months, offering protection, top Govt jobs etc.,
It is also in the public domain that MBS put up the so called directive to lure Khashoggi back to Saudi. Whether Cengiz is used
to honey trap Khashoggi - because, it seems he never trusted the offers from Riyad. Police protection to Cengiz rises several
doubts - Is Riyad trying to assassinate Cengiz 0r Istanbul put Cengiz in a protective custody for being an accessory to the murder
of Khashoggi?
Alastair Crooke on the JK murder:
https://www.strategic-culture.org/news/2018/10/23/khashoggi-murder-complex-intersection-three-points-inflection.html
"When a single additional, undifferentiated, snowflake can touch off a huge slide whose mass
is entirely disproportionate to the single grain that triggers it. Was Khashoggi's killing
just such a trigger? Quite possibly yes – because there are several unstable
accumulations of political mass in the region where even a small event might set off a
significant slide. These dynamics constitute a complex nexus of shifting dynamics."
B, it does seem that the k affair has risen the crisis in Yemen to the foreground just as
many predicted. Thank goodness.
You are correct in that many are looking too far into this as some kind of conspiracy. I
am reminded by this of many who put forth that it made no difference as to who won the prez
election. It did make a difference to the military as well as Hillary's backers in the cIa
and fbI.
The Saudis screwed up and they will get their comeuppance it seems. Russia might be able
to wiggle their way into the middle then, filling the vacuum of uncle Sam at the circle
jerk. The Saudis will have to curtail their operation in Yemen and no quarter will be given
to wahhabi-terrorists by ksa who wish retribution against Russia. Win-win.
Interesting take by Ghassan Kadi on the Saker's blog, for those who still sense a
conspiracy in this. https://thesaker.is/insights-into-the-khashoggi-ordeal-who-and-why/
Goes back to this 'fiance', but adds Gullen to the mix and makes Erdy out to be an
instigator. Good to have a viewpoint from someone who has lived in Sawdi land.
Some goals are difficult to accomplish directly but can be easy with cunning and patience.
To wit:
How do you move a society to the right?
By allowing 'radicals' on the left to act up via a Potemkin 'resistance'.
'Open Borders' and gender are fluff compared to issues like Cold War II and inequality (which
the Democratic Party is silent about)
How do you discredit a Movement like #MeToo?
You "invite" them to discredit themselves by prompting them to go too far. Accusations with
no substance against Kavanaugh did just that.
How do you take down a King and crown prince?
By indulging his whims and flattery and creating opportunities for him to cross a moral line
that was deliberately blurred.
How do you control what people believe to be true?
By controlling narrative and timing. First news reports get the widest audience - subsequent
clarifications are mostly ignored. And people believe news sources that align with mythology
that they are emotionally invested in.
Trump has invested a lot in taking control of MBS and with him control of Saudi Arabia.
Because of this, I think MBS is important, if not key to Trumps plans in the middle east, the
main part of which is war with Iran. With the anti Trump factions riding this for all its
worth, the Khashoggi killing is at least a spanner in the works for Trump's plans, if not
derailing them completely.
Trump has been and is building the US military up for war with some countries and perhaps
trying to bluff others. Going by Trump's actions to date, pulling out of the missile treaty
was perhaps inevitable.
Eric Zuesse writes 'the eartbhquake ininternational alliances' at off-guardian. It is well
worth the time and delves into aspects of sunni schism as the background to current shifts.
Thanks b this khashoggi bone saw massacre and the Palestine and Yemen genocide are most
significant stories right now.
I don't think its strange at all, The Media has received the talking points from their
"Deep State" contacts and now their piling on with the allegations against MbS. It's quite
possible that the Whitehouse is still trying to craft a deal to minimize the fallout from the
murder and save MbS (and their Iran plans), but there are elements within the government that
are trying to undermine the deal to get rid of MbS. I wouldn't be surprised if the body parts
were found, but the Whitehouse / Turkey is not confirming to prevent the situation from
escalating and save the possibility of a deal, but the Deep state elements are leaking
details to the Media to keep the pressure on.
Well, let's see what he does about it! He can start by granting K's son and brother
asylum. They shouldn't have to endure this threatening farce on top of what they're
suffering.
The best insights in this drama can be found (IMHO) at Scott Crieghtons American everyman
blog. MbS has reneged on a huge Lockheed Martin Arms deal. That alone can get you in deep
shit with the establishment( just ask Sth Korea's Pres.)However, Scott goes on to explain
that MbS has committed a even greater sin.
Also... 4 seconds of video and a drip feed of "facts" from Turkeys Prez. Mmmmmm No body as
yet.... Put on ya Tin-foil hat boys... something bit fishy bout the whole story.
Bit o/T but while MSM and alt media have us mesmorized with Khashoggi gate 4 days ago
Vladimir Putin said ISIS had taken 700 hostages in the US-controlled area of Syria. The
hostages captured in Syria by ISIS terrorists include US and European citizens and are being
killed off 10 people a day.
Putin "This is just horrible, it is a catastrophe.....Some US and European citizens are
among the hostages....everyone is silent as if nothing has happened."
Cant have that being an issue before elections. Save it for November. MBS saves Trump
Thanks for the wonderful journalism to the estimable owner of this cantina, Mr b. I have no
idea how he does it. The quality of investiigation, the quality of writing, the synthesis and
pointed questions,
all these are first-rate and deserve applause and attention.
To me the Kashoggi thing is simple, the Skirpal assassins (yes they were involved, amazing
as this
may seem) screwed up. They confused Riyad Time with London time; they were still in bed
together and
not available to routinely refine orders issued by the young King's secretary, an addict of
pep pills
I agree with Mina. It IS a unique world-historical event. Kashoggi's gory death might be
the one thing
that saves us. After all, it seems to be a very rare non-staged world-historical event, we
have not
seen actual organic accidental purely human events since telephone operators asked: "Number
please?
Still Erdowan hit HIS number, with a natural four. Even Erdo could hardly believe it when
the casino manager rolled up the rack of his winnings. He had doubled down twenty-four
times-in-a-row and the figurative Strip was totally silent as the awed gamblers and their
molls saw him hit that fantastic roll.
Putin doesnt gamble. He doesnt smoke or drink. He likes to work and he loves his country
like other Russians: from Solzyanetzin, to Sholokhov, to Dostoyevsky, to Chekov, to Tolstoy,
to Gogol...
he lets the sharp operators wheel-and-deal, he's otherwise engrossed in the life of his
nation.
Like a magician's trick, with Russia's blessing, the Palestinians are given Saudi Arabi as
theirs;
so long as they promise to preserve sacred traditions of Mecca and Medina, the Ka'aba and so
forth.
Everyone says "wow that was easy!; now that's settled let's relax and get back to building
things
and to normal lives with our families..." It's so very easy. There is NO need to force
anybody to do that."
The Balfour Document is cited as precedent and everything is solved in a happy way that is
not a war.
The Royal family of Arabia becomes a You Tube Channel, with Nancy Pelosi and the Houses of
Congress
Evil fights evil. Who loses? Evil loses. That's the only possible chance we good people
have: it is
to make it so the worst evil is killed by the less worse evil; that's how human history
progresses
and we are all stuck with this moral Universe the way it is, whether it makes sense at first
or not.
Sorry for the mono-thematic posting. I am also working on several other themes and will
post those in time. But for now the Khashoggi issue is the event with likely the most
consequences and I try to stay on top of it.
Posted by: b | Oct 23, 2018 2:27:46 PM | 1
Khassogi theme has been milked for all that it could deliver, yet the large Russian
delegation to Saudi Arabia Direct Investment Fund - headed by Cyril Dmitriev and the
following international corporations Trafigura, Total, Hyundai, Norinco, Schlumberger,
Halliburton, Baker Hughes.
Total also signed a 15 billion deal with the Saudi's.
Russian-Saudi partnership particularly is about deals being made between corresponding
State Funds of each country. This means they are important.
Probably Erdogan and Mossad didn't like that, as the whole Khassogi case seems as an
Erdogani-faction, possible pro Mossad Saudi elements from within the closed circle of MbS and
the Mossad itself.
There is no Heaven or Hell. There is only the Mossad.
Las Vegas Massacre 1st Octobr 2017
Khassogi assasination October 1st 2018.
Mossad actions are all about dates/numbers/and cabala magic rituals. It's how they
roll.
from: Joe Vialls internet investigator research.
Three major investigations
The first major Vialls investigation was into the 1984 murder of WPC Yvonne Fletcher
outside the Libyan embassy in St. James's Square . He concluded that the fatal shots
had come not from within the embassy but from a penthouse flat next-door-but-one to the
Libyan embassy, and were fired by CIA/Mossad agents .[7]
The second investigation concerned the 1988 Lockerbie bombing together with
day-by-day summaries of the Pan Am Flight 103 bombing trial . Vialls developed his
own theory about the true cause of the bombing. Again, Vialls linked the CIA and
Mossad to the crime.[8]
The third major investigation was into the Port Arthur massacre in Tasmania,
Australia . Vialls claimed that an intellectually impaired man, Martin Bryant, was
wrongly convicted for this crime and did not receive a fair trial. Vialls claimed that this
case, also, was an Israeli operation carried out by Mistaravim .[9]
Other controversies
Vialls was a self-proclaimed private investigator dedicated to "exposing media
disinformation," and made many claims in his reports disputing official explanations for
events. The website thewebfairy.com wrote a comprehensive report, rebutting Vialls' claims
regarding the crash of American Airlines Flight 77 into the Pentagon on 11
September 2001 . The rebuttal centred mainly on Vialls' comparison of the Pentagon
crash with an incident in which an Israeli El Al 747-200F cargo plane, flight 1862 ,
crashed into a 12-story apartment block in the Amsterdam suburb of Bijlmer on 4 October
1992 .[10]
He also disputed the official explanation for the bombings of the Australian
embassy and Marriott Hotel in Jakarta, Indonesia's capital. Vialls asserted that
the explosives that authorities claimed were used in the Indonesian bombings were
not powerful enough to have caused the damage and casualties that resulted. He claimed to
demonstrate from photographs of the aftermath of each of the bombings, compared to the
photographs taken in Northern Ireland where a 1,000 pound IRA bomb did not
leave a crater or strip concrete from buildings, that a "micronuke" from Mossad's Dimona
research and development facility in the Negev desert had been used. Vialls claims a
device similar to the smallest United States nuclear weapon known as the Davy Crockett or
M-388 round, a version of the W54 warhead, a very small sub-kiloton fission device, was
used in the attacks. The Mk-54 weighed about 51 lb (23 kg), with a selectable yield
of 10 or 20 tons, which Vialls claimed was consistent with the damage inflicted in
Bali and elsewhere. A complete Mk-54 round weighed 76 lb (34.5 kg). One
criticism of Vialls' theory was the absence of any radiation in Bali after the explosion.
Vialls explained this flaw by arguing that Geiger counters cannot effectively detect
alpha radiation , the most likely radiation to be present after the detonation of a
plutonium fission bomb, since alpha particles are large and do not penetrate the walls
of the Geiger-Muller tubes adequately enough to register radiation.[11] In his
investigation of the first Bali bomb, Vialls cited an opinion article in the Jakarta Post,
Indonesia's largest English-language newspaper by circulation, written by an expatriate
editor at the Post, which expounded a similar theory.[12]
Vialls' theories have received popular support among leaders of some Muslim factions
in Indonesia, who have cited his theories as fact. Indonesian internet forum Swara Muslim
('Muslim voice') wrote an opinion piece stating that Vialls' claim that the bombing of the
Australian embassy was conducted by the CIA and Mossad was "based on solid fact."[13]
Indonesian Muslim cleric Abu Bakar Ba'asyir told Australia's ABC radio that he believed
Vialls' theory regarding the first Bali bomb was a correct one.[14]
Mossad has two parallel structures going through its hierarchy from top to bottom.
One is directly influenced/assisted/funded by the Rothchilds.
They do the ussual hacking/killing/maiming/disposing by the "their magick numbers"
principle.
The best insights in this drama can be found (IMHO) at Scott Crieghtons American everyman
blog. MbS has reneged on a huge Lockheed Martin Arms deal. That alone can get you in deep
shit with the establishment( just ask Sth Korea's Pres.)However, Scott goes on to explain
that MbS has committed a even greater sin.
Posted by: The cycnic | Oct 23, 2018 5:39:38 PM | 34
I am willing to bet it is plausible it would have to do with these guys:
Lockheed Martin Space Systems
Lockheed Martin Space is one of the four major business divisions of Lockheed Martin. It
has its headquarters in Denver, Colorado with additional sites in Sunnyvale, California;
Santa Cruz, California; Huntsville, Alabama; and elsewhere in the US and UK. The division
currently employs about 16,000 people, and its most notable products are commercial and
military satellites, space probes, missile defense systems, NASA's Orion Multi-Purpose Crew
Vehicle, and the Space Shuttle External Tank.[1]
They are the guys that ussualy go KABOOM or missing because of possible meddling/messing
around with cosmic frequencies/energies they shouldn't be messing with, from the days
Operation Paperclip ended and so forth.
So now that Trump sent Gina Haspell to Turkey he's changing his tune and calling this the
worst cover-up in the history of cover-ups!
Posted by: Circe | Oct 23, 2018 4:59:29 PM | 26
Just quoting some interesting timing here.
This (as it seems) is high level negotiation and secret ops preps between both sides.
Against whom I wonder.....
To where else our friend Gina has traveled abroad since her inaguration?Is this her first?
Her first cup of coffee abroad was at Erdogan's palace in Konstantinople?
That's a little over the top, even for smarmy Merkelian arms dealers trying to get their
mercantile horns into the hog sty.
Something tells me Marmeladebrüders would hold their noses and sell $100B of German arms
to MbS in a NYC Sekunde.
Trump has been and is building the US military up for war with some countries and perhaps
trying to bluff others.
Posted by: Peter AU 1 | Oct 23, 2018 4:42:09 PM | 23
He is changing the configuration and introducing new doctrines for the End Game.
It's goose stepping at Rothchild's orders.
It's for moving the chess pieces on the board before the actual full blown WWIII events in
such a way to favor the Rothchild devised plan for the world domination. The actual war is a
scheme in order to divide resources and strategic possitioning, while getting rid of the
excess poppulations here and there. They have huge plans concerning energy management
projects and new technologies. Real energy management like terrawats think about Tesla style
technologies, not mundane stuff like oil/gas and pipelines which is only there just for show
about controlling the narrative for the masses. They want to become gods. They will suck
everything on this plane of existence dry for their purpose to succeed. The war is
innevitable. It's a must do for them. We are near the End Game.Prepare accordingly.
Someone convinced Khashoggi he would be safe entering that Consulate. This was a man who had
lived his life next to Middle Eastern power so it must have been a persuasive argument.
MbS did what he did, and the shite hit the fan.
So now what? Turkey doesn't want to leave northern Syria (or Iraq?), and while she doesn't
control oil, she does control the water.
Putin (Putin again) emerges as the new best friend to the House of Saud. What would happen if
Saudi oil were to start trading in a mix of Yuan/Rouble/gold?
I can't decide if this is all fortuitous or orchestrated, but the waters are roiling.
Currently, the extraterritorial judgement is to Magnitsky
Act those responsible , which amounts to yet another illegal action. Given what Khashoggi
promoted--Daesh and the wider aims of Outlaw US Empire designs on the region plus visiting
genocide on Yemenis--I applaud his demise as I've written previously. And yes, I wouldn't
mind seeing the same fate befall those who killed him along with those who supported him.
Much of what we read amounts to deploring the gangland murder of a gangster, and we're
supposed to lament that--WHY? And what's worse overall: A recession caused by the removal of
Saudi oil from global market or the Climate Crisis generated by burning that oil?
Seems we've reached Through the Looking Glass extremes with no end in sight.
"... Btw, the CIA knew Riyadh was planning to kidnap the unfortunate guy, if the Turks recorded the slaughter they must have been recording before, too, the same goes for the police who couldn't have missed the team of 15 equipped with the bone saw. No one of these agencies tipped K. Aren;t they complicit in the sickening atrocity? More the point, why didn't they warn him? ..."
Since the Russian entry into Syria, the self labeled friends of Syria group of countries have
taken to infighting and slowly disintegrating. First Turkey then Qatar, Jordan now seems on
more diplomatic terms with Syrian government opening border and so forth. Russia's
geo-political power has been perhaps more important in saving Syria than its military power.
Is it by accident or design that the 'friends of Syria group' have been so affected
Putin is one of the best in setting up and carrying out long term strategy, putting it
together in seemingly unconnected steps so that the setting up goes unnoticed.
The Erdogan Russia deal on Idlib seemed odd at the time even with the genuine threat of a
US attack. Russia said there where no, and had not been any plans for an offensive on Idlib.
Syrian government seemed unhappy with the deal at the time but then a few weeks ago came out
publicly in support of what Turkey was trying to achieve in the buffer zone. What is going on
here.
Khashoggi - purely MBS stupidity or an easily set trap knowing MBS character.
On Crooke's bit about a snowflake touching of an avalanche, as the same time, an unstable
mass can easily be set in motion by a deliberate action. Both Erdogan and Putin would have a
sharp eye for these unstable masses.
Except for the Caligula outcome that cannot be ruled out, the Prince will stay, removing him
would suggest the old King's judgement's at fault, a sign of unforgivable weakness in any
autocracy that could be exploited by others in the future, the Prince's power may be
curtailed for a while, but that's about it.
The Americans should be careful not to get too harsh on the Kingdom, the old King visited
Moscow last November, nobody knows why, it may well be the old man's smarter than anyone
thinks, he senses the Americans are losing their grip e.g. Syria, the era of the Far East
approaches, his timing may be about right. 'The Kingdom must switch alliances before it's too
late to secure its future', he may think.
Btw, the CIA knew Riyadh was planning to kidnap the unfortunate guy, if the Turks
recorded the slaughter they must have been recording before, too, the same goes for the
police who couldn't have missed the team of 15 equipped with the bone saw. No one of these
agencies tipped K. Aren;t they complicit in the sickening atrocity? More the point, why
didn't they warn him?
Looks like an intelligence operation to remove MBS was launched after this blunder. BTW was it MBS blunder or a set-up?
Notable quotes:
"... Washington Post ..."
"... Washington Post ..."
"... This death is kabuki "wag the dog" type theatre for the masses while the real geo-political arm wrestling goes on behind the scenes ..."
"... Khashoggi met his fiance (36 year old to his 59) in May 2018. By October 2018, they were looking to get married. One little problem. He is already married and had to arrange a separation. Did he go to the consulate of his own free will or was he 'pushed' (ie he went very reluctantly as he realized he was taking a big risk). His fiancée is documented as a PhD candidate (in what subject? At which institute? What was her background?) They managed to meet at some high level think-tank get-together. That sounds a bit unlikely for some random unconnected outsider. How did she manage to get invited to the meeting? In other circumstances (Assange, Vanunu, etc) a honeypot would come to mind. ..."
"... Qui bono? Trump is negotiating with SWIFT to disconnect Iran from the world economy (an act of war?). Presumably once Iran reacts, it will be used as an excuse for an all out military attack against Iran, using Saudi airspace and ground facilities. Given Saudi has been making nice with Russia (and potentially Iran via Russian mediation), some 'encouragement' seems necessary for that to go ahead. Not so long ago, Trump stated that Saudi wouldn't last two weeks without US support, possibly a not-so-subtle hint. Corrupt leaders desire nothing more than holding on to power and the benefits of said power. ..."
No one seems to care how many Yemeni's Mohammad bin Salman kills each day. There was no harsh reaction when MbS kidnapped the
Lebanese Prime Minister Hariri, nor when he incarcerated nearly 400 princes and tortured them to steal their money. Why would
anyone care about Khashoggi?
Because that is how human psychology works:
The death of one man is a tragedy. The death of millions is a statistic.
Josef Stalin
We humans care way more for a single persons we know, than for a mass of people we have no relations with.
Khashoggi was a personal friend of Erdogan. He was a columnist at the Washington Post , the CIA's most favored news
outlet. Mohammad bin Salman is an enemy of both. Neither the neocon opinion editor of the Post , Fred Hiatt, nor Erdogan
have any love for the Saudi clown prince. They would of course raise a ruckus when given such a chance.
They will pile on and air the Saudi's dirty linen until MbS is gone. Yesterday the New York Timesexposed the twitter
brigades the Saudis hired to manipulate the public. Today the Washington Post has a
detailed report of Saudi influence peddling through U.S. stink tanks. The Middle East Institute, CSIS and Brookings get called
out. Lobbyists for the Saudis are
canceling their contracts. More such reports will come out. Years of lobbying and tens of millions of dollars to push pro-Saudi
propaganda have now gone to waste.
The affair is damaging to Trump. He built his Middle East policy on his relations with Saudi Arabia. But he can not avoid the
issue and has to call out MbS over the killing. His own party is pressing for it. Yesterday the Republican Senator Bob Corker,
chairman of the Foreign Relations Committee, dismissed the Saudi version of the story on CNN and
called (vid) for consequences:
"It is my sense, I don't know yet, but based on the intel I have read, based on the other excerpts that I have read, it is
my thinking that MbS was involved in this, that he directed this and that this person was purposefully murdered. "
...
There has to be a punishment and a price paid for that.
...
Do I think he did it? Yes, I think he did it. [...] We obviously have intercepts from the past that point to involvement at
a very high level, so let's let play this out.
On Sunday Erdogan was on the phone with Trump. The Turkish readout of the call
hints at
negotiations over Syria, the lifting of sanctions against Turkey and other issues. But the Khashoggi case has now
gone too far to allow for a deal to be made over it.
Erdogan's mouthpiece, the somewhat lunatic columnist Ibrahim Karagül,
gives an insight into Erdogan's thinking and sets out his aims:
The real trap was set against Saudi Arabia. Even though a Saudi Arabia-U.S.-Israel rapport was established and discourse about
shielding the Riyadh administration from Iran, the objective was to destroy Saudi Arabia through Salman and Zayed. The next
front after the Syria war was the Persian Gulf, Saudi Arabia. They never understood this, they could not understand it. Turkey
understood it, but the Arab political mind was blinded.
Now Saudi Arabia is in a very difficult situation. The world collapsed over them. Crown Prince Salman is going through a
tough test via Zayed, who has control over him. If the gravity of the situation after the facts revealed with the Khashoggi
murder is not comprehended, we will witness a "Saudi Arabia front" in less than a few years.
...
The Riyadh administration must dethrone Crown Prince Mohammed bin Salman at once . It has no other choice. Otherwise, it is
going to pay very heavy prices. If they fail to quash the trap set up targeting Saudi Arabia through bin Zayed, they will be
victims of Trump's "You won't last two weeks" statement, and the process is going to start to work in that direction.
...
This duo must be taken out of the entire region and neutralized. Otherwise they are going to throw the region in fire.
Crown Prince of Abu Dhabi Mohammed bin Zayed is Mohammad bin Salman's mentor and partner in crime in Yemen. MbZ is smarter
than MbS - and will be more difficult to dislodge.
Erdogan announced that he will describe more details of the case on Tuesday in a speech to his party's parliament group. He
will probably not yet play the tape from inside the consulate that Turkish intelligence claims to have. But he may well confirm
the revealed phone calls and threaten to release their content.
Erdogan's aim seems clear. The chance for deal is gone. MbS has to go. He will try to play the case out until that is achieved.
Posted by b on October 22, 2018 at 11:47 AM |
Permalink Here are some cables that Wikileaks released in 2015 showing how the Saudi royal family tries to control the world's
media:
It appears like a very ambitious plan to get rid of MbS and MbZ, but I have to agree that it's critical. They along with Netanyahoo
are the biggest threat in the ME.
"No one seems to care how many Yemeni's Mohammad bin Salman kills each day. There was no harsh reaction when MbS kidnapped the
Lebanese Prime Minister Hariri, nor when he incarcerated nearly 400 princes and tortured them to steal their money. Why would
anyone care about Khashoggi?
Because that is how human psychology works:
The death of one man is a tragedy. The death of millions is a statistic.
Josef Stalin
We humans care way more for a single persons we know, than for a mass of people we have no relations with."
You are naive person, b, and this section does not belong to MoA articles.
This is not about human psychology. Its about targeted media attention. Media could create a hysteria about Yemen too, but
only if the elite wanted that. Then you would see lots outraged people and large protests against the war in Yemen. But elites
do not want that. So that is not going to happen.
It is very simple how that works. When elites want, they bring massive media attention to something. When elites do not want,
they cover up things and the media is silent.
If elites wanted to adress the issue of the Yemen war, you will see similar media hysteria to the ones about Idlib or Aleppo.
Since the elites do not want that, media will be generally silent about the killings in Yemen and will keep things under control.
In this case, there are important western elites behind this, so you are getting lots of media coverage. So this has nothing to
do with what Stalin said or with human psychology, and everything to do with the fact that elites control media and public attention.
This is being used as a way of attacking Trump.
For more information, you can check Adam Garrie and Andrew Korybko, it seems that some european, US deep state (behind Trump's
back), and of course turkish interests are behind the increased media attention.
Where is the body (or its parts)? Having arrested 18 the Saudis must know the answer to this question. Why the delay on this question?
But as Pieraccini hinted a few days ago the
American Congress and its associates want MbS gone because he's a bad business manager. (Look at what happened to the "Vision"
thing although Munchkin today indicated business deals more important than anything else.) Trump will need to get over his sentimentalism
to go along, and he needs to do this fast with midterms two weeks away.
The same could be said of Palestine as Yemen, along with Zionist manipulation of "Western" policy. Clearly, having to justify
his actions is something MbS has seldom faced previously and has failed abysmally when it was actually very simple at the outset.
If MbS gets demoted, will he flee or stay and fight? The arms contracts were never signed, so they're likely dead, which I view
as a plus. I wonder if a pro-Palestinian/Anti-Zionist non-CIA captured Prince exists within Saudi that Salman might name to replace
MbS, or is such a beast wishful thinking?
All this proves that the spy-craft of the Saudi assassination team was abysmal. All cellphone networks store records of each
call. Any foreign official's phone in Turkey is under surveillance of the country's intelligence service. Only some throw-away
phone with an anonymous prepaid card could have given some protection.
Perhaps some, but not much. Even anonymous cellphone connections can be geo-located with a maximum error of a few meters, so
calls to Saudi Arabia from within the consulate could be noted. What more, the dim-witted Saudis probably would not have bothered
with tack-on encryption devices.
The one death is a tragedy quote is often misattributed to Stalin. See
here and
here and here .
What is apparent, however, is that the large American media outlets suddenly have discovered Yemen as a club to use in retribution
for the murder of one of their own.
B's point on human psychology is good on the question why this event has attracted so much attention. Obviously in the congress
the event is working in two ways: to facilitate removal of MbS, yes, by those annoyed with his and Trump's amateurish bullshit;
and to appeal for votes via all the outrage. Even Trump has to play to this sentiment.
But cynical deal-making on the inside aside, the ordinary person is amused and appalled at this naked display of the psychopath
with his thuggish sadism as increasingly it becomes apparent Mohammed Been Sawbones has done the deed. Plus trying to excuse it
and cover it up, as Trump et al are trying to do, clashes obscenely with the usual rhetoric/propaganda.
So, yes, the specific content here is much easier and clearer to grasp than abstractions and generalities. It's a case for
JQ Ordinary of "Got you! And we'll rub your face in it while we can!" In short, it's another reflection of how pissed off people
are with the globe's honorable leaders.
It is obvious that Erdogan didn't get the deal he was hoping for probably due to Trump's arrogance thinking that this one will
blow over as well and they can fix it. Gross miscalculation.
MBS is small potatoes. MBZ as mentioned is the target. He is the ambitious one with a brain, at least he thinks so. And he
has pissed off most of the gulf monarchies that have no interest in war and hegemony. They want to live quiet and make their money
and get along, especially with Iran.
What is interesting here, is that this event seems to have not been a random thing, but a carefully laid out trap they walked
right into.
This might be the undoing of Trump, Bolton and the rest, in the midterms first and then in their ME plans. Watch for the Russians
to come out as victors, yet again.
"B's point on human psychology is good on the question why this event has attracted so much attention."
No, it's not. If elites did not want, there would be zero attention about it. In the same way, there would be huge attention
for the killings in Yemen or Palestine, if only the elites wanted that. In fact, it would be number one news story every day and
the topic of the year if they wanted that.
All bets are off until we see how the impetuous one in the White House takes the growing "global consensus" and accepts defeat.
I think MBS was "supposed" to be gone 2 weeks ago ... being a well-documented loose-cannon. He was given temporary reprieve
(again) as Trump and the money men "negotiated" various terms of his survival and that of the arms deal....
Erdogan may well end up with a "better" deal than he hoped for due to impeccable stage craft and and slam-dunk evidence (we'll
see).
I believe I read that MBS personally assured Erdogan that Khasoghogi would be save ... assurances passed on to that gentlment
before he entered the compound. If true, that also speaks massively about MBS and his "word" as a gentleman (perhaps part of reason
for claims it was a "hot-headed accident")
The Saudis have such an embarassing history of failure at "stealth" like this ... if they'd just managed to abduct Khashoggi
like so many others currently disappeared or simply waited. This is also riding the crest of journalist complaints of state-sponsored
threats of violence towards journalism under the "fake news claims" internationally and by Donald Trump specifically in the American
heart land which is pretty much bled out already when it comes to "keep 'em honest" investigations.
If, when MSB goes, it will be -imho- the first major defeat of the Trump administration, both foreign and domestic.
There are some who want that, in the US and especially Europe, as well as medium level ones such as Erdogan. And some who do
not want that (the US administration, or Israel).
For Europe, the reaction was relatively harsh, as they use that to hit back at the US admin for its belligerent behavior. In
the US, it is used by those who oppose Trump, as well as due to other reasons. Check Adam Garrie and Andrew Korybko for more on
this.
As for Erdogan, it is already mentioned in the article here.
Forget advisors. Seems that in his purge, MbS eliminated everybody with a functioning brain. At least, from the ranks responsible
for "special actions". Some princes were kidnapped shortly after he got ministerial portfolios so at that time the art of committing
atrocities on kith and kin without raising undue noise was not lost.
"What is interesting here, is that this event seems to have not been a random thing, but a carefully laid out trap they walked
right into.
This might be the undoing of Trump, Bolton and the rest, in the midterms first and then in their ME plans. Watch for the Russians
to come out as victors, yet again.
Posted by: Alpi57 | Oct 22, 2018 1:18:50 PM | 17"
In retrospect, it seems that Khashoggi was "suicidal", but probably he thought that his government will not be so monumentally
stupid to kill him or kidnap in a consulate that is under monitoring of an unfriendly government. Perhaps he was persuaded by
his princely mentors who knew that he is a sacrificial pawn. The purge of people with functioning brain could eliminate the threat
of assassination by MbS own protecters, but it made him vulnerable in other ways.
Khashoggi may have thought Erdogan was his friend. From what I have read, they worked on a number of the same Muslim Brotherhood
projects.
Turkey have the goods on the killing which means Turk intel was most likely watching or listening in real time to what was occurring
in the consulate. Erdogan seems quite ruthless when setting a trap.
This death is kabuki "wag the dog" type theatre for the masses while the real geo-political arm wrestling goes on behind
the scenes
The world is being brought to a climax by the real or feigned death of empire and its too early to tell how the elite infighting
will work out but the elite still expect to be in control with private finance when it is over.
The link between Khashoggi and Erdoğan is not "fiendship", but the Muslim Brotherhood. Erdoğan made a similar scene about the
Morsi's overthrow in Egypt. This is a Ikhwan vs Wahabbi spat.
I couldn't imagine with the faux friendship that MBS has developed with Kushner/Mossad that they didn't know about this and
allowed him to do something like this. There is a larger play here. Why this and why now? On the surface, this will derail the
Iran plan entirely, not to mention a big dent in Trump and the midterms. This a gift to democrats. Why would they risk that over
Khashoggi?
well, so far in the "damage control" column we have not seen vast alarms about "targeted assassinations" (of journalists or scientists)
or much mention of the large-scale arrests of various Trump / Israel buddies and allies or -- for that matter --- the wholesale
slaughter of Mexican journalists (not to mention the usual Putin fingerpointing). There is an intersection between international
crime/money laundering and this sort of "pointless" ad hoc killing of the messengers which could also be "ripe" for discussion.
The Trump "coverup" has been quite successful in protecting the usual suspects.
#2 : he gets called "journalist" but his true vocation was professional ass kisser. it's not a huge leap of faith to assume he
went from directly kissing saudi royal ass to smooching various high level turkish ones. maybe not a "friend" (but who really
is at that level?) but probably a useful acquaintance.
now that we have the silly minutiae out of the way...this is still an increasingly amusing game of "let's you and him fight".
the whole "ultimate game of taking down saudi arabia" idea floated by the turkish writer is just silly but it will make the royals
slightly more malleable and it distracts from the "OMG iran is teh devul!!!1!!" bullshit we've been force-fed for the last few
years (and decades). whether it disrupts the newish israel/saudi axis has yet to be seen but i doubt it.
i also keep thinking of the odd selective outrage - not just when it comes to yemen but going back to 9/11. 15 of those guys
(going by the official story here) were saudis. relations barely skipped a beat after they offed ~3,000 of our own folks.
15 saudi guys butcher one saudi stenographer turned bezos/CIA company man and everyone shits their collective pants (including
many of the most virulent "STFU trutherz!" establishment idiots and Brennan CIA types who have 9/11 stink all over them). Seems
like a good time to dredge up any unfinished 9/11 business. after all, 3K americans = like 9 quadrillion yemenis, amirite?
The Khashoggi Affair has been messier than a dog's breakfast from the get go. Is it possible that MBS is using the same team of
UK "Intelligence Experts" as the nonchalant and sleazy Theresa (Would I Lie To You) May?
And what's with this continuing blather about malign forces operating behind Trump's back to make him look bad? He went
all in with a psychopath, sidelined all the seasoned diplomats, and left his fucking son-in-law in charge of his entire
ME policy.
Khashoggi met his fiance (36 year old to his 59) in May 2018. By October 2018, they were looking to get married. One little
problem. He is already married and had to arrange a separation. Did he go to the consulate of his own free will or was he 'pushed'
(ie he went very reluctantly as he realized he was taking a big risk). His fiancée is documented as a PhD candidate (in what subject?
At which institute? What was her background?) They managed to meet at some high level think-tank get-together. That sounds a bit
unlikely for some random unconnected outsider. How did she manage to get invited to the meeting? In other circumstances (Assange,
Vanunu, etc) a honeypot would come to mind.
Qui bono? Trump is negotiating with SWIFT to disconnect Iran from the world economy (an act of war?). Presumably once Iran
reacts, it will be used as an excuse for an all out military attack against Iran, using Saudi airspace and ground facilities.
Given Saudi has been making nice with Russia (and potentially Iran via Russian mediation), some 'encouragement' seems necessary
for that to go ahead. Not so long ago, Trump stated that Saudi wouldn't last two weeks without US support, possibly a not-so-subtle
hint. Corrupt leaders desire nothing more than holding on to power and the benefits of said power.
The situation is much more complicated than your rather arrogant comment suggests. The elites in the US are divided and have
been since the election of Trump. The Democrats and their media have found an ideal weapon in the brutal demise of Khashoggi with
which to bash Trump and bolster their chances in the mid-terms. We are perfectly aware of the hypocrisy involved by all elites.
But another section of the elites, namely the military industrials and Wall Street (weapons and petrodollar) do not want any problems
with Saudi Arabia, whatever MBS does or does not do. They want the story to go away. If they can get a more placid figure to lead
the country all well and good but, if they can't they will stick with "bone saw man."
The situation has maybe come about because Saudi Arabia is concerned about lashing its future so completely to a sinking ship
and a young upstart like MBS feels he is able to challenge the US, just as the Philippines' Duterte did when he cursed Obama;
just as Turkey and India and indeed the Saudis have done by ordering the S-400 from Russia. Rebellion is in the air as everyone
looks East.
I don't see how this would have any effect on the mid-terms. Most US-ians don't care. Also, pretty sure KSA is no friend to Muslim
B-hood, so hard to believe that the sultan and MbS would have worked on any such projects. OTOH, it is "highly likely" that somewhere,
MbZ lurks in the background. In some form or shape, he is a part of the trap (including that the trap could turn against him).
This was an interesting discussion (and hear what Sharmine Narwani has to say at the end):
https://www.rt.com/shows/crosstalk/441490-saudi-murder-journalist-trump/
He ran social media for Saudi Arabia's crown prince. He masterminded the arrest of hundreds of his country's elite. He detained
a Lebanese prime minister. And, according to two intelligence sources, he ran journalist Jamal Khashoggi's brutal killing at
the Saudi consulate in Istanbul by giving orders over Skype.
...
Qahtani himself once said he would never do anything without his boss' approval.
"Do you think I make decisions without guidance? I am an employee and a faithful executor of the orders of my lord the king
and my lord the faithful crown prince," Qahtani tweeted last summer.
...
According to one high-ranking Arab source with access to intelligence and links to members of Saudi Arabia's royal court, Qahtani
was beamed into a room of the Saudi consulate via Skype.
He began to hurl insults at Khashoggi over the phone. According to the Arab and Turkish sources, Khashoggi answered Qahtani's
insults with his own.
... ... ...
A Turkish intelligence source relayed that at one point Qahtani told his men to dispose of Khashoggi. "Bring me the head
of the dog", the Turkish intelligence source says Qahtani instructed.
...
The Arab source and the Turkish intelligence source said the audio of the Skype call is now in the possession of Turkish President
Tayyip Erdogan. The sources say he is refusing to release it to the Americans.
Erdogan said on Sunday he would release information about the Turkish investigation during a weekly speech on Tuesday. Three
Turkish officials reached by Reuters declined to comment ahead of that speech.
Yonatan, please read the articles linked by b before asking wrong questions;
he was not married since right after he fled to the US in 2015 (trying to escape what happened to a number of his rich friends)
the KSA regime made pressure on his family until his wife filed for divorce.
But Turkish law requests a proof of such a divorce to allow a man marrya Turkish woman.
Some good rants by PLang lately https://tinyurl.com/yc9fg9xu https://turcopolier.typepad.com/sic_semper_tyrannis/2018/10/did-the-chihuahua-do-it.html
Trump has unilaterally begun economic warfare wherever and whenever he wants. He does not conduct foreign policy in consultation
with anyone, least of all the Republican Party. If he or his own are taking bribes from Saudi, then he is likely going to retain
MbS no matter the whining. It's not like the US is a democracy. If Kashoggi gave up something against Trump, so that Erdogan thinks
he has something, Erdogan is overplaying his hand.
Trump is bullet proof politically, and he will almost certainly resort to violence if needed. Although cell phones can be cloned
and placed from a car in front of an embassy, it is likely there were nineteen calls to MbS personally. The thing is, this is
rather strong evidence the murder either was not premeditate...or the real point was the interrogation. We know nothing about
what Kashoggi said. All this blather about the incident is drivel until we know that.
The effects of the midterm elections depend entirely on turnout. The Democrats have been trying to run to the right, which
suppresses popular turnout. The centerpiece has been the Kavanaugh nomination, which they lost. Losing depresses turnout. The
Republicans are consciously suppressing turnout. If people turn out, yes, there's a blue wave. But every indication is there's
not going to be the kind of turnout. If turnout is low, the Democrats may even fracture as the few Democratic Party winners will
be anathema to the moderate conservative paymasters. And, after Trump pretends not being massively rejected at the polls means
he is massively popular instead of people being in despair at having no one for them, Trump will be even less inclined to dump
MbS.
Erdogan is soft on Iran and Russia because the US insists on limiting his slice of the pie, in favor of Israel and Saudi. He's
miscalculated the balance of forces.
Tomorrow will be the opening of the Arab Economic Summit (that MBS's was staking KSA's future on) apparently competing with Erdogan's
"weekly speech" ... Watch what happens (except KSA/MBS could have scarcely engineered quite as effective a "kick me" sign to affix
on the back of their robes.
KSA's economic development/innovation (rather like US infrastructure investment) is decades shopworn with little to show for
it (AFAICT) AP Saudi prince's future put to the
test at investment forum . Millions of bitterly disappointed over-educated young Saudis could be hard to contain given how
long they've been fed empty promises of jobs-jobs-jobs and meaningful lives.
Erdogan has been handed a "golden football" to run with wrt knocking KSA's "dominance" into proportion (American's don't know
there are any non-KSA lover's except evil Iran) I'm curious what the summit will produce, from whom ... strange to realize the
Saudi's are publicly admitting to need to recruit investment to bankroll their future ...
Agree with GoraDiva @46 that this will have negligible impact on midterms as Trump and 2/3s of Senate aren't on ballot. It may,
however, have some impact on Trump's ability to help stump for other Reprehensibles.
Passer by @25--
I disagree with Korybko's take that Russia will be happy to fill the vacuum caused by the Outlaw US Empire's abandonment of
its longtime ally if MbS remains. Most important is the media war being waged on Russia--Russia will be further demonized if it
befriends MbS, which comes at a time when its image is recovering. IMO, Russia won't launch any new initiatives until the situation
eases being content to continue its current policy.
"... why would MBS risk a Khashoggi scandal as he was assiduously promoting his image abroad as an enlightened reform-minded Saudi leader? ..."
"... We lack the evidence and official candor needed to study these questions, as is usually the case with covert, secretive, disinforming intelligence operations. But the questions are certainly reason enough not to rush to judgment, as many US pundits do. Saying "we do not know" may be unmarketable in today's mass-media environment, but it is honest and the right approach to potentially fruitful "analysis." ..."
1. National intelligence agencies have long played major roles, often not entirely visible, in international politics. They are
doing so again today, as is evident in several countries, from Russiagate in the United States and the murky Skripal assassination
attempt in the UK to the apparent murder of Jamal Khashoggi in the Saudi consulate in Turkey. Leaving aside what President Obama
knew about Russiagate allegations against Donald Trump and when he knew it, the question arises as to whether these operations were
ordered by President Putin and Crown Prince Mohammed bin Salman (MBS) or were "rogue" operations unknown in advance by the leaders
and perhaps even directed against them.
There have been plenty of purely criminal and commercial "rogue" operations by intelligence agents in history, but also "rogue"
ones that were purposefully political. We know, for example, that both Soviet and US intelligence agencies -- or groups of agents
-- tried to disrupt the Eisenhower-Khrushchev détente of the late 1950s and early 1960s, and that some intelligence players tried
to stop Khrushchev's formal recognition of West Germany, also in the early 1960s.
It is reasonable to ask, therefore, whether the attacks on Skripal and Khashoggi were "rogue" operations undertaken by political
opponents of the leaders' policies at home or abroad, with the help of one or another intelligence agency or agents. Motive is a
-- perhaps the -- crucial question. Why would Putin order such an operation in the UK at the very moment when his government
had undertaken a major Western public-relations campaign in connection with the upcoming World Cup championship in Russia? And
why
would MBS risk a Khashoggi scandal as he was assiduously promoting his image abroad as an enlightened reform-minded Saudi leader?
We lack the evidence and official candor needed to study these questions, as is usually the case with covert, secretive, disinforming
intelligence operations. But the questions are certainly reason enough not to rush to judgment, as many US pundits do. Saying "we
do not know" may be unmarketable in today's mass-media environment, but it is honest and the right approach to potentially fruitful
"analysis."
Was the assassination of JFK by Lee Harvey Oswald still getting as much media coverage three
weeks after his death as it did that first week after Nov. 22, 1963? Not as I recall.
Yet, three weeks after his murder, Jamal Khashoggi, who was not a U.S. citizen, was not
killed by an American, and died not on U.S. soil but in a Saudi consulate in Istanbul, consumes
our elite press.
The top two stories in Monday's Washington Post were about the Khashoggi affair. A third,
inside, carried the headline, "Trump, who prizes strength, may look weak in hesitance to punish
Saudis."
On Sunday, the Post put three Khashoggi stories on Page 1. The Post's lead editorial bashed
Trump for his equivocal stance on the killing.
Two of the four columns on the op-ed page demanded that the Saudis rid themselves of Crown
Prince Mohammed bin Salman, the prime suspect in ordering the execution.
Page 1 of the Outlook section offered an analysis titled, "The Saudis knew they could get
away with it. We always let them."
Page 1 of the Metro section featured a story about the GOP candidate for the U.S. Senate in
Virginia that began thus:
"Corey A. Stewart's impulse to use provocative and evidence-free slurs reached new heights
Friday when the Republican nominee for Senate disparaged slain Saudi Arabian journalist Jamal
Khashoggi
"Stewart appears to be moving in lockstep with extremist Republicans and conservative
commentators engaging in a whisper campaign to smear Khashoggi and insulate Trump from global
rebuke."
This was presented as a news story.
Inside the Business section of Sunday's Post was a major story, "More CEOs quietly withdraw
from Saudi conference." Featured was a photo of JP Morgan's Jamie Dimon, who had canceled his
appearance.
On the top half of the front page of the Sunday New York Times were three stories about
Khashoggi, as were the two top stories on Monday.
The Times' lead editorial Monday called for a U.N. investigation, a cutoff in U.S. arms
sales to Riyadh and a signal to the royal house that we regard their crown prince as
"toxic."
Why is our prestige press consumed by the murder of a Saudi dissident not one in a thousand
Americans had ever heard of?
Answer: Khashoggi had become a contributing columnist to the Post. He was a journalist, an
untouchable. The Post and U.S. media are going to teach the House of Saud a lesson: You don't
mess with the American press!
Moreover, the preplanned murder implicating the crown prince, with 15 Saudi security agents
and an autopsy expert with a bone saw lying in wait at the consulate to kill Khashoggi, carve
him up, and flee back to Riyadh the same day, is a terrific story.
Still, what ought not be overlooked here is the political agenda of our establishment media
in driving this story as hard as they have for the last three weeks.
Our Beltway elite can smell the blood in the water. They sense that Khashoggi's murder can
be used to discredit the Trump presidency, expose the amorality of his foreign policy and sever
his ties to patriotic elements of his Middle American constituency.
How so?
First, there are those close personal ties between Crown Prince Mohammad bin Salman, son
of the King, and Jared Kushner, son-in-law of the president of the United States.
Second, there are the past commercial connections between builder Donald Trump, who sold a
floor of a Trump building and a yacht to the Saudis when he was in financial straits.
Third, there is the strategic connection. The first foreign trip of the Trump presidency
was, at Kushner's urging, to Riyadh to meet the king, and the president has sought to tighten
U.S. ties to the Saudis ever since.
Fourth, Trump has celebrated U.S. sales arms to the Saudis as a job-building benefit to
America and a way to keep the Saudis as strategic partners in a Mideast coalition against
Iran.
Fifth, the leaders of the two wings of Trump's party in the Senate, anti-interventionist
Rand Paul and interventionist Lindsey Graham, are already demanding sanctions on Riyadh and
an ostracizing of the prince.
As story after story comes out of Riyadh about what happened in that consulate on Oct. 2,
each less convincing than the last, the coalition of forces, here and abroad, pressing for
sanctions on Saudi Arabia and dumping the prince, grows.
The time may be right for President Trump to cease leading from behind, to step out front,
and to say that, while he withheld judgment to give the Saudis every benefit of the doubt, he
now believes that the weight of the evidence points conclusively to a plot to kill Jamal
Khashoggi.
Hence, he is terminating U.S. military aid for the war in Yemen that Crown Prince Mohammed
has been conducting for three years. Win-win.
An interesting fact that Khashoggi father was a well known and very rich Saudi arms merchant and he himself was very close to
jihadists, especially those who belong to Muslim brotherhood.
Notable quotes:
"... Mr. Trump bought the Trump Princess, as the well-known yacht is called, for $30 million in 1987 from the Sultan of Brunei, who had secured it as collateral for a multimillion-dollar loan to Adnan M. Khashoggi. ..."
"... Mr. Khashoggi, a Saudi Arabian arms dealer, reportedly spent $85 million to build and outfit the vessel with such features as a helicopter landing pad, a screening room and 800-film library, a discotheque, a hospital, sleeping quarters for a crew of 52, bathrooms of hand-carved onyx, and refrigerators that can carry a three-month supply of food for 100 people. The yacht has 14 fuel tanks that allow it to travel 8,500 miles without refueling. ..."
Mr. Trump bought the Trump Princess, as the well-known yacht is called, for $30 million in
1987 from the Sultan of Brunei, who had secured it as collateral for a multimillion-dollar loan
to Adnan M. Khashoggi.
Mr. Khashoggi, a Saudi Arabian arms dealer, reportedly spent $85 million to build and outfit
the vessel with such features as a helicopter landing pad, a screening room and 800-film
library, a discotheque, a hospital, sleeping quarters for a crew of 52, bathrooms of
hand-carved onyx, and refrigerators that can carry a three-month supply of food for 100 people.
The yacht has 14 fuel tanks that allow it to travel 8,500 miles without refueling.
In 1989, the Princess was leased by the Trump's Castle hotel and casino and berthed at an
Atlantic City marina. It was used for promotion and entertainment by the Castle and several
other Trump enterprises.
Mr. Trump disclosed on a recent television appearance that the yacht was cruising the waters
of the Far East while he sought a buyer for it.
"... Hatice graduated from the Sharia college in the University of Istanbul in 2013 and got her MA in 2017 from the Faculty of Social Sciences – History Department at Salahaddin University after finishing a field study about sects in Oman. ..."
"... Sources close to Hatice's family said the family did not know their daughter was engaged to Khashoggi and were surprised to hear the news which they only learnt via media reports, adding that Hatice does not live in the same house with her family. ..."
Ever since Saudi journalist Jamal Khashoggi went missing in Istanbul, the name Hatice Cengiz
has dominated the scene and remained at the forefront of news headlines amid the mysterious
aura of the past 13 days.
So who is this Turkish woman that emerged from behind her Twitter account to claim that she
is Khashoggi's fiancée?
Hatice graduated from the Sharia college in the University of Istanbul in 2013 and got her
MA in 2017 from the Faculty of Social Sciences – History Department at Salahaddin
University after finishing a field study about sects in Oman.
She later joined a study program at the Ibn Khaldun University which is affiliated with the
Justice and Development Party, and where Bilal Erdogan holds the post of Vice Chairman of the
Board of Trustees.
The Ibn Khaldun University which was founded in 2015 signed educational and cultural
cooperation agreements with the Doha Institute for Graduate Studies where the Chairman of the
Board of Trustees is Azmi Bishara.
Hatice presented herself as a freelance researcher of Gulf countries and presented academic
studies about Oman, but the most important question is: Which party was Hatice Cengiz working
for then, and which center did her studies and articles serve?
On July 13, 2018, she interviewed Dar Al-Arab media group's Executive Director Jaber
al-Harmi for the foreign policy magazine, which is a periodical that is published in the
Turkish and English languages and which is affiliated with the Institute of Foreign Policy
that's affiliated with the Turkish Foreign Ministry.
In the interview, she addressed the convergence between Qatar and Iran and the stance of the
countries that have boycotted Qatar.
The topic was under the headline "Qatari-Iranian relations and the region's developments
after America's withdrawal from the nuclear deal," and in it, Hatice criticized Saudi Arabia in
exchange for extending the "olive branch of peace" to the Khomeini regime.
Sources close to Hatice's family said the family did not know their daughter was engaged
to Khashoggi and were surprised to hear the news which they only learnt via media reports,
adding that Hatice does not live in the same house with her family.
"... As a Muslim, Mr. Khashoggi could have gone to any country that upholds Muslim marriage rites and remarried without having to formally divorce his first wife, and then go to America and live with his "new wife" under the guise of a de-facto relationship. So why would he risk his life and walk into a potential death trap? ..."
"... Logic stipulates that Khashoggi entered the Consulate after he was given vehement assurances that his safety was guaranteed by the Saudi Crown. He would have never entered the Consulate had he not been given this assurance. ..."
"... Hatice Cengiz (Turkish for Khadijeh Jengiz) it is claimed, raised the first alarm for Khashoggi's disappearance, announcing at the same time that she is/was his fiancée. But that latter announcement of hers came as a surprise even to Khashoggi's own family. ..."
"... Some reports allege that Hatice has had a colourful history, including Mossad training https://www.youtube.com/watch?v=6SPuKo7WMSA&feature=youtu.be . The same YouTube alleges that she was a Gülenist and was arrested by Erdogan and released under the condition that she works for his security apparatus in order to guarantee her freedom. If such is the case, do we know if she has been also blackmailed in exchange for security of family members, loved ones, property etc? We don't know. ..."
"... In reality, irrespective of what his family members are saying now, Khashoggi has never introduced her to the world as his fiancée; and this is fact. So was she his fiancée? It is at least possible that she wasn't? So, who was she to Khashoggi and what role did she possibly play? ..."
"... Gülen is falling out of America's favour as he seems to have outlived his use-by date, and the Gülenist movement would be in dire need of a new benefactor. ..."
"... Cengiz, a former Gülenist, released on the above-mentioned conditions and possible threats, might have introduced herself to Khashoggi as an undercover Gülenist, and she had a history to support her claim. Being a former Gülenist, she might have indeed kept a foot in the Gülenist camp, and with the diminishing support of the American Government to the Gulenist movement, she might have been recruited to source finance. The Gülenists might have eyed Saudi Arabia to take this role, and as the rift between the Saudi royals and Erdogan intensified after their former joint effort to topple the legitimate secular government of Syria ..."
"... MBS himself would have inadvertently invited the Gülenists to approach him when he announced, back in March 2018 during a visit to the Coptic Pope Tawadros II in Egypt, that the triangle of evil in the Middle East is comprised of Iran, Islamist extremists groups and Turkey, and, in naming Turkey, he obviously meant Erdogan personally. ..."
"... With the Saudi-led Wahhabi version of fundamentalist Islam competing with the Muslim Brotherhood side, politically and militarily headed by Erdogan, it is not far-fetched to believe that either party is conspiring to topple the other. ..."
"... It is highly likely that Saudi officials had several contingency plans for Khashoggi's visit; depending on its outcome and the information that he had to offer. Those plans might have included giving him a wide range of treatments, ranging from a red carpet reception in Saudi Arabia, to beheading and dismembering him within the Consulate's grounds. ..."
"... It is possible that the Saudi officials in Turkey have had their own contacts with the Gülenists prior to the supposed ground-breaking visit of Khashoggi. In such a case, if the story Khashoggi may have offered did not fall in line with the story the Saudi's already know, then Khashoggi would have automatically been branded as suspicious and his safe entry would have been revoked. In such a case, he would have walked into his own trap. ..."
"... If any of the above scenarios are accurate, then the role of Erdogan in this story is not that of a scavenger who capitalized on the rift generated between the Saudis and America, but that he was instrumental in conjuring up and orchestrating the whole drama. Erdogan might have subjected the Saudi Government to the Gülen litmus test, and in such a case, the victim is Saudi Arabia and the scavenger is America seeking silence money in lieu of continued protection of Saudi interests. ..."
"... In all of the above scenarios, Khashoggi would have been driven into the trap by his alleged fiancée and had his impunity revoked by the Saudi officials because he failed the test. ..."
"... Most likely, Khashoggi was after amnesty from the Saudi Crown, and this would be a safety concern not only for Khashoggi himself, but also for his family that continued to live in Saudi Arabia ..."
"... Arabic media are inundated with posts and YouTube videos that are very damning of Hatice Cengiz ..."
"... . In reality however, her sudden emergence as Khashoggi's "fiancée", the fact that she allegedly waited for nearly 24 hours before reporting his disappearance and her personal, professional and political history are all factors that cast much doubt about her innocence and instead, portray her as a possible key element in the series of events that led to the disappearance of Khashoggi. ..."
"... And if Trump is seizing the opportunity to grab MBS, and this time he will be grabbing by the wallet, if Erdogan smells a hint of preparedness of MBS to support Gülen, then Erdogan would want MBS's wallet and head. Any whichever way, the silver lining of this story is that for once, Saudi Arabia is finally running for cover. Few around the world will give this brutal royal family any sympathy. ..."
"... MBS has committed heinous war crimes in Yemen and has made huge errors of judgment with regard to Syria and Qatar. He made many enemies, and it seems that Erdogan is out to get him. ..."
"... It does seem possible that the Assad-must-go curse has reached the neck of the Saudi throne ..."
"... Interestingly enough apparently K handed his two phones to fiancée before he went in ..any good journalist would have left a cache somewhere to be opened incase of certain events?????? ..."
"... why enter the consulate in Turkey? And, not in USA? And, why not the Embassy as the Ambassador has more power, than the Consular? Also, both the Muslim Brotherhood have Wahhabism have been friends for ages, as their theology is very similar with each other. And, if fact Erdogan is not Muslim Brotherhood but a Sufi. ..."
"... I've read several articles about Khashoggi and my feeling right now is everyone is lying, including B and Ghassan Kadi. ..."
"... Seems to me that also the Old US Establishment, along with the EU Establishment, both anti-Trump, never wanted MbS in the first place. Israel, and therefore Trump, are happy with MbS but a lot of people would like to see him gone and get the old "safe" gang back (who paid handsome bribes/salaries for decades). MbS is similar to Trump, way too impulsive, unpredictable and manic, and a special kind of crazy on top to make for a reliable partner in crime. ..."
"... The Establishment wants the Saudis to sell them their oil, then to recycle the money back into their economies. They'd prefer that they do this quietly, without any big fuss. They can get rich doing so, but they shouldn't disrupt the world. And this is the role that the Saudis have played mostly for the last 60-70 years. ..."
"... Until MbS. So yes, it is conceivable that some other powerful people are getting a bit tired of him. The same powerful people who really don't want the disruption of the world that a Shiite-Sunni war over the oil fields would cause. The same powerful friends who are also worried about Trump upsetting apple carts. Perhaps these powerful people are moving against a war, which means against Trump on Iran, and against MbS if they feel he keeps stirring things up too much. ..."
"... One problem throughout this whole affair is that I don't believe the Turks. Erdogon shutdown or converted the independent media that they once had. And in a case like this, all information comes from the government anyways. The Sauds have been rightly attacked for changing their story. But the Turks have been too. I've gotten the feeling that the 'news' reports from Turkish leaks (supposedly) have simply been the plot lines of various Hollywood movies. The body was cut up (with a chainsaw? like in Texas?), the body was dissolved in acid, the killers watched on Skype (always good to get that hip tech tie-in to a story). It can't all be true. ..."
"... Like The Salisbury Affair, The Case of the Disappearing Lover in Instanbul simply is going to have to be one to sit back and wait and see what if anything actually emerges as the truth. ..."
"... Seems pretty clueless to drop the bits in a well. Maybe the "local contact" was actually the consul, suggesting: Hey, I have an idea! How about dropping the body parts down the well? ..."
"... That is about the dumbest thing I have heard yet in the Story of K. Except, the idea of the body double. The people who thought up the body double idea must be the same Einsteins who figured the well in the consul's garden was a solution to disposal. Keystone Konsul. ..."
"... That bit of imagination leads to the idea that one of Khashoggi's last thoughts was "shit, I knew getting married again was a bad idea." ..."
"... The interesting thing was watching the US media go crazy about this. I kept thinking how different was this from Obama ordering Anwar Al-Awaki executed by drone strike? Al-Awaki received no trial, or even some kind of demand. Obama and his team just had him executed. So MBS is a horrible monster for doing exactly what Obama did. ..."
"... Khashoggi seemed to be working to "end dictatorship" and spread "free speech," democracy, voting, opinion polls, feminism, gender theory, lgbt washrooms, all that. All the great stuff of democracy. Worked out great in Sweden, why not Saudi Arabia? ..."
"... It was Khashoggi beating the Assad must go drum. The last Saudi represented on this site said Assad is harmless as long as he understands Saudi interests exist in Syria. Not ideal, but a better offer than London's. Further, the dead "journalist" believed Syria should be divided, and worse, that we should now act as if Assad is already gone ..."
"... Seems to come down to him being lied to, conn'd or lured into the consulate and his death. Then we come to the whole other point of why on earth did the Saudis use their consulate as an assassination killing ground? ..."
"... Governments killing people within their consulates is very rare. For reasons that are now very obvious, if they weren't before. ..."
"... The pundits who say MBS wanted to send a message set off alarms in my brain. Because that is exactly the reason we are supposed to believe that Putin uses all sorts of bizarre assasination methods that are obviously traced back to him. He wants to send a message. Yeah, right. And that's why they brought a bleep-storm of trouble down on top of their heads. To send a message? ..."
When I worked and lived in Saudi Arabia, one of the first things I learnt was that
the company I worked for had a fulltime employee with the job description of "Mu'aqeb". The
best translation of this title is "expeditor". This man was in charge of every matter that had
to do with dealing with government. He is the one who takes one's passport and sees that a
Saudi "Iquama" (temporary certificate of residence) is produced. He is the one who renews
driving licenses. He is the one that does the necessary paperwork to grant employees exit and
re-entry visas when they go away on holidays. He even applies on one's behalf for visas to
visit other countries. He even paid water and electricity bills. He did it all, and of course,
on top of his salary, he expected a present from employees on their return to work from
holidays, and some employees would risk big penalties smuggling in Playboy magazines to reward
him with. But the company I worked for was not alone in this regard; all other companies had
their own "Mu'aqeb".
It is against the Saudi psyche, culture and "pride" to go to a government office, wait in
line and make an application for anything. Not even uneducated poor Saudis are accustomed to go
through the rigmarole of government red-tape and routine.
Mr. Khashoggi was from the upper crust, and it is highly doubtful that he would have been
willing and prepared to physically enter the Saudi Consulate in Istanbul seeking an official
document.
Jamal Khashoggi was no fool. He knew the modus operandi of the Saudi Government too well. He
knew that what he had said was tantamount to a death sentence in the brutal Kingdom of Sand. So
what incited him to walk into the Consulate? To receive a divorce certificate so he could
remarry as the reports are trying to make us believe? Not a chance.
But this is not all. As a Muslim, Mr. Khashoggi could have gone to any country that upholds
Muslim marriage rites and remarried without having to formally divorce his first wife, and then
go to America and live with his "new wife" under the guise of a de-facto relationship. So why
would he risk his life and walk into a potential death trap?
Logic stipulates that Khashoggi entered the Consulate after he was given vehement assurances
that his safety was guaranteed by the Saudi Crown. He would have never entered the Consulate
had he not been given this assurance.
But why would the Saudi Government give him this assurance even though he had been very
critical of MBS? A good question.
Once again, a logical hypothetical answer to this question could be that Khashoggi had some
important meeting with a high ranking Saudi official to discuss some issues of serious
importance, and this normally means that he had some classified information to pass on to the
Saudi Government; important enough that the Saudi Crown was prepared to set aside Khashoggi's
recent history in exchange of this information.
If we try to connect more dots in a speculative but rational manner, the story can easily
become more interesting.
Hatice Cengiz (Turkish for Khadijeh Jengiz) it is claimed, raised the first alarm for
Khashoggi's disappearance, announcing at the same time that she is/was his fiancée. But
that latter announcement of hers came as a surprise even to Khashoggi's own family.
Not much is said and speculated about Hatice in the West, but she is definitely making some
headlines in the Arab World, especially on media controlled and sponsored by Saudi Arabia. To
this effect, and because the Saudi neck is on the chopping board, it is possible that for the
first time ever perhaps, the Saudis are telling the truth.
But the Saudis are the boys who cried wolf, and no one will ever believe them. But, let us
explore how they might have got themselves into this bind.
As we connect the dots, we speculate as follows:
Some reports allege that Hatice has had a colourful history, including Mossad training
https://www.youtube.com/watch?v=6SPuKo7WMSA&feature=youtu.be . The
same YouTube alleges that she was a Gülenist and was arrested by Erdogan and released
under the condition that she works for his security apparatus in order to guarantee her
freedom. If such is the case, do we know if she has been also blackmailed in exchange for
security of family members, loved ones, property etc? We don't know.
It has also been reported that Jamal Khashoggi met her only as early as May 2018 and later
introduced her as an expert on Omani history and politics. In reality, irrespective of what his
family members are saying now, Khashoggi has never introduced her to the world as his
fiancée; and this is fact. So was she his fiancée? It is at least possible that she wasn't? So, who was she to Khashoggi and what role did she possibly play?
The following speculation cannot be proved, but it makes sense:
To explain what a Gülenist is for the benefit of the reader who is unaware of this
term, Erdogan blamed former friend and ally Fethullah Gülen for the failed coup attempt of
July 2016 and persecuted his followers, putting tens of thousands of them in jail. Erdogan's
relationship with America was already deteriorating at that time because of America's support
to Syrian Kurds, and to add to Erdogan's woes, America was and continues to give Gülen a
safe haven despite many requests by Erdogan to have him extradited to Turkey to face trial. But
Gülen is falling out of America's favour as he seems to have outlived his use-by date, and
the Gülenist movement would be in dire need of a new benefactor.
Cengiz, a former Gülenist, released on the above-mentioned conditions and possible
threats, might have introduced herself to Khashoggi as an undercover Gülenist, and she had
a history to support her claim. Being a former Gülenist, she might have indeed kept a foot
in the Gülenist camp, and with the diminishing support of the American Government to the
Gulenist movement, she might have been recruited to source finance. The Gülenists might
have eyed Saudi Arabia to take this role, and as the rift between the Saudi royals and Erdogan
intensified after their former joint effort to topple the legitimate secular government of
Syria
The Gülenists would have found in Al-Saud what represents an enemy of an enemy, and
they had to find a way to seek Saudi support against Erdogan. MBS himself would have
inadvertently invited the Gülenists to approach him when he announced, back in March 2018
during a visit to the Coptic Pope Tawadros II in Egypt, that the triangle of evil in the Middle
East is comprised of Iran, Islamist extremists groups and Turkey, and, in naming Turkey, he
obviously meant Erdogan personally.
https://www.washingtonpost.com/news/worldviews/wp/2018/03/08/saudi-crown-prince-sees-a-new-axis-of-evil-in-the-middle-east/
Khashoggi, with his expansive connections, looked like a good candidate to introduce the
would-be new partners and broker a deal between them.
Back to what may have incited Khashoggi to enter the Saudi Consulate and to why the Saudi
Government would have, in that case, given him a safe entry despite his history. Possibly,
Khashoggi believed that he had a "big story" to relay to the Saudi Government; one that most
likely exposed big time anti-Saudi dirt about Erdogan.
With the Saudi-led Wahhabi version of fundamentalist Islam competing with the Muslim
Brotherhood side, politically and militarily headed by Erdogan, it is not far-fetched to
believe that either party is conspiring to topple the other. If Khashoggi had a story to this
effect, even if it was fake but credible enough for him to believe, it would have given him the
impetus to seek an audience at the Saudi Consulate and hence an expectation for the Consulate
to positively reciprocate. In reality, given the history and culture involved, it is hard to
fathom that any scenario short of this one would have given either Khashoggi and/or the Saudi
officials enough reasons to meet in the manner and place they did.
It is highly likely that Saudi officials had several contingency plans for Khashoggi's
visit; depending on its outcome and the information that he had to offer. Those plans might
have included giving him a wide range of treatments, ranging from a red carpet reception in
Saudi Arabia, to beheading and dismembering him within the Consulate's grounds. What happened
after Khashoggi entered the precinct of the Consulate is fairly muddy and hard to speculate on.
If the above speculations thus far have been accurate, then these are the possible scenarios
that followed the fateful CCTV coverage of Khashoggi's entry to the Consulate:
1. It is possible that the Saudi officials in Turkey have had their own contacts with the Gülenists prior to the supposed ground-breaking visit of Khashoggi. In such a case, if the
story Khashoggi may have offered did not fall in line with the story the Saudi's already know,
then Khashoggi would have automatically been branded as suspicious and his safe entry would
have been revoked. In such a case, he would have walked into his own trap.
2. On the other hand, if Khashoggi indeed gave Saudi authorities vital information, so vital
that it clearly is vehemently pro-Gülen, and as Gülen is no longer an American
favourite, then upon his return to America he may have become a Saudi liability that can
potentially muddy the Saudi-American waters that the Saudis desperately try to keep clear. In
such an instance, it would be opportune for the Saudis to finish him off before he could return
to America.
3. A third possibility is that some Saudi officials already working covertly with Gülen
saw in Khashoggi an already persona non grata, a dangerous Erdogan implant and decided to take
action against him.
If any of the above scenarios are accurate, then the role of Erdogan in this story is not
that of a scavenger who capitalized on the rift generated between the Saudis and America, but
that he was instrumental in conjuring up and orchestrating the whole drama. Erdogan might have
subjected the Saudi Government to the Gülen litmus test, and in such a case, the victim is
Saudi Arabia and the scavenger is America seeking silence money in lieu of continued protection
of Saudi interests.
In all of the above scenarios, Khashoggi would have been driven into the trap by his alleged
fiancée and had his impunity revoked by the Saudi officials because he failed the
test.
But what triggered him off personally to walk into this possible trap? What was in it for
him? Definitely not divorce documents. Most likely, Khashoggi was after amnesty from the Saudi
Crown, and this would be a safety concern not only for Khashoggi himself, but also for his
family that continued to live in Saudi Arabia. He may well have thought that by providing vital
and sensitive information to his government, his previous "sins" would be set aside and he
would be treated as a hero, his family would feel safe, despite that fact that he has
criticized the Crown Prince in the past.
Arabic media are inundated with posts and YouTube videos that are very damning of Hatice
Cengiz. Most of them perhaps are Saudi propaganda and should not be taken without a grain of salt.
In reality however, her sudden emergence as Khashoggi's "fiancée", the fact that she
allegedly waited for nearly 24 hours before reporting his disappearance and her personal,
professional and political history are all factors that cast much doubt about her innocence and
instead, portray her as a possible key element in the series of events that led to the
disappearance of Khashoggi.
Furthermore, why would a person in her position make rules and conditions about meeting the
President of the United States of America, even if this President is Donald Trump? (
Jamal Khashoggi's fiancee I will only visit Trump if he takes action World news The Guardian ) How many
people in history have refused the invitation of American Presidents? Who does she think she is
or who is she trying to portray herself as?
And if Trump is seizing the opportunity to grab MBS, and this time he will be grabbing by
the wallet, if Erdogan smells a hint of preparedness of MBS to support Gülen, then Erdogan
would want MBS's wallet and head. Any whichever way, the silver lining of this story is that
for once, Saudi Arabia is finally running for cover. Few around the world will give this brutal
royal family any sympathy.
There are other rumors spreading in the Arab world now alluding to the removal of MBS from
office and passing over the reins to his brother. MBS has committed heinous war crimes in Yemen
and has made huge errors of judgment with regard to Syria and Qatar. He made many enemies, and
it seems that Erdogan is out to get him.
It does seem possible that the Assad-must-go curse has reached the neck of the Saudi
throne.
Erdogan presentation to his party today too most media seemingly reporting deep
international concern and hubris from arms suppliers... Interestingly enough apparently K
handed his two phones to fiancée before he went in ..any good journalist would have left a
cache somewhere to be opened incase of certain events??????
No confirmation of victims "screams", etc although a there is one report he was held in a
stranglehold which would prevent such vocalisation?
You left the elephant out of the room. You are right that Jamal Khashoggi had no need to
enter the consulate for his divorce, and you suggested the reason being quid pro quo. But why enter the consulate in Turkey? And, not in USA? And, why not the Embassy as the Ambassador has more power, than the Consular? Also, both the Muslim Brotherhood have Wahhabism have been friends for ages, as their
theology is very similar with each other. And, if fact Erdogan is not Muslim Brotherhood but
a Sufi.
So, why did you leave out the elephant in the room, Israel. With the fall of Saudi
Arabia, Israel has more to loose and Iran has more to gain.
I was waiting for this article.
Looks B is not buying this version.
"There seem to be a lot of conspiracy theories being weaved around the case. Some of them
were mentioned in the comments here. I don't buy it. Turkey did not arrange the incident. I
see no sign that the U.S., Israel, Qatar or the UAE had a hand in this. This was a very
stupid crime committed by Mohammad bin Salman. Or even worse, a mistake. The wannabe-sultan
Erdogan is a crafty politician. He is simply riding the wave." https://www.moonofalabama.org/2018/10/how-will-caligula-fall.html#more
I've read several articles about Khashoggi and my feeling right now is everyone is lying,
including B and Ghassan Kadi. (wrote this article. Mod.)
B ignores all said by Ghassan Kadi . And Ghassan Kadi is being soft on
SA cuz Russian wants it.
SA is a prize big enough to the bear get out of his cave. Deep State set the trap and SA fell like a kid cuz they are very predictable. They simply
kill a lot! Everybody is trying to profit and only one thing is sure about all this:
we will never know!
Seems to me that also the Old US Establishment, along with the EU Establishment, both
anti-Trump, never wanted MbS in the first place. Israel, and therefore Trump, are happy with
MbS but a lot of people would like to see him gone and get the old "safe" gang back (who paid
handsome bribes/salaries for decades). MbS is similar to Trump, way too impulsive,
unpredictable and manic, and a special kind of crazy on top to make for a reliable partner in
crime.
The Establishment wants the Saudis to sell them their oil, then to recycle the money back
into their economies. They'd prefer that they do this quietly, without any big fuss. They can
get rich doing so, but they shouldn't disrupt the world. And this is the role that the Saudis
have played mostly for the last 60-70 years.
Until MbS. So yes, it is conceivable that some other powerful people are getting a bit tired of him.
The same powerful people who really don't want the disruption of the world that a
Shiite-Sunni war over the oil fields would cause. The same powerful friends who are also
worried about Trump upsetting apple carts. Perhaps these powerful people are moving against a
war, which means against Trump on Iran, and against MbS if they feel he keeps stirring things
up too much.
One problem throughout this whole affair is that I don't believe the Turks.
Erdogon shutdown or converted the independent media that they once had. And in a case like
this, all information comes from the government anyways. The Sauds have been rightly attacked for changing their story. But the Turks have been
too. I've gotten the feeling that the 'news' reports from Turkish leaks (supposedly) have
simply been the plot lines of various Hollywood movies. The body was cut up (with a chainsaw?
like in Texas?), the body was dissolved in acid, the killers watched on Skype (always good to
get that hip tech tie-in to a story). It can't all be true.
To some extant, I get the feeling I'm watching Qatar money buying news stories to get back
at the Sauds. If so, good for them.
Like The Salisbury Affair, The Case of the Disappearing Lover in Instanbul simply is going
to have to be one to sit back and wait and see what if anything actually emerges as the
truth.
Could not be sulphuric acid the "traditional acid" for dissolving bodies you would need more
than 25 litres the most dangerous lethal fumes and smell would have filled the whole building
which would have been contaminated other people choking with deadly fumes. How to get acid in
and out/disposed ..people in PPE hosing down etc etc
I actually thought the "local contact" who supposed disposed of the body took it rolled up in
a rug and cremated it. Seems pretty clueless to drop the bits in a well. Maybe the "local contact" was actually the
consul, suggesting: Hey, I have an idea! How about dropping the body parts down the well?
That is about the dumbest thing I have heard yet in the Story of K.
Except, the idea of the body double.
The people who thought up the body double idea must be the same Einsteins who figured the
well in the consul's garden was a solution to disposal. Keystone Konsul.
Maybe I'm being sexist, but I imagine a discussion between the couple, with the future wife
saying she wants to get married, while the future husband is saying "Ah, aren't things great
now? Why change it? We can just live together." That bit of imagination leads to the idea that one of Khashoggi's last thoughts was "shit,
I knew getting married again was a bad idea."
The interesting thing was watching the US media go crazy about this. I kept thinking how
different was this from Obama ordering Anwar Al-Awaki executed by drone strike? Al-Awaki
received no trial, or even some kind of demand. Obama and his team just had him executed. So
MBS is a horrible monster for doing exactly what Obama did.
Khashoggi seemed to be working to "end dictatorship" and spread "free speech," democracy,
voting, opinion polls, feminism, gender theory, lgbt washrooms, all that. All the great stuff
of democracy. Worked out great in Sweden, why not Saudi Arabia?
All I'm getting out of this article is a desire to see the house of Saud fall. Plus some
dense little leaguer stuff about a marriage or something. Come on!
It was Khashoggi beating the Assad must go drum. The last Saudi represented on this site said Assad is harmless as long
as he understands Saudi interests exist in Syria. Not ideal, but a better offer than London's. Further, the dead "journalist"
believed Syria should be divided, and worse, that we should now act as if Assad is already gone – said the guy who got
sawed up and buried under a flower bed.
Seems to come down to him being lied to, conn'd or lured into the consulate and his death. Then we come to the whole other point of why on earth did the Saudis use their consulate
as an assassination killing ground? Governments wanting to kill people is nothing new. That's
what governments do. Governments killing people within their consulates is very rare. For
reasons that are now very obvious, if they weren't before.
The pundits who say MBS wanted to send a message set off alarms in my brain. Because that
is exactly the reason we are supposed to believe that Putin uses all sorts of bizarre
assasination methods that are obviously traced back to him. He wants to send a message. Yeah,
right. And that's why they brought a bleep-storm of trouble down on top of their heads. To
send a message?
Email is cheaper. And if someone is dead from methods not traced back to you, then someone
else goes and whispers the message into the few ears you want to hear it, that is a lot more
effective than either Novachuk in a park or a bloody murder in a consulate.
Israel/US/Saudi tried to pass Turkey off as the sole sponsor and creator of ISIS. It was an
important player, certainly, largely because of its geographic location. So a bit of revenge?
As with all these events, there will be multiple facets from the various actors, some
mutually exclusive.
The only thing that is certain so far is the west's concern for Saudi's alleged execution
of a 'journalist' is rank hypocrisy.
"2. On the other hand, if Khashoggi indeed gave Saudi authorities vital information, so
vital that it clearly is vehemently pro-Gülen, and as Gülen is no longer an
American favourite, then upon his return to America he may have become a Saudi liability that
can potentially muddy the Saudi-American waters that the Saudis desperately try to keep
clear. In such an instance, it would be opportune for the Saudis to finish him off before he
could return to America."
The SA gang would want to protect the "vital" . . . pro-Gulan" information obtained from K
because that information would have given the SA gang an advantage in dealing with America
because a K running free could expose SA sources and knowledge, so he had to be eliminated.
(??)
Or, Erdogan knows via Cengiz that K believes he can facilitate a deal between Gulan and SA
to the detriment of Turkey, in order that K can protect his family in SA. But SA already
knows somehow that K is in effect an agent for SA's enemy Erdogan and is peddling polyester
rugs, that K's story is donkey doo, so SA believes K is betraying SA with said donkey doo, so
out comes the Popeil's Pocket Body Dismemberer. ??
". . . should not be taken for (without) a grain of salt." ??
As for the conflict between the Muslim Brotherhood and SA's Wahabbists, it strikes me that
the custodianship of the two holy mosques in SA, or better said the moral leadership role
that said literal custodianship confers could be in contention if Erdogan can demonstrate to
his immense egoic neo-Ottoman satisfaction belongs to Turkey under his direction.
It seems no matter who "wins" every one of the players loses credibility any way this
plays out.
"contention if Erdogan can demonstrate to his immense egoic neo-Ottoman satisfaction belongs to
Turkey under his direction."
This was my main takeaway from Erd's address to Parliament. The bit about the Saudis as
protectors of the holy cities. Like, maybe not. LIke, look at the mess they have made.
They are clearly incompetent and have no standing as protectors of holy sites.
Hmm, so who would be a better "protector"? Could it be the one who arrogates to himself the
authority to call out false 'protectors" by any chance?
Probably this murder will end with nothing more than "The Saudis are really evil. Who didn't
already know that". But lets look at what we do know about the killing (and what is rumored in
news reports).
Before Khashoggi goes into for the meeting a team of 15 Saudi agents, several of them men
close to MBS arrive from Saudi Arabia and go into the building. Including among them an
autopsy expert with a "bonesaw". One of them is a body double for Khashoggi and carries with
him a fake beard to make his resemblance to Khashoggi even stronger. An hour or so later that
man leaves the building wearing Khashoggi's clothes and sunglasses. And the fake beard. So that
the CCTV might record him as Khashoggi.
RT reports that minutes before the killing Khashoggi talks on the phone to MBS. Its thought
that MSB wants Khashoggi to agree to return to Saudi Arabia, Khashoggi refuses. Right after
that Khashoggi is killed and dismembered. The Turkish press is now reporting that parts of
Khashoggi's remains have been found in a well at the Saudi Consuls official residence. I'd say
with that kind of evidence anyone would have to be braindead (or just not willing to admit
the truth for political reasons), to not conclude MBS is up to his beard in this conspiracy to
commit murder.
One question being asked is why would MBS risk it. But I think the answer is simple. He
believes he is untouchable and can do whatever he wants (the track record for that is pretty
good for him until now, and maybe now as well). He took power in Saudi Arabia from his
cousins, and got away with it. He starts and conducts a bloody war against Yemen, and isn't
punished. He holds hostage dozens of the wealthiest Saudis and tortures them for large chunks
of their wealth. And gets away with it. He kidnaps the Lebanese PM, and forces him to resign (at
least for a while). And he gets no punishment even for that. He threatens Qatar with war, closes
the border. And still no punishment. He funds terrorists all over the Middle East. And yet again
no punishment. So why on earth would he pause at murdering a "pain in the a$$" Saudi dissident
who dares to defy him. He may have gone a "bridge too far" this time. But his record points to
his surviving this time too (hopefully not).
Has anyone commented of the features of this grisly murder that make it look like some kind
of ritual murder?
They could have just stabbed or strangled him or druged him. Bu why cut off fingers?
Symbolism?
Why deface facial features?
Was he drawn and quartered like traitors in medieval Europe?
Or was it renaissance Europe?
And, what happened to all the blood?
How did they keep it off the clothing that the body double then donned?
Just wondering what kind of "message" K's murder was designed to send to him, as he
died.
Or, what kind of cultic weirdness was being provided for bin Salman to feel satisfaction at
the manner of the death?
"The Saudis say they are countering Iran, which backs the Houthis. But the Houthis are an indigenous group with legitimate grievances,
and the war has only enhanced Iranian influence . As has been obvious for some time, the only solution is a negotiated settlement.
But the Saudis have done their best to sabotage a U.N.-led peace process. Talks planned for Geneva in September failed when Saudi
leaders
would not grant safe travel guarantees to Houthi leaders." Bezos' editorial board at WaPo
---------------
Beneath the largely specious argument that Saudi Arabia has the US by the cojones economically lies the true factor that
has caused the two countries to be glued together.
This factor is the Israeli success in convincing the US government, and more importantly, the American people, that Iran is a
deadly enemy, a menace to the entire world, a reincarnation of Nazi Germany, and that Saudi Arabia, a country dedicated to medieval
methods of operation, is an indispensable ally in a struggle to save the world from Iran. The successful effort to convince us of
the reality of the Iranian menace reflects the previous successful campaign to convince us all that Iraq was also Nazi Germany come
again.
The Iran information operation was probably conceived at the Moshe Dayan Center or some other Israeli think tank. and then passed
on in the form of learned papers and conferences to the Foreign Ministry, the Mossad and the IDF. After adoption as government policy
the Foreign ministry and Zionist organizations closely linked to media ownership in the US and Europe were tasked for dissemination
of the propaganda themes involved. This has been a brilliantly executed plan. The obvious fact that Iran is not presently a threat
to the US has had little effect in countering this propaganda achievement.
Last Saturday morning, the Philadelphia based commentator Michael Smerconish openly asked on his popular talk show why it is that
US policy favors the Sunni Muslims over the Shia. i.e., Saudi Arabia over Iran. To hear that was for me a first. This was an obvious
defiance of the received wisdom of the age. I can only hope that the man does not lose his show.
It is a great irony that the barbaric murder of a personally rather unpleasant but defiant exiled journalist has caused re-examination
of the basis and wisdom of giving strategic protection to a family run dictatorship. pl
Erdogan called the Khashoggi murder brutal and premeditated, but did not reveal any damning audio or video evidence. Elijah Magnier
surmises Erdogan extracted a heavy payment from both the Saudis and the Americans in exchange for his relative silence. We shall
see if the economic pressure on Turkey dissipates in the coming days and weeks.
It appears the central pillar of the Borg creed, so eloquently and precisely described here by Colonel Lang, will survive this
bout of heretical thinking. Will journalists and other members of the press be able to keep challenging the Borg? With Trump so
thoroughly assimilated into the Borg, will the "resistance" keep the issue of Saudi perfidy alive? I have my doubts. The Israeli
information operations machine is a juggernaut. Few have the stamina and will to resist it. But it is a fight worth fighting.
"... It's quite unusual to see such unanimous anti-Saudi reactions from the American political class for the assassination of Mr. Khashoggi – who was just a part-time journalist living in U.S – he was not even an American citizen ..."
"... Oil which is extracted by Fracking method that requires high Oil price above $70 to remain competitive in the global Oil market – by simultaneously sanctioning Iran, Venezuela, and the potential sanction of Saudi Arabia from exporting its Oil, the Trump Administration not only reduces the Global Oil supply which will certainly lead to the rise of Oil price, but also it lowers demand for the US Dollar-Greenback in the global oil market which could lead to subtle but steady devaluation of the US dollar. ..."
"... And perhaps that's what Trump Administration was really aiming for all along; a significant decline of the US Dollar Index and the rise of price of Oil which certainly pleases the American Oil Cartel, though at the expense of Iran, Saudi Arabia and Venezuela – all of which are under some form of U.S sanctions. ..."
"... However gruesome, Mr. Khashoggi's assassination is going to be used by the Trump Administration to help the American Oil Cartel by controlling the Saudi Oil output, hence, to raise the price of Oil and to lower demand for US dollar which is the currency of the global Oil trade. ..."
The overplayed drama of Mr. Khashoggi assassination is going to be used by the American Oil
Cartel to control the Saudis Oil output.
It's quite unusual to see such unanimous anti-Saudi reactions from the American
political class for the assassination of Mr. Khashoggi – who was just a part-time
journalist living in U.S – he was not even an American citizen , so, it's quite
unusual because the same political class remained muted about the Saudis involvement with
ISIS, the bombing and starvation of civilians in Yemen and destruction of Syria, and of
course the Saudis involvement in 9/11 terrorist attack in which 3000 American citizens have
perished in New York, in the heart of America.
So, we must be a bit skeptical about the motive of the American Political Class, as this
again could be just about the OIL Business, but this time around the objective is to help the
American Oil producers as opposed to Oil consumers – with 13.8% of the global daily Oil
production, the US has lately become the world top producer of Crude Oil, albeit, an
expensive Oil which is extracted by Fracking method that requires high Oil price above
$70 to remain competitive in the global Oil market – by simultaneously sanctioning
Iran, Venezuela, and the potential sanction of Saudi Arabia from exporting its Oil, the Trump
Administration not only reduces the Global Oil supply which will certainly lead to the rise
of Oil price, but also it lowers demand for the US Dollar-Greenback in the global oil market
which could lead to subtle but steady devaluation of the US dollar.
And perhaps that's what Trump Administration was really aiming for all along; a
significant decline of the US Dollar Index and the rise of price of Oil which certainly
pleases the American Oil Cartel, though at the expense of Iran, Saudi Arabia and Venezuela
– all of which are under some form of U.S sanctions.
However gruesome, Mr. Khashoggi's assassination is going to be used by the Trump
Administration to help the American Oil Cartel by controlling the Saudi Oil output, hence, to
raise the price of Oil and to lower demand for US dollar which is the currency of the global
Oil trade.
@Alistair History has its weird twists.
Early in WWII FDR was reported that USA oil would be depleted in thirty years time.
So FDR sent Harold L Ickes to Saudi Arabia,where at the end of 1944 the country was made the
USA's main oil supplier.
FDR entertained the then Saud in early 1945 on the cruiser Quincy, laying in the Bitter Lakes
near the Suez Canal.
This Saud and his entourage had never seen a ship before, in any case had never been on board
such a ship.
In his last speech to Congress, seated, FDR did not follow what had been written for him,
but remarked 'that ten minutes with Saud taught him more about zionism than hundreds of
letters of USA rabbi's.
These words do not seem to be in the official record, but one of the speech writers,
Sherwood, quotes them in his book.
Robert E. Sherwood, 'Roosevelt und Hopkins', 1950, Hamburg (Roosevelt and Hopkins, New York,
1948)
If FDR also said to Congress that he would limit jewish migration to Palestine, do not now
remember, but the intention existed.
A few weeks later FDR died, Sherwood comments on on some curious aspects of FDR's death, such
as that the body was cremated in or near Warm Springs, and that the USA people were never
informed that the coffin going from Warm Springs to Washington just contained an urn with
ashes.
At present the USA does not seem to need Saudi oil.
If this causes the asserted cooperation between Saudi Arabia and Israel ?
@Harris ChandlerNow it has made alliances with Israel and between them the tail wags
the dog
The Saudi Royal family and the governments of Israel have always been in cahoots. They
both despise and fear secular governments that are not under their own control in the Middle
East. Witness the fear and dread of both of them of president Nasser in the 1960′s, for
example.
'Cherchez la femme' is sometimes mistakenly thought to refer to men's attempts to pursue romantic liaisons with women. In
fact, the phrase, which is occasionally used in its loose English translation 'look for the woman', expresses the idea that the
source of any given problem involving a man is liable to be a woman. That isn't to say that the woman herself was necessarily the
direct cause of the problem, as in Shakespeare's Macbeth for instance, but that a man has behaved stupidly or out of character in
order to impress a woman or gain her favour. 'Cherchez la
femme' - the meaning and origin of this phrase
Notable quotes:
"... His fiance is documentd as a PhD candidate (in what subject? At which institute? What was her background?) They managed to meet at some high level think-tank get-together. That sounds a bit unlikely for some random unconnected outsider. How did she manage to get invited to the meeting? In other circumstances (Assange, Vanunu, etc) a honeypot would come to mind. ..."
"... She is linked to a humanitarian aid organisation IHH whose head Bulent Yıldırım appears to have links with ISIS and al Qaeda. ..."
Khashoggi met his fiance (36 year old to his 59) in May 2018. By October 2018, they were
looking to get married. One little problem. He is already married and had to arrange a
separation. Did he go to the consulate of his own free will or was he 'pushed' (ie he went
very reluctantly as he realised he was taking a big risk). His fiance is documentd as a PhD
candidate (in what subject? At which institute? What was her background?) They managed to
meet at some high level think-tank get-together. That sounds a bit unlikely for some random
unconnected outsider. How did she manage to get invited to the meeting? In other
circumstances (Assange, Vanunu, etc) a honeypot would come to mind.
Posted by: Yonatan | Oct 22, 2018 2:32:51 PM | 44
Indded. These are some good questions. Nobody asks anything about the fiance. Like she is
not even there.
I posted this reply to LittleWhiteCabbage on a previous MoA comments thread:
LittleWhiteCabbage @ 223:
I would not trust Hatice Cengiz (the fiancée) even if Jamal Khashoggi
did.
Apparently her family did not know she was engaged to marry him until the news of his
disappearance / murder became public. She has not been living with her birth family for
some time. She first met Khashoggi only in May this year.
She is linked to a humanitarian aid organisation IHH whose head Bulent
Yıldırım appears to have links with ISIS and al Qaeda.
Methinks we would be wise not to give this 36-year-old "girl" a pass.
Incidentally the first link is now down but you can still read the Insurge Intelligence
link about IHH. Cengiz has now been placed under 24-hour police protection in Istanbul.
Removing Saudi's contribution of @8.5Mbbls/day from the global oil market would be a blow
that Western countries might not survive.
Looks like somebody in the West want MBS out.
Notable quotes:
"... be honest -- this all seems a bit too convenient for Erdogan, and at a too convenient time. ..."
"... at the moment I cannot believe someone has so much luck like Erdogan has. He stands to gain in the short term, in the long term, tactically and (geo)strategically. From just a stroke of luck, that came to his country. That came to him, for which he didn't even need to get out of his chair? ..."
"... Maybe we're asking the wrong questions. Are factions within the CIA at work, setting up elaborate plans with the ambitious Erdogan to get rid of Trump and MbS, for the sake of what... strategically increasingly important depleting oil fields? ... a better position to strangle Iran? ..."
"... Erdogan doesn't want a Kurdistan martyr in Khasshogi either. He wants to totally controlled-dissent ..."
"... This total psyop, and every piece of 'evidence' in it, is coming from Ankara Intel operatives! ..."
"... Hey, they had two weeks of preparation. You can make a full length Blair Witchcraft in two weeks. ..."
"... Cui bono? Erdogan, Iran Oil transit and EU/RU weapons systems dealers. That's why Germany has jumped on the bandwagon, lol. Expect the whole krew to toe the line, and Putin left with a jumbled mess on the chessboard. ..."
"... Khashoggi has ties to Lockheed Martin through his late uncle Adnan Khashoggi, who used to be one of Saudi Arabia's most powerful weapons dealers. MBS is considering buying Russias S-400 instead of Lockheed Martins 15 billion THADD. Interesting fact but unlikely to be important IMO ..."
"... So regardless of the truth of Khashoggis disappearance there is a Deep State operation in place, the evidence is in the media saturation and persistence and bipartisan support. Its purpose may be as simple as coercing MBS to buy more weapons. Perhaps it may even be that a replacement for MBS even more pro-Israel has been found. ..."
"... Khashoggi is news, because they say its news. They make it news. Why? BC it fits an agenda. Somebody wants MBS out. ..."
"... The bigger play here is bringing turkey back into the western fold. Lose turkey you lose the whole middle east. also, a secondary play - guardianship of Mecca. SA an unreliable partner under mbs. ..."
Khashoggi's murder has transcended questions of foreign policy shaped by values of
democracy, free speech, and due process. The Khashoggi killing raises questions of cold,
unblinking realpolitik.
Three weeks into this affair and with the overwhelming evidence from the Turkish inquiry
and intelligence from US and British services, world leaders have only one question to ask
themselves: is Saudi Arabia safe in the crown prince's hands?
The kingdom is not Libya under Gaddafi. Nor is it Syria under Bashar al-Assad. It is the
world's largest oil producer. It is the region's richest nation.
For better or worse (mainly worse), it is the key Arab state. In the wrong hands, Saudi
Arabia has already proved that it can determine the fate of presidents in Egypt, kidnap
prime ministers from Lebanon, attempt coups in Qatar and, when that fails, blockade it. It
can start wars in Yemen.
The man who runs such a country is therefore a vital strategic Western interest. It is
important that he is mentally stable.
Reuters How the man behind Khashoggi murder ran the killing via Skype
He ran social media for Saudi Arabia's crown prince. He masterminded the arrest of
hundreds of his country's elite. He detained a Lebanese prime minister. And, according to
two intelligence sources, he ran journalist Jamal Khashoggi's brutal killing at the Saudi
consulate in Istanbul by giving orders over Skype.
Posted by: b | Oct 22, 2018 2:45:08 PM | 47
So this guy allegedly working for Public Relations (social media) & security (managing
lists with arrests) for Crown Prince MbS was making absolutely sure that everyone would be
able to follow his actions (attributed to MbS of course). We (the people) were getting fed
minute details of suspects and treatment (during/after the coop in Saudi Arabia) even from the
Alex Jones conspiracy show (been publicly ousted as Fake-News and Mossad ops though since he
was attributing Las Vegas massacre to either MbS or rivals that tried to allegedly assassinate
MbS in Vegas hinting at Iran )
Lo and behold! Las Vegas shooting October 1st 2017. Khassogi murder October 1st
2018! .
Both allegedly MbS involved! Ain't these all suspicious? There is no heaven or hell there is only the.... (let me hear it - The Israeli Intel
Services Sing-Along) sing it with me.... (come on)
Obamabots trying to reverse
history will find it hard to do. That they're trying is significant.
I've seen a few reports musing SKYPE was used during the brief interrogation. If true,
then all advanced intel services will know its content.
Peter AU 1 @55--
Yes, I was aware of that. TASS reports : "Deputy Foreign Minister Mikhail Bogdanov told reporters on Monday.
"'Yes, we [had] visits, our interministerial top-level delegation went, there were
meetings,' the diplomat said in response to the question about whether Russia still plans to
attend the summit in the wake of Khashoggi's murder."
Russian and Saudi cooperation in the energy field trumps other events. China will also
attend.
I don't know.
I'm having these waves of suspicions. I wouldn't put the current narrative past MbS at all,
that's for sure. And he deserves everything he currently gets -- foremost over Yemen. But -- be honest -- this all seems a bit too convenient for Erdogan, and at a too convenient
time. Id est, a too in convenient time for his opponent, that was until two weeks ago
holding Erdogan's ambitious head in a bucket of water -- Trump. With the midterms only a few weeks away, look who's holding whose head in that bucket, who
is holding whose feet to the fire.
If this is truly a coincidence, I'm beginning to believe Allah is Turkish. But at the moment I cannot believe someone has so much luck like Erdogan has. He stands to
gain in the short term, in the long term, tactically and (geo)strategically. From just a
stroke of luck, that came to his country. That came to him, for which he didn't even need to
get out of his chair?
Maybe we're asking the wrong questions. Are factions within the CIA at work, setting
up elaborate plans with the ambitious Erdogan to get rid of Trump and MbS, for the
sake of what... strategically increasingly important depleting oil fields? ... a better
position to strangle Iran?
Erdogan wants to be New Caliph. That's all this is. Caliphate wars. MbS is Erdogan's blood
enemy. MbS-IL-US is shading the New Caliphate! Duhh! Erdogan doesn't want a Kurdistan martyr
in Khasshogi either. He wants to totally controlled-dissent The Parable of a Man Walked Into an
Embassy New Revelations. Erdogan wants to be supplicated by US and IL for His permission to
transit Syria and Kurdistan. Erdogan wants to be Putin's go-to guy in Ankara for Assad.
This
total psyop, and every piece of 'evidence' in it, is coming from Ankara Intel operatives! Khashoggi could has as easily been re-dressed in a thwab, then frog-marched under the cameras
into the waiting Mercedes. His discarded clothes could have been paraded in front of Ankara's
street cameras by Turks.
Hey, they had two weeks of preparation. You can make a full length Blair Witchcraft in
two weeks.
Cui bono? Erdogan, Iran Oil transit and EU/RU weapons systems dealers. That's why
Germany has jumped on the bandwagon, lol. Expect the whole krew to toe the line, and Putin
left with a jumbled mess on the chessboard.
BREAKING: 15,000 RABBLE ARMY MARCHES ON TEXAS BORDER! TRUMP-CRUZ MILLION MAN HOUSTON SHOW
SCHEDULED TONIGHT!
It's all pure stress-positioning foreplay! JustGoVote!
Scotch Bingeington , Oct 22, 2018 5:00:53 PM |
link
B, amazing work again, thrilling to read. Though this is a yet unfolding story, you manage to
write about it in a profound way.
Regarding the manner in which MbS operates here and subsequently reacts towards other
people's reactions is certainly telling, at least to me. First off, the coercion –
"come back or else " – flat out. The ruthlessness vis-à-vis the victim, the
complete disregard for that individual's life. The crassness of the methods applied. The
carelessness concerning the risks and the half-assed way in which this exercise, by and
large, was carried out. Once word got out, being utterly taken by surprise that this murder
should draw so much attention and should shock and outrage people – like, at all!
Followed by, of course, a sudden switch from ever-so-charming to furious rage.
That's textbook psychopathic behavior. MbS is a psychopath. I don't mean that as an insult,
but as the descriptive term and category that it is. It was already palpable in all the other
incidents, which was duly pointed out here by people at the Moon. To me, it's also in his
eyes. But the thing is, as such, MbS is a befitting representation of his country. The
Kingdom of Saudi Arabia, the way that it works, how it's organized, its history, its outlook
on the world – it's the equivalent among states of a psychopath. I certainly agree, the
sooner MbS gets kicked off the stage, the better for them and for us. But he'll be replaced
and SA will still be the equivalent among states of a psychopath – and act accordingly.
There's much more to be done than just put an end to MbS' games. In that vein, I'd be
appalled if Russia were to seriously consider sucking up to SA should they break away from
the US orbit.
On another aspect: I don't really see how this would seriously upset Trump. Sure, it's a huge
challenge and a lot of accommodating will have to be done, which is always annoying. But if
Congress were to take action, why shouldn't he give in and play along?
At long last, Valdai Club questions about Saudi-Russian relations were added to transcript.
Here is the relevant passage, which mostly repeats what was posted from news stories:
Putin: "If someone understands it and believes that a murder has been committed, then I
hope that some evidence will be presented and we will adopt relevant decisions based on this
evidence. This gives me a pretext to say something else.
"From time to time, there are steps taken against Russia and even sanctions are imposed,
as I have repeatedly said, on the basis of flimsy excuses and pretexts. They groundlessly
claim that we have allegedly used chemical weapons, even though, incidentally, we have
destroyed our chemical weapons, while the United States has failed to do so despite the
obligation to that effect it assumed.
"So, there is no proof against Russia but steps are being taken. According to claims, the
murder was committed in Istanbul, but no steps are being taken.
"Uniform approaches to problems of this kind should be sorted. To reiterate: Our policy
towards Saudi Arabia has evolved over a long period of time, over many years. Of course, it
is a misfortune that a man has disappeared, but we must understand what has really
happened."
The policy investment "over many years" isn't one Russia will suddenly jettison. Yemen is
obviously a much greater tragedy but Russian-Saudi relations haven't suffered -- Geopolitics
creates strange bed-fellows. Russia's international relations are built upon fundamental
principles of International Law of which the sanctity of Sovereignty reigns supreme. As much
as we may dislike it, the Khashoggi Affair falls within the realm of an internal Saudi affair
although it occurred in Turkey; thus, it's up to Saudis to solve. Putin's pointing to the
Double Standards relates to that reality. Would Russia sell weapons for Saudi to use on
Yemen? I have no idea, although I'd like to think it wouldn't. It's quite possible some new
inroads have opened for Russian diplomacy, but they remain hidden from public.
Khashoggi has ties to Lockheed Martin through his late uncle Adnan Khashoggi, who used to
be one of Saudi Arabia's most powerful weapons dealers. MBS is considering buying Russias
S-400 instead of Lockheed Martins 15 billion THADD. Interesting fact but unlikely to be
important IMO
This Khashoggi story never lasts more than a week in MSM unless there is a psyops
operation in place by the Deep State. Media saturation and persistence is the key to any
operation. Inconvenient truths are reported and then dropped and forgotten. Lies without
evidence are repeated constantly until they are accepted as truths, in some cases
inconsequential truths that are convenient serve the same purpose
So regardless of the truth of Khashoggis disappearance there is a Deep State operation
in place, the evidence is in the media saturation and persistence and bipartisan support. Its
purpose may be as simple as coercing MBS to buy more weapons. Perhaps it may even be that a
replacement for MBS even more pro-Israel has been found. Israels influence on the media
is not neglible. This saturation coverage does not happen without them supporting it or at
least not using their influence to suppress it Another more disturbing possibility should MBS
stand his ground , is conditioning the people to accept MBS as the new OBL and Saudis
Wahhabis as the new AQ and repeating history.
There simply is no way to know. Just have to watch and see but whatever it is probably
wont be good
The Saudi bmobing - with US bmobs - of the Yemeni School Bus Full of Babies was truly and
completely horrifying - rotten and utterly detestable by anyone's standards (except for
Trump, Hillary, Bill, Bolton, Graham, Biden, All the Bush's, Rick Scott and etc.)
And Newsworthy. But it was, instead, crickets chirping in that deep east Texas
nighttime.
Khashoggi is news, because they say its news. They make it news. Why? BC it fits an
agenda. Somebody wants MBS out.
The bigger play here is bringing turkey back into the western fold. Lose turkey you lose
the whole middle east. also, a secondary play - guardianship of Mecca. SA an unreliable
partner under mbs.
In excerpts from the interview released by
CNN , Jones asked Kushner whether it is wise to trust MbS to oversee Saudi Arabia's
investigation, given that he's also the prime suspect. Kushner, who, in the absence of a US
ambassador to KSA, has been handling the kingdom's relationship with the Trump administration
directly via his friendship with MbS, said the US will examine facts from "multiple
places."
Jones: Do you trust the Saudis to investigate themselves?
Kushner: We're getting facts in from multiple places. Once those facts come in, the
Secretary of State will work with our national security team to help us determine what we
want to believe, and what we think is credible, and what we think is not credible.
Jones: Do you see anything that seems deceptive.
Kushner: I see things that seem deceptive every day I see them in the Middle East and in
Washington. We have our eyes wide open. The president is looking out for America's strategic
interests...the president is fully committed to doing that."
Given their close relationship, media reports have implied that Kushner has been acting as
an unofficial liaison of sorts to MbS since the crisis began (it has also been reported that
the Crown Prince initially didn't understand why the backlash to Khashoggi's murder had been so
intense). In light of this, Jones asked Kushner what advice, if any, he has given the Saudi
royal during their conversations (to be sure, MbS has also spoken with President Trump directly
on the phone). In a story published over the weekend,
the Washington Post reported that Trump has privately expressed doubts about MbS's story,
and has also lamented his close ties with Kushner, fearing they could be a liability. But
during a phone interview, the president was somewhat more sanguine, pointing out that both
Kushner and MbS are relatively young for the amount of power they wield.
"They're two young guys. Jared doesn't know him well or anything. They are just two young
people. They are the same age. They like each other, I believe," Trump said.
Kushner's interview followed
reports published Sunday night that MbS tried to convince Khashoggi to return to Riyadh
during a brief phone call with the journalist after he had been detained at the Saudi consulate
Khashoggi refused, reportedly because he feared that he would be killed, and was subsequently
killed anyway. Adding another macabre twist to the saga of Khashoggi's murder and
dismemberment, Surveillance footage released Monday showed one of the Saudi operatives leaving
the consulate wearing Khashoggi's clothes with the suspected intent of serving as
a "decoy" to bolster the kingdom's claims that Khashoggi had left after receiving his
papers. It was later reported that Turkish investigators had found an abandoned car that once
belonged to the Saudi consulate.
We imagine we'll be hearing more about these strange developments on Tuesday, when Turkish
President Erdogan is expected to deliver a report on the killings.
Why is "everyone" so ******* upset about the Muslim Brothernood, green-card holding
journalist being offed? I mean, folks in the M.E. are murdered all the ******* time.
Journalists are not immune. Especially ones that are actually agitators that write ****. This
whole thing is ********. How do I know? Just look at the reactions. Media everywhere to level
11.. What about Stormy Daniels? The Playboy bunny? Ford? Scandal # 42, 43, 44, 45, 46, 47 ,
etc??
Saudis murder folks . Turkey murders folks. Turkey crushed a coup a couple years ago and
60K folks disappeared. I don't remember the US media demanding Obama " do something" about
Turkey immediately, do you? Seriously.
true. And I'm sure the CIA gets in on some very disgusting killings as well. Along with
the Mossad and Mi6 (2 groups that get little attention but should).
" Jones: Do you trust the Saudis to investigate themselves?"
"Kushner: We're getting facts in from multiple places. Once those facts come in, the
Secretary of State will work with our national security team to help us determine what we
want to believe , and what we think is credible, and what we think is not credible."
Jones: Do you see anything that seems deceptive.
Kushner:
NO
I (bullshitbullshitbullshit) see things that seem deceptive every day I see them in
the Middle East and in Washington. We have our eyes wide open (bullshitbullshitbullshit.
The president is looking out for America's strategic interests...the president is fully
committed to hanging me out to dry . After that - ho noze bubelah ."
(Can I sukie suckie now black master?
FIFT
All will be well when the head honcho sends this YidTwat to be Royal Commissioner in
either Greenlnd or Antarctica.
Have you heard the latest about the Peace Deal of All Times Kushner has been working on?
And going to deliver any day now... soon...really soon.
After all this time what it comes down to is a leveraged buyout proposal. The buyout is
cash for Palestinians to give in to what Israel's far right wants, give up their land and
get the hell out of Dodge if they can't live with the remnants.. The leverage is Trump
trying to starve them out and Kushner's friends in the IDF Palace Guard at the ready to
pile drive anyone who resists.
" All this nonsense depends on the largesse of Saudi Arabia – whose bungling crown
prince appears to be arguing with his kingly father, who does not want to abandon the
original Saudi initiative for a Palestinian state with Jerusalem as its capital –
"
Jared Kushner was communicating with Saudi Crown Prince Mohammed bin Salman (MBS)
prior to and after the Saudis brutally murdered Washington-based journalist Jamal
Khashoggi
Wayne Madsen - the author of the above - also reckons it was Kushner that supplied the
Saudi Prince HIT LIST to MbS a few months back - to clear the deck for "closer
co-operation" with ISISrael
Unfortunately, the only crime here is that the Turks have no decent respect for the
consular as sovereign territory, thus they are revoking Saudi rights and are operating as
an act of territorial aggression as the US has done to the Russians. Civility is braking
down and one has to ask one's self, for who's benefit.. The Turks are not going to benefit.
Khashoggi was going to die one way or another, so he made a show of it.. Spy vs. spy.
The USA has in the past just 'droned' them (as Hilterary was eager to reveal).
Perhaps you missed the regime change that happened last year, a globally significant
event, by the way.
Khashoggi was on the wrong side of that, and has stayed away from SA ever since, sniping
from the sidelines. MBS has lots of reasons not to like him.
However, his power base was removed when MBS hung his mates up by their heels in the
Hilton Hotel. He was not worth bothering with. So why was he killed then?
Possibly, he was not killed, only used as a foil to bring down hell fire and damnation
on MBS. He probably walked out the back, just as the SA said when this first came out. Now
Marketwatch has a story saying a man dressed in Khashogggi's "still warm clothes" was
photographed going into the Blue Mosque. Yeah, right:
Yes! And tying it together with the Las Vegas Mandalay Bay-Harvest Festival shooting,
and the video of the LV SWAT team escorting a person who looked like MBS through a casino
suggests that there was a 'failed' assassination attempt.
And the fact that Prince Al Talweed, a co-owner of top floors of Manadaly Bay with Bill
Gates, had tweeted his loathing of Trump...
The "Crown" (British or SA or many others) is inviolable. They take threats to
sovereignty seriously unlike Americans who have outsourced Monetary Sovereignty to their
Banks, Military and Economic Sovereignty to their Corporations.
This kid's a ****. A real Chabad Lubavitch **** with a criminal father who I am going to
hazard has never worked a hard day in his life. (Both father and son)
Remember Dan Aykroyd from "Trading Places"? Kushner is like that, only not funny. And
jewish.
Kushner was parachuted into the White House on the sole basis of his being the
President's son-in-law.
He quickly ascended to the top rungs of power in our Nation even receiving Top Security
Clearance and has been privy to our most tightly guarded secrets ever since.
This little ********** has turned out to be a tremendous thorn in our side facilitated
by the President's pleasure.
Is everyone blind? This ******* nobody is practically running the whole show in the
Middle East and with what credentials?
He's a power *** with vast connections, having been chosen to be the front man for the
destruction of America as we know it.
Exactly, plus his arrogance and stupidity has made the middle east even more fraught
with problems.
Just like Trump moving the embassy to Jerusalem; this has caused nothing but
problems.
Going in with no background in the middle east, without knowing anything except what was
told to him in Hebrew school is a recipe for disaster which is unfolding before our
eyes.
Skinny. Stiff. Plastic. Rather defiant, somewhat snotty. I have no reason to decide
whether I like him or not but Kushner comes across to me as somebody I would not trust as
far as I could throw him. Mind you that's quite a distance since I think he probably weighs
about 109 lb.
The CNN interviewer is Van Jones.
This is the same Van Jones who was Obama's "Green Jobs Czar" and was forced to resign his
position in 2009 because of his radical left wing background.
What the hell is Kushner doing in a position of power in the White House, what are his
qualifications for whatever post he holds ?
What the hell is anyone doing dealing with these animals who dress up in dresses? They
behead people in public squares, mutilate people, oppress woman, kill homos, etc. Real
crazy degenerates that got ahold of lots of money via their oil.
Why is "everyone" so ******* upset about the Muslim Brothernood, green-card holding
journalist being offed? I mean, folks in the M.E. are murdered all the ******* time.
Journalists are not immune. Especially ones that are actually agitators that write ****.
This whole thing is ********. How do I know? Just look at the reactions. Media everywhere
to level 11.. What about Stormy Daniels? The Playboy bunny? Ford? Scandal # 42, 43, 44, 45,
46, 47 , etc??
Saudis murder folks . Turkey murders folks. Turkey crushed a coup a couple years ago and
60K folks disappeared. I don't remember the US media demanding Obama " do something" about
Turkey immediately, do you? Seriously.
true. And I'm sure the CIA gets in on some very disgusting killings as well. Along with
the Mossad and Mi6 (2 groups that get little attention but should).
" Jones: Do you trust the Saudis to investigate themselves?"
"Kushner: We're getting facts in from multiple places. Once those facts come in, the
Secretary of State will work with our national security team to help us determine what
we want to believe , and what we think is credible, and what we think is not
credible."
Jones: Do you see anything that seems deceptive.
Kushner:
NO
I (bullshitbullshitbullshit) see things that seem deceptive every day I see them in
the Middle East and in Washington. We have our eyes wide open
(bullshitbullshitbullshit. The president is looking out for America's strategic
interests...the president is fully committed to hanging me out to dry . After that - ho
noze bubelah ."
(Can I sukie suckie now black master?
FIFT
All will be well when the head honcho sends this YidTwat to be Royal Commissioner in
either Greenlnd or Antarctica.
Have you heard the latest about the Peace Deal of All Times Kushner has been working on?
And going to deliver any day now... soon...really soon.
After all this time what it comes down to is a leveraged buyout proposal. The buyout is
cash for Palestinians to give in to what Israel's far right wants, give up their land and
get the hell out of Dodge if they can't live with the remnants.. The leverage is Trump
trying to starve them out and Kushner's friends in the IDF Palace Guard at the ready to
pile drive anyone who resists.
" All this nonsense depends on the largesse of Saudi Arabia – whose bungling crown
prince appears to be arguing with his kingly father, who does not want to abandon the
original Saudi initiative for a Palestinian state with Jerusalem as its capital –
"
Jared Kushner was communicating with Saudi Crown Prince Mohammed bin Salman (MBS)
prior to and after the Saudis brutally murdered Washington-based journalist Jamal
Khashoggi
Wayne Madsen - the author of the above - also reckons it was Kushner that supplied the
Saudi Prince HIT LIST to MbS a few months back - to clear the deck for "closer
co-operation" with ISISrael
Unfortunately, the only crime here is that the Turks have no decent respect for the
consular as sovereign territory, thus they are revoking Saudi rights and are operating as
an act of territorial aggression as the US has done to the Russians. Civility is braking
down and one has to ask one's self, for who's benefit.. The Turks are not going to benefit.
Khashoggi was going to die one way or another, so he made a show of it.. Spy vs. spy.
The USA has in the past just 'droned' them (as Hilterary was eager to reveal).
lose
G M T Detect
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GaelicSerbianSesothoShonaSindhiSinhalaSlovakSlovenianSomaliSpanishSundaneseSwahiliSwedishTajikTamilTeluguThaiTurkishUkrainianUrduUzbekVietnameseWelshXhosaYiddishYorubaZulu
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I care because I am hoping this assassination will destroy our 80 year old relationship
with The House of Saud which is the epicenter of Wahhabism that brought us 9/11, the ISIS
headchoppers and much more.
Perhaps you missed the regime change that happened last year, a globally significant
event, by the way.
Khashoggi was on the wrong side of that, and has stayed away from SA ever since, sniping
from the sidelines. MBS has lots of reasons not to like him.
However, his power base was removed when MBS hung his mates up by their heels in the
Hilton Hotel. He was not worth bothering with. So why was he killed then?
Possibly, he was not killed, only used as a foil to bring down hell fire and damnation
on MBS. He probably walked out the back, just as the SA said when this first came out. Now
Marketwatch has a story saying a man dressed in Khashogggi's "still warm clothes" was
photographed going into the Blue Mosque. Yeah, right:
Yes! And tying it together with the Las Vegas Mandalay Bay-Harvest Festival shooting,
and the video of the LV SWAT team escorting a person who looked like MBS through a casino
suggests that there was a 'failed' assassination attempt.
And the fact that Prince Al Talweed, a co-owner of top floors of Manadaly Bay with Bill
Gates, had tweeted his loathing of Trump...
The "Crown" (British or SA or many others) is inviolable. They take threats to
sovereignty seriously unlike Americans who have outsourced Monetary Sovereignty to their
Banks, Military and Economic Sovereignty to their Corporations.
This kid's a ****. A real Chabad Lubavitch **** with a criminal father who I am going to
hazard has never worked a hard day in his life. (Both father and son)
Remember Dan Aykroyd from "Trading Places"? Kushner is like that, only not funny. And
jewish.
Kushner was parachuted into the White House on the sole basis of his being the
President's son-in-law.
He quickly ascended to the top rungs of power in our Nation even receiving Top Security
Clearance and has been privy to our most tightly guarded secrets ever since.
This little ********** has turned out to be a tremendous thorn in our side facilitated
by the President's pleasure.
Is everyone blind? This ******* nobody is practically running the whole show in the
Middle East and with what credentials?
He's a power *** with vast connections, having been chosen to be the front man for the
destruction of America as we know it.
Exactly, plus his arrogance and stupidity has made the middle east even more fraught
with problems.
Just like Trump moving the embassy to Jerusalem; this has caused nothing but
problems.
Going in with no background in the middle east, without knowing anything except what was
told to him in Hebrew school is a recipe for disaster which is unfolding before our
eyes.
There have been so many attempts at selling advertising with this article the author
says, "to deliver a report on the killings." I thought they only chopped up one cash-hoggi
now they are trying to turn it into two. What does the author think it was cactus they
killed?
Skinny. Stiff. Plastic. Rather defiant, somewhat snotty. I have no reason to decide
whether I like him or not but Kushner comes across to me as somebody I would not trust as
far as I could throw him. Mind you that's quite a distance since I think he probably weighs
about 109 lb.
G M T Detect
languageAfrikaansAlbanianAmharicArabicArmenianAzerbaijaniBasqueBelarusianBengaliBosnianBulgarianCatalanCebuanoChichewaChinese
(Simplified)Chinese
(Traditional)CorsicanCroatianCzechDanishDutchEnglishEsperantoEstonianFilipinoFinnishFrenchFrisianGalicianGeorgianGermanGreekGujaratiHaitian
CreoleHausaHawaiianHebrewHindiHmongHungarianIcelandicIgboIndonesianIrishItalianJapaneseJavaneseKannadaKazakhKhmerKoreanKurdishKyrgyzLaoLatinLatvianLithuanianLuxembourgishMacedonianMalagasyMalayMalayalamMalteseMaoriMarathiMongolianMyanmar
(Burmese)NepaliNorwegianPashtoPersianPolishPortuguesePunjabiRomanianRussianSamoanScots
GaelicSerbianSesothoShonaSindhiSinhalaSlovakSlovenianSomaliSpanishSundaneseSwahiliSwedishTajikTamilTeluguThaiTurkishUkrainianUrduUzbekVietnameseWelshXhosaYiddishYorubaZulu
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(Simplified)Chinese
(Traditional)CorsicanCroatianCzechDanishDutchEnglishEsperantoEstonianFilipinoFinnishFrenchFrisianGalicianGeorgianGermanGreekGujaratiHaitian
CreoleHausaHawaiianHebrewHindiHmongHungarianIcelandicIgboIndonesianIrishItalianJapaneseJavaneseKannadaKazakhKhmerKoreanKurdishKyrgyzLaoLatinLatvianLithuanianLuxembourgishMacedonianMalagasyMalayMalayalamMalteseMaoriMarathiMongolianMyanmar
(Burmese)NepaliNorwegianPashtoPersianPolishPortuguesePunjabiRomanianRussianSamoanScots
GaelicSerbianSesothoShonaSindhiSinhalaSlovakSlovenianSomaliSpanishSundaneseSwahiliSwedishTajikTamilTeluguThaiTurkishUkrainianUrduUzbekVietnameseWelshXhosaYiddishYorubaZulu
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It was at least fifty million $1 votes from Israel laundered through Trump supporter and
uber-Zionist Sheldon Adelson's casinos in Macau. Steve Wynn was likely in on that action
too.
Until America wakes up and gets dirty money out of your "(s)elections" you will be
hostage to foreign powers.
No one asked Kavanaugh if he thought "Citizens United" was settled law.
IDK if MbS had anything to do with the confrontation, or it was some 9th cousin royal
guard attempting to give Khashoggi an offer he couldn't refuse. Nobody will ever know what
happened. Just another MSM Piece Beyond Understanding.
Remember though, we *do know* that Obama and Rodham and their WH crew sat there in the
White House Situation Room, watching *live satellite feed* of Ghaddafi's final movements, the
half-meter long bayonet stabbing bloody anal rape to death.
Then Rodham sat there, right afterward, drenched in dewey musk, chortling a paraphrase
from Caesar, "We came, we saw, he died! CAWW, CAWW, CAWW!" Monsters!!
Then everyone forgot about it, like it never happened! Poor! The Lion of Africa, like the
Lion of Panjshir, just another hot blip on Deep State's radar. Same sh*t, different day.
Fahged abahd et.
So why is Khashoggi, a non-entity, *still in the media cross-hairs?!* Pre-election psyop,
and extortion. Saudis, Chinese and Russians want to dump their $Ts in junk 1.88% US
Treasuries. That will implode the US budget deficit, and the SS and MC Trust Funds as 'buyers
of last resort'.
What might Erdogan want out of this gift that has fallen into his lap?
Gulen out of the the US and into his hands.
CIA won't do that, but Gulen is what Erdogan wants from US. He gave up the "Pastor"
without getting anything.
Pompeo tried to pressure him over S-400s. That was laughed off by Ankara.
Erdogan has two big worries: Kurds and Gulen.
He has many desires (dreams, delusions).
But he knows the forces internally that threaten his existence and success as ruler. Already,
the Muslim Brotherhood has suffered great losses.
This noose around MBS's neck that Erdogan may be holding is leverage against the CIA
specifically. It was information handed by Jared Kushner to MBS that led to this and others
being liquidated by the Saudis. Erdogan might be able to tie it all together. That would be
leverage the US cannot ignore. The entire anti-Iran strategy depends on Jared-Bibi and
MBS.
IDK if MbS had anything to do with the confrontation, or it was some 9th cousin royal
guard attempting to give Khashoggi an offer he couldn't refuse. Nobody will ever know what
happened. Just another MSM Piece Beyond Understanding.
Remember though, we *do know* that Obama and Rodham and their WH crew sat there in the
White House Situation Room, watching *live satellite feed* of Ghaddafi's final movements, the
half-meter long bayonet stabbing bloody anal rape to death.
Then Rodham sat there, right afterward, drenched in dewey musk, chortling a paraphrase
from Caesar, "We came, we saw, he died! CAWW, CAWW, CAWW!" Monsters!!
Then everyone forgot about it, like it never happened! Poor! The Lion of Africa, like the
Lion of Panjshir, just another hot blip on Deep State's radar. Same sh*t, different day.
Fahged abahd et.
So why is Khashoggi, a non-entity, *still in the media cross-hairs?!* Pre-election psyop,
and extortion. Saudis, Chinese and Russians want to dump their $Ts in junk 1.88% US
Treasuries. That will implode the US budget deficit, and the SS and MC Trust Funds as 'buyers
of last resort'.
@ 16 "The whole mega-chart of crossed alliances has become so confused nobody knows what is
going on, who to support, who to trust to have an impact, what to do, etc."
Keeping in mind the anti Israel faction helps keep track of, or make sense of alliances.
Syria, Turkey, Iran, Qatar, Jordan and Kuwait headed that way. These are forming into a
faction of strange bedfellows with the US moving their embassy to Jerusalem and the other
Trump machinations with Israel being the catalyst.
Undisputed :::
Saudi Arabia Wahabbism is a leader of Mideast mayhem.
USA supports Saudi Arabia in the ongoing mayhem
So does Canada.
So does Britain.
and France.
Kashoggi a Washington Post reporter.
Washington Post big disseminator of lies.
Same with the New York Times
Both WP and NYT hid the Saudi USA CANADA BRITAIN FRENCH supported aggression on Yemen.
But this is WP and NYT opportunity to disparage Trump.
Therefore it is big "nooze." To be sensationalized. however.
Nothing new to report at all. Same old.
But shame on the alt for sucking along. Stupid is as stupid does.
One WP "journalist" a bigget casualty ? But, hundreds of thousands Syrian and Yemen
casualties? No pro blem for NYT and WP s--t heds.
Grow up, world.
Details continue to spill out. Now, interior royal princes are reported disturbed and trying
to contact the King, but prevented by MbS. A General Mutrib, very close to MbS, one of his
seven bodyguards at the Consulate,left Istanbul before the others with a large bag while the
others celebrated at a dinner re "mission accomplished."
The latest WHAAT? out of me is that MbS spoke to Khashoggi by telephone moments before he
was murdered. If true, this directly shows the lies the man is capable of. Maybe the US
senators calling MbS a liar know something we don't. Jared is in the doghouse for his
complicity in enabling MbS to deal with his critics.
Trump is floundering from "credible" to "deception," as he floundered re Kavanaugh ("both
seemed convincing," he said after the late September hearing with Christine Ford) before
wiping her up one side and down the other with demonizing a few days later. I think the
damage problem here for the midterms is significant, and Trump will not retain the House and
perhaps not the Senate either.
Why this case should rivet so much attention whereas deaths of 40 kids on a bus, then 17
more a few days ago, etc. etc. do not, seems a case of gag me, where is my vomit trough taken
a step too far, possibly because US friends of Khashoggi in the government, CIA, MSM got
upset. And let's not forget the rumor Khash was in on a CIA plot to establish a commission to
run SA (one of a three member board) in the interests of the US. Could add to why MbS was
keen on shutting him up.
I wouldn't think the detail of the fake person in his clothes leaving the back door is
"gratuitous, unneeded" in that it shows once again the lies spun from the Saudis in their
desperate scrabbling as this thing falls apart.
The Turkish government's vacillations and zigzagging in the face of the country's economic
woes reflect how squeezed it has become economically and politically and how concerned it is
about it with elections scheduled for March.
. . .
In mid-2018, Turkey's external debt stock stood at $457 billion. Over the next 12 months, the
country will need $181 billion to roll over maturing debts. The financing of the current
account deficit requires another $40 billion, at the least, though the gap has begun to
decrease under the impact of the economic downturn.
In total, Turkey needs a minimum of $220 billion over the next 12 months, or roughly $18
billion a month, but it has become a high-risk country for creditors. Its risk premium,
reflected in credit default swaps, has decoupled from those of other emerging economies,
hovering above 400 basis points despite occasional drops. In sum, borrowing has become more
expensive for Turkey.
Short Term External Debt Statistics [Central Bank of Turkey]
8/18
As of the end of August 2018, short-term external debt stock was realized as USD 175.2
billion, based on the remaining maturities calculated using external debt data, which was 1
year or less due to the original maturity. The stock's 18.2 billion US dollars portion,
composed of resident banks and the private sector's debts to foreign branches and
subsidiaries are in Turkey. When evaluated on a debtor basis, it is observed that the public
sector has a share of 18.1%, the Central Bank and the private sector have a share of 81% and
0.9%, respectively.
The Duran just published an article titled "Converting Khashoggi into Cash"
It points out that The Turkish/Saudi conflict goes back a long way as the "The first Saudi
state, the Emirate of Diriyah, went belly up in 1818, with the death of head of the house of
al-Saud, Abdullah bin Saud – actually, literally with his head hung on a gate in
Constantinople by Erdogan's Ottoman predecessor, Sultan Mahmud II." https://theduran.com/converting-khashoggi-into-cash/October
21, 2018
"... it's quite unusual to see such unanimous anti-Saudi reactions from the American political class for the assassination of Mr. Khashoggi – who was just a part-time journalist living in U.S – he was not even an American citizen ..."
"... So, it's quite unusual because the same political class remained muted about the Saudis involvement with ISIS, the bombing and starvation of civilians in Yemen and destruction of Syria, and of course the Saudis involvement in 9/11 terrorist attack in which 3000 American citizens have perished in New York, in the heart of America ..."
"... However gruesome, Mr. Khashoggi's assassination is going to be used by the Trump Administration to help the American Oil Cartel by controlling the Saudi Oil output, hence, to raise the price of Oil and to lower demand for US dollar which is the currency of the global Oil trade. ..."
"... The seemingly well-connected news outlet Voltairenet claims that there has been a plot against MbS and that Khashoggi was involved in it. ..."
"... It fares a atrocial war on Yemen, shits on international laws and regulations, just like Israel, Why would they not murder a juorno entering their land? Now this juorno was a man revealing in practices done by head choppers, so I will not cry much. It just shows these people are savages, all of them. What should be done ? You judge. ..."
"... I've read on Zerohedge that Khashoggi was on the verge of publishing an article about the Saudi's and CIA's involvement in 9/11, specifically about his former boss Turki al-Faisal, who ran Saudi intelligence for 23 years then abruptly resigned 10 days before 9/11 without giving any reason. ..."
"... Kashiggi's not a reformer. He's hard core Muslim Brotherhood ..."
The overplayed drama of Mr. Khashoggi assassination is going to be used by the American Oil
Cartel to control the Saudis Oil output.
it's quite unusual to see such unanimous anti-Saudi reactions from the American political
class for the assassination of Mr. Khashoggi – who was just a part-time journalist
living in U.S – he was not even an American citizen.
So, it's quite unusual because the
same political class remained muted about the Saudis involvement with ISIS, the bombing and
starvation of civilians in Yemen and destruction of Syria, and of course the Saudis
involvement in 9/11 terrorist attack in which 3000 American citizens have perished in New
York, in the heart of America.
So, we must be a bit skeptical about the motive of the American Political Class, as this
again could be just about the OIL Business, but this time around the objective is to help the
American Oil producers as opposed to Oil consumers – with 13.8% of the global daily Oil
production, the US has lately become the world top producer of Crude Oil, albeit, an
expensive Oil which is extracted by Fracking method that requires high Oil price above $70 to
remain competitive in the global Oil market – by simultaneously sanctioning Iran,
Venezuela, and the potential sanction of Saudi Arabia from exporting its Oil, the Trump
Administration not only reduces the Global Oil supply which will certainly lead to the rise
of Oil price, but also it lowers demand for the US Dollar-Greenback in the global oil market
which could lead to subtle but steady devaluation of the US dollar.
And perhaps that's what
Trump Administration was really aiming for all along; a significant decline of the US Dollar
Index and the rise of price of Oil which certainly pleases the American Oil Cartel, though at
the expense of Iran, Saudi Arabia and Venezuela – all of which are under some form of US sanctions.
However gruesome, Mr. Khashoggi's assassination is going to be used by the Trump
Administration to help the American Oil Cartel by controlling the Saudi Oil output, hence, to
raise the price of Oil and to lower demand for US dollar which is the currency of the global
Oil trade.
This seems to explain the motive to kill him. A few mildly critical articles by
Khashoggi's pen scarcely seem to be sufficient for such a high-profile murder, even if we
take into account that MbS appears to be impulsive and little capable of thinking ahead.
First of all, when has the death of a journalist made any difference in the relations between
countries? Why act like it should now?
Second, Khashoggi was not simply a journalist -- he was a member of the Saudi elite, an
Intelligence officer, and an activist for the Muslim Brotherhood (the Die Welt article
established that).
Third, the real question is how this story came out, and why it has come out as it has
("journalist murdered by police state agents"). Turkey pushed this story out into the open.
Apparently a calculation that the crown prince is losing ground, and an effort (perhaps
assisted by bribes) to align the AK party with the crown prince's enemies in Saudi.
It fares a atrocial war on Yemen, shits on international laws and regulations, just like
Israel, Why would they not murder a juorno entering their land?
Now this juorno was a man revealing in practices done by head choppers, so I will not cry
much.
It just shows these people are savages, all of them.
What should be done ? You judge.
It seems quite curious why MBS would go through such trouble to waste a guy whose only crime
was writing a few low key disparaging articles about him that nobody read. Maybe there's more
to this story than meets the eye.
I've read on Zerohedge that Khashoggi was on the verge of publishing an article about the
Saudi's and CIA's involvement in 9/11, specifically about his former boss Turki al-Faisal,
who ran Saudi intelligence for 23 years then abruptly resigned 10 days before 9/11 without
giving any reason. The rumor was he knew about the attack as did CIA, but Saudis and CIA
decided not to do anything to use it as pretext to start the "war on terror" and bring down
Saddam Hussein. Personally I find that a little far fetched but you never know when it comes
to the CIA.
The murder of d'Enghien had no effect on the French Revolution, other countries reactions to
the revolution and the subsequent revolutionary and Napoleonic wars. In fact, most of the
liberal pro French Revolution historians consider the execution as necessary and moral as the
execution of other anti revolutionaries
Koshoggi's murder won't make a bit of difference either once the blame Trump media blast
blows over. The Turkish police appear to be doing a good job. They've arrested 18 people involved. At least the moralist pundits won't be punditing and pontificating about Kavanaugh for a
few days. Kashiggi's not a reformer. He's hard core Muslim Brotherhood
That the Saudi regime commits murders does not surprise me, but getting caught not just with
murder, but also with torture, indeed an unbelievable stupidity.
Why torture the man ?
But what also baffles me is that the journalist wrote for Washpost, a friend of Israel.
That Netanyahu and the Saudi regime cooperate to attack Iran, it is asserted by many, and it
sems quite probable to me.
A technical question, can indeed a smartwatch do what it is supposed to have done ?
If so, then the torturers and murderers are even more stupid, I let the moral issue
undiscussed, than one can imagine.
Then there is the assertion, in cases like this one never knows what the facts are, that the
journalist's girl friend waited outside.
Did he expect trouble ?
Did he ask her to record the trouble ?
Did not the consulate security see her ?
A final remark, what now is the difference in cruelty between IS and the USA's ally ?
Early in WWII FDR was reported that USA oil would be depleted in thirty years time.
So FDR sent Harold L Ickes to Saudi Arabia,where at the end of 1944 the country was made the
USA's main oil supplier.
FDR entertained the then Saud in early 1945 on the cruiser Quincy, laying in the Bitter Lakes
near the Suez Canal.
This Saud and his entourage had never seen a ship before, in any case had never been on board
such a ship.
In his last speech to Congress, seated, FDR did not follow what had been written for him,
but remarked 'that ten minutes with Saud taught him more about zionism than hundreds of
letters of USA rabbi's.
These words do not seem to be in the official record, but one of the speech writers,
Sherwood, quotes them in his book.
Robert E. Sherwood, 'Roosevelt und Hopkins', 1950, Hamburg (Roosevelt and Hopkins, New York,
1948)
If FDR also said to Congress that he would limit jewish migration to Palestine, do not now
remember, but the intention existed.
A few weeks later FDR died, Sherwood comments on on some curious aspects of FDR's death, such
as that the body was cremated in or near Warm Springs, and that the USA people were never
informed that the coffin going from Warm Springs to Washington just contained an urn with
ashes. At present the USA does not seem to need Saudi oil.
If this causes the asserted cooperation between Saudi Arabia and Israel ?
@Harris ChandlerNow it has made alliances with Israel and between them the tail wags
the dog
The Saudi Royal family and the governments of Israel have always been in cahoots. They
both despise and fear secular governments that are not under their own control in the Middle
East. Witness the fear and dread of both of them of president Nasser in the 1960′s, for
example.
The US establishment, 'liberal' or not, just fake an outcry to soften the image of 100′s
of 1000′s of yemenis, iraqis, libyan.. war casualties they are wholly or partly
responsible for. Khashoggi's death is no more brutal than that of Gaddafi. What's the big
deal ?
Whether Khashoggi is an islamist or not is very minor.
(Sunni) Islam is basically a caravan of arab tribal or civilizational power and the house of
Saud just rides this vehicle or caravan to siphon off the oil wealth.
The house of Saud, said to be Jewish in origin, have the option to migrate en mass to Israel
or French Riviera, with their swiss/US/caribbean offshore accounts during time of crisis or
after new forms of energy resource displace oil
Equally important, the Saudis and Emiratis are now closely allied to Israel's far right
government. Israel has been a door-opener for the Saudis and Gulf Emirates in Washington's
political circles. The Israel lobby is riding to the Saudi's defense .
The Israelis are defending Old Saudi (pre MBS) -- not the New MBS/Kushner fix Palestine
cabal. The last thing Israel wants is a defined Israeli border recognized by the world. The sycophant Israeli backing Senators in congress (Graham et al) are all backing Israel
by condemning MBS and calling for his head.
@FKA Max Thanks for the excellent Real News Network interview with someone I hadn't heard
about (As'ad AbuKhalil) who has followed the career of Khashoggi for years.
It seems that Khashoggi was lately different things to different people – one voice
in English at the Washington Post following the Israeli line, and another in Arabic and the
Arab media supporting the Palestinians and the Moslem Brotherhood.
Over the long term he was a propagandist for the rule of the Saudi princes, and his
problem seemed to be his too close connection to the wrong ones, while they were overthrown
by Crown Prince Mohammed bin Salman (MbS). There's the suggestion of a plot against MbS where
he may have been involved.
So why are the Israelis, their MSM and their AIPAC congressmen making such a big thing out
of it? Isn't MbS their friend? And why should they care about the assassination of a
pro-Palestinian journalist?
Maybe they've a better knowledge of the forces at play in Saudi Arabia, and concluded that
MbS was too much of a risk (too isolated and independent – e.g. talking with the
Chinese about a Petro/Yuan). Maybe they decided to Regime Change MbS in a usual Israeli/US
Deep State operation with Khashoggi at the centre (the duplicitous sort of character that
they favor) – with the outrage at MbS unexpectedly striking back. It was in fact MbS'
team of bodyguards who arrived in Istanbul. And it would account for the Deep State anger at
having one of its chief conspirators murdered.
The back story has to be that the US/Israel want control of both Saudi and Iranian oil
priced in US Dollars and they'll go with anyone who can give that outcome (currently not
MbS). Or they invade Saudi Arabia Eastern Province on some pretext or other and just take the
oil directly.
I'm surprised that the Saudis didn't ask the Israelis, who are very good at
assassination and kidnapping, to go after Khashoggi.
They probably did, but Israel is gearing up to invade Gaza AGAIN, and that takes time and
resources that they couldn't afford to let go and do some free-lancing in the Murder Inc
Department.
But Blessed are the War Mongers or something, as that oh-so devout Christian, Pat
Robertson, is against holding KSA accountable:
Prominent evangelical leader on Khashoggi crisis: let's not risk "$100 billion worth
of arms sales"
Pat Robertson, founder of the Christian Broadcasting Network, appeared on its flagship
television show The 700 Club on Monday to caution Americans against allowing the United
States' relationship with Saudi Arabia to deteriorate over Khashoggi's death.
"For those who are screaming blood for the Saudis -- look, these people are key allies,"
Robertson said. While he called the faith of the Wahabists -- the hardline Islamist sect to
which the Saudi Royal Family belongs -- "obnoxious," he urged viewers to remember that
"we've got an arms deal that everybody wanted a piece of it'll be a lot of jobs, a lot of
money come to our coffers. It's not something you want to blow up willy-nilly."
Did Robertson take all of that loot he made from smuggling blood diamonds out of
Africa–using his charity as a front–and invest in the defense industry?
If Pat is headed to Heaven after he expires, then send me to the other place, as I have
no desire to be stuck with hypocrites for all eternity.
"Error" ? "Mistake" ? These people (the KSA) are fucking "stupid" .
Now they're saying he died in a "fist fight" in the consulate !
A 13 year old street criminal would know that that excuse is an admission of guilt. These
guys shouldn't be allowed to run a model railroad.
On television in 1988, Donald Trump said he had bought a
US $200 million 85-metre-long yacht ,'The Nabila', from billionaire arms dealer Adnan
Khashoggi, uncle of just-murdered-in-Istanbul journalist Jamal Khashoggi. The yacht was named
after Adnan Khashoggi's daughter. Trump later sold the yacht to Saudi Prince Al-Waleed bin
Talal.
Donald Trump talking about the boat and arms dealers like Khashoggi – "not the
nicest guys in the world"
Once
again my best House of Saud-connected source RE-CONFIRMED Mohammed Bone Saw (MBS) received
direct info on CIA assets in Saudi Arabia from his close whatsapp pal Jared of Arabia.
Jared could only have access to this top secret info because of his high clearance. That led
to the Ritz-Carlton jail saga - and other arrests.
The CIA protégé Mohammed bin Nayef - who was previously made Crown Prince by
the CIA itself - was also arrested and is still under house arrest. The CIA was grooming Nayef
be King.
The CIA managed to elevate Nayef by plotting to get rid of Bandar Bush - who was fired by
then King Abdullah. When King Abdullah died, Nayef continued to be Crown Prince until ousted by
the new King Salman bin Abdulaziz to the benefit of his son.
Big mistake.
MBS moved against the clergy - who had been neutralized by Nayef. He moved against CIA
friends, ousting former King Abdullah's son Prince Miteb as head of the powerful National Guard
- who's after his blood ever since.
Crucially, Khashoggi was also CIA.
MBS ordered the invasion of Yemen - and turned large sectors of the army against him. He met
with AIPAC in New York, befriended Israel and turned the bulk of the Saudi population against
him.
Only misinformed simpletons believe that the Pulp Fiction in Istanbul op could have
proceeded without his green light. Hubris, arrogance and inter-galactic ignorance are MBS's
trademarks.
What kind of intel op does not know that Turkish secret police would be monitoring the Saudi
embassy 24/7?
The Coward Prince, meanwhile, has had ample time to find not one but TWO fall guys.
Fall Guy Number One is Gen. Ahmed al-Assiri, deputy head of Saudi intel (yes, that's an
oxymoron), a senior air force officer with NO (very important) family connections to the Saudi
two-bit royals.
Fall Guy Number Two is Saud al-Qahtani, who was a sort of Desert Grand Inquisitor - totally
controlling the media and supervising the non-stop purge of any critics. Call him the Saudi
Steve Bannon - as he was known in Qatar. He led a mighty troll army spreading fake news on the
murderous war on Yemen, the pathetic blockade of Qatar and non-stop demonization of Iran.
Turkey for its part has masterfully deployed Death by a Thousand Leaks on MBS.
Now the whole planet knows the detailed description of the 15-men hit squad; pics of all of
them; their role in the "mission"; arrival and departure flights; which hotels they stayed for
a few hours.
The hit squad includes the Bone Saw Master; four intel ops; 6 Royal Guard members; a member
of MBS's personal guard; and a free agent.
Compared to all this evidence, the official "fist fight" Saudi explanation as well as the
Jared of Arabia-spun "rogue killer" spin are inter-galactic jokes designed for suckers.
What remains unexplained is whether MBS was striking some sort of dodgy deal with the Trump
administration, via his best pal Jared, behind the back of his House of Saud many rivals.
Consul Pompeus Minimus was on the phone to MBS immediately after the Pulp Fiction news broke
out. This could well turn out to have been a double-double cross.
Comment: Pepe is probably a little too sure it couldn't have happened without MbS's approval.
He may have been involved and it escalated further than he approved, (as Scott Adams
theorizes ), or
it could've been a rogue operation. Mohammed bin Salman has made enough enemies within the
sprawling Saudi royal family with last year's "anti-corruption purge", that more than one
faction would be happy to pin the assassination on him
"... "I am withdrawing from all ventures with the Saudi government until they go back to killing people I'll never meet at a party" ..."
"... In relation to people like MBS, there is a double stupidity. The problem is not simply that he has been playing to their need to believe that he wants to 'modernise' Saudi Arabia. It is also that they have wanted to believe that such a venture is possible, which it almost certainly is not. ..."
Someone from whose writings I have derived a great deal of instruction, as well as
amusement, is Vladimir Golstein, a Russian Jewish émigré now in charge of
'Slavic Studies' at Brown University.
I introduce his explanation of the response to the Khashoggi killing, in a 'Facebook'
post, not because I think it should be taken as some kind of authoritative truth, but
because, as often, Golstein's irreverence is thought-provoking.
The post begins:
'Thank you, Saudi Arabia for exposing the utter hypocrisy and moral bankruptcy of British
and American gangsta press and equally gangsta establishment.
'You've been at it for a very long time. And it seems that finally you've got it
right.'
After providing a long list of Saudi delinquencies, Golstein continues:
'I understand that you began to feel more and more desperate. You sided with Israel
against Iran and Syria, and the rest of the world said that it is a moral thing to do and
put you on the UN human rights board.
'Well, finally, you hit the right cord. Killing innocent people and abusing your moneyed
power by buying newspapers, hotels, city districts or think tanks, was not enough to
produce an outrage in the west, but when you whacked another cynical morally corrupt
journalist that proved too much for the cynical and morally corrupt western press. They
decided to stand up for one of their own.'
This does, I think, point to something rather important. And it leads to the thought
that MBS and others may have miscalculated, as a result of an 'hubris' which many in the
West have actually encouraged – just as they have a parallel 'hubris' in Israel.
As Golstein, who has a great deal of complex history behind him, can see very clearly,
it is an interesting question when the 'sympathy' of Western 'liberals' is and is not
actually felt.
What I think MBS may have missed is, quite precisely, the realisation that for people
like Tom Friedman the fact that – as Golstein is pointing out – Khashoggi is
the same kind of animal as they are means that killing him touches them personally.
Second, he is the kind of figure whom they have, as it were, 'cast' in a 'starring
role', in their 'narrative' as to how somehow 'Saudi Barbaria' is going to 'modernise', and
in so doing create a Middle East hospitable to a Jewish settler state.
So, in assassinating him, MBS may have unleashed a curious kind of psychological
'maelstrom.'
But, as well as hypocrisy, there is also a basic stupidity.
In fact, if one is reasonably 'worldlywise', one knows that people's sympathies, including
one's own, are very often much more limited than they profess to be. We commonly find it much
easier to feel the griefs and pain of people whom we see as like ourselves, than we do with
those of others.
My own history, ironically, has been a move from finding it relatively easy to sympathise
with people who write for the 'New York Times', or the 'Guardian', or the 'New York Review of
Books', to finding it really rather difficult.
There is also, however, about so many of these people, an element of sheer stupidity.
Whether one agrees, or disagrees, with 'deplorables' is relevant, but only partly so.
Actually, people who would not appear at the kind of 'party' which Jon Schwarz so aptly
characterises have a very wide range of views, and I often agree in whole or in part with
such people, and also often disagree in whole or in part. It is not a simple matter.
A related but distinct question has to do with common prudence.
People who lock themselves in a kind of bubble of the supposedly 'enlightened' are not
only doing the rest of us no favours, but are inherently bound to head off in directions
which are liable to be suicidal for themselves.
Prudent élites take the trouble at least to be aware that the world is not
controllable by the comfortable people who appear at their dinner parties, and realise that
if they persist in trying to persuade themselves that it is, sooner or later their
self-delusion will blow up in their faces.
In relation to people like MBS, there is a double stupidity. The problem is not simply
that he has been playing to their need to believe that he wants to 'modernise' Saudi Arabia.
It is also that they have wanted to believe that such a venture is possible, which it almost
certainly is not.
Citing "three people familiar", Bloomberg reports that on Thursday, around the time when the
Trump administration was contemplating next steps in the Saudi Arabia fiasco, Trump's chief of
staff, John Kelly, and his national security adviser, John Bolton, engaged in a
"profanity-laced" shouting match outside the Oval Office.
The shouting match was so intense that other White House aides worried one of the two men
might immediately resign. Neither is resigning, the people said.
While one possible reason for the argument is which of the two admin officials was more
excited to start war in [Insert Country X], Bloomberg said that it wasn't immediately clear
what Trump's chief of staff and national security adviser were arguing about. However, the
clash was the latest indication that tensions are again resurfacing in the White House 19 days
before midterm elections.
It's not clear if Trump heard the argument. "but the people said he is aware of it."
This is not just MBS stupidity (which killing of a journalist in a consulate is), or Erdogan reaction, this might be something
else. Neoliberal MSM reaction suggest that this is a kind of trigger for the color revolution against MBS when an event is blown out
of proportion and used to justify already decided political shift or actions. It might be a trap specifically designed
to MBS (the role of "fiancé" here is very interesting) by western intelligence agencies. Look at Skripals for the main
components of this plot.
What is interesting is the Stephen Cohen supports this hypothesis.
Notable quotes:
"... Last summer, a standoff between Saudi Arabia and Canada gave us a window into how Crown Prince Mohammed bin Salman deals with critics -- but most of the world looked away. It started with two tweets. On Aug. 2, Canadian Foreign Affairs Minister Chrystia Freeland wrote on Twitter that she was alarmed by the detention of Samar Badawi, a Saudi human rights activist whose brother, Raif Badawi, was arrested in 2012. Raif Badawi's family lives in Canada. The next day, Global Affairs Canada weighed in, urging Saudi authorities to release civil and women's rights activists. ..."
"... Saudi Arabia was not having it. In a blustery Aug. 6 tweetstorm, the country's Foreign Ministry announced that it was recalling its ambassador to Canada and gave the Canadian ambassador to Saudi Arabia 24 hours to leave. The state airline said it would stop flying to Toronto. Saudi scholarship students were told to pack their bags. Trade and investment were frozen. ..."
"... Pulling ambassadors and threatening to suspend investment was a "massive overreaction" and offered an important lesson, said Thomas Juneau, assistant professor of public and international affairs at the University of Ottawa. "The lesson was that MBS is reckless and completely overreacts to threats," he added, using the crown prince's nickname. ..."
"... The sheer stupidity of what MBS has done fascinates me. The inability to realise 1. that the MIT are rather good at 'bugging', 2. that Erdogan may calculate that his need for Saudi financial assistance is outweighed by his determination – which may also involve 'need' – to portray himself as the leader of the 'Umma', and 3. that people like Tom Friedman are happy to see Yemenis murdered on mass, but get a bit queasy when people like Khashoggi are. ..."
"... For very many years, the 'ruling élites' in Washington, as in London, have allowed themselves to be 'played for suckers', alike by the Saudis and the Israelis. Both have created situations in which there are very powerful concrete incentives for those who have gulled them to continue doing so. A rather unsurprising result is that people like MBS and Netamyahu have got to used to thinking they can get away with anything. A natural result has been massive 'hubris.' An equally unsurprising result is that this is in the process of leading to 'nemesis.' ..."
"... people like Tom Friedman are happy to see Yemenis murdered on mass, but get a bit queasy when people like Khashoggi are ..."
"... This is so true. The sociopaths in the MSM only care when one of their own is put on the chopping block. I get ill watching these people smile as they interview 'experts' cheering on the Saudis on in Yemen. They are pleased by the more convoluted arguments because it makes them feel more intellectual. ..."
"... David Habakkuk's comment below illustrates the difficulty that Western observers have in understanding the thinking and actions of the Saudi rulers. They are essentially just glorified tribal chieftains, still stuck in their medieval ways. MbS wasn't "stupid" when he ordered the killing of Khashoggi, that is what a tribal chief does when a member of his tribe defies him. It was, for him, a 'normal' reaction. After all, he has been doing this kind of stuff in his kingdom for years (without any reaction from outside). ..."
"... I'm quite sure he did realise that the consulate was bugged, and that it would be known that the Saudis had murdered Khashoggi. He just didn't care. Since he believed he had bought off Erdogan and the Western leaders, media, etc who mattered. While he was right in his expectation of the Western leaders' reactions, he misjudged Erdogan's reaction. ..."
Treasury Secretary Steven Mnuchin just announced he will not be attending the Future Investment Initiative Summit in Saudi Arabia
next week. Obviously he didn't decide this on his own. His announcement stated that this was done after consultation with Trump and
Pompeo. Given that this "Davos in the Desert" summit is the brainchild of MbS, this official and personal snub by the Trump administration
could be a sign of future sanctions or it could be an effort to get through this crisis with the issuance of a wrist slap. A lot
will depend on how MbS reacts. Judging by his reaction to a mean tweet by the Canadian Foreign Affairs Minister earlier this year,
it would not surprise me if MbS goes ballistic over the collapse of his summit.
***********************
Last summer, a standoff between Saudi Arabia and Canada gave us a window into how Crown Prince Mohammed bin Salman deals
with critics -- but most of the world looked away. It started with two tweets. On Aug. 2, Canadian Foreign Affairs Minister Chrystia
Freeland wrote on Twitter that she was alarmed by the detention of Samar Badawi, a Saudi human rights activist whose brother,
Raif Badawi, was arrested in 2012. Raif Badawi's family lives in Canada. The next day, Global Affairs Canada weighed in, urging
Saudi authorities to release civil and women's rights activists.
Saudi Arabia was not having it. In a blustery Aug. 6 tweetstorm, the country's Foreign Ministry announced that it was recalling
its ambassador to Canada and gave the Canadian ambassador to Saudi Arabia 24 hours to leave. The state airline said it would stop
flying to Toronto. Saudi scholarship students were told to pack their bags. Trade and investment were frozen.
Pulling ambassadors and threatening to suspend investment was a "massive overreaction" and offered an important lesson,
said Thomas Juneau, assistant professor of public and international affairs at the University of Ottawa. "The lesson was that
MBS is reckless and completely overreacts to threats," he added, using the crown prince's nickname. (Washington Post)
***********************
Trump and Pompeo are now pushing for more time for the Saudis to investigate the disappearance of Khashoggi, essentially stalling
for time. I doubt Pompeo's recent trip to Riyadh and Ankara was a search for the truth. It was a desperate effort to coordinate a
way out of this mess and preserve the existing Saudi-US relationship. I'd like to know what Pompeo promised Erdogan in an effort
to make this all go away. Was it enough? I doubt it. This situation is absolute gold for Erdogan's dreams of a renewed Ottoman Empire.
How about MbS? Did Pompeo convince him to meekly accept whatever slap on the wrist is on the way? I doubt that as well. The Trump
administration pretty much destroyed what was left of "Davos in the Desert." If I had my family stationed in the Kingdom, I'd get
them out right now and have my go bag within arm's reach at all times. Without any degree of hyperbole, I predict MbS is about to
get medieval on someone's ass someone beyond an aging expatriate reporter. The chessboard of the Middle East may be about to change
dramatically. The result will be a lot of crying in Tel Aviv and Washington and a lot of smiling in Ankara and Tehran. And maybe
an end to the needless dying and suffering in Yemen.
"On October 16 th , unnamed Turkish officials reportedly provided the Washington Post with scans of passports supposedly
carried by seven men who were part of the 15-person team suspected in the disappearance and likely killing of journalist Jamal Khashoggi.
The passports add to the public information provided by Turkish officials as it seeks to fill out gaps in the narrative of what
purported after Khashoggi entered the Saudi consulate on October 2 nd . The Washington Post published the passports, but
obscured the names and faces of the suspects, because it reportedly had no time to verify the people's identities.
Turkey maintains that Jamal had been killed and dismembered within the Saudi Arabian consulate. It also claims that a 15-man team
dispatched from Saudi Arabia played a major role in the killing. One man from the group is the head of the medical forensics department
in the Saudi ministry of interior.
Turkish officials also reportedly confirmed that the 15 names reported in the Daily Sabah are the actual names of the suspects."
SF
-----------
Saudi Arabia is an absolute monarchy. There is no constitution. There is no legislature. Instead, there is "consultation." There
are no laws that are not royal whims or Wahhabi Hanbali Sharia. Ah, no, my bad! There is also 12er Sharia in the Eastern Province
for the Shia second class subjects (not citizens) who live there.
Turkey clearly is intent on "outing"Saudi Arabia as the butchers who killed Khashoggi and cut up his body in the Saudi consulate
in Istanbul, thus preparing it for re-export to The Kingdom.
Why are the Turks doing this? IMO, the Erdogan government wants to establish itself as the leading power in the world Islamic
community, the 'Umma. the Ottoman Sultan Caliph was effectively that in Sunni communities and Erdo seeks to "restore" Ottoman times.
Donald Trump has one hell of a problem, largely of his own and Jared's creation, but, to be fair, also the product of 70 years
of IMO misguided US insistence that the Saudis were a normal, post Treaty of Westphalia country that thought of the US as an ally
rather that an alien entity to be manipulated and deceived whenever possible.
The Turks evidently really have "the goods" on MBS who is effectiely both head of state and head of government in SA. IMO they
will drive the evidence home with the world media seeking to force an acknowledgement of their position in the world by Trump. pl
A very fine piece. I am waiting to see how this plays out, wit h a mixture of interest and fear.
The sheer stupidity of what MBS has done fascinates me. The inability to realise 1. that the MIT are rather good at 'bugging',
2. that Erdogan may calculate that his need for Saudi financial assistance is outweighed by his determination – which may also
involve 'need' – to portray himself as the leader of the 'Umma', and 3. that people like Tom Friedman are happy to see Yemenis
murdered on mass, but get a bit queasy when people like Khashoggi are.
This is a clear case of stupidity, but, as we have been learning, the 'realist' notion that one can interpret international
politics in terms of reasonably 'rational' calculations of 'national interest' is complete BS: theories produced by intellectually
lazy academics who want to avoid the messy business of attempting to understand how other societies, and indeed one's own, actually
work.
A further thought.
For very many years, the 'ruling élites' in Washington, as in London, have allowed themselves to be 'played for suckers', alike
by the Saudis and the Israelis. Both have created situations in which there are very powerful concrete incentives for those who
have gulled them to continue doing so. A rather unsurprising result is that people like MBS and Netamyahu have got to used to thinking they can get away with anything. A natural result has been massive 'hubris.' An equally unsurprising result is that this is in the process of leading to 'nemesis.'
"and 3. that people like Tom Friedman are happy to see Yemenis murdered on mass, but get a bit queasy when people like Khashoggi
are."
This is so true. The sociopaths in the MSM only care when one of their own is put on the chopping block. I get ill watching these
people smile as they interview 'experts' cheering on the Saudis on in Yemen. They are pleased by the more convoluted arguments
because it makes them feel more intellectual.
I haven't seen Babbak post in ages, I hope he is doing okay.
Chris- in case you didn't see this, a well done job on Tom Friedman by Hamid Dabashi, in Al Jazeera. An American and an Arab Journalist Walk Into a Saudi Consulate
http://www.informationclear...
David Habakkuk's comment below illustrates the difficulty that Western observers have in understanding the thinking and actions
of the Saudi rulers. They are essentially just glorified tribal chieftains, still stuck in their medieval ways. MbS wasn't "stupid"
when he ordered the killing of Khashoggi, that is what a tribal chief does when a member of his tribe defies him. It was, for
him, a 'normal' reaction. After all, he has been doing this kind of stuff in his kingdom for years (without any reaction from
outside).
I'm quite sure he did realise that the consulate was bugged, and that it would be known that the Saudis had murdered Khashoggi.
He just didn't care. Since he believed he had bought off Erdogan and the Western leaders, media, etc who mattered. While he was
right in his expectation of the Western leaders' reactions, he misjudged Erdogan's reaction.
As DH has correctly surmised, Erdogan took advantage of this wonderful opportunity to turn on MbS, and cleverly ensured that
Western leaders and media had to publicly react. I don't think Trump, Friedman, etc got "queasy" about the killing, they were
pushed into having to take a stand.
The reason the 'ruling élites' in Washington, London etc have "allowed themselves to be 'played for suckers' by the Saudis"
is because they've all been bought by the latter (Israel is a different case).
Col Lang is a very special case in that he resisted all their attempts to buy him, unlike all the other US military and political
leaders he has mentioned in an earlier comment.
Gold indeed. Right now the drip drip of salacious details in the Turkish press is focused on the audio recordings, they haven't
even started on the claimed video evidence yet. It seems MbS is to undergo prolonged torture by media. And the fear and loathing
in The Kingdom is now being given a nice helping hand by claims that one of the 15 dismemberers has been traffic accidented in
Riyadh. The report on this starts with the words "
Claims are circulating " - outstanding. Turkish media has a huge audience among the 'Umma these days and combined with Al
Jazeera this is a potent weapon.
You are right to ask what price Erdogan may be willing to accept to make this go away, his wish list will be long. But if he
calculates that the prize may be MbS himself plus irreparable damage to the reputation of the custodians of Islam's two holiest
sites, I am not at all sure Pompeo will be able to offer anything to beat that. My SWAG is MbS is removed before it these negotiations
are concluded.
IMO, for sure Saudi intelligence as well as MBS knew that their diplomatic missions like everybody else's is bogged, everybody
knows airports and foreign missions are closely monitored by the host country. With that in mind, what still inspired MBS without
any fear of getting exposed and still order the journalists' execution, was his believe of his indispensability and the protection
from Trump and the Israelites. I think he very well thought if Erdo and the world can and will find out they wouldn't be able
to do a damn thing about him. Unfortunately, with Trump' behavior in last few days he might be right. The one good thing about
Trump' admin. is, that they don't care to bore us with the usual hypocritical AMERICAN moral high ground and shining hill BS,
they know the world in now full of it. That same goes for our good mannered and morally proper Europeans the Germans, French and
jolly good Brits. Not a word about this is coming out of Europeans, they are waiting for the coin to drop and see which side is
proper for business to side with.
An important second point in this IMO, is that the American foreign policy establishment, can not and will not trust Erdo and
Turks to climbs to the leadership of the Sunni Muslims, that has been the case ever since the Iranian Islamic revolution, specially
as is been seen by behavior of this last three US Administrations. US wants and will accept a SOB for the job, as long as he is
their SOB. Erdo knows who was behin the cope a few years back, this was a mana from the heavens for him, he is enjoying this torturing
MBS and US inch by inch.
Thanks. Even in the States it is good idea to have a bag packed. Albany GA has been hit three times in the last two years.
During Mike Pompeo's visit, it was reported that the Saudis gave him the 100 million dollars for the American occupation of
Eastern Syria. That sum is something that Donald Trump is unlikely to walk away from nor Israel's desire to cut the Shiite Crescent.
Erdogan's new Ottoman Empire and eliminating Turkey's Kurd problem requires the Americans to leave. This cauldron will keep boiling
until it explodes into a world war. The only way out is Russia convincing the Kurds to rejoin a Syria Federation; liberating Idlib
Province and pounding out a peace treaty where everyone respects each other's borders and stands down.
It was "reported" by what or whom? You know better than that. If you say such a thing on SST you must support the statement. You
want to believe that all people are corrupt? You must prove it here.
It was in the NYT and WaPo. The money was pledged by al Jubier back in August. This is from Yahoo Finance:
"U.S. Secretary of State Mike Pompeo arrived in Saudi Arabia on Tuesday to discuss the disappearance and presumed murder of
journalist Jamal Khashoggi with Crown Prince Mohammed bin Salman. That same day, the U.S. government received a $100 million payment
from the oil-rich kingdom, The New York Times and Washington Post reported -- an amount that had earlier been promised to the
Trump administration to support its stabilization efforts in Syria."
What do you all think Erdogan's opening line of negotiation would be? Abandoning the Kurds in Syria? Or further, US support for
destroying the YPG/J/PKK?
Yes. They knew exactly what they were doing, but Trump did not. I said at the time that the Islamic World interpreted his performance
in Riyadh as submission. At last!
"........This situation is absolute gold for Erdogan's dreams of a renewed Ottoman Empire......."
If that is his dream, it is as realistic as Putin reviving the Soviet empire. Turkey is gaining regional influence; however,
Erdogan certainly has no plans to share that with Iran if the Saudis falter.
Col. Lang,
tayyip is truly delusional along many dimensions. However, he is probably cognizant of the economic difficulties his policies
have caused in Turkey. He and his coterie are desperately trying to find a way to pay the piper.
Putin has no intention of restoring the soviet empire, he has every intention of protecting the interest of Russians who were
stranded outside the Russian state when the soviet union dissolved
Agreed. This is going to be a tricky transition, which is typical when the successors dare not raise their hand before it's crystal
clear their head chopping predecessor no longer poses a threat.
But, according to Bloomberg...Big Money is going...although, allegedly, not its "heads"...But since when it is public the air
traffic of private jets.....
If great banks are going ( their is that unique opportunity of the public offering by Aramco ), I very doubt Trump is
going to lose this opportunity to make "deals"......
I mantain that all this noise is focussed on the midterms, so as to whitewash US support related to Yemen war....After that,
everything will go business as usual .....
"Go medieval" I like it. The idea of getting your family out before they become hostages is a good one. The State Department will,
of course, evacuate their dependents to Switzerland or some such place while trying to persuade or "demand" that the military
not evaacuate families. Ii have "been there" several times.
There was a time in the late 90s that it felt like we were coordinating a non-combatant evacuation operation (NEO) some place
in Africa every other week. At least my car pool buddy and I missed the rush hour traffic on the ride back home on those days.
Blame Mossad. MbS is off the hook, the weapons sales can go forward, the Davos party can proceed, no one needs to be punished
because Mossad is never, ever culpable; Adelson quiescent & Bibi happy to have spotlight off his indicted spouse; wins all around.
Blame Iran: MbS is not only off the hook, he gets refreshed motivation for his vendetta, weapons sales not only go forward but
are even more necessary; Davos proceeds with renewed vigor; punish Iran some more-- they're used to being the punching bag; Adelson
and Bibi are very happy, making US legislators very happy in campaign season.
Wins all around.
State Department propaganda writers must be on strike to have let these opportunities to create narratives cede to Erdogan.
Why the western news media has suddenly developed all this concern for Saudi human rights has been very puzzling to me. I read
somewhere that it is to be used as leverage in order to get Saudi Arabia to cancel their S-400 order. This is the most plausible
explanation that I have heard so far - the Borg really doesn't like S-400 exports.
As far as I can find out there is currently no Saudi S-400 order placed, only discussions taking place at a slow pace. Previous
such discussions have always faded away as the Russians are well aware of the Saudi's technical (in)abilities and really don't
want western contractors operating their systems and giving all kinds of others the opportunity to practice against it. Also I
would expect the US to warn that the deal could attract sanctions under the
Countering America's Adversaries Through Sanctions Act (CAATSA) law.
"... hey make clear to him that it would involve him disappearing for ever but with a huge amount of cash to enjoy with his new wife, thus shutting up his mouth about possible details about the 9-11 forever. ..."
"... (Plausible, Khassogi was no saint, he was photographed being armed with an rpg rolling down a hill along with Bin Laden. In Afghanistan?. He used in the past to write supportive stuff for ISIS or "moderate" head choppers) ..."
"... They explain the plan to him and it seems it involves a scheme to feed false information to the close environment of Erdogan in order to damage his credibility and also bring Mohammad Bin Salman in a difficult position. ..."
"... There were other people at the Embassy during the time going about their bussines, it was working hours. It was also mentioned everybody were hearing screams. ..."
"... Yes, a major global geo-political shift is taking place and it is like folks say about you not wanting to see how sausage is made. ..."
"... How did war become substituted for human growth? When will the West realize its inherent social/economic structure is the problem? ..."
"... A few weeks ago Assad said he'd reached an 'understanding ' with other Arab states... Who were those other Arab states ..."
"... I don't know why we are believing the Turk's story, just because it has been spread worldwide by the Mighty Wurlitzer of the corporate media. If there were 15 Saudis meeting with Khashoggi at the Embassy, why do we assume that they were a hit team? Sounds like a joke.. ..."
"... The Turks, a week later, say that he didn't, and come up with a serial narrative, doled out daily, which the imperial media spreads, unchallenged, 24/7. Erdogan doesn't control the world's media. I remain skeptical. ..."
"... I agree that the target may be Trump. This reminds me of Stephen Vincent Benet's short story, "The Devil and Daniel Webster." The devil (anti-Trump deep state) ostensibly wants to take the soul of Jabez Stone (Mohammad bin Salman) but in reality the devil has his sights on a bigger quarry, Daniel Webster (Trump.) ..."
"... My feeling is that if sanctions against Saudi Arabia are approved by Congress, Trump will NOT veto. He has tended to follow the laws made by Congress more than his predecessor did. ..."
"... On the other hand, how can Congress approve significant financial sanctions against Saudi Arabia? There is too much power and money involved. You think the NRA has power to influence Congress? I expect that congressmen and congresswomen are getting phone calls even as we speak. ..."
Agatha Christie's Murder in the Embassy d'Orient Express
It was a dark and rainy afternoon...Jamal, sitting in his favorite Constantinopolitan
coffee shop was seeping his Earl Gray tea watching the clouds gathering from afar in
Bosporus, watching the impressive Hagia Sophia ancient church monuments in the background.
The smells of Musaka and kiofte with red hot tomato sauce from a small tavern down the road
were tinkling his nose. As he reaches his phone to call his soon to be Turkish wife, someone
approaches khassogi and makes him a deal he can't refuse.
They make clear to him that it would involve him disappearing for ever but with a huge
amount of cash to enjoy with his new wife, thus shutting up his mouth about possible details
about the 9-11 forever.
(Plausible, Khassogi was no saint, he was photographed being armed with an rpg rolling
down a hill along with Bin Laden. In Afghanistan?. He used in the past to write supportive
stuff for ISIS or "moderate" head choppers)
They explain the plan to him and it seems it involves a scheme to feed false information
to the close environment of Erdogan in order to damage his credibility and also bring
Mohammad Bin Salman in a difficult position.
Khassogi is thrilled and he accepts gladilly.
(Plausible, D.Trump needs the new deal with the weapons to be signed which MbS agreed
to but now it seems he stalled, D.Trump's/J.Kushner's environment along with Israel also
could be needing to get a better control on Aramco's future plans which MbS might be
postponing for the time, because these actors have planed new and suprising moves in the
global scene)
This entity would also exploit this scheme to the max by discrediting every loud critic
against D.Trump/J.Kushner (and Israel over it's alleged cooperation with MbS/Saudi Arabia),
and that all soap opera would happen during the final weeks closing November's elections in
the US.
(Plausible, timing is suspicius, also D.Trump should know better since he is no
idiot)
The plan would involve designing the scheme in a way that false possitives about the truth
of the story would regularly surface in the media being fed from the scheming Entity to
Erdogan's environment who in their turn would leak out to the regime press (though that would
also involve trusted persons in his environment having been sold out to the dark side in
order to see him go) (Plausible, still no body, no video, and a few audio tracks here and there make absolutely
no credible truth for anything since fals audio is very easy to be manufactured, plus how can
Erdogan explain in detail how he bugged Saudi embassy, since that would also be
illegal?)
After the deal is made, Khasoggi played his part and they find a way to whisk him out from
somewhere erdogan's people wouldn't be able to surveil. The "evidence" is planted and the
soap opera is rolling....
given how much of the audio tapes descriptions have been leaked already I think the actual
recordings (at least audio and perhaps even the video) will be leaked shortly. I would
theorize that if the negotiations between the Saudis and Turkey don't make progress quickly
enough Erdogan will leak the full Audio and then threaten to release the video.
However, the real unknown is Trump and the US, Trump & the Republicans need Saudi
Arabia to keep oil prices low to prime the US economy, especially if the rumors of a planned
strike against Iran in 2019/2020 are true.
I don't see how the US could launch anything against Iran (beyond funding Terrorist
attacks) without completely tanking the US/world economy unless they have 100% support of
Saudi Arabia (even with their support, I still think an attack against Iran would be a
disastrous failure). Even getting rid of MbS would still leave Saudi Arabia with strained
relations with the US for years to come (possibly derailing the plans against Iran
entirely)
There were other people at the Embassy during the time going about their bussines, it was
working hours. It was also mentioned everybody were hearing screams. Where is their
audio/video of what happened?
Nobody mentioned that people were being frisked on their way
out from the Embassy for their cellphones, and also the alleged team left in a hurry from an exite other than the main entrance where
obviously people usually com and go. Where is their
stuff? Why nothing on the internets about that? Turkey is not on an total internet lockdown,
yet at least.
So?
@ Pft who is thinking big enough for the situation....nice
Yes, a major global geo-political shift is taking place and it is like folks say about you
not wanting to see how sausage is made.
Pft alluded to blatant exertion and assertion of force which much of the world only sees
on TV or in the movies. Since so much effort has been made to normalize such behavior, is
there any surprise that might-makes-right continues to be projected by the West?
We are about to see how far the might-makes-right folks are willing to push their inhumane
social structure. At the end of WWII there was a semblance of claim to moral high ground and
global structures to support furtherance of visions of global peace.....which has all seemed
to evolve to myth/facade
How did war become substituted for human growth? When will the West realize its inherent
social/economic structure is the problem?
But would our man Jamal not also be smoking a hookah pipe while sipping apple tea through
a cube of sugar between his teeth and snacking on some nice baklava?
mark2 ^^^ A few weeks ago Assad said he'd reached an 'understanding ' with other Arab
states... Who were those other Arab states Turkey ? Saudi? Iran we can only guess ! We could
all think of many others !
Turks? Iranians? Arabs? Wow. USA education system? Pretty basic schoolboys howlers there.
Looks as if we could not "all think of many others".
I don't know why we are believing the Turk's story, just because it has been spread worldwide
by the Mighty Wurlitzer of the corporate media.
If there were 15 Saudis meeting with Khashoggi at the Embassy, why do we assume that they
were a hit team? Sounds like a joke...
how many Saudis does it take to murder one journalist?
Maybe it was a negotiation.
The Saudis say that he left the Embassy. The Turks, a week later, say that he didn't, and
come up with a serial narrative, doled out daily, which the imperial media spreads,
unchallenged, 24/7.
Erdogan doesn't control the world's media.
I remain skeptical.
I agree that the target may be Trump.
This reminds me of Stephen Vincent Benet's short story, "The Devil and Daniel
Webster." The devil (anti-Trump deep state) ostensibly wants to take the soul of Jabez Stone
(Mohammad bin Salman) but in reality the devil has his sights on a bigger quarry, Daniel
Webster (Trump.)
Axios has just reported a letter signed by 11 senators demanding that Trump disclose his
family's financial links to Saudi Arabia.
"It is imperative that this sanctions determination, and U.S. policy towards Saudi
Arabia generally, are not influenced by any conflicts of interest that may exist because of
your or your family's deep financial ties to Saudi Arabia."
My feeling is that if sanctions against Saudi Arabia are approved by Congress, Trump will
NOT veto. He has tended to follow the laws made by Congress more than his predecessor
did.
On the other hand, how can Congress approve significant financial sanctions against Saudi
Arabia? There is too much power and money involved. You think the NRA has power to influence
Congress? I expect that congressmen and congresswomen are getting phone calls even as we
speak.
"... I agree with Jack that when Brennan is writing an op-ed calling for the head of MbS something fishy is up. Kashoggi has had a long career at the heart of Saudi national security power structures. He's no angel. Clearly he touched a nerve to be murdered so openly with no plausible deniability. Or maybe that was intentional. Then....the reaction of the Deep State. Hmm? ..."
"... Please don't get me wrong. Saudi Barbaria has been a corrupting influence for decades and the role they have played in Syria, Libya is not to be condoned. I fully support walking away from our interventionist position in the Middle East and letting the chips fall there. However, I have a deep distrust of Brennan and his motives. I can't put my finger on why the neocons are reacting in this way in light of their previous attitude of ignoring such atrocities or even abetting them. This is raising suspicions. ..."
"... if that is such a common knowledge that host states always bug the guest embassies and consulates, that would mean that Saudis would have to assume that as well, so that they would make sure that these devices were ´blinded´, ..."
"As for arms sales, someone needs to brief Mr. Trump on the actual results of the promises made to him when he visited Riyadh
last year. As Bruce Riedel of the Brookings Institution
sums it up , "The Saudis have not concluded a single major arms deal with Washington on Trump's watch ." Moreover, an end to
supplies of U.S. spare parts and technical support, something Russia cannot provide, would quickly ground the Saudi air force . That
would have the welcome effect of ending a bloody bombing campaign in Yemen that a
U.N. investigation concluded was probably responsible for war crimes." Washpost
-----------
Once again, I am not a great fan of Bezos or his blog, but two days in a row they have printed something I can agree with. Something
has changed for him.
It has become a meme in the blather that runs shrill and shallow in the US media, that Saudi Arabia is a faithful, and indispensable
ally of the US in the ME. Bezos disputes this and so do I.
A few points:
Yes, they chop heads off after Friday prayers outside the local mosque. They also do hands and feet. They stone to death women
found guilty of adultery. They sew them in bags before the men present throw handy five pound rocks at them. The government is deeply
approving of this. Sound familiar? Yes, it should. The jihadis whom the Saudis sponsor in Syria do the same things. The Sunni jihadis
are nearly defeated in Syria and it has become clear that the Saudi government has been evacuating their leaders, probably with US
connivance, so that they can pursue greater visions of jihad elsewhere.
The importance of Saudi Arabia in the world oil market is IMO now much exaggerated. They can undoubtedly do some damage by manipulating
the short term contract (spot) market but this is something they would pay for heavily. The Kingdom is cash strapped. It was not
for nothing that MBS turned the Ritz Carlton in Riyadh into a prison for the wealthy including many of his own kin in order to squeeze
and in some cases torture them into handing over a lot of their cash to the government. Depressed petro sales at artificial prices
will only further reduce revenue to the government.
The notion that Saudi intelligence contributes much to the GWOT is a joke. Saudi intelligence competence is something that exists
only in pitchmen's claims voiced by TV touts. In fact, they get almost everything they have from the US and are like greedy baby
birds always looking to be fed. They cannot organize a trip to the gold plated toilet. It took 15 of them to ambush Khashoggi, well,
OK, 14 of them and a doctor to carry the electric bone-saw.
We need to sell them more equipment that they cannot use? It does not appear to me that any of the contracts that they promised
to DJT has been signed. Their technique is simple. Keep the hope of profit for the US alive as leverage.
Lastly, the chimera of a great Arab alliance (a la NATO) is delusory. The Saudis lack both the organizational ability for such
a thing and significant military power. They possess one of the world's largest static displays of military equipment. They have
neither the manpower nor the aptitude to use such equipment effectively. As I have written previously, the Gulf Arabs have long had
such an alliance. It is the GCC and it has never amounted to anything except a venue for the Arab delight in meetings and blather.
The basis for the desire for such an alliance is the Israeli strategic objective of isolating Iran and its allies; Syria, Hizbullah
and Hamas with an eventual hope of destroying the Iranian theocracy. Israel is frightened of a possible salvo of many thousands of
missiles and rockets into Israel from Lebanon as well as an eventual successful creation of a missile deliverable nuclear weapon
by the Iranians. These are real and credible threats for Israel, but not for FUKUS . Israel has only two really valuable counter-value
targets; Haifa and Tel Aviv. A hit on one or both with a nuclear weapon would be the end of Israel. The Israelis know that.
Adroit information operations carried out over generations by the Israeli government and its supporters have created in the collective
US mind an image of Iran as a disguised 3rd Reich. This was well done. The same operation was run against Iraq with magnificent results
from the POV of Israel
What happened here that all the neocons like Fred Hiatt and Sen. Lindsey Graham now want the blood of MBS? Jamal Kashoggi was
apparently a good pal of Osama and an insider who worked for Prince Turki al-Faisal both when he ran Saudi intelligence and when
he was in DC. My antenna is up when John Brennan starts writing op-eds. After all he was in Riyadh when Turki was the internal
security chief.
Does this have to do with our Deep State? Who may not be happy that MBS has by-passed them with a direct connection through
Jared?
We didn't do anything or demand anything when the Saudis sent terrorists to attack us on 9/11. What's changed now with the
murder of Jamal Kashoggi in Istanbul?
I'm with Jack. Don't get me wrong: I hate MBS as much as the next man, but I can't say I trust Erdogan or Bezos either. And these
days, whenever the WaPo tells me to zig, my instinct tells me to zag. At the very least, I would like to know more about what's
really going here before committing myself to one side or the other. Kashoggi, after all, was not just some random 'journalist'.
He had intimate contact with, and knowledge of, high-ranking personages in the KSA and beyond. He even knew Osama bin Laden! There
could be any number of parties out there in this world who have felt that he knew too much. It's just too early to jump to conclusions.
Over at Consortium News, Asad Abu Khalil, the 'Angry Arab', has up a good piece arguing that Kashoggi was no reformer. In fact,
up until extremely recently, he was doggedly loyal to the régime. As he puts it:
"Western media coverage of Khashoggi's career (by people who don't know Arabic) presents a picture far from reality. They portray
a courageous investigative journalist upsetting the Saudi regime. Nothing is further from the truth: there is no journalism in
Saudi Arabia; there is only crude and naked propaganda."
It is very unlikely that the people, who time and time again have been found to lack even a shred of human decency, compassion
and fairness, Brennan et al and I include WaPo in that, are now going gaga over the murder of a journo, who had strong links with
the power players in the region.
The way that these things have worked out in the media earlier, I think the order has come from higher up to push this incident
to damage either the relationship with SA or mbs. I think that keeping this incident hot has also kept the oil price high just
before the mid-term elections. surely, a higher oil price hurts trump. that might be a reason for the trump-hating crowd including
wapo to discover decency and fairness and other human virtues just right now. very intriguing, this reaction from the MSM.
I note that the British press is not pressing this issue as much, nor is Haaretz. Only the US MSM is pressing this very hard.
The US and the Brits before us have slavishly courted the Saudi Royals since before WWII. This is a constant through Republican
and Democratic administrations. The Trump administration is no exception. Why the murder of one journalist would challenge a half
century of established US policy at this time is beyond my understanding. Perhaps it's the proverbial straw that broke the camel's
back.
Someone from whose writings I have derived a great deal of instruction, as well as amusement, is Vladimir Golstein, a Russian
Jewish émigré now in charge of 'Slavic Studies' at Brown University.
I introduce his explanation of the response to the Khashoggi killing, in a 'Facebook' post, not because I think it should be
taken as some kind of authoritative truth, but because, as often, Golstein's irreverence is thought-provoking.
The post begins:
'Thank you, Saudi Arabia for exposing the utter hypocrisy and moral bankruptcy of British and American gangsta press and equally
gangsta establishment.
'You've been at it for a very long time. And it seems that finally you've got it right.'
After providing a long list of Saudi delinquencies, Golstein continues:
'I understand that you began to feel more and more desperate. You sided with Israel against Iran and Syria, and the rest
of the world said that it is a moral thing to do and put you on the UN human rights board.
'Well, finally, you hit the right cord. Killing innocent people and abusing your moneyed power by buying newspapers, hotels,
city districts or think tanks, was not enough to produce an outrage in the west, but when you whacked another cynical morally
corrupt journalist that proved too much for the cynical and morally corrupt western press. They decided to stand up for one
of their own.'
This does, I think, point to something rather important. And it leads to the thought that MBS and others may have miscalculated,
as a result of an 'hubris' which many in the West have actually encouraged – just as they have a parallel 'hubris' in Israel.
As Golstein, who has a great deal of complex history behind him, can see very clearly, it is an interesting question when
the 'sympathy' of Western 'liberals' is and is not actually felt.
What I think MBS may have missed is, quite precisely, the realisation that for people like Tom Friedman the fact that –
as Golstein is pointing out – Khashoggi is the same kind of animal as they are means that killing him touches them personally.
Second, he is the kind of figure whom they have, as it were, 'cast' in a 'starring role', in their 'narrative' as to how
somehow 'Saudi Barbaria' is going to 'modernise', and in so doing create a Middle East hospitable to a Jewish settler state.
So, in assassinating him, MBS may have unleashed a curious kind of psychological 'maelstrom.'
But, as well as hypocrisy, there is also a basic stupidity.
In fact, if one is reasonably 'worldlywise', one knows that people's sympathies, including one's own, are very often much more
limited than they profess to be. We commonly find it much easier to feel the griefs and pain of people whom we see as like ourselves,
than we do with those of others.
My own history, ironically, has been a move from finding it relatively easy to sympathise with people who write for the 'New
York Times', or the 'Guardian', or the 'New York Review of Books', to finding it really rather difficult.
There is also, however, about so many of these people, an element of sheer stupidity.
Whether one agrees, or disagrees, with 'deplorables' is relevant, but only partly so. Actually, people who would not appear
at the kind of 'party' which Jon Schwarz so aptly characterises have a very wide range of views, and I often agree in whole or
in part with such people, and also often disagree in whole or in part. It is not a simple matter.
A related but distinct question has to do with common prudence.
People who lock themselves in a kind of bubble of the supposedly 'enlightened' are not only doing the rest of us no favours,
but are inherently bound to head off in directions which are liable to be suicidal for themselves.
Prudent élites take the trouble at least to be aware that the world is not controllable by the comfortable people who appear
at their dinner parties, and realise that if they persist in trying to persuade themselves that it is, sooner or later their self-delusion
will blow up in their faces.
In relation to people like MBS, there is a double stupidity. The problem is not simply that he has been playing to their need
to believe that he wants to 'modernise' Saudi Arabia. It is also that they have wanted to believe that such a venture is possible,
which it almost certainly is not.
Yes, Vladimir Golstein has a point. The DC cocktail circuit have been offended as one of their fellow travelers has been offed.
If this will lead to a break with Saudi Barbaria that will be good. I'm cynical however. Brennan, et al just want their boy in
Riyadh not Jared's buddy.
Wait until it becomes clear that Israel in actuality negotiates her safety with Russia (it is ongoing as I type this)--that's
when the party will start in earnest.
"The US and the Brits before us have slavishly courted the Saudi Royals since before WWII."
TTG, as you are doubtless aware, it goes back even further, to early World War I. David Fromkin's seminal 1989 history, "A
Peace to End All Peace: The Fall of the Ottoman Empire and the Creation of the Modern Middle East (also subtitled Creating the
Modern Middle East, 1914–1922)":
https://en.wikipedia.org/wi... describes the machinations by British, French, and (later) Americans to play the competing
desert chieftains against each other, alternately catering to and dumping unceremoniously each one as political necessity dictated.
Recommended to readers wishing to further appreciate the roots of the irresolvable turmoil that is the modern Middle East.
Yes, there's clearly more than meets the eye. I agree with Jack that when Brennan is writing an op-ed calling for the head
of MbS something fishy is up. Kashoggi has had a long career at the heart of Saudi national security power structures. He's no
angel. Clearly he touched a nerve to be murdered so openly with no plausible deniability. Or maybe that was intentional. Then....the
reaction of the Deep State. Hmm?
Please don't get me wrong. Saudi Barbaria has been a corrupting influence for decades and the role they have played in
Syria, Libya is not to be condoned. I fully support walking away from our interventionist position in the Middle East and letting
the chips fall there. However, I have a deep distrust of Brennan and his motives. I can't put my finger on why the neocons are
reacting in this way in light of their previous attitude of ignoring such atrocities or even abetting them. This is raising suspicions.
The evidence I see is that a Saudi citizen who used to be a "regime insider" with high level connections and aligned with the
previous head of Saudi intelligence was brutally murdered by Saudi government officials. Turkey leaked this information and in
the leaks claim they have audio and video evidence of the murder. John Brennan and other neocons who previously have not only
supported but also connived in some of the atrocities committed by the Saudi government are demanding that MbS be held to account.
The question that is nagging me is why are the neocons reacting this way now, considering they have always carried water for
the Saudi royals when real dissidents have been routinely executed after show trials?
for example, how did Turks get the audio and possibly video of the deed, the transmission by Apple watch story may be just a red
herring, they may have independent sources and methods which the US is not privy to the word ´their´ in my remark intended to
say ´Turks´. Sorry about the unclear sentence.
I thought you Germans were supposed to be smart. You don't understand that MIT, the Turkish intelligence service had bugged the
consulate? What part of that do you not understand? Go get some strudel and think about it!
hahaha, I will eat it, BUT - if that is such a common knowledge that host states always bug the guest embassies and consulates,
that would mean that Saudis would have to assume that as well, so that they would make sure that these devices were ´blinded´,
and that would mean that there were other devices which they were not able to ´blind´. Just deep thinking, is that also German
trait?
Sounds like Klarity, a German trait. The Saudis probably lacked the skill to find the Turkish bugs. MIT, the Turkish service are
very skilled at installation.
Maybe this new surprising "moral" attitude has something to do with the mid-terms elections. Yes Saudi Arabia is a kind of traditional
commodity platform and surely not an Ally, but DJT did enhance the Saudis status as Partners in his projected Deal of the Century
(still not published).
The Khasoghi murder has become the DJT problem and while raising his expression for the outrage has also
opened the exit door, and provided a possibility to dilute MBS direct responsibility. Of interest is the Erdogan careful but repeated
supply of details.
What 'terrorists' attacked on 911...?...nobody knows what exactly happened on that day, and who was involved...except that the
official narrative is total BS...
Yes, one could lump me under the dismissive and unflattering epithet of 'truther'...after looking into some of the physical aspects
of the matter, the narrative is impossible on grounds of physics...that is not to say I am speculating on who or even the how...which
is where we see a lot of tinfoil hat stuff...but I have a solid engineering and aviation background...it could not have happened
the way we are told...
The President has authority under the Global Magnitsky Act to impose sanctions against
anyone who has committed a human rights violation. Congress has already requested a HR
investigation which Trump must act on and report to them within 4 months
It appears my prediction of Saudi gate may be right. This potentially is good news for
Iran and Russia. Perhaps not so good for Trump and Saidis. Israel may not be happy. Perhaps
his wife's plane troubles were a warning shot to remind him who is boss. Who knows ?
Haleys resignation beginning to make sense now. The House of Trump and House of Saud may
soon fall, and Bibi wont be happy losing Trump and MBS. We all know what they are capable of
to get things back on track
Why did the media held back on this so for so long?
Yemen (and Gaza).
CGTN & Al-Jazeera are the only global news outlets consistently and regularly reporting on the US facilitated
genocides in Yemen and Jewish-occupied Palestine/Gaza.
The never-ending Khashoggi non-mystery mystery keeps Yemen & Gaza out of the Jew-controlled Western Media
headlines. Saudi Barbaria and "Israel" are natural allies because each of them is an artificial Western political
construct with a cowardly and incompetent military apparatus and an anti-heroic penchant for slaughtering undefended
civilians - for psychopathic reasons.
--------
Talking about psychopathy...
Oz's Christian Zionist PM, Sco Mo, is blathering about following Trump's lead and moving Oz's Embassy in "Israel" to
Jerusalem. Sc Mo, who has never had an original idea in his life, still hasn't woken up to the fact that Trump's
Jerusalem gambit was a trap for Bibi. So it's hilarious that Sco Mo The Unoriginal, is planning to take a flying
leap into the same trap!
Anyone with more than half a brain would realise that...
1. No civilised country has followed Trump's lead.
2. Trump can, and will, reverse his (illegal) Jerusalem decision out of a 'new-found respect' for International Law.
Posted by: Hoarsewhisperer | Oct 18, 2018 12:14:08 AM |
83
Whoever is ultimately behind this campaign (which I
suspect is a loose association of interest groups spread throughout SA, Turkey, London citi, wall street, whoever)
they will not stop until MbS is paraded through the streets in chains or at least his head at the end of a lance. At
this point the only question how many days will it take to see his head on a pike?
"Their target that night: Anssaf Ali Mayo, the local leader of the Islamist
political party Al-Islah. The UAE considers Al-Islah to be the Yemeni branch of the worldwide Muslim Brotherhood,
which the UAE calls a terrorist organization. Many experts insist that Al-Islah, one of whose members won the Nobel
Peace Prize, is no terror group. They say it's a legitimate political party that threatens the UAE not through
violence but by speaking out against its ambitions in Yemen."
Getting to the bottom of the Jamal Khashoggi disappearance is a bit like peeling an onion.
It is known that Khashoggi entered the Saudi Arabian Consulate in Istanbul on October 2
nd to get a document that would enable him to marry a Turkish woman. It is also
known, from surveillance cameras situated outside the building, that he never came out walking
the same way he entered. The presumption is that he was either killed inside or abducted,
though the abduction theory would have to be based on a Consulate vehicle leaving the building
with him presumably concealed inside, something that has not been confirmed by the Turks. If he
was killed inside the building and dismembered, as seems likely, he could have had his body
parts removed in the suitcases carried by the alleged fifteen official Saudis who had arrived
that morning by private jet and left that afternoon the same way. The supposition is that the
fifteen men, which may have included some members of Crown Prince Muhammad bin Salman's
bodyguard as well as a physician skilled in autopsies who was carrying a bone saw, constituted
the execution party for Khashoggi.
There are certain things that should be observed about the Turks, since they are the ones
claiming that the disappearance of Khashoggi may have included a summary execution and
dismemberment. The Turkish intelligence service, known by its acronym MIT, is very good, very
active and very focused on monitoring the activities of foreign embassies and their employees
throughout Turkey. They use electronic surveillance and, if the foreign mission has local
employees, many of those individuals will be agents reporting to the Turkish government. In my
own experience when I was in Istanbul, I had microphones concealed in various places in my
residence and both my office and home phones were tapped. A number of local hire consulate
employees were believed to be informants for MIT but they were not allowed anywhere near
sensitive information.
As Turkey and Saudi Arabia might be termed rivals if not something stronger, it is to be
presumed that MIT had the Consulate General building covered with both cameras and microphones,
possibly inside the building as well as outside, and may have had a Turkish employer inside who
observed some of what was going on. Which is to say that the Turks certainly know exactly what
occurred but are playing their cards closely to see what they can derive from that knowledge.
The two countries have already initiated a joint investigation into what took place. Turkey's
economy is in free fall and would benefit from "investment" from the Saudis to create an
incentive to close the book on Khashoggi. In other words, Turkey's perspective on the
disappearance could easily be influenced by Saudi money and the investigation might well turn
up nothing that is definitive.
Saudi Arabia, for its part, has a couple of cards to play also even if it did kill and
dismember Khashoggi under orders from the Crown Prince. First of all, the system of
petrodollars, which basically requires nearly all purchases of petroleum to be paid in dollars,
is underwritten by the Saudis. Petrodollars in turn enable the United States to print money for
which there is no backing knowing that there will always be international demand for dollars to
buy oil. The Saudis, who also use their own petrodollars to buy U.S. treasury bonds, could pull
the plug on that arrangement. That all means that the United States will be looking for an
outcome that will not do too much damage to the Saudis.
Second, Saudi Arabia is in bed with Israel in opposition to Iran. This means the Israel
Lobby and its many friends in Congress will squawk loudly about Khashoggi but ultimately shy
away from doing anything about it. It already appears that a cover story is halfway in place to
explain what happened. It is being suggested that a "rogue" element from Saudi Arabia might
have carried out without the knowledge of the Crown Prince an interrogation or abduction
attempt that went too far. Donald Trump speculated on Monday that that might be the case,
suggesting that it may already be part of the official line that will be promoted. Those who
know Saudi Arabia well, however, consider a high-level assassination not ordered by the Crown
Prince directly to be extremely unlikely, but that does not necessarily mean that a cover story
including that feature might not be successfully floated.
In regional terms, Saudi Arabia is also key to Trump's anticipated Middle East peace plan.
If it pulls out from the expected financial guarantees aspect, the plan will fall apart. Riyadh
is also committed to buy tens of billions of dollars' worth of American arms, an agreement that
could be canceled if Washington begins to pressure the Saudis for answers. Beyond that, Saudi
Arabia could stop pumping oil or fail to increase production when Iranian oil becomes subject
to U.S. sanctions early next month, driving the price per barrel up dramatically for everyone.
The Saudi government has already indicated that it will respond forcefully to any attempts to
punish it over Khashoggi and there is no reason to doubt the seriousness of that threat.
There are, of course, possible impediments to selling the fake news narrative. Some early
reports suggested that Khashoggi's fiancé had observed and possibly recorded the
execution inside the consulate using the victim's Apple wristwatch linked to an iPad in her
possession. If that is true, the release of such material to the media will create worldwide
demand to learn the truth that will be difficult to control. Also, there are unconfirmed
reports that U.S. intelligence knew in advance of Saudi plans to abduct Khashoggi, which could
prove embarrassing to the Trump administration and could narrow its options.
The trick will be to see how a bit of extreme brutal behavior by the Saudis can be
manipulated by all interested parties to produce a solution that doesn't damage anyone too
much. It will undoubtedly be far from the truth, but truth doesn't necessarily matter much
these days.
The macabre case of missing journalist Jamal Khashoggi raises the question: did Saudi rulers
fear him revealing highly damaging information on their secret dealings? In particular,
possible involvement in the 9/11 terror attacks on New York in 2001.
Even more intriguing are US media
reports now emerging that American intelligence had snooped on and were aware of Saudi
officials making plans to capture Khashoggi prior to his apparent disappearance at the Saudi
consulate in Istanbul last week. If the Americans knew the journalist's life was in danger, why
didn't they tip him off to avoid his doom?
Jamal Khashoggi (59) had gone rogue, from the Saudi elite's point of view. Formerly a senior
editor in Saudi state media and an advisor to the royal court, he was imminently connected and
versed in House of Saud affairs. As one commentator cryptically put it: "He knew where all the
bodies were buried."
For the past year, Khashoggi went into self-imposed exile, taking up residence in the US,
where he began writing opinion columns for the Washington Post.
Khashoggi's articles appeared to be taking on increasingly critical tone against the heir to
the Saudi throne, Crown Prince Mohammed bin Salman. The 33-year-old Crown Prince, or MbS as
he's known, is de facto ruler of the oil-rich kingdom, in place of his aging father, King
Salman.
While Western media and several leaders, such as Presidents Trump and Macron, have been
indulging MbS as "a reformer", Khashoggi was spoiling this Saudi public relations effort by
criticizing the war in Yemen, the blockade on Qatar and the crackdown on Saudi critics back
home.
However, what may have caused the Saudi royals more concern was what Khashoggi knew about
darker, dirtier matters. And not just the Saudis, but American deep state actors as as
well.
He was formerly a
media aide to Prince Turki al Faisal, who is an eminence gris figure in Saudi intelligence,
with its systematic relations to American and British counterparts. Prince Turki's father,
Faisal, was formerly the king of Saudi Arabia until his assassination in 1975 by a family
rival. Faisal was a half-brother of the present king, Salman, and therefore Prince Turki is a
cousin of the Crown Prince – albeit at 73 more than twice his age.
For nearly 23 years, from 1977 to 2001, Prince Turki was the director of the Mukhabarat, the
Saudi state intelligence apparatus. He was instrumental in Saudi, American and British
organization of the mujahideen fighters in Afghanistan to combat Soviet forces. Those militants
in Afghanistan later evolved into the al Qaeda terror network, which has served as a cat's paw
in various US proxy wars across the Middle East, North Africa and Central Asia, including
Russia's backyard in the Caucasus.
Ten days before the 9/11 terror attacks on New York City, in which some 3,000 Americans
died, Prince Turki retired from his post as
head of Saudi intelligence. It was an abrupt departure, well before his tenure was due to
expire.
There has previously been speculation in US
media that this senior Saudi figure knew in advance that something major was going down on
9/11. At least 15 of the 19 Arabs who allegedly hijacked three commercial airplanes that day
were Saudi nationals.
Prince Turki has subsequently been named in a 2002 lawsuit mounted by families of 9/11
victims. There is little suggestion he was wittingly involved in organizing the terror plot.
Later public comments indicated that Prince Turki was horrified by the atrocity. But the
question is: did he know of the impending incident, and did he alert US intelligence, which
then did not take appropriate action to prevent it?
Jamal Khashoggi had long served as a trusted media advisor to Prince Turki, before the
latter resigned from public office in 2007. Following 9/11, Turki was the Saudi ambassador to
both the US and Britain.
A tentative idea here is that Khashoggi, in his close dealings with Prince Turki over the
years, may have gleaned highly sensitive inside information on what actually happened on 9/11.
Were the Arab hijackers mere patsies used by the American CIA to facilitate an event which has
since been used by American military planners to launch a global "war on terror" as a cover for
illegal wars overseas? There is a huge body of evidence that the 9/11 attacks were indeed a
"false flag" event orchestrated by the US deep state as a pretext for its imperialist
rampages.
The apparent abduction and murder last week of Jamal Khashoggi seems such an astoundingly
desperate move by the Saudi rulers. More evidence is emerging from Turkish
sources that the journalist was indeed lured to the consulate in Istanbul where he was
killed by a 15-member hit squad. Reports are saying that the alleged assassination was ordered
at the highest level of the Saudi royal court, which implicates Crown Prince MbS.
Why would the Saudi rulers order such a heinous act, which would inevitably lead to acute
political problems, as we are seeing in the fallout from governments and media coverage around
the world?
Over the past year, the House of Saud had been appealing to Khashoggi to return to Riyadh
and resume his services as a media advisor to the royal court. He declined, fearing that
something more sinister was afoot. When Khashoggi turned up in Istanbul to collect a divorce
document from the Saudi consulate on September 28, it appears that the House of Saud decided to
nab him. He was told to return to the consulate on October 2. On that same day, the 15-member
group arrived from Riyadh on two private Gulfstream jets for the mission to kill him.
Official Saudi claims stretch credulity. They say Khashoggi left the consulate building
unharmed by a backdoor, although they won't provide CCTV images to prove that. The Turks say
their own CCTV facilities monitoring the front and back of the Saudi consulate show that
Khashoggi did not leave the premises. The Turks seem confident of their claim he was murdered
inside the building, his remains dismembered and removed in diplomatic vehicles. The two
private jets left the same day from Istanbul with the 15 Saudis onboard to return to Riyadh,
via Cairo and Dubai.
To carry out such a reckless act, the Saudis must have been alarmed by Khashoggi's critical
commentaries appearing in the Washington Post. The columns appeared to be delivering more and
more damaging insights into the regime under Crown Prince MbS.
The Washington Post this week is
reporting that US intelligence sources knew from telecom intercepts that the Saudis were
planning to abduct Khashoggi. That implicates the House of Saud in a dastardly premeditated act
of murder.
But furthermore this same disclosure could also, unwittingly, implicate US intelligence. If
the latter knew of a malicious intent towards Khashoggi, why didn't US agents warn him about
going to the Saudi consulate in Istanbul? Surely, he could have obtained the same personal
documents from the Saudi embassy in Washington DC, a country where he was residing and would
have been safer.
Jamal Khashoggi may have known too many dark secrets about US and Saudi intel collusion,
primarily related to the 9/11 terror incidents. And with his increasing volubility as a
critical journalist in a prominent American news outlet, it may have been time to silence him.
The Saudis as hitmen, the American CIA as facilitators.
"... He is just an agent of one Saudii faction against the MBS faction, a faction just as evil. ..."
"... After Lebanese prime minister, Saad Hariri, was kidnapped and taken to Riyadh to be re-educated (tortured) Khashoggi left Saudi Arabia . Khashoggi continued with his columns criticizing the Saudi regime, attacking its campaign in Yemen on Al Jazeera. ..."
According to an article in the Duran Khashoggi was an agent in the employ of Riyadh and
the CIA during the Soviet presence in Afghanistan.
Turki bin Faisal Al-Saud was Khashoggi's political protector. Turki bin Faisal Al-Saud was
at the center of relations between Washington and Saudi Arabia against the USSR while it was
in Afghanistan using fighters who later became known as Al Qaeda - armed and trained by
CIA:Pakistan and financed by the Saudis.
Faisal became the leader of Saudi intelligence. He was removed from his post on May 24,
2001, a few months before September 11, 2001 (convenient) .The connections he had with Osama
bin Laden led him to being sued by relatives of 9/11 directed at him and other Saudi
operatives.
In 2005, Turki bin Faisal was appointed Saudi ambassador to the US during the Bush
administration, with Khashoggi accompanying him as a media advisor. During Turki bin Faisal's
ambassadorship in Washington, Khashoggi assumed the position of head of press relations,
coming into direct contact with major national and international organs of US media.
During the Obama administration, Khashoggi supported the Obama administrations strategy of
color revolutions and the Arab Spring to extend US imperialist domination following the
disasters of Iraq and Afghanistan. He was most likely a CIA asset, perhaps also Saudi
intelligence as well
When MBS became the strongman holding power in Saudi Arabia, he triggered a near war with
Qatar with Trumps blessing, and was unhappy over the role of Al Jazeera, which often hosted
Khashoggi and was increasingly critical of MBS.
So whatever the story is I am not losing any sleep over Khashoggi. He is just an agent
of one Saudii faction against the MBS faction, a faction just as evil. Kind of like the
pick between agents of the 2 factions duking it out in the US. Evil does vs Evil do. There
are no white knights here.
After Lebanese prime minister, Saad Hariri, was kidnapped and taken to Riyadh to be
re-educated (tortured) Khashoggi left Saudi Arabia . Khashoggi continued with his columns
criticizing the Saudi regime, attacking its campaign in Yemen on Al Jazeera.
What hypocrisy on display by the US. Unfuckingbelievable. Such concern for a journalist, such
outrage!
There is currently a case working its way through the court system (here in the US)
brought by two journalists, one of them an American, where they are pleading to have their
names removed from the US "kill list". They say their inclusion on the list is erroneous, and
ask that they be given a chance to show that they are not, in fact, terrorists before a drone
blows them into pieces. They are represented by Reprieve lawyers, and they joined their two
suits together as co-plainiffs, although it now appears that the foreign-born journalist was
basically told by the judge he was shit out of luck, having "no standing", since he didn't
sufficiently prove that he was on the list. (He had found his name listed as a "highest
scoring target" on some of Edward Snowden's leaked NSA materials, but that was not enough
"proof" for the judge.)
The American journalist is Bilal Kareem, and the other is a journalist from Pakistan named
Ahmad Zaidan. BTW, both these men were originally targeted under the Obama administration,
but their names remain on the list under Trump. And Trump has increased the use of these
targeted drone killings by 4 to 5 times the number of Obama's, who himself had increased the
assassination program 10 fold over Bush' numbers. Trump has also loosened the "rules" about
where these drone killings can take place, and who can be targeted. US drone warfare has
taken the lives of some 10,858 individuals since 2004, according to the Bureau of
Investigative Journalism (TBIJ).
The Washington Post and the Middle East Monitor both have good stories about the case, but
the best article by far is Matt Taibbi's article in Rolling Stone published on 19 July.
According to
NYT , Khashoggi "had expressed concern to a friend on Monday that he could be
kidnapped and returned to Saudi Arabia if he visited the consulate". He went in at
1:30pm , while his friend and fiancée were waiting outside till 9:00pm .
Isn't it a bit odd that his friend and fiancée, while fully aware the danger of him
being kidnapped insider the consulate, waited for 7:30 hours before alerting Turkish
authorities? Normally it takes 2 or 3 hours get a document, esp. already processed ones.
Why didn't his friend and fiancée alert the Turkish police earlier? Esp. "he
left his cellphone outside with Hatice, who had instructions to alert his friends if Mr.
Khashoggi did not return".
Mr. Khashoggi's wife had remained in Saudi Arabia while he was no longer able to return
freely. Their separation had led to a divorce, and he wanted to remarry to a Turkish woman.
Normally, you don't divorce your wife/husband because of one-year's separation. According
to this NYT article, Khashogg divided his time between the Washington, D.C., London and
Istanbul, how long did he come to know his fiancée? Isn't it a bit too
rush/risky for a 59-year old man suddenly decided to divorce long-year wife and marry a new
Turkish girl friend? Could it be a honey trap?
" Odd dates ?"
- Oct. 2, Khashoggi disappeared.
- Oct. 3, Trump told his supporters that Saudi could last two weeks without American
support.
- Oct. 6, MbS said Suadi could survive 2000 years without US help .
- Now full-blown MSM storm, State Deparment is closely monitor the whole affair, Turkish
government is feeding the media with all sorts of lurid details and claims. (Isn't it much
easier and simpler just to kidnap/shot him on the streets of Istanbul or London than
dismembering his body inside Istanbul consulate?)
Now Saudi is "willing to cooperate" with Turkey, American priest Brauson is set free, plus
MbS now has probably to purchase tens of billions, if not hundreds of billions of US
armaments. What a "coincident" win-win situation for Erdy and Trump.
As another poster commented, something is missing...
It is like a well choreograhped drame, Skripals were the same, this also is tooooo nice
fitting together... Hmfr!
Qui bono? Who makes money on this? I certainly cannot answer that, but lets play safe : The
Russians did it!
They beamed up Kasshoggi to their base on the dark side of the moon, the re killed him in
civilized manner, fucking him to death with nice looking whores and spoonfeeding him Beluga
caviar and interjected wit sips of Russian Starka. He was then made to mush and beamed back
into the Saudi consulate making a real mess. Now poor headchop promoter is all over the
place! He must love that up in his muslum heaven with 72 old hags. There is no martyrdom in
being beamed to the moon and put through a garden shredder, that is nothing special.
So now the Saudi's has Khassoggi al over their faces (literally :)) and the Turks eye a new
way to betray someone (Putin, wake up!!). Ever since democracy was bestowed on these people,
they have made a mess of it.
Back in the day (when I was gung ho Army boy), it was OK for a Turk officer to shoot dead a
couple of conscripts a year, no problemo, the sentries with weapons had no live rounds hi-hi.
Turkey does not need a hard shove and it will crumble, and the Americans will intervene,
unless Russia is first.
This game is about Turkey, and not goat herders in Saudi Sodoma. They have hardly oil left
and the plebs are angry.
I think Dennis said some time ago that Saudi's 266 billion barrels of reserves that they
claim was perhaps when they raised P2 reserves to P1 reserves.
Naaaa, that's not where they got it. They still claim 403 billion barrels of P2 reserves
and 802 billion barrels of P3 reserves. And that 802 billion barrels will soon be increased
to 900 billion barrels via enhanced recovery techniques.
This is a good article if you need a good belly laugh today. It is brought to you on the
opinion page of Arab News. Arab News is a Saudi Publication just in case anyone is
wondering. I used to get it in hard copy, free, courtesy of ARAMCO, when I was there.
Saudi Aramco, according to its own records, has about 802.2 billion barrels of oil
resources, including about 261 billion barrels of proven reserves; 403.1 billion of probable,
possible and contingent reserves. The company has produced up to 138 billion barrels of oil
to date out of the 802.2 billion barrels.
It plans to raise oil resources to 900 billion barrels from the 802.2 billion over the
long term as its also plans to increase recovery rate of reserves to 70 percent from the
current 50 percent.
P.S. When I was in Saudi they had a word for this kind of thing. They called it
wasta . Wasta means "deliberate exaggeration" as a way of dialogue. That's just the
way they talk. They don't believe they are lying. They really expect you to know they are
just exaggerating. They don't expect you to take it literally.
Saudi Aramco, apparently there was an audit of their reserves in preparation for the Aramco
IPO. It says Baker Hughes was involved???
2018-04-29 DUBAI/LONDON (Reuters) – An audit of Saudi Aramco's oil reserves – an
essential part of the preparatory work for its planned initial public offering – has
found the state oil giant to have higher reserves than it previously reported, sources familiar
with the matter told Reuters.
Two sources, speaking on condition of anonymity, said the independent external audit has
found the proven oil reserves to be at least 270 billion barrels, which is slightly higher than
the 260.8 billion barrels the company reported in its 2016 annual review.
Dallas-based DeGolyer and MacNaughton, and Gaffney, Cline and Associates, part of Baker
Hughes, are involved in the auditing, sources have said.
Did they pay for the audit? I've found that audits often show the results the customer is
looking for. Its not quite a science. More like a combination of fishing and editing.
"In no way should these results be construed as a true representation of the 'real' ."
au·dit
NOUN
an official inspection of an individual's or organization's accounts, typically by an
independent body.
VERB
conduct an official financial examination of (an individual's or organization's
accounts).
"companies must have their accounts audited"
They audited their books! I have no doubt that they found exactly what Saudi had on
their books. But that is likely to bear no resemblance to what field reserves actually are.
At any rate, it is entirely possible that Saudi could have doctored their books in
anticipation of the audit.
How would one go about actually checking the remaining reserves in Ghawar? Or any of the
other Saudi fields?
Dipstick??🤡 Seriously, they are both oil consulting companies. Hardly an audit.
Just high priced consultants. Key phrase is high priced. Nobody is going to jerk their
consulting license if they accept the high price, and give SA what they want. If SA runs out
of oil tomorrow, the worst that could happen is the companies say, whoops, missed that
one.
This is ,of course, hypothesis by Eric Zuesse, and the idea that the USA elite decided to
abandon EU elite is somewhat questionable, but some of his consideration are interesting...
Notable quotes:
"... Yeah, its the defense contractors. It has nothing to do with the zillions of cars that clog every fucking freeway in this country every morning and every evening, 7 days a week. Its not the assholes cruising around in monster trucks alone, just to show off their stupid trucks. It has nothing to do with the the zillions of jets screaming through the skies carry all those fat assholes to meetings all over the world for no reason. It has nothing to do with the billions of barrels of oil that come to the US on tankers as long as city blocks filled constantly day and night. ..."
The following is entirely from open online sources that I have been finding to be
trustworthy on these matters in the past. These sources will be linked-to here; none of this
information is secret, even though some details in my resulting analysis of it will be entirely
new.
It explains how and why the bottom-line difference between Donald Trump and Barack Obama,
regarding US national security policies, turns out to be their different respective estimations
of the biggest danger threatening the maintenance of the US dollar as the world's leading or
reserve currency. This has been the overriding foreign-policy concern for both Presidents .
Obama placed as being the top threat to the dollar, a breakaway of the EU (America's largest
market both for exports and for imports) from alliance with the United States. He was
internationally a Europhile. Trump, however, places as being the top threat to the dollar, a
breakaway of Saudi Arabia and of the other Gulf Arab oil monarchies from the U.S. Trump is
internationally a Sunni-phile: specifically a protector of fundamentalist Sunni monarchs -- but
especially of the Sauds themselves --
and they hate Shia and especially the
main Shia nation, Iran .
Here's how that change, to Saudi Arabia as being America's main ally, has happened --
actually it's a culmination of decades. Trump is merely the latest part of that process of
change. Here is from the US State Department's official
historian , regarding this history:
By the 1960s, a surplus of US dollars caused by foreign aid, military spending, and
foreign investment threatened this system [the FDR-established 1944 Bretton Woods gold-based US dollar as
the world's reserve currency ], as the United States did not have enough gold to cover
the volume of dollars in worldwide circulation at the rate of $35 per ounce; as a result, the
dollar was overvalued. Presidents John F. Kennedy and Lyndon B. Johnson adopted a series of
measures to support the dollar and sustain Bretton Woods: foreign investment disincentives;
restrictions on foreign lending; efforts to stem the official outflow of dollars;
international monetary reform; and cooperation with other countries. Nothing worked.
Meanwhile, traders in foreign exchange markets, believing that the dollar's overvaluation
would one day compel the US government to devalue it, proved increasingly inclined to sell
dollars. This resulted in periodic runs on the dollar.
It was just such a run on the dollar, along with mounting evidence that the overvalued
dollar was undermining the nation's foreign trading position, which prompted President
Richard M. Nixon to act, on August 13, 1971 [to end the convertibility of dollars to
gold].
When Nixon ended
the gold-basis of the dollar and then in 1974 secretly switched to the current oil-basis,
this transformation of the dollar's backing, from gold to oil, was intended to enable the
debt-financing (as opposed to the tax-financing, which is less acceptable to voters) of
whatever military expenditure would be necessary in order to satisfy the profit-needs of
Lockheed Corporation and of the other US manufacturers whose only markets are the US Government
and its allied governments, as well as of US extractive industries such as oil and mining
firms, which rely heavily upon access to foreign natural resources, as well as of Wall Street
and its need for selling debt and keeping interest-rates down (and stock-prices -- and
therefore aristocrats' wealth -- high and rtising).
This new system didn't only supply a constant flow of Saudi tax-money to the US Government;
it supplied a constant flow of new sales-orders and profits to the military firms that were
increasingly coming to control the US Government -- for the benefit of both aristocracies: the
Sauds, and America's billionaires.
That was near the end of the FDR-produced 37-year period of US democratic leadership of the
world, the era that had started at Bretton Woods in 1944. It came crashing to an end not in
1974 (which was step two after the 1971 step one had ended the 1944 system) but on the day when
Ronald Reagan entered the White House in 1981. The shockingly sudden ascent, from that moment
on, of US federal Government debt (to be paid-off by future generations instead of by current
taxpayers) is shown, right here, in a graph
of "US Federal Debt as Percent of GDP, 1940-2015" , where you can see that the debt had
peaked above 90% of GDP late in WW II between 1944-1948 , and then plunged during Bretton
Woods, but in 1981 it started ascending yet again, until reaching that WW II peak for a second
time, as it has been ever since 2010 , when Obama bailed-out the mega-banks and their
mega-clients, but didn't bail out the American public, whose finances had been destroyed by
those banksters' frauds, which Obama refused to prosecute; and, so, economic inequality in
America got even more extreme after the 2008 George W. Bush crash, instead of less extreme
afterward (as had always happened in the past).
Above 90% debt/GDP during and immediately following WW II was sound policy, but America's
going again above 90% since 2010 has reflected simply an aristocratic heist of America, for
only the aristocracy's benefit -- all of the benefits going only to the super-rich.
Another, and
more-current US graph shows that, as of the first quarter of 2018, this percentage
(debt/GDP) is, yet again, back now to its previous all-time record high of 105-120%%, which had
been reached only in 1945-1947 (when it was justified by the war).
But can the US Government's extreme misallocation of wealth, from the public to the
insiders, continue without turning this country into a much bigger version of today's Greece?
More and more people around the world are worrying about that. Of course, Greece didn't have
the world's reserve currency, but what would happen to the net worths of America's billionaires
if billionaires worldwide were to lose faith in the dollar? Consequently, there's intensified
Presidential worrying about how much longer foreign investors will continue to trust the
oil-based dollar.
America's political class now have two competing ideas to deal with this danger , Obama's
versus Trump's, both being about how to preserve the dollar in a way that best serves the needs
of 'defense' contractors, extractive firms, and Wall Street. Obama chose Europe (America's
largest market) as America's chief ally (he was Euro-centric against Russia); Trump chose the
owner of Saudi Arabia (he's Saudi-Israeli centric against Iran) -- that's the world's largest
weapons-purchaser, as well as the world's largest producer of oil (as well as the largest
lobbies) .
The Saudi King owns Saudi Arabia, including the world's largest and most valuable oil
company, Aramco, whose oil is the "sweetest" -- the least expensive to extract and refine --
and is also the most abundant, in all of the world, and so he can sell petroleum at a profit
even when his competitors cannot. Oil-prices that are so low as to cause economic losses for
other oil companies, can still be generating profits -- albeit lowered ones -- for King Saud;
and this is the reason why his decisions determine how much the global oil-spigot will be
turned on, and how low the global oil-price will be, at any given time. He controls the value
of the US dollar. He controls it far more directly, and far more effectively, than the EU can.
It would be like, under the old FDR-era Bretton Woods system, controlling the exchange-rates of
the dollar, by raising or lowering the amount of gold produced. But this is liquid gold, and
King Saud determines its price.
Furthermore, King Saud also leads the Gulf Cooperation Council of all other Arab oil
monarchs, such as those who own UAE -- all of them are likewise US allies and major
weapons-buyers.
In an extraordinarily fine recent article by Pepe Escobar at Asia Times, "Oil
and gas geopolitics: no shelter from the storm" , he quotes from his not-for-attribution
interviews with "EU diplomats," and reports:
After the Trump administration's unilateral pull-out from the Iran nuclear deal, known as
the Joint Comprehensive Plan of Action (JCPOA), European Union diplomats in Brussels, off the
record, and still in shock, admit that they blundered by not "configuring the eurozone as
distinct and separate to the dollar hegemony". Now they may be made to pay the price of their
impotence via their "outlawed" trade with Iran.
As admitted, never on the record, by experts in Brussels; the EU has got to reevaluate its
strategic alliance with an essentially energy independent US, as "we are risking all our
energy resources over their Halford Mackinder geopolitical analysis that they must break up
[the alliance between] Russia and China."
That's a direct reference to the late Mackinder epigone Zbigniew "Grand Chessboard"
Brzezinski, who died dreaming of turning China against Russia.
In Brussels, there's increased recognition that US pressure on Iran, Russia and China is
out of geopolitical fear the entire Eurasian land mass, organized as a super-trading bloc via
the Belt and Road Initiative (BRI), the Eurasia Economic Union (EAEU), the Shanghai
Cooperation Organization (SCO), [and] the Asia Infrastructure Investment Bank (AIIB), is
slipping away from Washington's influence.
This analysis gets closer to how the three key nodes of 21st century Eurasia integration
-- Russia, China and Iran -- have identified the key issue; both the euro and the yuan must
bypass the petrodollar, the ideal means, as the Chinese stress, to "end the oscillation
between strong and weak dollar cycles, which has been so profitable for US financial
institutions, but lethal to emerging markets."
It's also no secret among Persian Gulf traders that in the -- hopefully unlikely -- event
of a US-Saudi-Israeli war in Southwest Asia against Iran, a real scenario war-gamed by the
Pentagon would be "the destruction of oil wells in the GCC [Gulf Cooperation Council]. The
Strait of Hormuz does not have to be blocked, as destroying the oil wells would be far more
effective."
And what the potential loss of over 20% of the world's oil supply would mean is
terrifying; the implosion, with unforeseen consequences, of the quadrillion derivatives
pyramid, and consequentially [consequently] of the entire Western financial casino
superstructure.
In other words: it's not the 'threat' that perhaps, some day, Iran will have nuclear
warheads, that is actually driving Trump's concern here (despite what Israel's concerns are
about that matter), but instead, it is his concerns about Iran's missiles, which constitute the
delivery-system for any Iranian warheads: that their flight-range be short enough so that the Sauds will be
outside their range . (The main way Iran intends to respond to an invasion backed by the
US, is to attack Saudi Arabia -- Iran's leaders know that the US Government is more dependent
upon the Sauds than upon Israel -- so, Iran's top targets would be Saudi capital Riyadh, and
also the Ghawar oil field, which holds over half of Saudi oil. If US bases have been used in
the invasion, then all US bases in the Middle East are also be within the range
of Iran's missiles and therefore would also probably be targeted.)
Obama's deal with Iran had focused solely upon preventing Iran from developing nuclear
warheads -- which Obama perhaps thought (mistakenly) would dampen Israel's (and its billionaire
US financial backers') ardor for the US to conquer Iran. Israel had publicly said that their
concern was Iran's possibility to become a nuclear power like Israel became; those possible
future warheads were supposed to be the issue; but, apparently, that wasn't actually the issue
which really drove Israel. Obama seems to have thought that it was, but it wasn't, actually.
Israel, like the Sauds, want Iran conquered. Simple. The nuclear matter was more an excuse than
an explanation.
With Trump now in the White House, overwhelmingly by money from the Israel lobbies (proxies
also for the Sauds) -- and with no equivalently organized Jewish opposition to the pro -Israel
lobbies (and so in the United States, for a person to be anti-Israel is viewed as being
anti-Semitic, which is not at all true, but Israel's lies say it's true and many Americans
unfortunately believe it) -- Trump has not only the Sauds and their allies requiring him to be
against Iran and its allies, but he has also got this pressure coming from Israel: both the
Big-Oil and the Jewish lobbies drive him. Unlike Obama, who wasn't as indebted to the Jewish
lobbies, Trump needs to walk the plank for both the Sauds and Israel.
In other words: Trump aims to keep the dollar as the reserve currency by suppressing not
only China but also the two main competitors of King Saud: Iran and Russia. That's why
America's main 'enemies' now are those three countries and their respective allies.
Obama was likewise targeting them, but in a different priority-order , with Russia being the
main one (thus Obama's takeover
of Ukraine in February 2014 turning it against Russia, next door ); and that difference was
due to Obama's desire to be favorably viewed by the residents in America's biggest export and
import market, the EU, and so his bringing another member (Ukraine) into the EU (which still
hasn't yet been culminated).
Trump is instead building on his alliance with King Saud and the other GCC monarchs, a group
who can more directly cooperate to control the value of the US dollar than the EU can.
Furthermore, both conservative (including Orthodox) Jews in the United States, and also white
evangelical Protestants in the US, are strongly supportive of Israel, which likewise sides with
the Arab oil monarchs against Iran and its allies. Trump needs these people's votes.
Trump also sides with the Sauds against Canada. That's a matter which the theorists who
assert that Israel controls the US, instead of that the Sauds (allied with America's and
Israel's billionaires) control the US, ignore; they ignore whatever doesn't fit their theory.
Of course, a lot doesn't fit their theory (which equates "Jews" with "Israelis" and alleges
that "they" control the world), but people whose prejudices are that deep-seated, can't be
reached by any facts which contradict their self-defining prejudice. Since it defines
themselves, it's a part of them, and they can never deny it, because to do so would be to deny
who and what they are, and they refuse to change that. The Sauds control the dollar; Israel
does not, but Israel does the lobbying, and both the Sauds and Israel want Iran destroyed.
Trump gets this pressure not only from the billionaires but from his voters.
And, of course, Democratic Party billionaires push the narrative that Russia controls
America. It used to be the Republican Joseph R. McCarthy's accusation, that the "commies" had
"infiltrated" , especially at the State Department . So: Trump
kicked out Russia's diplomats, to satisfy those
neocons -- the neoconservatives of all Parties and persuasions, both conservative and
liberal.
To satisfy the Sauds, despite the EU, Trump has dumped the Iran deal . And he did it also to
satisfy Israel, the main US lobbyists for the Sauds. (Americans are far more sympathetic to
Jews than to Arabs; the Sauds are aware of this; Israel handles their front-office.) For Trump,
the Sauds are higher priority than Europe; even Israel (who are an expense instead of a
moneybag for the US Government) are higher priority than Europe. Both the Sauds and Israel
together are vastly higher. And the Sauds alone are higher priority for Trump than are even
Canada and Europe combined . Under Trump, anything will be done in order to keep the Sauds
and
their proxy-lobbyists (Israel) 'on America's side'.
Consequently, Trump's political base is mainly against Iran and for Israel, but Obama's was
mainly against Russia and for the EU. Obama's Democratic Party still are controlled by the same
billionaires as before; and, so, Democrats continue demonizing Russia, and are trying to make
as impossible as they can, any rapprochement with Russia -- and, therefore, they smear Trump
for anything he might try to do along those lines.
Both Obama and Trump have been aiming to extend America's aristocracy's dominance around the
world, but they employ different strategies toward that politically bipartisan
American-aristocratic objective: the US Government's global control, for the benefit of the US
aristocracy, at everyone else's expense. Obama and Trump were placed into the White House by
different groups of US billionaires, and each
nominee serves his/her respective sponsors , no public anywhere -- not even their voters'
welfare.
An analogous example is that, whereas Fox News, Forbes, National
Review, The Weekly Standard, American Spectator, Wall Street Journal, Investors Business Daily,
Breitbart News, InfoWars, Reuters, and AP , are propagandists for the Republican Party ; NPR,
CNN, NBC, CBS, ABC, Mother Jones, The Atlantic, The New Republic, New Yorker, New York
Magazine, New York Times, Washington Post, USA Today, Huffington Post, The Daily Beast , and
Salon , are propagandists for the Democratic Party ; but, they all draw their chief sponsors
from the same small list of donors who are America's billionaires, since these few people
control the top advertisers, investors, and charities, and thus control nearly all of the
nation's propaganda. The same people who control the Government control the public; but,
America isn't a one-Party dictatorship. America is, instead, a multi-Party dictatorship . And
this is how it
functions.
Trump cancelled the Iran deal because a different group of billionaires are now in control
of the White House, and of the rest of the US Government. Trump's group demonize especially
Iran; Obama's group demonize especially Russia. That's it, short. That's America's aristocratic
tug-of-war; but both sides of it are for invasion, and for war. Thus, we're in the condition of
'permanent war for permanent peace' -- to satisfy the military contractors and the billionaires
who control them. Any US President who would resist that, would invite assassination; but,
perhaps in Trump's case, impeachment, or other removal-from-office, would be likelier. In any
case, the sponsors need to be satisfied -- or else -- and Trump knows this.
Trump is doing what he thinks he has to be doing, for his own safety. He's just a figurehead
for a different faction of the US aristocracy , than Obama was. He's doing what he thinks he
needs to be doing, for his survival. Political leadership is an extremely dangerous business.
Trump is playing a slightly different game of it than Obama did, because he represents a
different faction than Obama did. These two factions of the US aristocracy are also
now battling each other for political control over Europe .
The US #1 objective is to protect US$ as the only one reserve currency that is the
foundation of US economic and military power as well as the US economic stability and
prosperity
Zionist Banking Mafia controls US$ and both US major political Parties
The USA can accomplish its goals only by destroying China, Russia, and Iran. The USA
cannot achieve its goals short of having a major military confrontation with China. Russia
is only one power that can provide/satisfy China with raw materials including oil &
gas. However, politically Trump is locked in a corner by the Democratic Party and it's
globalists allies who are trying to destroy Russia due to it's "misguided" policies in
Syria and Iran.
China understands the game and does it's best to confront America. Time is on China's
side. Very shortly China will move it's military to Iran and Syria with Turkey becoming a
serious US headache.
The Bottom Line
Trump and its policies have no chance to succeed neither inside nor outside the USA. The
USA has less than 3-5 years to maintain the present status quo.
Yeah, its the defense contractors. It has nothing to do with the zillions of cars that clog every fucking freeway in this
country every morning and every evening, 7 days a week. Its not the assholes cruising around
in monster trucks alone, just to show off their stupid trucks. It has nothing to do with the
the zillions of jets screaming through the skies carry all those fat assholes to meetings all
over the world for no reason. It has nothing to do with the billions of barrels of oil that
come to the US on tankers as long as city blocks filled constantly day and night.
Its not that, its Lockheed selling them airplanes. Thats how the sand niggers got so much
US money, Lockheed.
What a fucking conspiratorial ass-swipe this guy is.
Eric Zeusse ranks in popularity right along the Gatestone Institute - though Eric may just
be ignorant and opinionated whilst Gatestone is an affirmative disinformation propaganda
organ, both are equally annoying to read. I just came for the comments :).
+1. Eric Zuesse is part-and-parcel of the agenda that the Gatestone Institute
espouses.
Eric Zuesse's real agenda can be revealed by his position on 9/11 (see second link below).
He also blames Obama for everything (he shifts the blame away from Israel onto any other
party which could be blamed due to either direct or indirect ties)
Here is Eric Zuesse in his own words:
Notice the absence of Israel/Zionism
Historic New Harpers Article Exposes Who Controls America
Posted on December 17, 2015 by Eric Zuesse.
"The fundamentalist-Sunni royal family of the Sauds have bought the highest levels of the
U.S. government in order to control U.S. foreign policies, especially the ongoing wars to
take down the governments of Iraq, Libya, Syria, and ultimately (they hope) of Russia itself,
which latter nation has allied itself instead with Shia countries. The controlling entities
behind American foreign policies since at least the late 1970s have been the Saud family and
the Sauds' subordinate Arabic aristocracies, which are the ones in Qatar (the al-Thanis),
Kuwait (the al-Sabahs), Turkey (the Turkish Erdoğans, a new royalty), and UAE (its six
royal families: the main one, the al-Nahyans in Abu Dhabi; the other five: the al-Maktoums in
Dubai, al-Qasimis in Sharjah, al-Nuaimis in Ajman, al-Mualla Ums in Quwain, and al-Sharqis in
Fujairah). Other Saudi-dominated nations -- though they're not oil-rich (more like Turkey in
this regard) -- are Pakistan and Afghanistan."
". But, perhaps, one can safely say that the alliance between the U.S. aristocracy and the
royal Sauds, is emerging as a global dictatorship, a dictatorial type of world government.
Because, clearly: those two aristocraciues have been, to a large extent, ruling the world
together, for several decades now. From their perspective, jihadists are themselves a weapon,
not merely a political nuisance.
This is a more realistic explanation of America's decades-long catastrophic failures to
make significant progress in eliminating even a single one of the numerous jihadist groups
around the world: that's how things have been planned to be. It's not just 'intelligence
errors' or 'not being tough enough.' Those 'explanations' are just cover-stories, propaganda,
PR from the aristocrats. It's skillful 'crowd control': keeping the people in their 'proper'
places."
9/11: Israel Didn't Do It; The Plan Was Co-Led by U.S. & Saud Governments
By Eric Zuesse
March 15, 2018
"9/11 was a well-planned operation, whatever it was. Substantial money paid for it, but
little if any of that came from either Iran or Israel. It all came from
fundamentalist-Sunnis.
And, if all of the money was fundamentalist-Sunni, then the only non-Sunni people who
could have been involved in planning the operation would have been George W. Bush and his
friends
The problem certainly isn't Jews nor Muslims. The problem is the aristocracy, which
controls Saudi Arabia, and the aristocracy which controls Israel, and the aristocracy which
controls America. The victim is the public, and the victimizer is the aristocracy. It's not
just 9/11."
Obama's Nazis
Posted on August 17, 2014 by Eric Zuesse.
(Zuesse's obsession with the word nazis or Nazis)
"What Obama has done and is doing in Ukraine is historic, like what Adolf Hitler did, and
like what Slobodan Milosevic* did, and like other racist fascists have done; and he, and we
Americans (if we as a nation continue accepting this), will be remembered for it, like they
and their countries were. Evil on this scale cannot be forgotten. No matter how solidly the
American "news" media hide this history, it is already solidly documented for the history
books. Obama will be remembered as the worst President in U.S. history, just as the
racist-fascist or 'nazi' leaders of other countries are."
Jewish Billionaire Finances Ukraine's Aydar SS Nazi Troops
Posted on April 7, 2015 by Eric Zuesse.
"The hyper-nationalist Ukrainian-Israeli billionaire Ihor Kolomoysky, a friend of the
Obama White House and employer of Joe Biden's son Hunter Biden, is a major donor to far-right
Ukrainian causes. He sides with the followers of Stepan Bandera, the pro-Nazi Ukrainian
leader whom Hitler ditched when Bandera made clear that he wanted Ukraine to be nazi but
independent of Germany's Nazi Party. Briefly, Bandera's #2 in command, Yaroslav Stetsko, led
nazi Ukraine, and approved the slaughter of thousands of Jews there."
"Zuesse is pushing Zionist lies. One of the links in the article goes to a Reuters story,
"Exclusive – Over 100 Russian soldiers killed in single Ukraine battle – Russian
rights activists," that claims to get its info from the "Russian presidential human rights
council."
If you want to read more lies by Zuesse, go to this "AMAZON" link to read reviews of his
book, "Iraq War: The Truth," in which Zuesse claims that GW Bush invaded Iraq to thank Jesus
for his alcohol and drug addiction cure and to neuter the International Criminal Court???
There is one comment lavishing praise on Zuesse's book about the Iraq War by David
Swanson, another Zionist tool and BS artist, who's been outed in the past by the blog,
"American Everyman."
See how fast the internet warriors are to claim the article is rubbish, and not reflecting
reality. No argument to back up their propaganda, but that's not important. Must be
depressing running the Sunday evening shift in the cubicle farm; all the boys in their neatly
pressed uniforms, clicking away to keep us safe from democracy. Well done lads, another day
keeping the evil Russians /Iranians at bay.
I actually find it interesting to see what shakes the foundations, and this article seems
to be something that they don't like, so probably worth a re-read just to get all the
nuances. Of course, the author suggesting that it is not Jews running America will get short
shrift from some commenters, but it is certainly interesting to have pointed out, finally,
that Israel is a net drain, and Saudi Arabia an enormous gain for the US. We always say to
follow the money, and whilst Israel is good profit for the MIC, Saudi Arabia IS the
petrodollar system - mustn't forget that. No oil in Saudi Arabia, no petrodollar. I wonder
how long they have left until it's all gone? That would probably be the over-riding factor in
deciding war with Iran.
I always wondered why the EU did nit make bigger efforts to replace the petrodollar with
the petroeuro but nobody wants to end up as Ghadaffi or Saddam Hussein who threatened to do
just that. Iran has also repeatedly threaten to that. Also Putin has recently said that
Russia wants to move away from the petrodollar. He must know that that is dangerous for one's
health so there must be some sort of alliance against the dollar being formed.
"... How different is it really from the past 70+ years (since that 45' meeting between FDR and the then ruler of KSA), and especially since the "oil shocks" of the 1970's ? The Trumpians are little more direct and crude in their wording, but that is really the only difference I see. ..."
"... Putin's announcement after Turkey's shooting down of a Russian jet that Turkey has been systematically facilitating ISIS oil sales illustrates how the terror-entity has become a figleaf to justify military action. ..."
"... As INSURGEintelligence has previously reported, there is significant evidence that high-level elements of Turkish government and intelligence agencies have covertly sponsored Islamist terrorist groups in Syria, including ISIS, and that this has involved permitting black market oil sales. ..."
"... Why, however, did Vladimir Putin wait until the murder of a Russian pilot before announcing Russia's possession of intelligence on Turkish state-sponsorship of ISIS? ..."
"... There can be little doubt that Putin had previously been more interested in protecting Russian relations with Turkey as an emerging gas transshipment hub to Europe, under which he and Erdogan planned to build the multibillion Russia-Turkey gas pipeline, Turkish Stream -- now suspended after the recent diplomatic furore. ..."
"... It has become increasingly clear that the US-led coalition strategy is aimed primarily at containment of the group's territorial ambitions within Syria. ..."
"... In this context, as Russia and Iran consolidate their hold on Syria through the Assad regime -- staking the claim to Syria's untapped resources in the Mediterranean -- the acceleration of Western military action offers both a carrot and a stick: the carrot aims to threaten the Assad regime into a political accommodation that capitulates to Western regional energy designs; the stick aims to replace him with a more compliant entity comprised of rebel forces backed by Western allies, the Gulf states and Turkey, whilst containing the most virulent faction, ISIS. ..."
The Saudi's. Interesting watching them agree to whatever Trump wants. The most recent one was Trump telling them to raise oil
output. The Saudi's now are very pro zionist and will back them against the Sunni Palestinians no matter what. If Trumps tells
them to pay for a US war or occupation they pay. If they are told to by lots of useless junk from the US MIC, they buy it and
manage to pull a twisted smile when Trump turns the screws about billions being peanuts.
Seems very much like KSA is now an expendable asset for the US, and their only chance of survival is a lot of 'yes sir, how
high sir'.
How different is it really from the past 70+ years (since that 45' meeting between FDR and the then ruler of KSA), and
especially since the "oil shocks" of the 1970's ? The Trumpians are little more direct and crude in their wording, but that is
really the only difference I see.
Posted by: Peter L. | Jul 1, 2018 11:21:17 PM | 23
Look no further than the first sentence of the text you quote. It has been documented a few times, including in the Intercept,
that there were some very serious money flows towards a certain foundation run by the family of the named person. Money flows
that originated in the Gulf. Money flows that were related to what happened in Libia.
Putin's announcement after Turkey's shooting down of a Russian jet that Turkey has been systematically facilitating ISIS
oil sales illustrates how the terror-entity has become a figleaf to justify military action.
As INSURGEintelligence has previously reported, there is significant evidence that high-level elements of Turkish government
and intelligence agencies have covertly sponsored Islamist terrorist groups in Syria, including ISIS, and that this has involved
permitting black market oil sales.
Why, however, did Vladimir Putin wait until the murder of a Russian pilot before announcing Russia's possession of intelligence
on Turkish state-sponsorship of ISIS?
There can be little doubt that Putin had previously been more interested in protecting Russian relations with Turkey
as an emerging gas transshipment hub to Europe, under which he and Erdogan planned to build the multibillion Russia-Turkey
gas pipeline, Turkish Stream -- now suspended after the recent diplomatic furore.
US, British and French military operations have been similarly inconsistent, inexplicably failing to shut down ISIS supply
lines through Turkey, failing to bomb critical ISIS oil infrastructure including vast convoys of trucks transporting black
market oil, and refusing to arm the most effective and secular Kurdish ground forces combating ISIS.
It has become increasingly clear that the US-led coalition strategy is aimed primarily at containment of the group's
territorial ambitions within Syria.
....
As Russia expands its military presence in the region in the name of fighting ISIS, the US, Britain and France are now scrambling
to ensure they retain a military foothold in Syria -- an effort to position themselves to make the most of a post-conflict
environment. As the US Geological Survey Minerals Yearbook put it:
"Most of the international investors who pulled out of Syria following the deterioration of the safety and security situation
throughout the country are expected to remain so until the military and political conflicts are resolved."
In this context, as Russia and Iran consolidate their hold on Syria through the Assad regime -- staking the claim
to Syria's untapped resources in the Mediterranean -- the acceleration of Western military action offers both a carrot and
a stick: the carrot aims to threaten the Assad regime into a political accommodation that capitulates to Western regional energy
designs; the stick aims to replace him with a more compliant entity comprised of rebel forces backed by Western allies, the
Gulf states and Turkey, whilst containing the most virulent faction, ISIS.
Expecting SA to help supply the World's needs is perhaps going off the deep end. It's their
bread and butter for years to come. As years pass, they become more aware that those years
are limited. This is not the 1970's, it's 2018. They will supply what is profitable for them,
and wasting it early, doesn't sound real smart, does it? If we offered them massive support
to develop their nuclear capabilities, it would probably entice them. Or, jump out of the
pot, and into the frying pan. Iran May have more capacity for new oil.
If I have understood this correctly. When most of their fields are mature, the option they
have is to invest (almost overbuild) in facilities foremost to treat and inject the steadily
higher volume of water to keep oil production steady and at the same time overinvest in
infill drilling to keep the volume rising. All this to sustain or even increase oil output
from mature fields, so that the oil price can stay low. And then there is the extra gain in
extra barrels to consider as a result of the investments that adds to ultimate recovery at
each field. The gain from extra barrels could make up for a mediocre return on investment in
some cases and a questionable one in other cases. Given a relatively low oil price
assumption.
Why would they do that? Keeping the facilities as they are for mature fields, accepting
only small investments where they are highly profitable, limiting infill drilling to the best
locations, let the oil production fall and hope for prices to rise would be a superior
solution for them, would it not? Why rush investments in mature oil fields?
When most of their fields are mature, the option they have is to invest (almost overbuild)
in facilities foremost to treat and inject the steadily higher volume of water to keep oil
production steady and at the same time overinvest in infill drilling to keep the volume
rising. All this to sustain or even increase oil output from mature fields,
Well no, it does not usually increase production, it just drastically reduces the decline
rate. For instance, a very mature field may have a natural decline rate of 6 to 8% per year.
With infill drilling of horizontal wells along the top of the reservoir, they may reduce that
decline rate to 2% per year.
so that the oil price can stay low.
No, that's not why they are doing it. They are doing it to maintain their annual
production. Some do increase production but with oil from new fields. These new fields,
however, will have a much lower URR and will start to decline after only a few years. All the
giant and supergiant field have already been discovered.
The "so that the oil price can stay low" was a well hidden irony from my part. But you
have a point, they want to keep their long term customers supplied, not losing face in OPEC
and their long term allies happy. They stretch to keep everyone happy.
2018-07-05 (Platts) While Saudi Aramco CEO Amin Nasser told Platts recently that "maximum
sustainable production" was 12 million b/d, industry experts believe Saudi Arabia will
struggle to pump more than 1 million b/d of additional output.
Yeah, I think that is pretty much what Ron and George have been saying. It is why all these
drops in production, and projected production that will not get out of the ground has to
cause demand to exceed supply within the next year by a substantial amount. Throw in Iran's
sabre rattling over the Homez, and oil prices should be through the roof. That it is not, is
mainly complacency built up over the past four years from the inventory overage. As Scarlet
O'Hara said, "After all tomorrow is another day".
MSNBC announced that the Aramco IPO may never happen. MSNBC didn't say why, however I suppose
those reserves that the Saudis have touted for so long could be very difficult to have
verified based on SEC rules. I think that much of the last two years of prep for their IPO
has been shopping for a exchange that would allow them to get their stock issued without
drastically revising their prior reserve disclosures.
You can also look at this development as an indication that the above discussed "rock" may
have already dropped.
"I think not, it's a lot cheaper to add a few more production wells than to add a couple of
million barrels of high pressure water injection capacity (topsides facilities and the wells
needed to inject it"
Water injection isn't the problem, its water cut. The don't need to inject more if they
keep the water cut stable. In order to keep the water cut, they have to perodically drill new
wells to keep the wells in contact with the Oil column. Over time the Water column push up on
the Oil column (ie Oil floats on Water). All the CapEx/Opex goes into drilling to keep in the
Oil Column Zone as well as add new wells to tap oil trapped in pockets. As the Oil column
continues to shrink and and as the water column become increasing contact with the cap rock
its going to required more and more drilling to maintain production.
My guess well know when SA starts running into problems when we start to see the rig count
increase and the production dropping over a period of a couple of years.
"The drilling of new oil wells is to maintain current production, not to increase it"
SA cannot increase Oil production much. They are working on extracting the remaining cream
(oil column) floating on a see of water. Increasing production would just increase the water
cut and also increase trapped oil that would later be more costly to extract. The only way SA
can increase production is to tap new fields or increase drilling for oil trapped in pockets.
But at some point these options will vanish over time as it will be increasing more difficult
to squeeze more oil out, like trying to squeeze trapped toothpaste out of a depleted
toothpaste tube.
I didn't say water injection was the problem I said it was the limit to increasing
production. It is. Water cut is the problem that leads to decline unless they keep drilling
new wells.
Two ways that increasing water cut is a problem are: 1) you have to inject more water for
the same amount of oil, which they don't have, 2) you have to treat more produced water,
which they don't have capacity for. Exactly what I said above. The third is that it reduces
overall well flow and, more so, oil flow; but that is easily got round if it easy to drill
new wells, as is the case for Saudi, even the offshore fields, which are shallow. That also
solves the first two problems because the individual field and overall country water cuts are
held steady.
The limits on surface facilities are much more expensive and long term (5 years at least)
to get round, but it could be done, therefore it is wrong to say that the only way to
increase production is to tap new fields.
(ps – I worked on water flood oil fields, including some minor studies for Saudi,
for at least 15 years through my career, the water is a bigger influence on the design and
operation than the oil.)
That all together sounds like it's completely senseless to keep some spare capacity for
fields like this.
This capacity will cost billions, hold back for not much. A big oil storage is better
there for satisfying demand peaks or temporary supply losses.
Reserve capacity is cheap to have when you are in primary recovery of a conventional
(giant) field.
The only illusion of reserve capacity would be in fields with tertiary recovery would be
to postpone maintainance for a few months to get that 5% more production.
Some spare is always needed, just to maintain production during maintenance or unplanned
outages. Sparing doesn't postpone maintenance, it means maintenance can be done without
taking the plant offline, or at least not for too long, so you get maximum returns on your
investment (when plants are taken down for major turn arounds it is to do work on items for
which there are no online spares).
Depending on the maturity of the field there is also always different amount of sparage in
the different project components – e.g. the wells, compression, power generation, oil
processing, export capacity, water injection, water processing – the limit is the
component with the least amount of sparage.
In Saudi also, at least for the heavy fields, they have been known to rest them completely
for a time, this allows the water contact to settle out and avoid excessive coning, which
provides a much better sweep of the oil and higher recoveries (I don't think any where else
has that luxury).
So when someone says "we have spare capacity" it can mean almost anything from
2×100% pumps on a particular duty to an entirely unused, ready for action oil
field.
From a modern capitalist approach with everything just-in-time and the next quarterly
statement being all important then excess sparing wouldn't please the shareholders, but Saudi
designed facilities with 50 year life times, so it might be different.
From looking at their recent production profiles, which seem to go up when they report a
new start-up and then decline, and stock draws, which have been consistent since January
2016, I find it hard to believe they have a large amount of "real" spare capacity –
i.e. that's easy to bring on line and that doesn't alter any of the performance of the fields
over the long term or compromise planned maintenance schedules – but I can't say for
sure. And, as I've said, the limit to expanding production (that means beyond just using up
the spare) is almost certainly with the surface facilities for water, so it's likely that is
also the part with the least spare capacity.
It sounds like you believe they might be able to maintain a plateau of 10 Mb/d for many
years, if they just drill more wells as needed. Though I may not be understanding
correctly.
There's the big question. Once the horizontal wells are at the top of the reservoir then you
can't drill any more and once the water contact hits them, even with intelligent completions,
then the decline will be fast (but even that is relative, huge fields take longer to decline
than small ones). There was a report in the Oil Drum some time ago that indicated that a lot
of Ghawar wells were near the limit but nothing much seems to have happened since to indicate
this turned into a problem, but then Saudi has a lot of other fields. On some of their
offshore fields they are replacing all the wellheads to add ESPs, that usually means they
have run out of new well options. Their rig count is declining, but maybe jus because they
are drilling much more productive MRC wells.
It's the difference between the size of the tank and the size of the tap (or for water
injection more like the size of the vent that lets air in to stop the tank collapsing under
suction). Might only know what's going on well after the fact.
"... My own hunch is that these reports may well be true. How long can the Saudis (and the Western media) conceal what has happened? ..."
"... Second, I believe the trip by our Secretary of State was in response to the incident of April 21st. My hunch is the Crown Prince was gravely wounded and later perished at a Military Hospital. ..."
"... Third, the night of the incident a twitter user named CivMilAir tracked the Royal Medevac jet leaving the airport near the gunfire and documented the airplane turning off its transponder. There was speculation concerning whether or not it was the Crown Prince that night on that thread. There was even push back from other twitter users based in Saudi Arabia. Even one demanding to know how this twitter user obtained this information. ..."
"... Fifth, the outrage at the German Government and the reports from German businesses that the door to trade has been slammed shut this past month. I attribute this to the one and only exile prince from the Royal family, Saudi Prince Khaled Bin Farhan. living in Europe. He was granted asylum by Germany. There were 3 other exiles but they have been tricked or kidnapped back to Saudi Arabia. This Prince was advocating for the removal of the Crown Prince as recently as March 23, 2018. ..."
"... Sixth, I noticed this week in the news that Crown Prince "MBS" has consolidated his control further this week by taking operational control of the construction and cyber security industries in the country. 35% of the Bin Laden group was basically stolen. I watched an interview of Saudi Prince Alwaleed bin Talal after his release from detention and he was clearly shaken. He was playing a confidence game where everything would go back to normal and mention how the Bin Laden group was back working on his projects. Then this? 35% gone overnight. Cyber security crack down or internet crackdown coming in Saudi Arabia? ..."
"... Seventh, there is no way that MBS approved the recent arrest of the feminist. Not after his carefully cultured PR campaign in the United States. ..."
"... Eight, where's Waldo? ..."
"... Here is my speculation. Al-Qaeda will be the cover story. Crown Prince MBS was killed by members of the Royal Family and other powerful individuals he made enemies with in his short rule. ..."
"... The Royal family members who supported MBS are furious at Germany for the above stated reasons and lashing out in all directions. Threatening to invade Qatar if Russia provides them the S-400. I believe even President Trump's bizarre threat to put huge tariffs on German luxury automobiles because the German public doesn't want to buy crappy American cars like the Chevy Impala is his frustration over one of his essential architects on the plan to change regime's in Iran being eliminated. ..."
"... A lot of torture and indiscriminate arrest is going on at this very moment in Saudi Arabia. The family appears split and trust lost. Time will tell. ..."
"... It would appear that there's no one in charge in SA at the moment. One can now expect a period of confusion, and lots of infighting between various factions trying to assert dominance, or just survive. ..."
"... Considering MbS's policies, I think his exit is better for the Middle East. His tilt of SA policy towards the US and Israel is likely to be reversed. ..."
"... All you need to know is that Mr. Media Roadshow decided overnight to shun video cameras, and not come out for Pompeo. The guy is dead as a door knob. He made way too many enemies during the forced corporate retreat he hosted at the Ritz. ..."
"... myself , i think the attack succeed in wounding and ultimately kill the prince , otherwise why no public appearance at all ? ( if i recall , muslim have to be buried no more than 24 hours after death so that's why i assume he was wounded at first and the medical team failed to keep him alive) ..."
"... In Assad's interview with RT he pointed out that the "opposition" first attacked Syria's air defenses at the beginning of the "civil war". Hillary wanted a "no-fly zone" over Syria. All that's missing is Victoria Nuland. ..."
"... The playground version: The neocons and Netanyahu think they're playing Trump, who in turn thinks he's use them. MbS wanted to be one of the cool kids and tried to get in on the action and might have gotten himself dead in the process. ..."
Re Saudi Arabia: I have previously referred to reports regarding the death of the Saudi Crown
Prince, MbS, as a result of the AQ attack on his palace on April 21. Now, pictures are
circulating of his funeral.
There is so far no official announcement, but that means nothing.
My own hunch is that these reports may well be true. How long can the Saudis (and the
Western media) conceal what has happened?
Agree. There is also the report that he was not at the Graduation Ceremony of the King Abdul
Aziz Military College on May 19. (As Defence Minister, he would have been expected to
attend).
I have been following the story. A few things. Yes, I have seen the pictures of the funeral
and his actual corpse prepared for burial under #mbs at twitter. The pictures are not the
best. The size of the corpse and the nose and receding hairline along with the cheekbones and
body size could definitely be MBS along with the eyes.
Second, I believe the trip by our Secretary of State was in response to the incident
of April 21st. My hunch is the Crown Prince was gravely wounded and later perished at a
Military Hospital.
Third, the night of the incident a twitter user named CivMilAir tracked the Royal
Medevac jet leaving the airport near the gunfire and documented the airplane turning off its
transponder. There was speculation concerning whether or not it was the Crown Prince that
night on that thread. There was even push back from other twitter users based in Saudi
Arabia. Even one demanding to know how this twitter user obtained this information.
Fourth, the recent trip of the Lebanon Prime Minister being called to Saudi Arabia when
his schedule indicated no such trip.
Fifth, the outrage at the German Government and the reports from German businesses
that the door to trade has been slammed shut this past month. I attribute this to the one and
only exile prince from the Royal family, Saudi Prince Khaled Bin Farhan. living in Europe. He
was granted asylum by Germany. There were 3 other exiles but they have been tricked or
kidnapped back to Saudi Arabia. This Prince was advocating for the removal of the Crown
Prince as recently as March 23, 2018.
And he asserted that he receives emails and other forms of communications from disaffected
family members and the security services desiring for a change to be made.
Sixth, I noticed this week in the news that Crown Prince "MBS" has consolidated his
control further this week by taking operational control of the construction and cyber
security industries in the country. 35% of the Bin Laden group was basically stolen. I
watched an interview of Saudi Prince Alwaleed bin Talal after his release from detention and
he was clearly shaken. He was playing a confidence game where everything would go back to
normal and mention how the Bin Laden group was back working on his projects. Then this? 35%
gone overnight. Cyber security crack down or internet crackdown coming in Saudi
Arabia?
Seventh, there is no way that MBS approved the recent arrest of the feminist. Not
after his carefully cultured PR campaign in the United States.
Eight, where's Waldo?
Finally, here is what I find so fascinating. The KIng of Saudi Arabia is reported to have
dementia. Unfortunately, I have a great deal of experience with this dreadful disease. My
stepfather. 16 years. There is no King in charge of Saudi Arabia. In fact, if MBS was killed
like I believe there is no legitimate line to the next ruler. Survival of the Fittest.
Here is my speculation. Al-Qaeda will be the cover story. Crown Prince MBS was killed
by members of the Royal Family and other powerful individuals he made enemies with in his
short rule.
The Royal family members who supported MBS are furious at Germany for the above stated
reasons and lashing out in all directions. Threatening to invade Qatar if Russia provides
them the S-400. I believe even President Trump's bizarre threat to put huge tariffs on German
luxury automobiles because the German public doesn't want to buy crappy American cars like
the Chevy Impala is his frustration over one of his essential architects on the plan to
change regime's in Iran being eliminated.
A lot of torture and indiscriminate arrest is going on at this very moment in Saudi
Arabia. The family appears split and trust lost. Time will tell.
Thank you for that excellent rundown of events. I tend to agree with your "speculation".
It would appear that there's no one in charge in SA at the moment. One can now expect
a period of confusion, and lots of infighting between various factions trying to assert
dominance, or just survive.
Considering MbS's policies, I think his exit is better for the Middle East. His tilt of SA
policy towards the US and Israel is likely to be reversed.
All you need to know is that Mr. Media Roadshow decided overnight to shun video cameras,
and not come out for Pompeo. The guy is dead as a door knob. He made way too many enemies
during the forced corporate retreat he hosted at the Ritz.
This is news to me. How big do you think the resulting power struggle would be if MbS was
killed or incapacitated? I can envision outcomes that range from 2nd page news all the way up
to Archduke Ferdinand grade but I don't have any feel for the probabilities.
If true, would it cause you to see the events of the last month in the region in a
different light?
With MBS dead, how will Saudi react to MBS's previous Israel's right to exist scenario,
along with Jerusalem being declared Israel's capital and the embassy move by DT?
How much longer will the Saudi and international press be able to remain silent on
this?
Who do you think will now ascend the Saudi throne as heir apparent?
FB Ali , sir , it is so hard to get info in the AQ Attack that allegedly mortally wound MBS..
as for the shooting reported as a wayward drone , i recall this video (anyone can confirm the
skyline if this is saudi city near palace ?) , the gunfire last for long time , far too long
to be guards firing on a drone.
myself , i think the attack succeed in wounding and ultimately kill the prince ,
otherwise why no public appearance at all ? ( if i recall , muslim have to be buried no more
than 24 hours after death so that's why i assume he was wounded at first and the medical team
failed to keep him alive)
do you think this is the 'blowback' from the massive shakedown that the prince did to his
seniors ?
Has DT done a single thing that has helped Israel? I would say no. In Assad's interview
with RT he pointed out that the "opposition" first attacked Syria's air defenses at the
beginning of the "civil war". Hillary wanted a "no-fly zone" over Syria. All that's missing
is Victoria Nuland.
Your post vividly depicts how isolated Israel has become. I reiterate DT has done nothing
to help Israel and everything to harm it. One is permitted to ask what's going on.
The playground version: The neocons and Netanyahu think they're playing Trump, who in turn
thinks he's use them. MbS wanted to be one of the cool kids and tried to get in on the action
and might have gotten himself dead in the process.
All the while Putin and the SCO crew wait
and play for time as they tangle each other up into an ever larger mess of their own making
hoping to avoid, or minimize, whatever conflict is necessary to get them all to accept the
coming multi-polar world order.
Perhaps in the future when they make a movie about this period it will be called "A Deal
Too Far".
Also "However, a week after the coup speculations, the Crown Prince, along with Saudi King
Salman, was seen at the opening ceremony of a huge entertainment resort Qiddiya – an
ambitious multi-billion dollar project that is expected to include a Six Flags theme park,
water parks, motor sports, cultural events and vacation homes." Sputnik
International
Saudi Arabia's Crown Prince Mohammed Bin Salman, the 32-year-old
media-savvy leader of the oil kingdom, has been unnaturally quiet recently, so much so
that some in the Middle East media couldn't help but wonder if he is dead.
Bin Salman hasn't been seen in the public eye since his meeting with the Spanish royal
family in on April 12. On April 21, heavy gunfire was heard near a royal palace in Riyadh,
the kingdom's capital. Although Saudi Arabia's state news agency claimed it was a security
force
shooting down a toy drone that had gotten too close to the royal property, some wondered
if the gunfire was in fact a coup led by Saudi royals trying to topple King Salman, Bin
Salman's father.
Some of Saudi Arabia's enemies were pretty sure.
Last week, the
Iranian
newspaper Kayhan reported that the Crown Prince was hit by two bullets during
the attack and may actually be dead, citing "a secret service report sent to the senior
officials of an unnamed Arab state."
"There is plenty of evidence to suggest that the absence of nearly 30 days of Muhammad bin
Salman, the Crown Prince of Saudi Arabia, is due to an incident which is being hidden from
the public," the daily paper claimed.
To add credence to the speculation, Kayhan pointed out that Bin Salman was not
seen on camera when the new U.S. Secretary of State Mike Pompeo visited Riyadh in late April,
while his father, Saudi King Salman bin Abdulaziz Al Saud, and Foreign Minister Adel
al-Jubeir were photographed.
"... By Irina Slav, a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry. Originally published at OilPrice ..."
By Irina Slav, a writer for the U.S.-based Divergente LLC consulting firm with over a
decade of experience writing on the oil and gas industry. Originally published at OilPrice
"I personally think none of us will be able to get around it," Vitol's chief executive Ian
Taylor
said last week, commenting on the effects that renewed U.S. sanctions against Iran will
have on the oil industry.
The sanctions, to go into effect later in the year, have already started to bite. French
Total, for one,
announced earlier this month it will suspend all work on the South Pars gas field unless it
receives a waiver from the U.S. Treasury Department -- something rather unlikely to happen. The
French company has a lot of business in the United States and cannot afford to lose its access
to the U.S. financial system. So, unless the EU strikes back at Washington and somehow manages
to snag a waiver for its largest oil company, Total will be pulling out of Iran.
Other supermajors have not dared enter the country, so there will be no other pullouts of
producers, but related industries will be affected, too, in the absence of a strong EU reaction
to the sanctions. For example, Boeing and Airbus will both have their licenses for doing
business in Iran revoked, Treasury Secretary Steven Mnuchin said , which
will cost them some US$40 billion -- the combined value of contracts that the two aircraft
makers had won in Iran.
Tanker owners are also taking the cautious approach. They are watching the situation
closely, anticipating Europe's move, but acknowledging that the reinstatement could have
"significant ramifications" for the maritime transport industry, as per the
International Group of PI & Clubs, which insures 90 percent of the global tanker fleet.
Everyone is waiting for Europe to make its move even as European companies in Iran are
beginning
to prepare their exit from the country. Everyone remembers the previous sanctions, apparently,
and they don't want to be caught off guard. But the signals from Europe are for now positive
for these companies, of which there are more
than a hundred .
Earlier this month, an adviser to French President Emmanuel Macron
said that Europe's response to the thread of U.S. sanctions on Iran will be "an important
test of sovereignty." Indeed, unlike the last time there were sanctions against Iran, the
European Union did all it could to save the nuclear deal and has signaled it will continue to
uphold it.
While some doubt there is a lot the EU can do against U.S. sanctions, there is one 1996 law
dubbed a blocking statute that will ban European companies from complying with U.S. sanctions,
which would put companies such as Total between a rock and a hard place.
European Commission President Jean-Claude Juncker
said two weeks ago the commission will amend the statute to include the U.S. sanctions
again Iran and that the amendments should be completed before the first round of sanctions
kicks in in early August.
Many observers believe that if the sanctions are only limited to the U.S. and no other
signatory to the nuclear deal joins them, the effect will be limited as well. As McKinsey
analyst Elif Kutsal
told Rigzone, "Market fundamentals are not expected to change structurally given that Iran
doesn't export crude oil or refined products to the U.S. and exports go mainly to Europe (20
percent) and Asia Pacific (80 percent). Therefore, if the sanctions are only limited to the
United States, then this could cause short-term volatility in prices until a new/revised
agreement framework is put in place."
And this is where Iran's Supreme Leader Ayatollah Ali Khamenei scored a goal: He demanded
that the European Union provide guarantees it will continue to buy Iranian crude. If it
doesn't, he said, Iran will restart its nuclear program. Now, if this happens, the EU will not
have much choice but to join the sanctions, and then hundreds of thousands of barrels of
Iranian crude could be cut off from global markets.
However, even this will result in only a temporary decline in supplies, according to Kutsal,
and others that believe that Asian imports from Iran will offset the effect from the U.S.
sanctions. According to this camp, the only thing that can unleash the full effect of sanctions
is the UN joining the sanction push against Iran.
They gave Obama their tepid approval, then poured millions into a three-year campaign to kill it -- and won.
By William D. Hartung and Ben Freeman
• Benjamin Netanyahu's April 30
presentation accusing Iran of lying about its nuclear program was clearly aimed at a Western audience, and at one man in particular
-- Donald Trump. Trump was already inclined to violate and exit the multi-party deal to block Iran's path to a nuclear weapon, but
Netanyahu's presentation offered a timely addition to the administration's rhetorical arsenal. His PowerPoint performance, filled
with misleading assertions and
stale information dressed up as new revelations, was referenced by Trump as part of the justification for abandoning the nuclear
deal.
While this garnered headlines, another U.S. ally -- Saudi Arabia -- had been orchestrating a quieter but equally effective lobbying
and public relations push to dismantle the deal. The Saudis' arguments were used just as much, if not more, by Trump in justifying
his decision for the U.S. to walk away from a carefully crafted agreement that even some of his own military leaders had
acknowledged was working.
The Saudi lobby's push began long before the Joint Comprehensive Plan of Action (JCPOA) was formally announced on July 14, 2015.
In fact, Saudi lobbyists had been working behind the scenes in the U.S. for years to ensure that the Kingdom's concerns were incorporated
into any deal Washington would agree to with Iran -- if there was to be a deal at all.
In total, the Christian Science Monitor
found that Saudi Arabia spent $11 million dollars on Foreign Agents Registration Act (FARA)-registered firms in 2015, and "much
of this spending relates to Iran." They were also assembling former policymakers like Senator Norm Coleman, whose FARA
disclosure mentions his work on "limiting
Iranian nuclear capability." More recently, Coleman penned an op-ed in The Hill applauding Trump for leaving the deal
without disclosing
that he was being paid by the Saudi government.
Despite their strong opposition to any deal with Iran, however, many of the Saudis' concerns were ultimately addressed by the
JCPOA, specifically their demands that "snapback" provisions be incorporated to quickly reinstitute sanctions if Iran violated the
agreement and that inspectors have access to military and other suspect sites. Above all, the Saudis wanted an assurance that the
deal would prevent Iran from acquiring a nuclear weapon. The agreement provided this and President Obama
guaranteed it. This led to what many had thought impossible --
Saudi Arabia supporting
the Iran deal . Obama sealed the grudging support of Saudi Arabia and other Gulf States in a May 2015 meeting at Camp David where
he offered "reassurances" that the deal would not jeopardize their security, underscored by a
promise to sell them even more weaponry.
But Saudi support for the deal was tepid and ephemeral at best. While publicly supporting it, the Saudis and their lobbyists in
D.C. were quietly working to undermine it. Their arguments largely centered on two points: that the funds freed up by the deal would
underwrite Iran's continued support for terrorist groups, and that the deal would do nothing to halt Iran's ballistic missile program.
While more than two dozen D.C. lobbying and public relations firms working for Saudi interests have registered under FARA since
the U.S. agreed to the Iran deal, none has been more aggressively pushing these anti-Iran talking points than the MSLGroup (which
acquired long-serving Saudi client Qorvis Communications in 2014). The MSLGroup, which has been paid more than
$6 million dollars by the Saudis
just since the U.S. agreed to the Iran deal, has distributed a variety of "informational materials" (formerly called
propaganda ) on each of
these topics, including a five-page fact sheet on "
Iranian Aggression in Yemen ,"
and a press release on Iran being the "
biggest state sponsor of terrorism
," among many others. And of course, the MSLGroup wasn't alone in spreading anti-Iran propaganda on behalf of the Saudi regime. For
example, as recently as March 2018, the Glover Park Group distributed information on Iran's "region," and Hogan Lovells distributed
" facts about the Houthis and Iran
," with a section on Iran's ballistic missiles.
With these talking points in hand, the Saudis saw an opportunity in the election of the neophyte Donald Trump to up the ante on
Iran, and they invested heavily in
courting him. Their efforts paid off handsomely as Trump made his first overseas visit to the Kingdom of Saudi Arabia, initially
supported them in their spat with Qatar (until he learned the U.S. has a rather large military base in Qatar), kept U.S. military
support and bombs flowing for a Saudi-led campaign in Yemen that has cost more than
10,000 civilians
their lives, and agreed to sell them billions of dollars in additional U.S. weaponry of all sorts, from more munitions to a costly
missile defense system. But Saudi Arabia still wanted more -- they wanted the U.S. out of the Iran deal.
While Saudi Arabia's most unlikely ally in this cause, Israel, took a very outspoken approach to move the president, which culminated
in Netanyahu's misleading presentation, the Saudis used their well-financed lobbying machine to disseminate their message into the
D.C. bloodstream. Their primary talking points found their way to the president's ears and became routine features of his justification
for abandoning the deal. The White House
statement justifying leaving the Iran deal is littered with Saudi lobby talking points, including that "The JCPOA failed to deal
with the threat of Iran's missile program," and Iran "continues to fund terrorist proxies In Yemen, the regime has escalated the
conflict and used the Houthis as a proxy to attack other nations." The president's
remarks on the day he announced that the U.S. was abandoning the deal are also rife with language that could easily have been
lifted from a Saudi-financed "fact sheet." In fact, Trump's second sentence, "the Iranian regime is the leading state sponsor of
terrorism," is nearly verbatim off of an anti-Iran
talking point distributed by
the MSLGroup.
Why did the Saudis want the U.S. to abandon the Iran deal? A New York Timesanalysis
identified what is probably the primary reason -- a fear that the deal would be the first step towards a U.S. rapprochement with
Iran that would undermine the Saudi regime's power in the region in general and its campaign against Iran in particular. "Exiting
the deal, with or without a plan, is fine with the Saudis," the Times wrote. "They see the accord as a dangerous distraction
from the real problem of confronting Iran around the region -- a problem that Saudi Arabia believes will be solved only by leadership
change in Iran."
Former State Department official Jeremy Shapiro
underscored
this point when he noted that the Saudis and their Gulf allies "believe they are in this existential conflict with the Iranian regime,
and nuclear weapons are a small part of that conflict . If the deal opened an avenue for better relations between the United States
and Iran, that would be a disaster for the Saudis," he said. "They need to ensure a motivation for American pressure against Iran
that will last even after this administration."
One disquieting outcome of the trashing of the Iran nuclear deal is that Saudi Arabia has threatened to acquire a nuclear weapon
of its own if the end of the agreement leads Iran to revive its program. This is not the first time Saudi leaders have made such
threats. Just after Trump announced the U.S. would be leaving the deal, the Saudi foreign minister
said that if Iran now builds a nuclear weapon his country "will do everything we can" to follow suit. So on top of its implications
for increased conventional conflict in the region, the end of U.S. participation in the Iran deal could spark a nuclear arms race
in the Middle East -- an outcome that would have been far less likely if U.S. participation in the Iran deal had been maintained.
The potential for a Mideast nuclear arms race is yet another example of the disastrous consequences of Saudi Crown Prince Mohammed
bin Salman's reckless foreign policy, which includes everything from his regime's brutal, counterproductive intervention in Yemen,
to the Saudi-led effort to impose a blockade on Qatar, to its promotion of regime change in Iran -- preferably carried out by the
United States.
In the wake of the U.S. pullout from the Iran deal, we can expect the Saudi lobby, working in concert with administration allies
ranging from Jared Kushner to newly appointed national security advisor John Bolton, to double down in its efforts to promote these
ill-advised, dangerous directions for U.S. foreign policy in the region. Countering Riyadh's blatant influence peddling should be
part of an expanded effort to distance the United States from its increasingly risky, counterproductive relationship with Saudi Arabia.
If Mohammed bin Salman's aggressive policies -- and Saudi advocacy for them in Washington -- continue, Riyadh is one "friend" the
United States should consider doing without.
William D. Hartung is the director of the Arms and Security Project at the Center for International Policy, and Ben Freeman
directs the Center's Foreign Influence Transparency Initiative.
Qatar's foreign minister reacted publicly on Thursday to the recent wave of visits by
leaders of U.S. Jewish organizations to his country at the invitation of the ruling
Emir.
It seems the Qataris have figured out the best way to influence American foreign policy is to
appeal to the real power brokers in the U.S..
Doha wants to influence D.C. elites. But rather than targeting Congress or the media,
they're lavishly, and disproportionately, focusing on right-wing, pro-Israel Jews
One demand which the Qataris immediately acceded to was the suppression of the al Jezeera
expose on the jewish lobby in American politics.
Two extraordinary events have come together to place Al Jazeera in a vise-like squeeze
that may result in the death of a major TV documentary expose about the power and operations of
the Israel Lobby in the U.S. The same investigative team ... created the remarkable four-part
film, The Lobby, about the UK Israel Lobby.
and
The new documentary follows a similar script. Al Jazeera recruited someone to infiltrate
various Lobby organizations based in Washington...
and
...Haaretz published a story acknowledging that almost all of these American Jewish supplicants
came to Qatar for one very special reason (there may have been others, but this one was key).
They wanted the Al Jazeera documentary killed. They knew if it was aired it would make them
look as shabby, venal, and crude as the UK series did.
Posted by: pantaraxia | May 22, 2018 11:03:42 AM |
6
The Saudi defense ministry announced in a statement on Sunday that Riyadh ruler Faisal bin
Bandar bin Abdolaziz has attended the ceremony instead of bin Salman.
The statement declined to comment on the reason of bin Salman's absence while naturally the
defense minister should participate in such ceremonies.
He didn't appear for any of the Ramadan events either, which is very odd."
Notable quotes:
"... A growing number of videos surfaced the media at the time displaying that a heavy gunfire erupted around King Salman bin Abdulaziz Al Saud's palace in the capital, Riyadh. ..."
"... Witnesses and residents of the neighborhoods near the palace said a coup was underway, adding that the soldiers attacking the palace were guided by footage and intel they were receiving from a drone flying over the palace. ..."
"... Saudi opposition members claimed that "a senior ground force officer has led a raid on the palace to kill the king and the crown prince". ..."
"... Saudi Arabia, the world's top oil exporter, has witnessed a series of radical political changes over the past year as Mohammed bin Salman ousted his cousin as crown prince and jailed well-known princes in an anti-corruption purge. ..."
"... Moreover, bin Salman oversees social and economic reforms that have been censured by several powerful Wahhabi clerics. ..."
"... Notably, bin Salman made no media appearance during the April 28 visit of the newly-appointed US State Secretary Mike Pompeo to Riyadh, his first foreign trip as the top US diplomat. ..."
"... During his stay in Riyadh, Saudi media outlets published images of Pompeo's meetings with King Salman and Foreign Minister Adel al-Jubeir. ..."
According to the Persian-language newspaper, Keyhan, a secret service report sent to the
senior officials of an unnamed Arab state disclosed that bin Salman has been hit by two bullets
during the April 21 attack on his palace, adding that he might well be dead as he has never
appeared in the public ever since.
Heavy gunfire was heard near the Saudi King's palace in Riyadh Saudi Arabia on April 21,
while King Salman was taken to a US bunker at an airbase in the city.
A growing number of videos surfaced the media at the time displaying that a heavy
gunfire erupted around King Salman bin Abdulaziz Al Saud's palace in the capital,
Riyadh.
Reports said the king and his son, Crown Prince Mohammed bin Salman, were evacuated to a
bunker at an airbase in the city that is under the protection of the US troops.
While Saudi officials and media were quiet over the incident, there were contradicting
reports over the incident. Witnesses and residents of the neighborhoods near the palace
said a coup was underway, adding that the soldiers attacking the palace were guided by footage
and intel they were receiving from a drone flying over the palace.
Saudi opposition members claimed that "a senior ground force officer has led a raid on
the palace to kill the king and the crown prince".
Videos also showed that a growing number of armored vehicles were deployed around the
palace. 'Bin Salman's special guard' then took charge of security in the capital. Riyadh's sky
was then closed to all civil and military flights as military helicopters from 'Bin Salman's
special guard' were flying over the palace.
Bin Salman was a man who previously often appeared before the media but his 27-day absence
since the gunfire in Riyadh has raised questions about his health.
Saudi Arabia, the world's top oil exporter, has witnessed a series of radical political
changes over the past year as Mohammed bin Salman ousted his cousin as crown prince and jailed
well-known princes in an anti-corruption purge.
Moreover, bin Salman oversees social and economic reforms that have been censured by
several powerful Wahhabi clerics.
Saudi Arabia is also embroiled in a long running conflict in its Southern neighbor Yemen,
dubbed by the United Nations as the world's worst humanitarian crisis.
Notably, bin Salman made no media appearance during the April 28 visit of the
newly-appointed US State Secretary Mike Pompeo to Riyadh, his first foreign trip as the top US
diplomat.
During his stay in Riyadh, Saudi media outlets published images of Pompeo's meetings
with King Salman and Foreign Minister Adel al-Jubeir.
This is while the state-run outlets used to publish images of meetings in Riyadh between bin
Salman and former US secretary of state Rex Tillerson.
A few days after the April 21 incident, Saudi media published footage and images of bin
Salman meeting several Saudi and foreign officials. But the date of the meetings could not be
verified, so the release of the videos could be aimed at dispelling rumors about bin Salman's
conditions.
It is not clear if bin Salman's disappearance is due to reasons such as him feeling
threatened or being injured in the incident.
It has been almost a month since Saudi Crown Prince Mohamed bin
Salman made a public appearance, triggering questions whether the April 21 incidents at the
Royal Palace had a role in his disappearance.
Several reports claimed that the security incident in April, what Saudi officials said was a
result of a recreational drone flying near the king's palace in Riyadh, was indeed a palace
coup attempt. Saudi Prince Salman was allegedly injured during the attempt, according to
reports, mostly coming from Iran.
As a man who enjoys the public and media's eye, Salman's absence caught attention especially
after he was not seen on camera during U.S. Secretary of State Mike Pompeo's first visit to
Riyadh in late April.
The 32-year-old leader ousted his older cousin as crown prince last summer in a palace coup
and then jailed senior royals as part of an anti-corruption sweep. Prominent clerics have also
been detained in an apparent bid to silence dissent.
Those moves have helped Prince Mohammed consolidate his position in a country where power
had been shared among senior princes for decades and religious figures exercised significant
influence on policy.
But they have also fueled speculation about a possible backlash against the crown prince,
who remains popular with Saudi Arabia's burgeoning youth population
F Y I :> Putin prefers Aramco to Trump's sword dance
Hardly 10 months after honoring the visiting US president, the Saudis are open to a
Russian-Chinese consortium investing in the upcoming Aramco IPO
By M.K. BHADRAKUMAR
FEBRUARY 16, 2018
[extract]
In the slideshow that is Middle Eastern politics, the series of still images seldom add up
to make an enduring narrative. And the probability is high that when an indelible image
appears, it might go unnoticed -- such as Russia and Saudi Arabia wrapping up huge energy
deals on Wednesday underscoring a new narrative in regional and international security.
The ebb and flow of events in Syria -- Turkey's campaign in Afrin and its threat to
administer an "Ottoman slap" to the United States, and the shooting down of an Israeli F-16
jet -- hogged the attention. But something of far greater importance was unfolding in Riyadh,
as Saudi and Russian officials met to seal major deals marking a historic challenge to the US
dominance in the Persian Gulf region.
The big news is the Russian offer to the Saudi authorities to invest directly in the
upcoming Aramco initial public offering -- and the Saudis acknowledging the offer. Even
bigger news, surely, is that Moscow is putting together a Russian-Chinese consortium of joint
investment funds plus several major Russian banks to be part of the Aramco IPO.
Chinese state oil companies were interested in becoming cornerstone investors in the IPO,
but the participation of a Russia-China joint investment fund takes matters to an entirely
different realm. Clearly, the Chinese side is willing to hand over tens of billions of
dollars.
Yet the Aramco IPO was a prime motive for US President Donald Trump to choose Saudi Arabia
for his first foreign trip. The Saudi hosts extended the ultimate honor to Trump -- a
ceremonial sword dance outside the Murabba Palace in Riyadh. Hardly 10 months later, they are
open to a Russian-Chinese consortium investing in the Aramco IPO.
Riyadh plans to sell 5% of Saudi Aramco in what is billed as the largest IPO in world
history. In the Saudi estimation, Aramco is worth US$2 trillion; a 5% stake sale could fetch
as much as $100 billion. The IPO is a crucial segment of Vision 2030, Saudi Crown Prince
Mohammad bin Salman's ambitious plan to diversify the kingdom's economy.
"... I fully agree that attacking Iran would be yet another disaster but I don't understand why Saudi Arabia is portrayed as an 'enemy', the 'real' one, no less, in alt-media circles like this. I mean let's be honest with ourselves. KSA is the definition of a vassal state. Has been so since the state established established relations with the USA in the 1940s and the status was confirmed during the 1960s under King Faisal. Oil for security. Why pretend that they have any operational clearance from the US? ..."
I fully agree that attacking Iran would be yet another disaster but I don't understand
why Saudi Arabia is portrayed as an 'enemy', the 'real' one, no less, in alt-media circles
like this. I mean let's be honest with ourselves. KSA is the definition of a vassal
state. Has been so since the state established established relations with the USA in the
1940s and the status was confirmed during the 1960s under King Faisal. Oil for security. Why
pretend that they have any operational clearance from the US?
Contrary to the popular view, Wahabism is necessary to keep the local population under
control. Particularly the minority Shia population who live along the eastern coast, an area,
which incidentally also has the all the oil reserves.
USA fully understands this. Which is why they not only tolerated Wahabism, but strongly
promoted it during Afghan jihad. The operation was by and large very successful btw.
It was only during the '90s when religion became the new ideology for the resistance
against the empire across the Muslim world. Zero surprise there because the preceding
ideology, radical left wing politics was completely defeated. Iran became the first country
in this pattern. The Iranian left was decimated by the Shah, another vassal. So the religious
right became the new resistance.
And as far as the KSA is considered, Wahabi preachers aren't allowed to attack the USA
anyway. If any individual preacher so much as makes a squeak, he will be bent over a barrel.
There won't be any "coming down very hard on Saudi Arabia" because USA already owns that
country.
So what's the answer? Well, props to Phillip as he understood – "it would also
require some serious thinking in the White House about the extent to which America's armed
interventions all over Asia and Africa have made many people hate us enough to strap on a
suicide vest and have a go."
Your analysis starts too late. The US supports Wahhabism and the House of Saud because
the pro-Arabic/Islamic English Elites of 1910 and 1920 and 1935 supported Wahhabism and
the House of Saud.
The British Empire 'made' the House of Saud,
Thinking it wise to use Wahhabism to control Shia Islam is like thinking it wise to
use blacks to control the criminal tendencies of Mexicans.
"... We are the ones who have been fomenting destabilization all throughout the region some of whom would have been allies of the Saudis in some common cause. ..."
"... I think there are more effective choices concerning Yemen and Qatar. But figuring out what the choices are is not going to be easy. And harder still perhaps is implementing them. As for backfire -- we are just not in a position to judge, at the moment. Anyone hoping that another major state collapses in that region is probably miscalculating the value of instability. ..."
Crown Prince Mohammed bin Salman (MbS) of
Saudi Arabia is the undoubted Middle East man of the year, but his great impact stems more
from his failures than his successes. He is accused of being Machiavellian in clearing his way
to the throne by the elimination of opponents inside and outside the royal family. But, when it
comes to Saudi Arabia's position in the world, his miscalculations remind one less of the
cunning manoeuvres of Machiavelli and more of the pratfalls of Inspector Clouseau.
Again and again, the impulsive and mercurial young prince has embarked on ventures abroad
that achieve the exact opposite of what he intended. When his father became king in early 2015,
he gave support to a rebel offensive in Syria that achieved some success but provoked
full-scale Russian military intervention, which in turn led to the victory of President Bashar
al-Assad. At about the same time, MbS launched Saudi armed intervention, mostly through
airstrikes, in the civil war in Yemen. The action was code-named Operation Decisive Storm, but
two and a half years later the war is still going on, has killed 10,000 people and brought at
least seven million Yemenis close to starvation.
The Crown Prince is focusing
Saudi foreign policy on aggressive opposition to Iran and its regional allies, but the
effect of his policies has been to increase Iranian influence. The feud with Qatar, in which
Saudi Arabia and the UAE play the leading role, led to a blockade being imposed five months
ago which is still going on. The offence of the Qataris was to have given support to al-Qaeda
type movements – an accusation that was true enough but could be levelled equally at
Saudi Arabia – and to having links with Iran. The net result of the anti-Qatari campaign
has been to drive the small but fabulously wealthy state further into the Iranian embrace.
Saudi relations with other countries used to be cautious, conservative and aimed at
preserving the status quo. But today its behaviour is zany, unpredictable and often
counterproductive: witness the bizarre episode in November when the Lebanese Prime Minister
Saad Hariri was summoned to Riyadh, not allowed to depart and forced to resign his position.
The objective of this ill-considered action on the part of Saudi Arabia was apparently to
weaken Hezbollah and Iran in Lebanon, but has in practice empowered both of them.
What all these Saudi actions have in common is that they are based on a naïve
presumption that "a best-case scenario" will inevitably be achieved. There is no "Plan B" and
not much of a "Plan A": Saudi Arabia is simply plugging into conflicts and confrontations it
has no idea how to bring to an end.
MbS and his advisers may imagine that it does not matter what Yemenis, Qataris or Lebanese
think because President Donald Trump and Jared Kushner, his son-in-law and chief Middle East
adviser, are firmly in their corner. "I have great confidence in King Salman and the Crown
Prince of Saudi Arabia, they know exactly what they are doing," tweeted Trump in early November
after the round up and confinement of some 200 members of the Saudi elite. "Some of those they
are harshly treating have been 'milking' their country for years!" Earlier he had tweeted
support for the attempt to isolate Qatar as a supporter of "terrorism".
But Saudi Arabia is learning that support from the White House these days brings fewer
advantages than in the past. The attention span of Donald Trump is notoriously short, and his
preoccupation is with domestic US politics: his approval does not necessarily mean the approval
of other parts of the US government. The State Department and the Pentagon may disapprove of
the latest Trump tweet and seek to ignore or circumvent it. Despite his positive tweet, the US
did not back the Saudi confrontation with Qatar or the attempt to get Mr Hariri to resign as
prime minister of Lebanon.
For its part, the White House is finding out the limitations of Saudi power. MbS was not
able to get the Palestinian leader Mahmoud Abbas to agree to a US-sponsored peace plan that
would have given Israel very much and the Palestinians very little. The idea of a Saudi-Israeli
covert alliance against Iran may sound attractive to some Washington think tanks, but does not
make much sense on the ground. The assumption that Trump's recognition of Jerusalem as the
capital of Israel, and the promise to move the US embassy there, would have no long-term
effects on attitudes in the Middle East is beginning to look shaky.
It is Saudi Arabia – and not its rivals – that is becoming isolated. The
political balance of power in the region changed to its disadvantage over the last two years.
Some of this predates the elevation of MbS: by 2015 it was becoming clear that a combination of
Sunni states led by Saudi Arabia, Qatar and Turkey was failing to carry out regime change in
Damascus. This powerful grouping has fragmented, with Turkey and Qatar moving closer to the
Russian-backed Iranian-led axis, which is the dominant power in the northern tier of the Middle
East between Afghanistan and the Mediterranean.
If the US and Saudi Arabia wanted to do anything about this new alignment, they have left it
too late. Other states in the Middle East are coming to recognise that there are winners and
losers, and have no wish to be on the losing side. When President Recep Tayyip Erdogan called a
meeting this week in Istanbul of the Organisation of Islamic Cooperation, to which 57 Muslim
states belong, to reject and condemn the US decision on Jerusalem, Saudi Arabia only sent a
junior representative to this normally moribund organisation. But other state leaders like
Iranian President Hassan Rouhani, King Abdullah of Jordan and the emirs of Kuwait and Qatar,
among many others, were present. They recognised East Jerusalem as the Palestinian capital and
demanded the US reverse its decision.
MbS is in the tradition of leaders all over the world who show Machiavellian skills in
securing power within their own countries. But their success domestically gives them an
exaggerated sense of their own capacity in dealing with foreign affairs, and this can have
calamitous consequences. Saddam Hussein was very acute in seizing power in Iraq but ruined his
country by starting two wars he could not win.
Mistakes made by powerful leaders are often explained by their own egomania and ignorance,
supplemented by flattering but misleading advice from their senior lieutenants. The first steps
in foreign intervention are often alluring because a leader can present himself as a national
standard bearer, justifying his monopoly of power at home. Such a patriotic posture is a
shortcut to popularity, but there is always a political bill to pay if confrontations and wars
end in frustration and defeat. MbS has unwisely decided that Saudi Arabia should play a more
active and aggressive role at the very moment that its real political and economic strength is
ebbing. He is overplaying his hand and making too many enemies.
The only hope someone as cloistered as a Saudi crown prince can have of being an effective
ruler is either by being an extraordinary person (very curious, love learning for its own
sake, etc), or be at least moderately intelligent, and listen to consensus.
For its part, the White House is finding out the limitations of Saudi power. MbS was not
able to get the Palestinian leader Mahmoud Abbas to agree to a US-sponsored peace plan that
would have given Israel very much and the Palestinians very little.
Lies and Jew-hatred. Everyone knows that despite their infamous sharpness in business
dealings, the world's longest history of legalism, a completely self-centered and
ethnocentric culture, and their longstanding abuse of the Palestinians, every single
deal the Jews try to sign with the Palestinians heavily favors the Palestinians, and the
only reason the Palestinians won't sign is because they're psychotic Jew-haters.
The idea of a Saudi-Israeli covert alliance against Iran may sound attractive to some
Washington think tanks, but does not make much sense on the ground. The assumption that
Trump's recognition of Jerusalem as the capital of Israel, and the promise to move the US
embassy there, would have no long-term effects on attitudes in the Middle East is beginning
to look shaky.
Hey, you skipped the part where you did anything to support the idea that a Zionist-Saudi
alliance doesn't make sense.
K, let's all wait for Art Deco to come in and spew some Hasbara then tell us he's not a
Zhid.
{Mohammed Bin Salman's Ill-Advised Ventures Have Weakened Saudi Arabia}
GREAT news.
Hopefully the evil, cannibalistic terrorism spreading so-called 'kingdom' of desert nomads
will continue on its path of self destruction, and disappear as a functioning state.
Once more a Saudi Firster was detained in KSA. This time the owner of Arab Bank, a Jordanian
with dual Jordan and KSA citizenship. Saad Hariri a Lebanese was the first one who was dual
Lebanon and KSA citizens and who lost his diplomatic immunity in KSA.
I wonder if the Israel Firster who are dual citizens are now sweating? Wonder, if Netanyahu is still an USA citizen? Happy days are coming back .
"Saudi relations with other countries used to be cautious, conservative and aimed at
preserving the status quo. But today its behaviour is zany, unpredictable and often
counterproductive:"
Saudis allied with Israelis, backed by the wealth and might of the US? Guaranteed to bring
out the worst in Saudis (which is bad enough at base) and Israelis and Americans.
Machiavellian skills really ? I'd see 6 months ahead if this was true. MBS just made a show
that they are a de facto Mafia not a businessman to the whole world. I'd bet he just quashed
a lot of efforts and money spent on raising the racing horses of the saud monarch and in turn
destroyed some serious connection that were vital but aren't readily available to them. Just
how potent money they thought it would be ? Sure all is businesses and it will work so long
you can pay the right person. The problem is where to find the right person.
Come on Cockburn, look at the Big Picture, not the little one. This the old fallacy of
looking at the trees and not seeing the forest. What is happening in Saudi Arabia is a piece
of the much bigger puzzle being put together over years, decades, and maybe generations.
The
psychopaths at the top of the power pyramid have been engaged in this hidden global game for
generations, it's always been part of their longterm strategy.
Very recently Highly
intelligent, realistic, morally and ethically centered, and practically oriented individuals,
have also formed secret powerful groups to arrive at beneficial goals for humanity. These
truly Good Guys have learned that the criminal, murderous, lecherous, degenerate, deviate,
psychopaths in positions of great power are irredeemable and should be eliminated where
possible. What you see in Saudi Arabia is merely a tree, not the forest. Just the same, to
the author, keep writing but research the subject much much more before you put pen to paper,
as you do have apersuasive and talented style.
1. We have been screaming about the unintended consequences of Saudi giving to charities
since 2004.
2. We removed the buffer of Iraq from Iranian ambitions (as unclear as it may be debated)
creating issues not only for Saudi Arabia, but others in the region as well.
3. We are the ones who have been fomenting destabilization all throughout the region some
of whom would have been allies of the Saudis in some common cause.
4. No one is escaping the negative consequences of our Iraq invasion.
5. We have been complaining about rogue and irresponsible wealthy Muslims ad naseum.
Now when someone steps up the plate to meet the challenges many caused by the US –
our first complaint is not astute counsel but rather a series of articles highlighting
failure. I would not contend that I support every choice. But I think we should at least take
a wait and see perspective. He is operating in a region rife with intrigue and ambitions, not to mention -- Muslims bent
on spreading Islam as one would expect a muslim to do. Frankly I am not sure how one governs
in the arena of the middle east – especially now – it's a region in major
shift.
I think there are more effective choices concerning Yemen and Qatar. But figuring out what
the choices are is not going to be easy. And harder still perhaps is implementing them. As for backfire -- we are just not in a position to judge, at the moment. Anyone hoping that another major state collapses in that region is probably miscalculating
the value of instability.
The Saudis are the U.S. and ISISRAELS puppet, they do what the Zionist neocons tell them to
do, which is to be the Zionist agent provocateur in the Mideast.
The Saudis have helped the U.S. and ISISRAEL create and finance ISIS aka AL CIADA and for
this the Saudis can rot in hell, and by the way the reason for the attack on Yemen is that
the Saudis oil reserves are diminishing and so the Saudis figured they would take Yemens
oil.
The main creators of ISIS aka AL CIADA are the U.S. and ISISRAEL and BRITAIN ie the CIA
and the MOSSAD and MI6.
The irony is that Saudis, before MbS and during his dominance, are making exactly the same
suicidal blunders as the US. No enemy could have damaged the US and its positions in the
world more than its Presidents and the Congress in the last 17 years. The same is true for
KSA, with the same mistakes being made: undermining the financial system of the country,
global over-reach that forces all opposition to unite, crazy military expenses, etc.
Sorry, but these people dressed in 14 century robes and garb, cannot be taken seriously. They
look like play-people feigning a furious grandeur.
Without their petrochemicals – they would be laughed at by everyone –
including their own kind. They should not be respected because they are religious – they are old world
tribalist thugs hiding behind a religion. They use and abuse their people – holding
them back from modernity.
Thing is, Saudi regime was rotten through and through before MbS, remains rotten under his
rule, and will remain rotten when some other jerk kicks him out and establishes himself at
the helm.
It does not matter how smart Saudi Arabia is with their foreign policy now, they became
allies with Israel, that means Saudi Arabia can never claim to be a power working for the
interests of Islam. MBS is a marked man, no matter how many purges he undertakes in his army,
or even if he just hires Pakistani soldiers, if he has Muslims fighting in his army he will
always be carrying the risk of being assassinated by somebody who has seen him cross the red
line and become pro jewish.
I don't really understand the constant hopes that the Saudi regime will fall. How is that any
different from cheering Bush's disastrous regime change in Iraq? How will the fallout be any
better in Arabia than it was in Iraq, Libya, etc?
It's not that there's a constant hope it's just they'd fall in the near future and
fortunately it will balance the geopolitical power in the future. Their fallout aren't going
to be as bad unless the people pulling their string persistent in keeping them in power.
It will be better because it means Israel loses an ally, also with the Saudis gone Egypt will also be unable to keep their
population in check. The fall of the Saudis means that Israel will be surrounded by regimes that oppose it...
Another Junior Gaddafi that is going to ruin his entire nation while intoxicated with NYT or
other Western media coverage. He talks of corruption after spending 1.1 Billion dollars on a
yacht and a painting.
Netenyahu is much the same. He has weakened Israel immensely by playing the scary wolf.
South Africa was never in danger from their hostile neighbors . They committed suicide. Egypt cannot control its own territory let alone start wars , ditto for Syria and Lebanon.
Jordan is a client state of Israel and lacks a functioning army. ...
"... Trump has just declared that the U.S. recognizes Jerusalem as the capital of Israel. Did the administration expect the applause of the Saudis for its breaking of international law with regards to Jerusalem? Does it lash out to the Saudis to get their agreement? ..."
"... If so the miscalculation is clearly on the U.S. side. It is impossible for the Saudis to concede the Haram al-Sharif, the mosque on the so called temple mount, to the Zionists. The Saudi King would no longer be the "custodian of the two holy mosques" in Mecca and Medina but the "seller of the third holy mosque" of Islam in Jerusalem. The people would kill him and his whole family. ..."
"... My pet hypothesis is Trump's recognizing Jerusalem was the bone he was willing to throw the Israelis after his generals told him attacking Iran would be catastrophic for the US military and world economy. The Saudis, who are as rabid about bombing Iran as the Zionists, were pissed as they probably had been led to believe the attack was a matter of time. ..."
"... That sacked FM - Is that the little fellow that Col Lang calls "The Chihuahua"? ..."
"... Saudi in all likelihood were not part of the Jerusalem declaration. Israeli sources spread a plan they said was agreed to by Saudi, trying to embarrass them. ..."
"... Jerusalem: The reaction is deeper than expected. Not in the way of street, easily contained, violence, but by a gut reaction of the whole ME..The religious aspect seems to have been totally ignored by the US. Removing one of the major symbols of about 1.2 billion people - is not going to go down well. ..."
"... wahabbi is a tavistock british demented fiendish virus injected into islam for gang counter gang pseudogang hagel control ..."
"... I do wonder...knowing that real or false-flag violence could ensue against Israeli or US targets, it could be a useful pretext for the US waging war in the ME against Hezbullah or anyone else we accuse. With our intelligence agencies providing the "evidence" and a compliant media to sell it, as usual a majority of Americans would support it. ..."
"... This Jerusalem declaration has me genuinely scared. Violence (real or false flag) could be the expected Reaction to this Problem, resulting in the long-planned Solution of finishing off MENA. If Russia is sincere in its alliance with Syria and Iran, and interest in a multi-polar world with self-determination for sovereign nations, this war could easily escalate to the End Timer's dreamt of Final Battle of Armageddon. ..."
"... Most of the MSM coverage of Reactions I've seen name Muslim/Arab countries as opposing, and others as "concerned," even though almost all official state responses have denounced President Trump's® declaration. This "Clash of Civilizations" type narrative is not encouraging. ..."
"... something stinks in trumptoon. really small world what are the chances A. whenever Donald Trump has left the White House and ventured anywhere, Dmitry Rybolovlev (aka the "Russian King of Fertilizer") has tended to show up in the same city. The latter possibility has long been bolstered by the fact that Trump sold Rybolovlev a mansion a few years ago that neither of them lived in nor cared about, suggesting the sale was mere cover for shifting money from Russia to Trump. ..."
"... Western media called Putin unpredictable, but that was because he could see moves that others didn't see. ..."
Just the day before the administration leaked to the WSJ about the art deal, President Trump
had publicly
scolded MbS about the situation in Yemen:
President Trump called on Saudi Arabia to lift its crushing blockade against its war-torn
neighbor Yemen on Wednesday, hours after defying the kingdom and saying the U.S. would
recognize Jerusalem as the capital of Israel .
In a statement Wednesday afternoon, Mr. Trump said he had directed members of his
administration to reach out to the Saudi leadership "to request that they completely allow
food, fuel, water, and medicine to reach the Yemeni people who desperately need it."
Speaking in Paris on Friday, Rex Tillerson, US secretary of state, called on Saudi Arabia to
be "measured" in its military operations in Yemen.
...
Tillerson urged Saudi restraint.
"With respect to Saudi Arabia's engagement with Qatar, how they're handling the Yemen war
that they're engaged in, the Lebanon situation, we would encourage them to be a bit more
measured and a bit more thoughtful in those actions to, I think, fully consider the
consequences," he said.
He once again demanded a "complete end" to the Saudi-led blockade of Yemen so that
humanitarian aid and commercial supplies could be delivered.
Embarrassing MbS about the art buy and publicly(!) scolding hm for the situation in Yemen,
for which the U.S. is just as much responsible as the Saudis, is quite an assault. What has MbS
done - or not done - to deserve such a punishment?
Trump has just
declared that the U.S. recognizes Jerusalem as the capital of Israel. Did the
administration expect the applause of the Saudis for its breaking of international law with
regards to Jerusalem? Does it lash out to the Saudis to get their agreement?
If so the miscalculation is clearly on the U.S. side. It is impossible for the Saudis to
concede the Haram al-Sharif, the mosque on the so called temple mount, to the Zionists. The
Saudi King would no longer be the "custodian of the two holy mosques" in Mecca and Medina but
the "seller of the third holy mosque" of Islam in Jerusalem. The people would kill him and his
whole family.
If the issue of this public hustle it is not Jerusalem, what else might it be that the Trump
administration wants and the Saudis can not, or are not willing to concede?
A few hours ago the Saudi King fired his ankle biting Foreign
Minster Adel al-Jubair. A relative of the king, Khaled bin Salman, will take the job. Is this
related to the spat with Trump?
The Saudi Foreign Minister, 'Adel Al-Jubeir, has been allegedly sacked by the Kingdom's
regime, several prominent political activists reported this evening.
According to the claims, Jubeir was fired and replaced by a close confidant of Crown
Prince Mohammad bin Salman.
The confidant that is allegedly replacing Jubeir is none other than Prince Khaled bin
Salman, the Crown Prince's brother.
The Saudi regime has yet to confirm or deny these rumors.
Where does MbS's interpretation of Salvator Mundi come from. The Saudi's have something with
crystal orbs, like the one Trump so fondly stroked in Riyadh after giving a masterful
interpretation of the sword dance.
Yes. It is puzzling what is going on between MbS and the Trump administration. I was sure
MbS, the reformer, secretly okayed the Jerusalem move. His negative statement might be just
theater, I figured. But I am not so sure anymore. Yes, MbS wants a peace deal (any deal with
"peace" written on it) between Palestinians and Israelis. But both he and Trump/Kushner are
novices in politics and diplomacy (and that ain't the same as getting a deal for a new tower)
and absolutely underestimated the effort. Totally.
Word is that Kushner made Trump delay delivering his campaign promise because he needed
more time for his peace plan (and that would be 6 months???). This is the level they are at.
And now, they placed an obvious obstacle in the path go their peace plan - out of folly.
Complete folly. Because Trump wanted to deliver. I believe they are already backtracking as
good as they can. But the damage is done. I think Palestinians were just waiting for a good
opportunity/reason to get rid of the US in the process and found it now. Also, the single
state solution is being talked about.
The source for the WSJ need not be the Trump administration in the narrow sense but some
stray intelligence official ("U.S. intelligence reports") wanting to throw a wrench because
that story is absolutely damaging. Absolutely, because it is embarrassing and I don't think
MbS enjoys that. Note, the story began to become known around the time it became obvious
Trump would not sign the waiver and reached its epitome (WSJ) just after that. Trump set
himself up for this.
My pet hypothesis is Trump's recognizing Jerusalem was the bone he was willing to throw
the Israelis after his generals told him attacking Iran would be catastrophic for the US
military and world economy. The Saudis, who are as rabid about bombing Iran as the Zionists,
were pissed as they probably had been led to believe the attack was a matter of time. In
order to remind them of their position and get them on board with the "peace" deal Tillerson
has been hinting about, they've been turning the screws on MBS as a taste of what's to come
if he puts up stink about the wonderful Kushner- concocted "plan".
$450 mil... MbS's Egyptian torturer-in-chief must have just torn a few princely nails and
whip a few feet for that, just a few days' worth of "anti-corruption" "campaigning".
Wait, wasn't the Saudi populace all behind MbS because he was going to spend the money on
them? If there is no bread, let them non-royals eat paint.
About the picture - after the shake down of
Saudi Arabia's rich princes MBS must have a lot of enemies. Some of these princes might
have been close to the Trump administration.
Gazan military groups are warming up to a rocket competition. I am sure the real stuff is
not involved yet. What were they thinking? That people did not take the chance to unite on
the only issue they all agree on?
4
I agree, Saudi in all likelihood were not part of the Jerusalem declaration. Israeli
sources spread a plan they said was agreed to by Saudi, trying to embarrass them.
MbS is in it for himself, no one else. Leave him aside for the moment.
However, Trump probably thought he had a marvellous peace plan for Palestine which he
would show the world.... errr... tomorrow. This was supposed to have the backing of the
Saudis and the Israelis and all the other ME "actors" would be lined up behind MbS.
ie. Saudis would provide the backing, which included the "Arab" states as per the recent
gathering of them all (excluding Iran and Iraq). Abbas would be blackmailed to go along in
order to keep his position (Moneywise), and the Palestinians as well - but by the withholding
of funds. (New vote in Congress).
Leaks of the plan (unverified) suggest that the PA's would be held in walled-in isolated
camps, with all contact subject to the harassement and nightly raids of the IDF, the land
still open to theft by settlers (this has been "legalised" in Israel !) and so on. ie they
get nothing except a tissue-paper "treaty" . They seem not to have even been consulted by
Kushner and the Israelis. ie who possibly expected to be able to impose whatever Netanyahu
and the Israeli Generals might allow.
BUT, when have either the US or Israel kept to an agreement - never. and the PA's and the
rest of the ME know it.
Jerusalem: The reaction is deeper than expected. Not in the way of street, easily
contained, violence, but by a gut reaction of the whole ME..The religious aspect seems to
have been totally ignored by the US. Removing one of the major symbols of about 1.2 billion
people - is not going to go down well.
Those countries with a large Palestinian refugee population, either fear them, or may be
outnumbered if there are more arriving (Jordan), or will find that they now have a potential
source of militants at their disposal.. (Syria?, Lebanon?). The Syrians and Lebanese have not
let the Palestinians get more arms - yet, as they might have become targets themselves. But,
there have been PA's in the Syrian counter-terrorist forces, even when Yarmouk camp was held
by Daesh (or one of the others).
So I think that the "bit" players have got cold feet. They cannot go along with the
eradication of the Palestinians or their confinement to concentrated internement camps such
as Gaza, whose conditions are WORSE that prisons. Otherwise the whole "Rulers-People and the
power-structures that keep them in place" would be in jeopardy.
......
The Leonardo ? .... acquiring "class" by buying expensive "cultural" artifacts. You can buy a
lot of "class" with $450.3 million.
a simple question who gets the 100s of millions? who is the seller? the fake painting is
cover for a payoff or tribute yes no maybe friends of kushner own the painting maybe it is to
help kushner and his 666 moloch tower block mortgage. the bank of gorge soros must need some
fund back quick for a new hungary regime change operation.
wahabbi is a tavistock british demented fiendish virus injected into islam for gang
counter gang pseudogang hagel control
uae and the house of saud are donmeh jews
satanist hate jesus.
simply google talmud quotes about jesus and all will become clear.
As to how the Jerusalem actions play out, the posting here (MOA) a couple of days ago was
informative as to reasons and timing (including info about Sheldon Adelson's hundred million
to Trump campaign). I do wonder...knowing that real or false-flag violence could ensue
against Israeli or US targets, it could be a useful pretext for the US waging war in the ME
against Hezbullah or anyone else we accuse. With our intelligence agencies providing the
"evidence" and a compliant media to sell it, as usual a majority of Americans would support
it.
Great stuff, b et al. This Jerusalem declaration has me genuinely scared. Violence (real
or false flag) could be the expected Reaction to this Problem, resulting in the long-planned
Solution of finishing off MENA. If Russia is sincere in its alliance with Syria and Iran, and
interest in a multi-polar world with self-determination for sovereign nations, this war could
easily escalate to the End Timer's dreamt of Final Battle of Armageddon.
Most of the MSM coverage of Reactions I've seen name Muslim/Arab countries as
opposing, and others as "concerned," even though almost all official state responses have
denounced President Trump's® declaration. This "Clash of Civilizations" type narrative is
not encouraging.
@ Daniel ending with "This "Clash of Civilizations" type narrative is not encouraging." That
is exactly what they want you to focus on as a narrative rather than the simple truth about
the demise of private banking. On the previous thread about the Republican: Ryan deficit BS
there was a commenter ex-SA with a John H. Hotson link that I want to see go viral because it
simply explains the history of the Gordian Knot we face as a species
"Banking came into existence as a fraud. The fraud was legalized and we've been living with
the consequences, both good and bad, ever since. Even so it is also a great invention-right
up there with fire, the wheel, and the steam engine."
Clash of Civilizations is as vapid a meme as the common understanding of the Capitalism
myth as that article so clearly states. Spread his word far and wide to wake up the zombies. It is time!
17 something stinks in trumptoon. really small world what are the chances A. whenever Donald Trump has left the White House and ventured anywhere, Dmitry Rybolovlev
(aka the "Russian King of Fertilizer") has tended to show up in the same city.
The latter possibility has long been bolstered by the fact that Trump sold Rybolovlev a
mansion a few years ago that neither of them lived in nor cared about, suggesting the sale
was mere cover for shifting money from Russia to Trump.
Deutsche Bank in Germany busted for laundering more than ten billion dollars out of Russia
and into places like New York. This stood out because Deutsche has also loaned more than a
billion dollars to Donald Trump, who just happens to be based out of New York.
thanks b.. fascinating.. i wait for the next shoe to drop.. it's coming... hopefully we get
the back story on this sooner then later..
i would think the timing of Foreign Minster Adel al-Jubair being fired has something to do
with all this.. he revealed something that he wasn't supposed to? i would also imagine those
heavies still hanging at the saudi ritz carlton might be pulling some strings from behind the
scenes? meanwhile mbz is doing a hell of a fine apprentice with mbs, lol..
nice pic in the post btw!! clown prince as savior of ksa, lol...
Belief in Jerusalem as the Jew capital is the same as belief in the intrinsic value of fiat
currency, or the exceptionalism of the US. It's just mental illness. The Kingdom of God is
within you, not in temples of stone and wood. We'd be better just cultivating our own
personal relationship with our higher selves and leave the deluded to scrap it out over ash
and sand. That said, if someone with a big nose came to my door and said my house was going
to get knocked down because Shalom etc, that would be the day I would have to really figure
out how to proceed without becoming the necessary victim in another's persecutor drama
complex. I guess that's what Palestinians have to deal with every day. Horrible situation.
I heard a story once that when the British were throwing the Aborigines of Australia off
cliffs en masse in their Australian version of the Middle East story of dispossession and
demonization, the Aborigines would look up calmly at the officers as they fell and in their
own language say: "You have a problem, bro". Sometimes death is better than becoming a
victim. And as a worshiper of Lord Shiva the Destroyer, I wish you all completely liberating
and renewing deaths from yourselves.
But, has not The Donald declared that this media NYT, Bloomberg , etc...were all "fake
news"?
Then why is anybody going to trust them when publishing whatever?
Sounds quite clumsy, or simply, demential ( as every move of this administration ) to try to
leak something through those media you have widely discredited during all your election
campaign and beyond....
I, by a norm, do not trust any move coming from Trump could be for any good. This is, simply,
"smoke and mirrors" and an intent of whitewashing a bit the already deplorable image of this
admnistration in front of the world wide reaction in rejection of his bold and clumsy
declaration of Jerusalem as capital of the Zionist regime.
The same for the clearly hypocritical call for to alleviate the suffering of the Yemeni
people, just another intent of whitewashing when they are main puppet-masters in that war
torn country, as it happens with every conflict in the world.
What it is beyond me is that the Russians, are always amongst those who swallow this theater
plays....I wonder why....
In front of the demential way this administration makes fun of every event, people,
country... in the world, in spite of the suffering they could inflict on them, I concur with
Terry in that this just could be some esotheric issue more proper of unoccupied people with
too much money to waste. Most probably something involving "Damian" Kushner, his 666,Madison
Avenue penthouse and an occult message from The Messiah in the reverse of the canvas of that
Jesus paint with a codified message on the results of the coming final battle of Armaggedon
amongst the forces of evil and those of good, when Russia will be santified as the real
Promised Land and The Saker will be ( finally! ) crowned as the saint he always claimed to be
along with Saint Nicolas Romanov, and they will all eat sardinas together with the
Trumps, the Kushners and the Netanyahus in Mar a Lago or in the super-yatch of
Abramovich during the summer, but in winter they will go together to Sochi´s Putin
dacha, since they love to meet super-intelligent, well educated, cool people....well, the
elite of everything...
The surviving Arabs and the rest of us, plebeian ignorant clumsy sinners not so white as
them, ( what they call "the sheeple", vaya )we will continue working from sunrise to sunset
for crumbs, but, who cares? We will continue having good times with our peers and loved ones
and laughing as usual with the little things of real life...Do not despair....
Western media called Putin unpredictable, but that was because he could see moves that others
didn't see. Erdogan looked unpredictable and irrational while moving from the hedgemon to the
multi-polar world.
Trump? Like Erdogan, trying to move US to the multi polar world?
Too many moves he makes puts sand in the hedgemon's gears.
"... The document, which is being unveiled for the first time, proves all that has been leaked since President Trump's visit to
Saudi Arabia last May on the launch of US efforts to sign a peace treaty between Saudi Arabia and Israel. This was followed by information
on the exchange of visits between Riyadh and Tel Aviv, the most important being the visit of the Saudi Crown Prince to the Zionist entity.
..."
"... The document reveals the size of concessions that Riyadh intends to present in the context of the liquidation of the Palestinian
issue, and its concern to get in return the elements of power against Iran and the resistance, led by Hezbollah. ..."
Revealed - Saudis Plan To Give Up Palestine - For War On Iran
The tyrants of Saudi Arabia developed a plan that sells away Palestine. They see this as necessary to get U.S. support for their
fanatic campaign against their perceived enemy Iran.
An internal Saudi memorandum, leaked to the Lebanese paper Al-Akhbar , reveals its major elements. (Note: The genuineness
of the memo has not been confirmed. In theory it could be a "plant" by some other party. But Al-Akhbar has so far an excellent
record of publishing genuine leaks and I trust its editors' judgement.)
According to the memo the Saudis are ready to give up on the Palestinian right of return. They forfeit Palestinian sovereignty
over Jerusalem and no longer insist of the status of a full state for the Palestinians. In return they ask for a U.S.-Saudi-Israeli
(military) alliance against their perceived enemy on the eastern side of the Persian Gulf.
Negotiations on the issue were held between the Saudis and the Zionist under the aegis of the United States. Netanyahu and Trump's
"shared personal assistant, wunderkind Jared Kushner", is the point men in these negotiations. He made at least
three trips to Saudi Arabia
this year, the last one very recently.
The Saudi operations over the last month, against the internal opposition to the Salman clan as well as against Hizbullah in Lebanon,
have to be seen
in the context and as preparation of the larger plan. To recap:
Last week the current front-man of the Palestinians, Mahmoud Abbas, was ordered to Riyadh. There
he was
told to accept whatever will be presented as U.S. peace plan or to resign. He was urged to cut all Palestinian ties with Iran
and Hizbullah:
Since the warnings, which could threaten the new Palestinian unity agreement signed by Fatah and the Iranian-backed Hamas in the
Gaza Strip, Palestinian media displayed a rare degree of unity in recent days by coming out against Iran.
On November 6 a letter by the Israeli Prime Minister Netanyahoo to Israeli embassies was intentionally "
leaked ". In it Netanyahoo urges his diplomats
to press for full support for the Saudi plans in Lebanon, Yemen and beyond. On the same day Trump
tweeted :
Donald J. Trump @realDonaldTrump - 3:03 PM - 6 Nov 2017
I have great confidence in King Salman and the Crown Prince of Saudi Arabia, they know exactly what they are doing....
The Saudi tyrant abducted the Prime Minister of Lebanon, Saad Hariri, and
declared
war on the country. The purpose of this move is to remove or isolate Hizbullah, the Shia resistance of Lebanon which is allied
with Iran and opposes the Saudi plans for Palestine.
On November 11 the New York Times reported on the
U.S. drafting of a "peace plan" but provided little detail. The chance for such a plan to succeed was described as low.
The left-wing Lebanese paper Al-Akhbar has obtained a
copy of the plan (Arabic) in form of a memorandum by the Saudi Foreign Minister Adel Al-Jubeir to the Saudi clown prince Mohammed
Bin Salman (
English machine translation ):
The document, which is being unveiled for the first time, proves all that has been leaked since President Trump's visit to
Saudi Arabia last May on the launch of US efforts to sign a peace treaty between Saudi Arabia and Israel. This was followed by
information on the exchange of visits between Riyadh and Tel Aviv, the most important being the visit of the Saudi Crown Prince
to the Zionist entity.
The document reveals the size of concessions that Riyadh intends to present in the context of the liquidation of the Palestinian
issue, and its concern to get in return the elements of power against Iran and the resistance, led by Hezbollah.
The Saudi foreign ministry memo starts by laying out its strategic perspective:
To face Iran by increasing sanctions on ballistic missiles and reconsidering the nuclear deal, the Kingdom has pledged in the
strategic partnership agreement with US President Donald Trump that any US-Saudi effort is the key to success.
...
Saudi Arabia's rapprochement with Israel involves a risk to the Muslim peoples of the Kingdom, because the Palestinian cause represents
a spiritual and historical and religious heritage. The Kingdom will not take this risk unless it feels the United States' sincere
approach to Iran, which is destabilizing the region by sponsoring terrorism, its sectarian policies and interfering in the affairs
of others.
The Saudi paper describes the issues and process steps towards a deal in five points:
First : The Saudis demand a " parity of the relationship " between Israel and Saudi Arabia. On the military level they demand
that either Israel gives up on its nuclear weapons or Saudi Arabia is itself allowed to acquire such
Second : In exchange Saudi Arabia will use its diplomatic and economic power to push through a 'peace plan' between Israel, the
Palestinians and Arab countries along the lines that the U.S. will lay out. Within such a peace plan the Saudis, according to the
memo, are willing to make extraordinary concessions:
The city of Jerusalem would not become capital of a Palestinian state but be subjected to a special international regime administered
by the United Nations.
The right of return for Palestinian refugees, who were violently expelled by the Zionists, would be given up on. The refugees
would be integrated as citizens of those countries where they currently reside.
(No demand for full sovereignty of a Palestinian state is mentioned.)
Third : After reaching an agreement of the "main principles of the final solution" for Palestine between Saudi Arabia and the
U.S. (Israel), a meeting of all foreign ministers of the region would be convened to back these up. Final negotiations would follow.
Fourth : In coordination and cooperation with Israel Saudi Arabia would use its economic power to convince the Arab public of
the plan. The point correctly notes "At the beginning of normalizing relations with Israel, normalization will not be acceptable
to public opinion in the Arab world ." The plan is thus to essentially bribe the Arab public into accepting it.
Fifth : The Palestinian conflict distracts from the real issue the Saudi rulers have in the region which is Iran: "Therefore,
the Saudi and Israeli sides agree on the following:
Contribute to counter any activities that serve Iran's aggressive policies in the Middle East. Saudi Arabia's affinity with
Israel must be matched by a sincere American approach against Iran.
Increase US and international sanctions related to Iranian ballistic missiles.
Increase sanctions on Iran's sponsorship of terrorism around the world.
Re-examination of the group (five + 1) in the nuclear agreement with Iran to ensure the implementation of its terms literally
and strictly.
Limiting Iran's access to its frozen assets and exploiting Iran's deteriorating economic situation and marketing it to increase
pressure on the Iranian regime from within.
Intensive intelligence cooperation in the fight against organized crime and drug trafficking supported by Iran and Hezbollah."
The memo is signed by Adel al-Jubeir. (But who were the 'advisors' who dictated it to him?)
The U.S. plan for peace in Palestine is to press the Palestinians and Arabs into anything Israel demands. The Saudis will agree
to that, with minor conditions, if only the U.S. and Israel help them to get rid of their nemesis Iran. But that is impossible. Neither
Israel nor the U.S. will agree to a "parity of relationship" for Saudi Arabia. Saudi Arabia lacks all elements to become a supreme
state in the Arab Middle East. Iran can not be defeated.
Iran is the at the core of the Shia constituency and at the core of resistance to "western" imperialism. Shia and Sunni aligned
populations in the Middle East (ex Egypt) are of roughly equal size. Iran has about four times the number of citizens the Saudis
have. It is much older and cultured than Saudi Arabia. It has an educated population and well developed industrial capabilities.
Iran is a nation, not a conglomerate of desert tribes like the desert peninsula under al-Saud. Its geographic position and resources
make it unconquerable.
To defeat Iran the Saudis started proxy-wars in Iraq, Syria, Yemen and now Lebanon. They needed foot soldiers to win these wars.
The Saudis hired and sent the only significant infantry they ever had at their disposal. Their hordes of al-Qaeda and ISIS fanatics
were defeated. Tens of thousands of them have been killed on the battle fields in Iraq, Syria and Yemen. Despite a global mobilization
campaign nearly all the potentially available forces have been defeated by the local resistances on the ground. Neither the colonial
settler state nor the U.S. are willing to send their soldiers into battle for Saudi supremacy.
The grant plan of the Trump administration to achieve peace in the Middle East is high on hopes but lacks all the necessary details.
The Saudi's promise to support the U.S. plan if the Trump administration is willing to fight their nemesis Iran. Both leaderships
are hapless and impulsive and both of their plans have little chance of final success. They will be pursued anyway and will continue
to create an enormous amount of collateral damage. The Zionist entity feels no real pressure to make peace. It is already
dragging its feet on these plans and will try to use them to its sole advantage.
Posted by b on November 14, 2017 at 05:42 AM |
Permalink
This reeks of despair. How long should one give to the clown prince MBS before he achieves the final collapse of Saudi Arabia
is the only question I have.
This did not need a leak, it was clear. The "leak" might as well have been invented from what has transpired anyway.
There is an Arab peace plan from 2002 which Israelis find unacceptable.
Israelis will find this new peace plan unacceptable, too, as it would mean a one state solution - Palestinian struggle for
a state would be changed to an equal rights campaign Israelis would find very difficult to counter.
The 'new' plan is too late anyway, Israel cannot directly engage in any war without being existentially threatened themselves,
last time proved in Gaza. Hamas might have been forced to allow the Palestinian authority back but they did not give up their
weapons.
And neither the US nor Israel can politically afford to lose many soldiers in a ground war. So if Saudi wants to fight against
Iran, they have to do it themselves.
Never ceases to amaze the repeated rhetoric about how Iran is the bogyman, when Saudi Arabia financed the destruction in Syria.
Israel fermenting discourse, has been going on for so long, to where the world looks upon it as being the "boy who cried wolf".
Israel give up its Nukes? Parity, if you believe in the tooth fairy. Exactly who meddles in others foreign affairs there in the
MENA?
Either way, the new "owner" of Saudi Arabia will have to make several choices if he wants to do anything at all without running
out of cash. Wars are expensive (particulrly if you have to pay mercenaries) and the recent asset seizures will only go so far.
...The actual "plot" mentioned by b seems to have included too many "wish-list" items for the Israelis, for it to be accurate.
Although there is definitely a possibility of Saudi and Israeli collusion, Israel for one would prefer the US AND the Saudis to
attack Iran. Note that overflying by Israel to attack Iran would probably be over Saudi which makes it into a direct target. The
"other" route via Greece would be used on the return (or outward first). Which is why the inclusion of foreign airforces in familiarisation
drills in Soutern Israel, actually lends credence to the leak - in spite of what I said earlier.
On RT Arabic, article saying that Aoun's aid has been informed that they indeed a war on Lebanon is coming.
In exchange for letting humanitarian business-help reach the Yemenis, they need to kill ppl elsewhere?
But what if the 350,OOO Lebanese leave KSA (and why don't they already do it?)
I believe KSA will suffer of that much more than Lebanon.
The incident increased tensions along the southern sector and threatened to disturb the calm that has prevailed there since
the end of the traumatic summer of 2014, which left Gaza in ruins and Israel licking its wounds. As of the writing of this
article, silence has been maintained. None of the parties are lashing out, despite the casualties from Islamic Jihad and Hamas.
Ever since the tunnel was destroyed, senior Egyptian intelligence officials have set off on a long round of mediation between
the parties in an effort to prevent a conflagration from erupting. Both sides are well-aware that the previous round of violence,
in 2014, was not planned. Rather, it was the result of a deteriorating situation and the loss of control on both sides. Neither
of the parties needs another round of violence like that right now. The IDF has clarified that it did not know that there were
excavators or fighters in the tunnel at the time, and that it did not plan to launch a "targeted killing." It simply wanted
to destroy the tunnel.
As Obama will be remembered for the Iran nuclear deal, Trump wants to be remembered as the maker of the Arab-Israeli deal to
end the state of wear.
Since Trump came to power he has been following a clear strategy of weakening all the parties involved, including Saudi Arabia
and Israel!
Syria, Lebanon, Hamas, Fatah, Turkey and Iran are been thrown into deep crisis while Saudi Arabia and Israel are been brought
to panic by agitating the "Iran and Shia threat'. Regional leaders reluctant to make concessions are coerced, bribed or quietly
removed in all these countries. Local allies such as the Kurds and ISIS have been pampered to move against the reluctant leaders.
Jared is the architect of that strategy. He is in charge of manipulating the Saudis and Israel into a deal that will be then be
imposed on the other countries.
Russia is NOT opposed to such a deal, provided it keeps its influence in the region. Therefore Trump is cozying up with Putin
to get his collaboration in convincing his allies of the benefits of such a deal.
The hard to break Arabs are Bashar al Assad's Syrians, and the Moslem Brotherhood (Hamas) .
Qatar and Turkey are been blackmailed to put pressure on the Moslem Brotherhood and any opponent to a 'forced' peace deal.
The Saudis are the key to the deal as they will be asked to contribute to the financial compensation Palestinians will ask
for to accept the deal. They are also the most eager to humiliate Iran and Turkey.
The train is on track, despite failure to tame Syria that remains a nut hard to crack.
I'm not convinced that this document is genuine because:
>> as b notes, 'parity' on nukes is a non-starter;
>> discussions with Israel about the Palestinians are unlikely to be phrased as a "final solution" with the severe negative
historical connotations of that phrase;
>> this wording is also odd: "rapprochement with Israel involves a risk to the Muslim peoples of the Kingdom" because
there is no need to make special reference to "Muslim peoples" when 99.9% of KSA is Muslim.
>> Does KSA really have the wherewithal to bribe the Muslim world?
>> The accusation that Iran engages in "organized crime and drug trafficking" seems planted. I haven't seen such
a charge before. The standard accusation (in the US) has been that Iran supports terrorism (meaning Hezbollah) and "destabilizes
the region" (meaning they don't bow to US-Israeli-Saudi masters).
Russian Foreign Minister Sergey Lavrov said Tuesday that a recently announced agreement on the terms of a ceasefire in Syria
did not include a Russian commitment to ensure Iran-linked militias would be pulled out of the country.
Lavrov said Iran maintained a "legitimate" presence in Syria, according to the Interfax news agency.
"What will the initiative include? According to various sources, it will consist of regional negotiations along three channels:
Israeli-Palestinian with American mediation, Israeli-regional and international (rehabilitation of the refugee camps and mobilization
of the world for a regional agreement). It is possible that the initiative will redefine the concept of "sovereignty" in a way
that allows the Israelis and Palestinians to share territory creatively. The initiative may even resuscitate the Palestinian-Jordanian
confederation idea. Perhaps even a Palestinian-Jordanian-Israeli configuration is possible."
Excellent article, thanks. yet I am left somewhat confused, Harir just talk on TV saying: He was running for a fear for his life
(hezbollah wants him dead, like they did with his father), he added that Hezbollah is the danger to Lebanon, he added that he
is not held by force and will return to Lebanon.
Something feels wrong, don't you have this feeling as well regarding this story?
@11...Jackrabbit:
How convenient that you forget the phrase, "...by deception thou shalt do war", when you rationalize Israeli motivations/sensibilities.
In addition to the Syria agreement, the officials are likely to discuss Iran's alleged construction of a military base less
than 50 kilometers (30 miles) from Israel's Golan border.
The leaking of a secret Israeli cable and publishing by an Israeli news organization also seems suspicious.
The past, such blatant Israeli support for an Arab State/Monarch would be the kiss of death, wouldn't it?
The best explanation I can muster for these leaks is this: to further the notion that an attack on Lebanon is imminent so as
to distract from the real target of an attack: Qatar.
So lets see: (Updated as I forgot the Hezbollah angle)
Israel gets the Palestinians dumped.
Israel gets somebody else to attack Iran who will be destroyed in return.
Israel gets Hezbollah weakened, allowing takeover of Lebanese oil interests / access for its planned Israel-Cyprus energy route
therough Lebanese territorial waters.
Palestine is a dead duck anyhow, and there won't be any war on Iran because of the extensive US presence (missile targets) in
the Gulf. So IMO the idea that Israel would give up its nukes might be the main issue here.
Meanwhile Iran will be working behind the scenes to weaken both Israel and Saudi Arabia, especially in the key KSA Eastern Province
where Shi'as predominate and ARAMCO will have new owners. The Persians have been around for centuries and they know how to deal
with these matters, as evidenced recently.
Yep, get the Saudis to plonk down billions in weapons that they won't , can't use and take part of that cash to help the Israelis
to bomb their Arab brethren.
The US politicians appear as dummies compared to Iranians, Russians and Chinese.
One may have serious doubts about these expensive and famous US universities that seem to breed political morons.
They all look like vicious children playing dirty and cruel games in a kindergarten
Last/not least - whilst Trump has fully bought into Saudi and Israeli aims (they might not be the same), his presidency might
end in three years. US (and Russian) interest is to balance the interests of Middle East actors not to become a proxy for one
of them.
"I paid a military security price every day as the commander of CentCom because the Americans were seen as biased in support
of Israel, and that moderates all the moderate Arabs who want to be with us, because they can't come out publicly in support
of people who don't show respect for the Arab Palestinians," he said Saturday at the Aspen Security Forum in Colorado in response
to a question about the peace process.
....
He called the current situation in Israel "unsustainable" and blamed the settlements for harming prospects for peace. The
chances for an accord between Israel and the Palestinians, said Mattis, "are starting to ebb because the settlements and where
they're at are going to make it impossible to maintain the two state solution."
Mattis then described a hypothetical in which 500 Jewish settlers live among 10,000 Arabs, and the implications of where
Israel draws the border. He called it a choice between giving up the idea of a Jewish state or becoming an apartheid state.
Saudi is desperate. Israel is not far behind. Whatever they did since 2006 worsened their strategic position.
The Zionist entity feels no real pressure to make peace.
Making peace, in any shape or form, with the palestinians is antithesis to the zionist mission. Israel's survival, as a jewish
state, hinges on this.
The same could also be said about the first point; Israel would never accept a technologically advanced state in the region
that could threaten its hegemony. A nuclear Saudi Arabia will never see the light of day.
I have a theory and I can't back it up but here goes...
I believe that The Donald gave Saudi two choices; go forward with his plan for the new Middle East or he throws his weight
and support in with the 9/11 families in their lawsuit against Saud.
The Saudis have so seldom been out front on foreign policy and certainly never played on the front line solo prior to the past
couple of years.
I believe that the Donald's plan is to emerge with the 3 strong actors of the US, Israel and SA and everyone else aligned with
them and against Iran. It may actually work.
Of course Israel might appear to be in line with the Saudis
in order to weaken Iran and the pro palestinians.
Then after Iran were vanquished, it would take on the Saudis.
I view the agreement, not as a threat to Iran, but as an alliance agreement between three weak actors, Trump, bin Salman and
Netanyahu, who need all the friends that they can get. The rhetoric against Iran looks like their traditional positions.
Both Trump and bin Salman are each already in a war for survival with the Globalists (the clique of global elitists, whose
members include Soros, Clinton, Tony Blair, Bandar Bush, etc. and who own the U.S. Deep State, the European Union structures,
and Western media). Both Trump and bin Salman came to power after the Globalists fight against Russia (for example via the orchestrated
drop in oil prices) did serious harm to their respective countries. Both are undoing the Globalist policies. The Globalists will
continue to do everything possible to remove them from power.
Netenyahu is also no friend of the Globalists after they tried to rehabilitate Iran with the nuclear deal in order to draw
Iran away from Russia. He has also been weakened by the disastrous outcome, for him, in Syria. (Are the Globalists behind the
allegations of corruption against him?)
In this context I have difficulty to see that any of these three are in a position, or would be willing to take the risks involved,
to launch a war with Iran.
It was on October 1st that Sayed Nasrallah made his attention-getting
statement that the Zionist occupiers should go back to the
countries they came from, because if the US-Israeli command launched a war on Lebanon there would be no time for the settlers
to flee. It was a pretty dramatic escalation of warning, and almost seemed to come out of the blue, but perhaps not, if crazy
ideas like the ones in this memorandum were swirling around the region. And they are crazy ideas, all highly dubious propositions.
Jackrabbit @18 makes a point if all this is smoke for the real attack, which is against Qatar. This seems much more plausible.
Beirut-based Paul Cochrane laid out this possibility:
Behind the Saudi Troublemaking
"... the global powers would vocally oppose such a move but likely not exercise military intervention a la 1991 when Iraq invaded
Kuwait. The U.S. troops based in Qatar would just stay in their base; the Trump administration has signaled it has sided with
Riyadh, even though the State Department has been more nuanced towards Doha. As for the Turks and the Iranians, they would
not want to be brought into a conflagration with Riyadh and the ATQ. That really would tear the MENA apart.
Ultimately, there's not much to stop a Saudi gas grab. There's not much desire internationally for yet another Middle Eastern
military "adventure" following the debacles in Iraq and Libya, while nobody's lifted a finger against Saudi Arabia for its
war against Yemen. As long as Qatari gas exports remain uninterrupted, the global powers might readily accept a change of management.
Mercouris at the Duran picked this up too, and makes a decent case that Saudi could actually get away with this. It seems to
make much more sense than the appalling logistics of trying to attack either Hezbollah or Iran. And by grabbing the Qatari half
of the massive gas field shared with Iran, Saudi would have achieved an ironic taste of "parity" with its true enemy.
The question is, how possible is such a move for Saudi Arabia?
Israel's government would be foolish if it were to engage in a deal that promises them what they already have de facto and demands
that they abandon the greatest strategic advantage Israel has; the exclusive regional possession of nuclear weapons.
The most dubious part of the "Saudi plan" is that it may be good for Saudis, in some deluded princely perspective, but there is
really nothing of value for USA. Goodies for USA -- Palestinians giving up on the right of return? USA does not consider that
right seriously, so value is zero, numerically speaking (zero shows a the result if you are not using exponential notation, 10^-50).
Goodies for KSA: the status of "Grand Prince" in Golden Horde.
Golden Horde was a successor state of Mongolian empire that had supremacy over Rus among its various holdings. Rus was split
into a number of principalities ruled by princes but one of them was given the function of Grand Prince, and he collected the
taxes from all other princes and passing them to the Khan of the Horde. While the power of Grand Prince was considerable, he could
be recalled (one way ticket to the capital of the Horde).
KSA imagines having that position in the Arab (or Muslim??) words, of course without the last detail -- obligatory invitation
to D.C. with a dinner that may be wholesome, but then again, it may be poisoned. But it is much better to USA to deal with a number
of small states that do not cooperate with each other. What if a single change of power in the Kingdom is followed by a request
to close all bases? This is a type of bother that is better to prevent from even being contemplated. Mind you, Americans were
disinvited from the Kingdom in the past. Trump may trust MbS, but Pentagon does not KSA.
You forgot to mention Macron's recent surprise visit. For some reason, Macron may be on the hook to them. He was awarded with
a military contract (navy vessels) from UAE, KSA ally.
Macron on the hook? Like a hooker? But that lady has no intention to be restricted in the choice of customers. Over time, she
will have a kind word (not just words) for everyone.
It would seem Nasrallah's/Hezbollah's intel reach is quite deep. As someone commented, the plan reeks of desperation; since
it's founded on numerous falsehoods, it has no chance of success. I expect the Umma to denounce Saudi's betrayal of Palestine
regardless of what their governments say.
I wrote a couple weeks ago that because of several years of weak chief executive, the power blocks in the US were pursuing their
respective interests more independently and openly than ever (which they are); and in Arabia MbS is a power hungry Machiavellian
prince who is also naive and thus hard to predict, but who must understand that he will need allies, and those allies will likely
have an influence on him, for better or worse (which is also true). I was naturally hoping that his daddy's trip to Russia, as
his last state visit, might indicate that the king was trying to open an option for MbS to turn to Russia for support against
the CIA/State sponsored factions within SA, which might in turn lead to at least the opportunity for Russia to exert some calming
influence on the region over time.
Well, that may have been the king's thought, but obviously his son has been getting his advice from elsewhere. In the US, a
most unlikely alliance appears to have formed (at least with respect to the ME). Because of the vitriol existing between the neocons
and Trump, and the fact that the office of the president has largely been taken over by the Pentagon (which often but does not
always see eye-to-eye with the Zionist/Neocons), it was easy to overlook the growing power and influence of the Zionist worm in
the White House, Kushner.
I think Trump never had a strong foreign policy concept in his own mind--mostly boiled down to a quasi-isolationist, so he
hasn't fought hard against turning things over to the Pentagon and Kushner. It is now clear that Kushner, the US's own power hungry
prince who is eager to prove his chops in an area he has no clue in--international politics--has fallen completely into the loving
arms of Israel. It is clear now that the Trump/Kushner plans for SA are entirely a Nuttyahoo wet dream. The visit to SA, where
they were persuaded to spend $110B of money they don't really have mostly on huge numbers of THAAD and other missile defense systems
and front-line fighters. Next MbS was persuaded to confront Qatar, as any breaks in a united front against Iran must be spanked
(notice how all these events keep happening a couple days after a visit from Kushner, who is usually hot off a meeting with his
masters in Israel). Then MbS is apparently advised to go all in to remove opposition within the kingdom, which gives Trump glee
because it also punishes Hillary's friends, but also commits MbS to the path, and makes him totally reliant on Israel/Kushner
for protection (cutting RF's increasing attraction). Now the crude attempt to boil the pot in Lebanon.
So in short order there will be far more missile defenses than Riyadh needs (but exactly what Israel desires). Israel doesn't
want to be first in on a direct attack on Iran, but if there is a whole air force worth of planes with Saudi markings just waiting
for Israeli/US/Wahabi pilots to take first blood--once it's a regional war on, who will notice who's planes are attacking Iran
after that? And MbS (under careful direction) has now set up trigger points from Yemen to Qatar to Lebanon, just waiting until
the preparations are done and an event to be blamed on Iran, and away we go. Israel finally gets its wish. The good news is that
MbS has likely bitten off more than he can chew by taking on all of his internal opposition at the same time as Iran, and done
so in such a heavy handed manner that I doubt he can buy a life insurance policy. And Russia and Iran have maintained a steady
and "back seat" approach to their assistance of everyone who seems to need it--and the US and Israel have been so brazen in their
duplicity and untrustworthiness--most countries in the area (and the world) don't seem so eager to follow the US lead any more
(plus, the Pentagon is still very strong in the US executive, and I don't think they're quite so anxious to tear into Iran). So
there is hope this latest Israeli plan to drag the world into war against Iran will melt down just like it did in Syria, but who
knows how much damage will be done before it does.
And neither the US nor Israel can politically afford to lose many soldiers in a ground war. So if Saudi wants to fight against
Iran, they have to do it themselves.
MBS would have to be absolutely deranged to fight Iran directly. The KSA's regular troops are mostly foreigners from Pakistan
and other poorer nations. They are well-equipped but poorly trained. In addition, fighting wars for a country one has no stake
in makes for poor morale. They are getting their asses handed to them on a regular basis by the relatively poorly-equipped (but
highly motivated) Houthi rebels in Yemen.
It is possible that MBS is wildly deluded but I can't see him facing Iran alone. What is more likely is covert and indirect
warfare from the US and Israel with special forces and proxies (like the MEK terrorist group inside Iran and perhaps some Wahhabi
fanatics) providing boots on the ground and the whole thing backed up by USAF air power and bankrolled by MBS.
Someone mentioned that 'parity on nukes is a non-starter. That is bullshit. SA already has 85 American B-61 nukes that were delivered
to them by Israel at the time when it appeared that McStain's plan of raising an Arab Army out of Turkey would eventually defeat
Syria.
No on has ever accounted for those nukes, and I seriously doubt, that once they got their hands on them, that SA would give
them back. Matter of fact, video exists somewhere out in the ether of a SA attack on Yemenn in which one of the B-61 nukes was
used, it just happens to have 'disappeared'.
I'd say this is a non-starter. The Palestinians though may take a page out of the Zionist playbook, take the money and then
just keep fighting, after all, most of world opinion in now firmly with them.
PeacefulProsperity | Nov 14, 2017 12:25:14 PM |
41
From b's report:
"The Saudi tyrant abducted the Prime Minister of Lebanon, Saad Hariri, and declared war on the country. The purpose of this
move is to remove or isolate Hizbullah, the Shia resistance of Lebanon which is allied with Iran and opposes the Saudi plans for
Palestine."
That's absurd, ridculoous, doesn't make sense at all.
Hariri is a mortal enemy of Hizb, even accused them of assassinations attempts. Saudis keeping Hariri in house arrest gives
the control of all Lebanon over to Hizb - a dream come true for them.
Add arresting plotters of 9/11 ponce Talal (also a major sponsor of Clinton/Bush criminal enterprise, CNN lies and Twitter
censorship) and ponce Bandar (a butcher of Syria) to the picture and you can see that this all turns conveniently into Russia's
advantage. Plus:
Which one is that? Over the Caspian Sea, through the Caucasus(Armenia, Azerbaijan, Georgia, Turkey or Russia), across the Black
Sea, through Bulgarian or Turkish airspace to Greece. That would be available one time only and the fuel loads the aircraft would
have to carry would severely restrict the bomb load they could carry. Also, going by previous experience the first time any Iranian
SAM batteries locked their radar onto the Israeli aircraft, they'd dump their drop tanks and bomb loads to head out of Iranian
airspace ASAP.
Any attempt by Israel to attack Iran would be a disaster for Israel which is why the conspiracy is aimed at getting Hezbollah
to launch missiles at Israel and Iran to launch missiles at Saudi Arabia in response to a Saudi attack on Hezbollah. Then the
United States could argue that it's intervention against Hezbollah and Iran was legitimate, well at least legitimate enough satisfy
the American public and the poodles.
PeacefulProsperity | Nov 14, 2017 12:31:24 PM |
43
Everything has been going well according to the Putin-Trump plan:
This is the same Saudi Prince Alwaleed bin Talal who, together with Bill Gates, owns the Four Seasons Hotel that is located
within the 5 top floors of the Mandalay Bay Hotel in Las Vegas.
That would be the same Mandalay Bay Hotel in Las Vegas that was the sight of the deadliest mass shooting in our nation's
history.
The Four Seasons Hotel-within-a-hotel boasts its own private elevators and separate entrance.
His arrest may or may not reveal more ties to the Las Vegas Massacre. But it does reveal that he's a pretty shady character.
Prince Alaweed's arrest was the result of King Salman's decree to create an anti-corruption committee chaired by his son,
Crown Prince Mohammed bin Salman.
King Salman decreed late on Saturday the creation of an anti-corruption committee chaired by Crown Prince Mohammed bin Salman
"
"The allegations against Prince Alwaleed include money laundering, bribery and extorting officials, one official told Reuters,
while Prince Miteb is accused of embezzlement, hiring ghost employees and awarding contracts to his own companies including
a $10 billion deal for walkie talkies and bulletproof military gear worth billions of Saudi royals."
Prince Alaweed bin Talal is also Twitter's second largest shareholder. That would be the same Twitter that allows ISIS,
Antifa and anyone who threatens to assassinate our President free reign on their platform but blocks conservative American
patriots' accounts.
Speaking of information flow-the Prince's investment company, Kingdom Holding Company, is a major shareholder in Time Warner
Cable. The same Time Warner cable that owns CNN. Oh- and they also own a major chunk of AOL that owns the Liberal multi-author
blogging platform posing as a news source-Huffpost.
Jim Murren, CEO of MGM dumped millions of dollars worth of his stocks in the weeks leading up to the massacre.
That would be the same MGM that owns the Mandalay Bay Hotel. How fortunate that he dumped his stocks before the mass shooting.
MGM Stock Selloff and Saudi Connections to Mandalay Bay Hotel.
CEO Jim Murren circulated an internal memo that stated that he would match donations to CAIR ( a terrorist organization)
and the ADL-a very anti-Trump, pro-Islamic organization. He must like Twitter.
The Saudis partnered with the MGM
Reuters reported that back in '07 Dubai World became partners with MGM.
"Dubai World, the investment holding firm of the Dubai government, will acquire a 9.5 percent stake in MGM Mirage and 50
percent of the casino operator's CityCenter development project for $5 billion."
Dubai World referred to the deal as a "long term strategic partnership."
Prince Alwaleed bin Talal hails from Saudi Arabia.
That would be the same country as the Saudi Royal Air Force-that just happened to be doing some "realistic combat training"
in Las Vegas.
From a previous post,
It may or may not be "routine," but during the month of August, from the 5th to the 28th, the Saudi Air Force booked an
entire tower of "SLS," a beleaguered Las Vegas hotel. They didn't stay there to ogle scantily clad Las Vegas women. Arrangements
were made to keep all female staff away from them. Some areas were closed to the public and pictures of females were yanked
from the walls.
The purpose was for "realistic combat training" and they're planning on making a habit of it. The Las Vegas Review Journal
reported,
"Saudi Arabia's 10th Squadron Royal Saudi Air Force will be taking part in Red Flag 17-4 at Nellis Air Force Base, according
to airwingspotter.com, a site dedicated to military aviation photography and spotting. Red Flag, combat training involving
the air, space and cyberforces of the United States and its allies, will be held Aug. 14-25.
"Depending on the year, the Royal Saudi Air Force will bring 175-210 members to these realistic combat exercises," S&K said
in the 2014 post."
Who needs a military base when you can rent a hotel? Food's better too.
Caught up in King Salman's sweep was the Commander of the Saudi Navy as well as the Minister of the National Guards. No
mention yet of the Royal Saudi Air Force.
Nuclear strike by proxy, Saudi Arabia purchased(or given) nuclear bomb(s). Temporary nuke parity.
The clown prince MbS is the perfect proxy to strike Iran.
I'm not convinced that this document is genuine because:
>> discussions with Israel about the Palestinians are unlikely to be phrased as a "final solution" with the severe negative
historical connotations of that phrase;
>> this wording is also odd: "rapprochement with Israel involves a risk to the Muslim peoples of the Kingdom" because there
is no need to make special reference to "Muslim peoples" when 99.9% of KSA is Muslim.
You are aware this is a machine translation? So unless you are fluent in Arabic and can translate the original article, your
comment has little value just like Liz Sly's and Anne Barnard's reporting from Beirut.
As for "final solution" why would an Arab be concerned since beyond the Mufti of Jerusalem, Arabs played little or no part
is the Holocaust. And the position and role of the Mufti of Jerusalem is heavily overstated by Zionists.
>> this wording is also odd: "rapprochement with Israel involves a risk to the Muslim peoples of the Kingdom" because there
is no need to make special reference to "Muslim peoples" when 99.9% of KSA is Muslim.
Firstly this could again be down to machine translation but it's more likely to be that 30% of the population of Saudi Arabia
are migrant workers so 99.9% of the population are not necessarily Muslims. If you'd bothered to check the CIA World Fact Book,
the only honest publication that the CIA produces, you would have known this.
>> The accusation that Iran engages in "organized crime and drug trafficking" seems planted. I haven't seen such a charge before.
The standard accusation (in the US) has been that Iran supports terrorism (meaning Hezbollah) and "destabilizes the region"
(meaning they don't bow to US-Israeli-Saudi masters).
You obviously haven't be paying attention to the bilge about the Tri-border region in South America. I would guess that this
is Kushner's contibution to the ploy - most Americans are deeply infected with a disease known as projection and thus assume their
enemies would act as they do because being the exceptional country everybody wants to do what Americans do. In this case with
the CIA funding their illegal activities prior to about 2001 with money raised from drug smuggling, Americans assume that is what
the Iranians are also doing which is ironic when you understand that the Iranians are fighting an existential war against drugs.
i agree with @20/21 anonymous.. this isn't a saudi plan! (The memo is signed by Adel al-Jubeir. (But who were the 'advisors'
who dictated it to him?) )
this is a memo thought up in some neo cons head - whether they are located in israel, or some washington stink tank..
@29 dh.. i agree with much of what you say, but don't you think israel/saudi/usa trio are batshit crazy enough to do something
stupid? witness their war on syria.. plenty of stupidity to continue on in the same fashion.
@18/30 jr and grieved... yes - qatar is a thorn in the side of the terrorist state saudi arabia.. nothing like another terrorist
state calling you out, lol.. one of them has to be silenced... i doubt the attack is going to be on qatar myself..
@38 j swift.. thanks.. makes sense..
@45 dognuke.. unfortunately that is true and a possibility.. the clown prince is a really unstable dude..
It should be born in mind, of course, that this is only MbS plotting. It can't be spoken of publicly in Saudi Arabia, because
the Saudi population is strongly pro-Palestinian. But all the media are owned by members of the royal family, so the population
is kept in ignorance and quiet. I don't know whether that number of al-Akhbar has been suppressed in Saudi, but this news has
sort of got out anyway, as it will be on the social media, which Saudis are dedicated to.
The fourth point is to bribe the public into accepting the plan. That'll cost a lot. And I don't think it will work. Another
risk for MbS's power.
Airbus Industries also just received a large order for A-380s from Dubai (Emirates) - since Abu Dhabi pretty much owns Dubai
after there financial troubles a few years back. it wouldn't surprise me if this was an MbZ bribe to various European countries
to look the other way when things kick off.
Military usually want some measure of surprise. If only for this reason, signaling an attack on Lebanon would seem foolish.
Unless it was a distraction.
Anyway, we then see a "leaking" of a secret Israeli cable (happens all the time, right?) that supports KSA's anti-Lebanon
stance. Hmm... K.
Now we have another leak(!) that implicitly explains Israel's support of KSA as part of a larger "peace deal" (really a
"war deal", isn't it?) that includes a betrayal of the Palestinians. Yeah that betrayal makes it totally believable, sure/sarc
- but parity on nukes?!?
Posted by: Don Bacon | Nov 14, 2017 9:43:39 AM | 22
Palestine is a dead duck anyhow...
That's what the western MSM with support from Israel, Gulf governments and some Islamists want you to believe. Elsewhere it's
still an important issue but US pressure means that many are reluctant to speak out but not
Celtic
supporters
"This US-Israeli-Saudi-UAE project is, at bottom, an attempt to overturn reality, no less – it is rooted in a denial of the
setback suffered by these states by their multiple failures to shape a New Middle East in the western mode. Now, in the wake of
their failure in Syria – in which they went to the limits in search of victory – they seek another spin of the roulette wheel
– in the hope of recouping all their earlier losses. It is, to say the least, a capricious hope."
It is hard to see how they would go about attackiung Iran unless it is just a quick strike/raid and then they all go home again.
For the US, military cargo planes with backloads of US boots neatly packaged in body bags is not acceptable.
Trump wants US to be a major energy exporter, but oil prices must go up to get fracking viable in a big way. A play to bump up
oil prices? Another option is Trump and Kushner playing MBS to get Aramco listed in the US and prevent China from puchasing the
full offering.
@50 Thank you james for agreeing with my thoughtful and erudite post but unfortunately it was written by one of the other dh s.
I've pretty much retired.
To answer your question....yes I think Israel and Saudis are crazy but maybe not crazy enough to strike Iran without a green
light from Washington.
Given the first demand: "First: The Saudis demand a "parity of the relationship" between Israel and Saudi Arabia. On the military
level they demand that either Israel gives up on its nuclear weapons or Saudi Arabia is itself allowed to acquire such." This
entire plan/proposal IMO is a nonstarter because of this initial and presumably most important (it is #1)requirement and whoever
wrote it/approved it knew it.
@dh... that is interesting as i was surprised at the longer post by you.. now it makes sense!
i guess they will have to work on a false flag before they get the green light from washington... iran won't do something stupid..
that is reserved for the clown prince/nutjob duo at this point..
@62 A false flag will require a substantial number of US fatalities. Thinking back to the US boat that 'strayed' into Iranian
waters some time ago wonder how Donald would handle something similar. Those sailors or whatever they were got soundly humiliated
but released unhurt. Hardly a casus belli.
The problem with this idea is that Turkey has already instituted a blocking action by placing Turkish forces in Qatar in response
to the original Saudi threat. While the contingent was small, approximately one thousand men, the message was quite clear - hands
off. Any move by the Saudis or their allies risks Turkish retaliation. it's a no-go zone.
Regarding the Saudi military, as pointed out, they are out of troops.
They could not get Egyptians to fight in Yemen or Syria, nor could they get the Pakistanis to fight on their side in either war.
They are desperate.
A war on Qatar would be to ignite Turkey and Iran's support for Qatar, and thus the Israeli-US coalition could punish both
those nations, a goal the US would enjoy doing.
The aim is to regain Hegemony over the ME. The Russia-Iran-Turkey alliance has pushed the US aside, if not away. Whatever allows
the US to hurt Russia by striking Turkey and Iran would be the goal, and Israel would benefit along with the US.
It would be an air war and the US and Israel would win it.
It isn't about Saudi goals and needs. It's about the Hegemon and Jr. Hegemon in Tel Aviv.
If it remains an air war, the probability is that US/Israel would overwhelm
at the beginning of a combined attack unless defenses are upgraded.
However, if in view of the probability of war, Russia were to rush AA
systems to Syria and Iran, the probability that substantial air forces
would be decimated is high. The US forces would certainly be pummeled
in their bases around the Gulf and their naval forces in the Gulf sunk
with the numerous Iran assets in the region.
Without resorting to nukes, the US is probably not going to win because
it cannot field sufficient boots on the ground in Iran. And remember, the
stakes are high for China to get its fuel from somewhere and the US will
have to take this into account. Depriving China of its needed fuel is no
laughing matter.
They are in Djibouti for a reason.
I believe Israel is trying to chew too big a bone. It will choke.
This was originally proposed as a "one-off" bombing route. ie. via the Med to cross (at that time Turkey) Now could cross Greek
airspace (would need NATO laisser-passer"). Caspian to Azerbaijan. (Has close links with Israel and just tried out an Israeli
suicide drone on Armenia for a "client"). From there a short hop to Iran. Fueling over greek airspace.
Return route, nowadays, would be via Saudi Arabia (plus refueling and no need to go any further). It's actually easier than a
few years ago.
The second para I agree with.
.....
General opinion.
Palestine. The single state AND the two state solution have probably been junked by Israel. Neither of the alternatives gives
an ethnically pure "Jewish" state. So what to do with them? At the moment the Palestinians are being dispossesed (of land, houses),
forcibly displaced (at the moment the focus is on the Jordan Valley and Bedouin villages anywhere). They are put in "camps" where
they are subject to daily harassment and destruction of living amenities (including water). The desired effect is ethnic cleansing
(a la Serbia). Gaza is a humanitarian disaster - under-developed children suffer stunting - and as well the IDF concentrate on
children as it is easy to make them submit.
Where could they go? . Jordan - doesn't want them, as they would make up the majority, and put in peril the stability of the
country.
Egypt - doesn't want them either.
"Gulf" countries - you must be joking, many are already minorities in their own countries. (Abu Dhabi,)
Leaves the neighbours, Lebanon, Syria and the EU (via Turkey?).
EU - Soros is taking care of that and destroying national unity at the same time.
Lebanon. Over-populated by refugees already.
Syria - Too many displaced persons, plus Palestinian refugee camps.
Maybe Israel imagines the solution is to force them on the latter two countries by means of military action as they won't take
them voluntarily.
Sorry for using dh. Didn't realize that it was already taken.
I think that the real war, right now, is between the Globalists and Trump/MBS. Trump and MBS are both fighting for their survival.
I can't see how attacking Iran would help them, quite the opposite.
@66 The Globalists want Hegemony over the ME. I'm not sure that Trump does. However, the Globalists first priority is to regain
control over the U.S. (i.e. impeach Trump), and then continue their war with Russia. I can't see how driving Turkey and Iran into
Russia's hands will help them either to tame Russia or to reassert Hegemony over the ME.
I think people here - and the KSA for that matter too - need to know that attacking and invading Iran won't be at the same (lower)
scale as attacking and invading Lebanon, Qatar, Syria and even Iraq. These countries are flat and a major part of their territories
is desert. Their populations are not that great either - the largest is Iraq with about 35 million.
Iran on the other hand is mostly mountainous (especially in its west and south) and its population reached 81 million some
time in October 2017. An attack on Iran from the west is going to need foot soldiers to be effective. Where will Israel, the US
or the KSA stump up the armies needed to invade Iran? Using ISIS and al Qaida / Jabhat al Nusra failed.
If an invasion comes from the east, how will Afghanistan (chaotic?) and Pakistan be brought on board to allow their use of
airspace for air attacks?
A third option would be to stage air and naval attacks from India. That might be plausible if India under Narendra Modi and
the BJP is friendly towards Israel and the US.
A number of thoughts comes to mind.
1) Divide and conquer
2) The Enemy of my enemy is my friend
3) Do as I say, not as I do
4) You are either with us or with the terrorists
5) Birds of a Fascist feather flock together
As to the "not in my name" shirt and withdrawal from the machine, it won't happen.
Remember the analogy about the frog in the water that will start to boil? No frog would ever do that. It is humans who threw the
frog into the pot and watched.
Karma can be a nasty bitch. It has transformed humanity into a frog and the masses will be boiled.
To implement change, people would have to turn off the propaganda hammering down on them from all sides. But that won't happen.
People are programmed to believe the lies they are dished out. No de-programming - no change.
Americans and their Fascist alies will have to go through their own collapsing 4th Reich.
And of course: Support your troops. Sell everything and donate the money to the MIC. Because they will come for it anyways. Only
in a Fascist country, warriors are elevated over any civil person. This morning at court: people congratulating a father because
his son just joined the troops.
Reject anything the parasites in the legislative tell you. Like George Carlin said: "I never believe what the government tells
me."
End of story.
Spend as much time as you can with your loved ones. The Motherearthfuckers are about to turn the heat on. And it is already way
too hot here.
US President Donald Trump has said that heavy sanctions imposed on Russia should not become a barrier to future friendly cooperation
between the two nations, adding that cordial international relations would be likely to help resolve the North Korean threat
and many other global issues.
How noble and considerate of Trump. "Vlad, my friend, I know we are waging economic warfare on your people, surrounding your
borders with nukes and want to take over and "regime change" your country. But, hey, never mind all that stuff and let us be friends!
Then you can help us do to other sovereign nations what we are doing to you."
Touching, very touching It raises the question: What "many other global issues" is Trump trying to solve? Climate change, perhaps?
Ending the war in Yemen? Rapprochement with Iran? Curbing corporate and Israeli influence in American elections and foreign policy?
Peaceful Prosperity...you are not still holding a candle for this duplicitous shitbag, are you?
Just my 2 cents but it seems to me the real target has always been Russia, more specifically Gazprom, why not just take control
of Qatar and their gas field which is also Irans gas field as well, which correct me if I'm wrong could be completely controlled/exploited
from Qatar without anyone having to step foot into Iran, couple this with limited strikes on Irans gas infrastructure in the name
of removing their ability to be "evildoers" and before you know it Aramaco, which now controls a third plus of the world's nat
gas is listed on the NY exchange and it still only accepts dollars. Wonder what countries that pipeline would pass through...
I am a new poster to this board. I've tried twice to post something and the message said it was posted successfully, but it is
not visible in the comments section. Is there some mediator process that it has to go through first, or is there something else
that I need to do? (I left the email and url boxes empty; could that be the issue?)
The way in which this plays out is almost pre-ordained.
There is no way that a formal, signed document will exist that states that when-you-shaft-Palestine then we-will-attack-Iran.
What will happen instead is that Trump will broker that "understanding" between Israel and Saudi Arabia. A nod and a wink,
and maybe even a handshake.
But the Israelis will insist that the Saudis have to do that Palestine-shafting first, and in The Most Public Way Possible
so that the House of Saud can't take it back. Trump will say that this is reasonable, and the dumb-ass Saudis will mull over it
then say "OK, sure, if the Yanks vouch for you then so will we".
The Saudis will then dump on Abbas.
The USA will then heap congratulations on the Saudis.
The Israelis will shout Yipeeeeeeeeeeeee!!!!!!!!!!!!
The Palestinians will descend into a deep despair.
And then...... [sound of crickets chirping].
Saudi: Hey, when are you going to attack Iran?
Israel: We're working on it. Give us time.
USA: Hey, I thought we had an understanding!
Israel: We do, this takes a lot of planning.
[crickets]
[crickets]
[crickets]
Saudi: What gives, guys?
USA: When are you were going to attack Iran?
Israel: We changed our mind. Bite me.
Let's get real here: the Israelis have a track-record of "agreeing" to a quid-pro-quo, then immediately pocketing the "quid"
while somehow, some way, never actually getting around to delivering on the "quo"
The Saudis will shaft the Palestinians.
The Israelis will then shaft the Saudis.
The Americans will fume (in private) but ultimately do nothing and say nothing.
And years later there will be an off-mike recording of Netanyahu boasting about how he f**ked over the Saudis, and gleefully
explain that the reason why he could do that is because the Americans are at least as dumb-ass stoooooopid as, well, a Saudi Clown
Prince.
Sorry if some one has mentioned this already, but Jerusalem belongs neither to the Palestinains or the Israelis. It belongs to
Jordan and Jordan is it's designated protector just as the freaks in KSA are the protectors of Mecca and Medena. The NATO countries
on orders of Israel have burred the Palestinian cause. But if the children running the US and KSA tried giving the third holiest
site in Islam (and likely the most important heritage site in the world) to the Jews so they could blow it up to build a Jewsih
temple on top of it ,the back lash among the 1.5 billion Muslims in the world would be immense. Not to mention basically righting
off international law in it's entirety. China, Russia and the EU would never allow it.serious
It has been obvious for years that Bibi and the KSA have have been cooking this up but it wasn't till last year they had any
one stupid enough in the White House to try and take a run at it. If you want total war in the Middle East this is how you acheave
it. The outcome will be a Palestinian state. Whether there will be a Jewish one if this is tried is up for debate.
Wonder what countries that pipeline would pass through...
Posted by: Joe | Nov 14, 2017 4:55:50 PM | 73
It's a source of not only bewilderment, but also amusement, that there are people so dumb/dishonest (delete as applicable)
that after all we have seen in the last few years, even just what we have seen in the last few weeks, that still pretend/think/pretend-to-think
that this has something to do with pipelines?
Seriously, would all you "It's the pipelines, stoopid!" gobshites kindly just stfu.
A dumber more gullible bunch of eejits would be hard to find
Typepad insists on a viable email address - not your real one just a viable one whose mail server will respond to a call. mailinatorDOTcom
(remove the DOT & replace with . to visit) is one of many spam dodging sites which will enable a poster to post here, plus let
you use it to sign up to all sorts of BBs forums etc. They have a rotating list of email server suggestions. otherwise joblo(or
whatever) at gmail will do the trick most times.
Another plan to get the US to fight another war that benefits zionists, this time against Iran. I wonder who is in the role of
Lord Balfour.
I like the idea of an independent religious Jerusalem city, I doubt either party will go for it. The same goes for an Israeli
agreement for nuke parity with Saudis or a single open state for Palestinians. While many Palestinians want their own state and
even some in Israel want this (including some Shin Bet officials) there are others who say it is too late due to the proliferation
of settlements in West Bank. These others (like Miko Peled) say a single state as the only option left. It seems to be a very
convoluted (Rube Goldberg?) solution to getting a united front to attack Iran and "solve" the Palestinian issue.
Video evidence of tactical weapons used in Yemen and other conflicts:
I doubt it, they all look like large conventional explosions to me.
The ones in Ukraine are from a detonation of a large weapons dump while the Saudis managed to hit a rocket manufacturing plant
in Yemen that resulted in a very large explosion.
Thanks for the link, CarlD. I think it entirely possible that 'tactical nukes" have been used. I would expect that at some point,
a credible, government-tied group will report that these weapons have been used. This will serve to normalize their use in the
future. People will feel that since they'd been used already, and we all survived, that using them again will not be so horrifying/dangerous.
More and more I'm thinking that humanity has reached the end of our rope, and we will have deserved it when the trapdoor finally
springs.
Mina @64. BBC is running that same "video game" story. In fact, on their Middle East News page earlier, they had both this and
their "expose" of the US helping ISIL escape arrangement.
I hadn't even considered the aspect of that gas trading in dollars. Now there's a resource grab the US could really like.
I'm not actually at the point of thinking anything will happen, anywhere. There are simply no geopolitical advantages in any
of the plays being mooted.
But there actually does seem at first glance to be some potentially cost-effective gain in plundering Qatar. Kind of wish no
one had thought of it - I'd much rather see a cooperation develop between Iran and Qatar, the way it recently started to look
like it might go.
As to your getting trolled, I will say that with what I've seen in the last few years, even with what I've seen in just the
last few weeks, there's nothing I've ever encountered anywhere that says it's NOT the pipelines.
RE: Daniel | Nov 14, 2017 7:46:39 PM | 85, CarlD | Nov 14, 2017 1:36:09 PM | 56
I agree with Ghostship, no nukes have been used. The thermal signature from a nuclear detonation is unmistakable, it is many,
many orders of magnitude greater than produced by a conventional explosive. Not to mention the by-products of fission, which are
always produced by a nuke and are always detectable.
You will know when a nuke is used, believe me.
Joe / Grieved
Best to discount nothing. Qatar gas the target? Quite possible. Pipelines for Qatar or in Joes theory, Saudi gas. Again possible.
Most depends on what Trump is behind the facade. The facade is the simple minded buffoon that makes a decision on what he has
last seen on Fox news. What he has just pulled off with MBS...
My thoughts on Trump at the moment, what is real and not facade. He wants to return the US to the power is was post WWII and through
the cold war era. Manufacturing power ect. The big thing, prevent China from overtaking US economicaly which would also mean overtaking
the US in science tech and military. Hence the many meetings with Kissinger earlier, Kissinger meeting Putin ect.
Trump needs to seperate Russia and China. Russia is no threat to the US whereas economicaly China is the only threat the US faces
(apart from itself).
Back to making America great again and gas. Saudi Arabia has oil (supposedly) and US has shale gas. Oil and gas are complementary
to each oither rather than competitors. Gas prices are basicaly set by oil prices. The main competitors to US shale is Russian
gas and Pars, both of which can be piped to where the gas is in demand. In my reading of Trump, which may not be right, Pars would
have to be either US controlled/owned or unable to pipe gas.
The option there I guess is joint US Saudi control of pars.
I would agree that it would be impossible to mistake a powerful hydrogen bomb for any sort of conventional bomb. That's not
what is being proposed here, though.
Do you know about the "Davy Crocket" mini-nuke from the 1950s?
Those were even carried in backpacks by the 1950s version of Special Ops soldiers. Since then, fission-fusion hybrid, mini-hydrogen
and neutron bombs have been made. As I'm sure you'd agree, military technology is always far beyond what the public is allowed
to know.
Like today's B61-12, the Davy Crockets could be dialed to produce explosions of greatly varying power.
So, the range of even publicly known nuclear weapons is pretty great. Some of the explosions recorded in the past few years
can be clearly seen as INCREASING in power as the explosion progresses. Though not impossible in some sort of thermobaric bomb,
that is a signature of many nuclear bombs.
I don't buy this at face value. I suspect MBS used the threat of war on Lebanon as a distraction from his counter coup. The possibility
of battle with Iran is a fear factor he exploits to stop a revolt against him.
The leaked plan and leaked Israeli wire to its embassies are both quite suspicious. Its possible the Israelis are helping MBS.
It's just as possible that MBS' foes in Saudi, or the CIA, are leaking these things to embarrass MBS. All are in fact embarrassing
to MBS. I don't know but everything about this is surreal. For all we know MBS' moves are just an aid to finish the counter coup
and to drive up oil prices. Saudi needs cash. We should expect the very wealthy Saudi opposition to strike back in the media,
and it's possible the intelligence community and state department support different sides here.
To enable LNG, Kushner's army [US_I:SA] has been designed to colonize the Syria:Russian: Yemen:Qatar:Iran:Libya (SRYQIL) oil,
gas competition, so that LNG can be port to port marketed. All eyes on LNG.
The Israelis might be willing to discuss this - maybe - but only if those discussions are "decoupled" from the issue of the
Saudis altering the 2003 Saudi Peace Initiative so that Israel gets everything it wants, while the only thing the Palestinians
get is their marching orders.
The Israelis will then pocket that neutered Saudi Peace Initiative (in essence, it would become the Netanyahu Land Grab Initiative,
with the Saudis in the role of stenographer) and then proceed to endlessly delay, deflect and derail any negotiations towards
a Middle East Nuclear Free Zone.
Something for nothing, which MbS ending up holding that Big Ol' Bag Of Nothin'.
LNG port to port is not competitive with Russian piped gas. From what I can see, US needs to either ensure they have control
of alternative piped gas, or try and shut down pipes so they can flog shale LNG.
b's post here is articulate and cogent as ever and I cast no aspersion at him or fellow commenters. However, as far as I'm concerned
the KSA-Israel drawing up these "accords" is all a pile of sabre-rattling and poseurism crap.
Anything touched by the KSA is a pile of B.S. e.g. the Qatar ultimatum. Anything said by Israel fits the purpose at the time
if it varies with their expansionist/farengi code of conduct.
The only way I see any of this playing out is an interlocking web of extortion that compels the two weaker parties to conform
to the will of the stronger, in my opinion Israel.
Who knows if Lebanon will cower under the threat but if the Iranian alliance bares its teeth, let's remember that their reach
is likely global and likely already in place at key targets. The stupidity of launching a shooting war in the ME with Iran and
Israel involved does not mean that someone will not dance the situation right up to the brink.
It's the Asian thrust we should consider, from China to Turkey via Russia. I would guess, and only guess, that Russia and China
would most likely wait it out and pick up the pieces during ending credits, or become minimally involved only to prevent a breakout.
Can't assume anything here.
Wouldn't it be interesting if the US/KSA/IZ trio throws everything into beating Iran only to have another player open a play
to seize the Pacific? Pretty wild.
I reckon you're correct Stumpy. Over the years there have been many "amerika will attack Iran" scares - all have passed by
without major incident despite the concerns of MoA-ites that "anything could happen in the next two hours"
It is highly likely that eventually some greedy opportunist with a hat size about 4 times larger than his dick measurement will
eventually have a crack at taking down Iran, but I don't reckon we're anywhere near that point yet.
As far as 'world peace' & justice for suffering indigenous people goes, today I'm much more concerned about events in Zimbabwe.
Hopefully the military is acting out in order to protect the socialist revolution from greedies & nepotists, and not using the
occasion of President Mugabe's age disorders to subvert the revolution by aiding africacom and the world bank oecd mob to boost
the amerikan empire's consumption of one of the few remaining independent sovereign entities still surviving on this old rock.
Whatever does happen in Zimbabwe over the next week, few will be paying much interest whilst corporate media distracts so many
with tall tales of the dissolute instincts of poor people everywhere.
Utter nonsense! Large scale conventional; exploding tightly stacked munitions in a large ammo dump by means of sympathetic
detonation. Large quantities of explosives going off must create a mushroom cloud - this is gas dynamics. Afterburning in the
rising cloud results from hot oxygen-deficient stythe mixing with air which in return helps sustaining the upward momentum of
the plume.
This pivotal agreement allowed KSA to secretly recycle its surplus petrodollars back into US
Treasuries while receiving US military protection in exchange. The secret was kept for 41
years, only recently revealed in 2016 due to a Bloomberg FOIA request:
The basic framework was strikingly simple. The U.S. would buy oil from Saudi Arabia and
provide the kingdom military aid and equipment. In return, the Saudis would plow billions of
their petrodollar revenue back into Treasuries and finance America's spending.
It took several discreet follow-up meetings to iron out all the details, Parsky said. But at
the end of months of negotiations, there remained one small, yet crucial, catch: King Faisal
bin Abdulaziz Al Saud demanded the country's Treasury purchases stay "strictly secret,"
according to a diplomatic cable obtained by Bloomberg from the National Archives database.
"Buying bonds and all that was a strategy to recycle petrodollars back into the U.S.," said
David Ottaway, a Middle East fellow at the Woodrow Wilson International Center in Washington.
But politically, "it's always been an ambiguous, constrained relationship."
The essence of this deal is pretty simple. KSA wanted to be able to sell its oil to its then
largest buyer, the USA, while also having a safe place to park the funds, plus receive military
protection to boot. But it didn't want anybody else, especially its Arab neighbors, to know
that it was partnering so intimately with the US who, in turn, would be supporting Israel. That
would have been politically incendiary in the Middle East region, coming as it did right on the
heels of the Yom Kipper War (1973).
As for the US, it got the oil it wanted and – double bonus time here – got KSA
to recycle the very same dollars used to buy that oil back into Treasuries and contracts for US
military equipment and training.
Sweet deal.
Note that this is yet another secret world-shaping deal successfully kept out of the media
for over four decades. Yes Virginia, conspiracies do happen. Secrets can be (and are routinely)
kept by hundreds, even thousands, of people over long stretches of time.
Since that key deal was struck back in the early 1970s, the KSA has remained a steadfast
supporter of the US and vice versa. In return, the US has never said anything substantive about
KSA's alleged involvement in 9/11 or its grotesque human and women's rights violations. Not a
peep.
Until recently.
Then Things Started To Break Down
In 2015, King Salman came to power. Things began to change pretty quickly, especially once
he elevated his son Mohammed bin Salman (MBS) to a position of greater power.
Among MBS's first acts was to directly involve KSA into the Yemen civil war, with both
troops on the ground and aerial bombings. That war has killed thousands of civilians while
creating a humanitarian crisis that includes the largest modern-day outbreak of cholera, which
is decimating highly populated areas. The conflct, which is considered a 'proxy war' because
Iran is backing the Houthi rebels while KSA is backing the Yemeni government, continues to this
day.
Then in 2016, KSA threatened to dump its $750 billion in (stated) US assets in response to a
bill in Congress that would have released sensitive information implicating Saudi Arabia's
involvement in 9/11. Then-president Obama had to fly over there to smooth things out. It seems
the job he did was insufficient; because KSA-US relations unraveled at an accelerating pace
afterwards. Mission NOT accomplished, it would seem.
In 2017, KSA accused Qatar of nefarious acts and made such extraordinary demands that an
outbreak of war nearly broke out over the dispute. The Qatari leadership later accused KSA of
fomenting 'regime change', souring the situation further. Again, Iran backed the Qatar
government, which turned this conflict into another proxy battle between the two main regional
Arab superpowers.
In parallel with all this, KSA was also supporting the mercenaries (aka "rebels" in western
press) who were seeking to overthrow Assad in Syria -- yet another proxy war between KSA and
Iran. It's been an open secret that, during this conflict, KSA has been providing support to
some seriously bad terrorist organizations like Al-Qaeda, ISIS and other supposed enemies of
the US/NATO. (Again, the US has never said 'boo' about that, proving that US rhetoric against
"terrorists" is a fickle construct of political convenience, not a moral matter.)
Once Russia entered the war on the side of Syria's legitimate government, the US and KSA
(and Israel) lost their momentum. Their dreams of toppling Assad and turning Syria into another
failed petro-state like they did with Iraq and Libya are not likely to pan out as hoped.
But rather than retreat to lick their wounds, KSA's King Salman and his son are proving to
be a lot nimbler than their predecessors.
Rather than continue a losing battle in Syria, they've instead turned their energies and
attention to dramatically reshaping KSA's internal power structures:
Saudi Arabia's Saturday Night Massacre
For nearly a century, Saudi Arabia has been ruled by the elders of a royal family that now
finds itself effectively controlled by a 32-year-old crown prince, Mohammad bin Salman. He
helms the Defense Ministry, he has extravagant plans for economic development, and last week
arranged for the arrest of some of the most powerful ministers and princes in the country.
A day before the arrests were announced, Houthi tribesmen in Yemen but allied with Iran,
Saudi Arabia's regional rival, fired a ballistic missile at Riyadh.
The Saudis claim the missile came from Iran and that its firing might be considered "an act
of war."
Saudi Arabia was created between the two world wars under British guidance. In the 1920s, a
tribe known as the Sauds defeated the Hashemites, effectively annexing the exterior parts of
Saudi Arabia they did not yet control. The United Kingdom recognized the Sauds' claim shortly
thereafter. But since then, the Saudi tribe has been torn by ambition, resentment and intrigue.
The Saudi royal family has more in common with the Corleones than with a Norman Rockwell
painting.
The direct attack was undoubtedly met with threats of a coup. Whether one was actually
planned didn't matter. Mohammed Bin Salman had to assume these threats were credible since so
many interests were under attack. So he struck first, arresting princes and ex-minsters who
constituted the Saudi elite. It was a dangerous gamble. A powerful opposition still exists, but
he had no choice but to act. He could either strike as he did last Saturday night, or allow his
enemies to choose the time and place of that attack. Nothing is secure yet, but with this
strike, there is a chance he might have bought time. Any Saudi who would take on princes and
clerics is obviously desperate, but he may well break the hold of the financial and religious
elite.
This 32 year-old prince, Mohammed bin Salman has struck first and deep, completely upending
the internal power dynamics of Saudi Arabia.
He's taken on the political, financial and religious elites head on. For example, pushing
through the decision to allow women to drive; a provocative move designed to send a clear
message to the clerics who might oppose him. That message is: "I'm not fooling around
here."
This is a classic example of how one goes about purging the opposition when either taking
over a government after a coup, or implementing a big new strategy at a major corporation. You
have to remove any possible opponents and then install your own loyalists. According the
Rules for Rulers ,
you do this by diverting a portion of the flow of funds to your new backers while diminishing,
imprisoning or killing all potential enemies.
So far, Mohammed bin Salman's action plan is par for the course. No surprises.
The above article from Stratfor (well worth reading in its entirety) continues with these
interesting insights:
The Iranians have been doing well since the nuclear deal was signed in 2015. They have
become the dominant political force in Iraq . Their support for the Bashar Assad regime in
Syria may not have been enough to save him, but Iran was on what appears to be the winning side
in the Syrian civil war. Hezbollah has been hurt by its participation in the war but is
reviving, carrying Iranian influence in Lebanon at a time when Lebanon is in crisis after the
resignation of its prime minister last week.
The Saudis, on the other hand, aren't doing as well. The Saudi-built anti-Houthi coalition
in Yemen has failed to break the Houthi-led opposition. And Iran has openly entered into an
alliance with Qatar against the wishes of the Saudis and their ally, the United Arab
Emirates.
Iran seems to sense the possibility of achieving a dream: destabilizing Saudi Arabia ,
ending its ability to support anti-Iranian forces, and breaking the power of the Sunni
Wahhabis. Iran must look at the arrests in Saudi Arabia as a very bad move. And they may be.
Mohammad bin Salman has backed the fundamentalists and the financial elite against the
wall.
They are desperate, and now it is their turn to roll the dice. If they fall short, it could
result in a civil war in Saudi Arabia. If Iran can hit Riyadh with missiles, the crown prince's
opponents could argue that the young prince is so busy with his plans that he isn't paying
attention to the real threat. For the Iranians, the best outcome is to have no one come out on
top.
This would reconfigure the geopolitics of the Middle East, and since the U.S. is deeply
involved there, it has decisions to make.
So given Yemen, Syria, and its recent domestic purges, Saudi Arabia is in turmoil. It's in a
far weaker position than it was a short while ago.
This leaves the US in a far weaker regional position, too, at precisely the time when China
and Russia are increasing their own presence (which we'll get to next).
But first we have to discuss what might happen if a civil war were to engulf Saudi Arabia.
The price of oil would undoubtedly spike. In turn, that would cripple the weaker countries,
companies and households around the world that simply cannot afford a higher oil price. And
there's a lot of them.
Financial markets would destabilize as long-suppressed volatility would explode higher,
creating horrific losses across the board. That very few investors are mentally or financially
prepared for such carnage is a massive understatement.
So..if you were Saudi Arabia, in need of helpful allies after being bogged down in an
unwinnable war in Yemen, just defeated in a proxy war in Syria, and your longtime 'ally', the
US, is busy pumping as much of its own oil as it can, what would you do?
Pivot To
China
Given its situation, is it really any surprise that King Salman and his son have decided to
pivot to China? In need of a new partner that would align better with their current and future
interests, China is the obvious first choice.
So in March 2017, only a very short while after Obama's failed visit, a large and
well-prepared KSA entourage accompanied King Salman to Beijing and inked tens of billions in
new business deals:
China, Saudi Arabia eye $65 billion in deals as king visits
Mar 16, 2017
BEIJING (Reuters) - Saudi Arabia's King Salman oversaw the signing of deals worth as much as
$65 billion on the first day of a visit to Beijing on Thursday, as the world's largest oil
exporter looks to cement ties with the world's second-largest economy.
The deals included a memorandum of understanding (MoU) between giant state oil firm Saudi
Aramco and China North Industries Group Corp (Norinco), to look into building refining and
chemical plants in China.
Saudi Basic Industries Corp (SABIC) and Sinopec, which already jointly run a chemical
complex in Tinajin, also agreed to develop petrochemical projects in both China and Saudi
Arabia.
Salman told Xi he hoped China could play an even greater role in Middle East affairs, the
ministry added.
Deputy Chinese Foreign Minister Zhang Ming said the memorandums of understanding and letters
of intent were potentially worth about $65 billion, involving everything from energy to
space.
This was a very big deal in terms of Middle East geopolitics. It shook up many decades of
established power, resulting in a shift away from dependence on America.
The Saudis arrived in China with such a huge crowd in tow that a reported 150 cooks had been
brought along to just to feed everyone in the Saudi visitation party.
The resulting deals struck involved everything from energy to infrastructure to information
technology to space. And this was just on the first visit. Quite often a brand new trade
delegation event involves posturing and bluffing and feeling each other out; not deals being
struck. So it's clear that before the visit, well before, lots and lots of deals were being
negotiated and terms agreed to so that the thick MOU files were ready to sign during the actual
visit.
The scope and size of these business deals are eye catching, but the real clincher is King
Salman's public statement expressing hope China will play " an even greater role in Middle East
affairs."
That, right there, is the sound of the geopolitical axis-tilting. That public statement
tells us everything we need to know about the sort of change the Salman dynasty intends to
pursue.
So it should have surprised no one to hear that, in August this year, another
$70 billion of new deals were announced between China and KSA . The fanfare extolled that
Saudi-Sino relations had entered a new era, with "the agreements covering investment, trade,
energy, postal service, communications, and media."
This is a very rapid pace for such large deals. If KSA and China were dating, they'd be
talking about moving in together already. They're clearly at the selecting furniture and carpet
samples stage.
As for the US? It seems KSA isn't even returning its calls or texts at this point.
You
Ain't Seen Nothing Yet...
All of the above merely describes how we arrived at where things stand today.
But as mentioned, the power grab underway in KSA by Mohammed bin Salman is unfolding in
real-time. Developments are happening hourly -- while writing this, the very high-profile
Prince Bandar bin Sultan (recent head of Saudi Intelligence and former longtime ambassador to
the US)
has been arrested .
The trajectory of events is headed in a direction that may well end the arrangement that has
served as the axis around which geopolitics has spun for the past 40 years. The Saudis want new
partners, and are courting China hard.
China, for reasons we discuss in Part 2 of this report, has an existential need to supplant
America as Saudi Arabia's most vital oil customer.
And both Saudi Arabia and China are inking an increasing number of strategic oil deals with
Russia. Why? We get into that in Part 2, too -- but suffice it to say, in the fast-shifting
world of KSA foreign policy, it's China and Russia 'in', US 'out'.
Maybe not all the way out, but the US clearly has lost a lot of ground with KSA over the
past few years. My analysis is that by funding an insane amount of shale oil development, at a
loss, and at any cost (such as to our biggest Mideast ally) the US has time and again displayed
that our 'friendship' does not run very deep. In a world where loyalty counts, the US has
proved a disloyal partner. Can China position itself to be perceived of as a better mate? When
it comes to business, I believe the answer is 'yes.'
In Part
2: The Oil Threat we couple these developments with China and Russia's recent efforts to
drop the dollar from trade, especially when purchasing oil, and clearly see the unfolding of
the biggest new driver of the world's financial, monetary and geopolitical arrangements in 50
years.
We also explain why, unless something very dramatically changes in either the supply or
demand equation for oil, and soon, we can now put a timeline in place for when the great
unraveling begins. Somewhere between the second half of 2018 and the end of 2019 oil will
dramatically increase in price and that will shake the foundations of the global mountain of
debt and its related underfunded liabilities. Think 9.0 on the financial Richter scale.
Let me be blunt - you have to have your preparations done before this happens. You really,
really want to be a year early on this (at least). When it starts happening, the breakdown will
progress faster than you can react.
The reason that the world is moving towards China this fast, it's because of Trump.
Trump is too radical, and that's why these nations are running for the exit.
"Trump's policies are taking a whole bunch of countries that were already worried about
America's commitment to lead and America's commitment to its alliances. China also wants to
be seen now as promoting globalization, promoting free trade, particularly for countries in
Asia that don't want to count on the U.S." -- Ian Bremmer
Wot about Dick Cheney, Alberto Gonzales, Don Rumsfeld, G.W.B., Weapons of Mass Destruction
in Iraq, Colin Powell, John Bolton, Condaleza Rice, Samantha Powers, Kagan, Susan Rice,
Hilary Clinton, Clinton Foundation, noecons, McCain, Lindsey Graham, Phil Gramm, TBTF
You seem to know the difference, a very basic one at that but the author does not.
"In 2017, KSA accused Qatar of nefarious acts and made such extraordinary demands that an
outbreak of war nearly broke out over the dispute. The Qatari leadership later accused KSA of
fomenting 'regime change', souring the situation further. Again, Iran backed the Qatar
government, which turned this conflict into another proxy battle between the two main
regional Arab superpowers."
Iran is Arab? I don't think so.
I tend to be skeptical when I see "breathless enthusiasm" touting the sky is falling
geopolitically (which it always is ) and then the "Iran is Arabs" thing just killed it for
me.
Oh well. I apologize for nit-picking and will get some popcorn.
"the kingdom also provides with full enthusiasm 20 percent of the cost of Hillary
Clinton's campaign,"
-- Prince Mohammed bin Salman, 2016
The Clinton Foundation, which is chaired by both Hillary and her husband Bill Clinton,
disclosed in 2008 that it had accepted up to US$25 million from the Saudi Kingdom in the same
year.
Other foreign governments who have donated money to the Clintons include Norway, Kuwait,
Qatar, Brunei, Oman, Italy and Jamaica, which together donated around US$20 million.
Now I see the big picture. The fuse to the mother of all "Truth bombs" as Bill Holter
coined has just been lit and the fuse is short. Until now I personally never really saw the
Rockefeller- Langley clan and its comrades all getting cleaned out with the fall of Petro
Dollar. But it is the only way. And with that the NY Fed as Dudley knows will lose its narco
money and means to support the dollar and its terror on mankind. The fall of Petro Dollar is
the only means to the end of the evil and the evil doers of the last 40 years perpetrated by
the psychopaths using the petro dollar as its fuel to the weapon of mass destruction. Alice
in Wonderland America is about to go Mad Max.
The 1 hour Perpetual Asset interview "The Saudi Straw That Broke the Petro Dollar's Back"
with Jim Willie on October 10 is well worth listening. https://m.youtube.com/watch?v=yY9j6vvCFE0 The
conclusion laid out in interview is simple and brilliant, Langley (Bush-Clinton-
Narco-CIA-Banker-Neo-Psycopaths) and the clear headed leaders in the Pentagon are having it.
Peacock MBS caught in the middle trying to save his own neck and Kingdom is collateral
damage.
After listening to interview, I ran across two zero hedge links below. The first article
makes some very poignant and interesting points that reinforce the dollars end game that we
are approaching. The markets have not caught on yet but will with a vengeance.
In the second article taking Bandar out must worry the Bush-Clinton-
Narco-CIA-Banker-Neo-Psycopaths more than we can imagine. The last two paragraphs of article
sum it up nicely. Time to pay the piper & the devil wants souls. All the gold, wealth,
and power won't save them. From the looks of Trump/Putin in Vietnam not to mention Trump's
warm welcome from Xi in China the heads of state seem jubilant in what is quickly spinning
out of control for the psychopaths of debt, destruction, conquer, divide and slavery. Trump
"strangely" pointed out that China and US need to jointly oversee security in Afghanistan
which of course will be necessary to police while eliminating 1300 tons of opium
production.
The PPT NYFed's actions in paper gold market this week seemed desperate. GS has to be
feeling the heat.
1- Fischer and now Dudley resign. Hopeful to hear the latter is leaving BIS as well.
2- Powell a Carlye Group flunky was a brilliant FED appointment to appear to be status quo
to ignorant market but is more likely a double agent than Bush butt buddy.
3- expect Cohn to give his resignation soon.
4- Expect NY Attorney General Eric Tradd Schneiderman to resign or do a 180
5- expect David A. Markowitz hired by Goldman in 2010 from the New York Attorney General's
office to resign. He defended GS in their NYFed collusion/corruption case
I have heard for almost a decade that KSA has been pumping some of their fields too fast
requiring huge amounts of seawater to be pumped in to get the flow rates to stay high. Some
oil professionals who know this also scoffed at the huge Aramco IPO value saying the oil
isn't all there. Not sure what will happen with the teams set to rumble but I will bet Israel
will make the first strike to use the element of surprise. I hope the fleet is ready and gets
the carriers out of the Persion Gulf.
Actually, the Saudi group is just climbing onto another life boat. They're the ones that
made the US Ponzi possible by nodding to the US dollar as the reserve currency many years
ago. They will force the US to face the music holding a 20 trillion debt. Now China gets a 20
to 30 year fiat ride like the US had. If they're careful, it could last much longer. In the
US, there's nothing left floating to hang onto. Maybe some fracked oil for awhile, but it
will have to go at a bargain price. The Saudis and Russia can cover a huge amount of the
world's consumption. Big bank loans are piled all over the entire US economy. In order for
the banks to save themselves, they've weighted down even the grunts at the bottom with eight
year car loans which should have never been issued. With everything underwater, and the
inability to export inflation by holding the reserve currency exclusively, the US is in for a
major ass whooping. Better learn some basic camping skills.
It is difficult to predict where all this will lead. Some, like Dennis Gartman, warn that
although the immediate impact of the latest Saudi events is positive for prices, it will turn
negative in the longer run as this sort of instability is unsustainable. Others, such as Morgan
Stanley's commodity analysts, are
revising upwards their oil price forecasts, encouraged by these same events. OPEC's Vienna
meeting, where the cartel will discuss the extension of the oil production cut it agreed almost
a year ago, is less than a month away. There are voices
suggesting that Saudi Arabia could make a U-turn on its support for the deal in light of
the now higher prices resulting from its internal tumult and the spike in tensions with
Iran.
In the meantime, the Ritz-Carlton in Riyadh is fully booked until February, as per the
hotel's website, and all guests were asked to leave or had their reservations cancelled.
The short-term outlook was bullish: MBS is seen as a key supporter for the OPEC policy of
measured production cuts, and his consolidation of power means the cuts are likely to be
maintained and extended through the rest of next year.
Conversely, rising prices may also signal increase instability in Saudi Arabia: there are
signs that the crackdown may have been meant to stave off a more substantive challenge to MBS
from upper-echelon figures in the Saudi hierarchy. The
uncertainty in future Saudi oil policy has created a bull market. While MBS is known to
favor an extension of production cuts, the turmoil within the Saudi ruling elite could signal a
shift in policy in advance of the November 30 OPEC meeting in Vienna, where an extension to
production cuts is expected to dominate the agenda
Don't forget Yemen war is expensive and oil ins still hovering around $60 not $80 needed for KSA
to balance the budget. . KSA might run out of money just about the same time the old king dies.
Going to be an interesting transition
Notable quotes:
"... The son of the eighty-one year old King Salman, Muhammad bin Salman, known as MbS, has amassed more power in the last two years than any member of the House of Saud, including its kings. The young prince, who before his father came to power held no position of significance, is now the heir to the throne, minister of defense, chairman of the newly launched "anti-corruption" committee, and, by royal decree, the man in charge of Saudi Arabia's primary source of wealth, Saudi Aramco. ..."
Will Backlash Against Prince Purge Begin Within Military?
Firing popular Saudi guard leader may have been a critical miscalculation.
November 10, 2017
Saudi security forces on parade, 2009.
Credit: AlJazeera/Omar Chatriwala/Creative
Commons
Muhammad bin Salman, the 32-year-old crown prince of
Saudi Arabia, has been called bold, brash, and even an anti-corruption crusader in the
press this week. But his arrest of hundreds of potential rivals, including 11 royal
princes and many influential Saudi businessmen, can only be described as a pre-emptive
coup.
If this was his aim, however, his firing of one
prince -- the head of the Saudi Arabian National Guard -- may have been his fatal mistake.
The son of the eighty-one year old King Salman,
Muhammad bin Salman, known as MbS, has amassed more power in the last two years than any
member of the House of Saud, including its kings. The young prince, who before his
father came to power held no position of significance, is now the heir to the throne,
minister of defense, chairman of the newly launched "anti-corruption" committee, and, by
royal decree, the man in charge of Saudi Arabia's primary source of wealth, Saudi Aramco.
... ... ...
Muhammad bin Salman's betrayal of
decades of rule by consensus and consultation in favor of determined autocracy has
undoubtedly made enemies of hundreds, if not thousands, of wealthy and influential
princes and businessmen. These princes and businessmen are unlikely to wait for their
invitation to the Ritz Carlton.
Michael Horton is a senior analyst for Arabian
affairs at the Jamestown Foundation. He is a frequent contributor to J
ane's
Intelligence Review
and has written for
numerous other publications including:
The
National Interest
The Economist
,
and West Point's
CTC Sentinel.
Craighead) Rosie Bsheer
warns Westerners not to fall for Mohammed bin Salman's reformer act:
Even as Western governments and media outlets sing his praises, the young crown prince is
viewed domestically as an incompetent and corrupt ruler who hides behind liberalism,
tolerance and anti-corruption rhetoric [bold mine-DL]. This view is shared by ruling members
of the monarchy, economic elites and the population at large, who see bin Salman as someone
who has disturbed the status quo for the sake of massive personal enrichment and political
aggrandizement.
Many Westerners are often eager to promote individual foreign leaders in as "reformers" or
"moderates" so that it makes it easier to justify a close U.S. relationship with these leaders.
Few would openly argue that the U.S.-Saudi relationship should remain the same or become even
closer if the next king is a reckless incompetent who is actively destabilizing the surrounding
region. For that reason, there is great reluctance on the part of supporters of the
relationship to judge MBS on what he has actually done rather than what he says he wants to do
in the future.
Bsheer comments on MBS' recent power grab and how it benefits him and his father:
These arrests, cloaked in populist rhetoric trumpeting a purported campaign to end
corruption, actually aim to silence and disempower, if not to completely purge, bureaucrats
and members of the ruling family who hold economic and political power and are still not on
board with Salman's rise to power.
The arrests benefit Salman in two ways. Politically, they upend the balance of power in
the Saudi regime, leaving Salman with few rivals. Financially, they make it easier to claim
his rivals' assets as his own, part of a two-year effort to consolidate economic power.
When stripped of their official justifications, we can see that these actions are not those
of a reformer at all. They are the actions of a despot engaging in a massive abuse of power. If
an adversarial authoritarian regime conducted such a purge and justified it in the same way,
the near-unanimous response from the West would be criticism and ridicule, and that response
would be appropriate. When MBS and his father do it, they are embraced by the president and
their justification is taken at face value by far too many news outlets.
At the very least, MBS and his father should be subject to the same skepticism and criticism
as any other authoritarian government. We should be wary of accepting the "reformer"
credentials of a person who has so far distinguished himself for his hubris and incompetence
while compiling a record of failure and repeated violations of international law. Perhaps we
could refrain from labeling the man who is helping to starve millions of people to death as a
"moderate." Ideally, the U.S. should take the opportunity provided by MBS' rise to recognize
that the relationship with the Saudis has become a liability and put as much distance between
us and Riyadh as possible.
The world has plenty of experience – all too much – with "reformers" who arrest
and kill their rivals, and who commit mass atrocities against civilian populations, as MBS is
doing in Yemen.
Our "friendships" in the Middle East have damaged and soiled us more than any foreign
relationships in our history that I can think of.
At least when we "opened" to China we did it fairly clear-eyed, and one could credibly
argue that it was necessary and served our national interest. But our sick, codependent
relationships with Saudi Arabia and Israel have only entangled us in pointless messes, put
America itself at risk, fouled us morally, and made us simultaneously a frightening,
destabilizing force on the world stage, and an international laughingstock.
When and where will it end? I had some hope that Trump might do it, but so far he seems to
be doubling down on the Bush the Younger / Obama stupidity.
Yesterday the ruling Salman clan in Saudi Arabia executed a Night of the Long Knives
cleansing the state of all potential competition. The Saudi King Salman and his son Clown
Prince Mohammad bin Salman initiated a large arrest wave and purge of high ranking princes
and officials. Part of this internal coup was the confiscation of huge financial estates to
the advantage of the Salman clan.
The earlier forced resignation of the Lebanese Prime Minister Saad al-Hariri is
probably related to the last night's events. The Israeli Prime Minister Netanyahoo endorsed
the resignation. This guarantees that Hariri will never again be accepted in a leading role
in Lebanon .
####
Plenty more at the link and don't forget to check the comments, of which PaveWay IV &
guidoamm are enlightening, the latter: I know from someone that, till last month, managed
a fleet of personal jets for the great and the good in Saudi Arabia, that there is an exodus
under way. The great and the good are literally taking the cuckoo clocks onboard their 380s
and relocating to their foreign residences. Owners of the fleets have not been paying their
bills for months neither to the crews, nor to the management nor, indeed, to the
facilities.
####
Just what Europe needs, a bunch of Saudi princes permanently flaunting themselves away
from home in various capitals.
Saudi declares war on Lebanon, by claiming that Lebanon declares war on
Saudi Arabia . Given that the Saudis have made their alliance with Israel open, this is a
threat to the Lebanese government and society, and a dare to the Russian government regarding
its anti-ISIS and anti-Al Qaeda policy.
The sale of ARAMCO is a sign of desperation in the Saudi regime, not strength. They know they
are running on empty and will have to use whatever resources they have already to stay in
power. The forced reduction in oil price was ostensably aimed at Russia, but it has also
crippled Saudi too. Qui bono? A forced sale of ARAMCO will lead to them getting below par in
a forced sale - to whom? Zionist central bankers?
The Zionists have seen rapprochement between Turkey and Russia, now Saudi and Russia so
they will be desperate. What better way to stir things up than linking Saudi in as a primary
driver for the Lebanese / Hezbollah position, with the hope of splitting the Russian
rapprochment. However, the reality is that Hezbollah/Lebanon is not an existential national
security threat to Saudi, but it is to Israel. And that is the elephant in the room
again.
Israel was so close to seeing all its regional enemies embroiled in terrorism and
social/economic disruption - Iran, Iraq, Syria, Saudi, Turkey, Lebanon - with the prospect of
making great gains (for national security purposes natch) in the Golan where Zionist proxy
forces have been guarding territory for it. And now it looks to be fading dream. Even Druze
living in the Occupied Golan have warned the IDF that they will defend their co-religionists
in Syria against ISIS/whatever.
Destruction of Hezbollah/Lebanon only benefits Israel.
There was talk not long ago of China buying the full 5% of Aramco. Not sure how much was
in that, but possibly why US is backing Saudi in their new Lebanon adventure. The US backs
Saudi's in Lebanon and Saudi does not sell Aramco to China?
In a shocking development, Saudi press Al Mayadeen reported late on Saturday that
prominent billionaire, member of the royal Saudi family, and one of the biggest shareholders
of Citi, News Corp. and Twitter - not to mention frequent CNBC guest - Al-Waleed bin Talal,
has been arrested for corruption and money laundering charges, along with several other top
officials. Among those fired and/or arrested are also the head of National Royal Guards,
Miteb Bin Abdullah, the Minister of Economy and Planning, Adel Fakeih, and Admiral Abdullah
bin Sultan bin Mohammed Al-Sultan, the Commander of the Saudi Naval Forces
snip
the heads of the main three Saudi owned TV networks were arrested, Alwalid Bin Talal
(Rotana), Walid Al Brahim (MBC), Saleh Kamel (ART)
snip
This could be a service to Trump, who hates Al-Walid: the two fought it out on twitter
during the campaign although Al-Walid tried to reconcile with Trump after his election but to
no avail.
snip
To summarise today's even more bizarre Saudi news day:
-Trump urges Aramco IPO
-Lebanon PM resigns
-Saudis intercept missile
-Major cabinet reshuffle; 3 Saudi princes - who run the anti-graft committee - arrested for
money-laundering
-A total of 11 princes, >30 ministers arrested on corruption
Saudi Arabia. Trump prostrated himself and his country before the Saudis and the leaders of
the Islamic World. The Saudis expect that this was more than a symbolic and empty gesture.
Saudi Arabia is a weak state in actual capabilities in the world It is a state that the US will
not need much longer as a source of petroleum. The feebleness of the Saudi government is
demonstrated by the ineffectual nature of its war in Yemen, This genocide is being aided and
abetted by the US government as part of its cartoon-like conception of basic social and
political structures in Islamdom. The Saudi government grows ever weaker as a result of this
war and decline in its monetized assets because of a growing surplus of petroleum in the world.
The Saudi princelings are not worth the effort being put into keeping them happy.
Qatar . US military operations in the ME are centered around the command and control
facility at Al-Obeid in Qatar as well as the air base itself. The air base is useful but is
only one of many used by the US in the ME. By siding with the Saudis DJT has de-stabilized the
US relationsip with Qatar and is driving the Qataris in the direction of an pro-Iranian stance.
Would the US fight to keep al-Obeid? The Saudis won't do it for the US.
"... Some analysts view the possible IPO delay as a sign of the problems Aramco and the Saudi government currently face. A lack of transparency, issues with its oil and gas reserves, and the role of the Saudi government as the main stakeholder have all been suggested as the reason for this possible delay. Most of these suggestions, however, are based purely on issues surrounding the IPO itself. The true reason for this delay, however, likely hides among the intricate societal and economic problems in the Kingdom. ..."
"... One obvious reason for a delay is the still-fledgling global oil price. A higher price setting -- above $60 per barrel -- would surely drive up the overall interest in the IPO. As long as OPEC and non-OPEC members, such as Russia, are still struggling to get a grip on the oil market, the potential for disaster looms. Needless to say, an oil price slump would have a detrimental effect on the expected revenues of the IPO. ..."
"... The impact of an influx of $1-2 trillion into the current Saudi economy is bound to have a significant impact. The implementation of Saudi Vision 2030 is broad and ambitiously planned. A full diversification of the economy is needed to guarantee work and salaries for future young Saudis, with the end of government subsidies or handouts. ..."
"... We previously indicated that China could step in as a financial savior. With around 8.5 million bpd of crude oil imports, which is 2.5 million bdp more than in 2014, the attractiveness of having a stake in Saudi Aramco is huge. Even though an energy diversification program is in place, China's imports from Saudi Arabia are going to increase. For Beijing, a stake in one of its main suppliers is a very attractive proposition. It will not only lock in Saudi crude oil and petroleum product exports to China but it will also provide some additional political and strategic clout in the heart of the Middle East. ..."
"... Given most of the largest sovereign wealth funds were created from their own oil revenue, I don't see them getting into someone else's oil. ..."
The FT notes that talks
about a private sale to foreign governments - including China - and other investors have
gathered pace in recent weeks, according to five people familiar with the IPO preparations,
amid growing concerns about the feasibility of an international listing.
The Saudi state oil company has struggled to select a suitable international venue for its
shares, as New York and London have vied for what has been billed as the largest ever
flotation.
The company would still aim to list shares on the kingdom's Tadawul exchange next year if
they pursue the private sale, the people said.
The latest proposal by the company's financial advisers was described by one of the people
as a "face-saving" option for Saudi Aramco, which has worked on plans to list its shares
internationally for more than a year.
Desk chatter included comments that the Saudis were anxious about the level of due diligence
and transparency involved in a public offering.
A Saudi Aramco spokesperson said:
"A range of options, for the public listing of Saudi Aramco, continue to be held under
active review. No decision has been made and the IPO process remains on track."
The planned listing of a 5 per cent stake in Saudi Aramco is the centrepiece of an economic
reform programme led by Saudi Arabia's powerful crown prince Mohammed bin Salman, who is keen
for a 2018 IPO. He has said the company could be worth $2tn although a Financial Times analysis
put the valuation figure at around $1tn.
An economic recession in the kingdom is piling pressure on the prince, the king's son and
next in line for the throne, amid calls for the government to increase investment and ease
austerity. As we noted
previously, there could be more at play here...
Some analysts view the possible IPO delay as a sign of the problems Aramco and the Saudi
government currently face. A lack of transparency, issues with its oil and gas reserves, and
the role of the Saudi government as the main stakeholder have all been suggested as the reason
for this possible delay. Most of these suggestions, however, are based purely on issues
surrounding the IPO itself. The true reason for this delay, however, likely hides among the
intricate societal and economic problems in the Kingdom.
One obvious reason for a delay is the still-fledgling global oil price. A higher price
setting -- above $60 per barrel -- would surely drive up the overall interest in the IPO. As
long as OPEC and non-OPEC members, such as Russia, are still struggling to get a grip on the
oil market, the potential for disaster looms. Needless to say, an oil price slump would have a
detrimental effect on the expected revenues of the IPO.
The analysts, it seems, feel no need to look any further than this simple oil price
explanation, but several other key factors should be addressed
The impact of an influx of $1-2 trillion into the current Saudi economy is bound to have a
significant impact. The implementation of Saudi Vision 2030 is broad and ambitiously planned. A
full diversification of the economy is needed to guarantee work and salaries for future young
Saudis, with the end of government subsidies or handouts.
A multitrillion investment scheme in a rather small local economy will likely result in
total disorder, inflation and possibly ineffective investment schemes. The attractiveness of
investing the total amount could lead to staggering inflation, higher costs and superfluous
projects being realized.
A delay of such an influx of cash seems to be more and more attractive, giving the Saudi
government and local industries more time to adjust and put in place the right steps for a
sustainable and commercially attractive economic future.
We previously
indicated that China could step in as a financial savior. With around 8.5 million bpd of
crude oil imports, which is 2.5 million bdp more than in 2014, the attractiveness of having a
stake in Saudi Aramco is huge. Even though an energy diversification program is in place,
China's imports from Saudi Arabia are going to increase. For Beijing, a stake in one of its
main suppliers is a very attractive proposition. It will not only lock in Saudi crude oil and
petroleum product exports to China but it will also provide some additional political and
strategic clout in the heart of the Middle East.
There will, of course, be a few big bankers who will be upset as their billion dollar
fee/commission just went up in smoke, but this may give MBS some breathing room - without the
undue attention of an IPO - as he deals with the nation's economic slowdown. However, coming
just a few days after the Saudi king's trip to Moscow, the timing of this leaked information
seems interesting at the least.
Tugg McFancy •Oct 13, 2017 5:41 PM
Given most of the largest sovereign wealth funds were created from their own oil
revenue, I don't see them getting into someone else's oil.
Freddie -> Government needs you to pay taxes •Oct 13, 2017 3:00 PM
They would have to release information on their in the ground oil reserves. Their biggest
oil field Ghawar is 60 years old and almost dead. They shelved it to hide this.
The deal may certainly be seen as a purely strategic/economic measure to stabilize the oil
market – with no geopolitical overtones. And yet OPEC is geared to become a brand new
animal – with Russia and Saudi Arabia de facto deciding where the global oil markets
go, and then telling the other OPEC players. It's open to question what Iran, Algeria,
Nigeria, Venezuela, among others, will have to say about this. The barely disguised aim is to
bring oil prices up to a band of $60-75 a barrel by the middle of next year. Certainly a good
deal for the Aramco IPO.
There were a rash of other deals clinched in Moscow – such as Aramco and the Russian
Direct Investment Fund (RDIF) $1 billion fund for oil-services projects in Russia, plus
another $1 billion for a technology fund.
"... The market is "balancing", stocks are drawing down, demand is healthy, US rig count/LTO does not increase, Nigeria and Libya have a very small upside in the short term, Venezuela is a pretty big downside risk, offshore is not too healthy. And the Saudis cut _voluntarily_ because ? ..."
"... If true, it seems likely to me that the Saudi's [and Russia?] are going to push the oil price issue and the best interests of the West be damned. Looks to me like SS might get back in the money next year. ..."
"... I don't think the Saudis or Russians would be concerned too much about what happens in the west. The upcoming supply shortage will happen, anyway. There is a lot of talk by the Saudis of making sure prices don't rise too much, but I am sure that is fake concern. ..."
"... I am sure this post does not apply to shale, because shale is a Wall Street phenomenon. However, for us, a price spike will not immediately lead to drilling wells. First, after what we have been going through the last three years, I would want to make sure the price is going to hold. Yes, no way to know that really, but I can guarantee we would not be rushing out to get permits. ..."
"... That is what always blows me away about Wall Street. They analyze every metric imaginable when it comes to E & P's except the bottom line. I'd rather own 50 BOPD and make $50K per month than own 500 BOPD and lose $50K per month. ..."
"... Is it possible that all of the end of oil talk actually helps cause a supply crunch? Believe me, it is going through our minds now that maybe we need to be worried about decreasing demand in our lifetimes due to EV's. ..."
"... Best to ignore the EV wackos and watch Chinese and India oil consumption data. ..."
The market is "balancing", stocks are drawing down, demand is healthy, US rig
count/LTO does not increase, Nigeria and Libya have a very small upside in the short term,
Venezuela is a pretty big downside risk, offshore is not too healthy. And the Saudis cut
_voluntarily_ because ?
Because, frankly they know more about the oil market than most of the "anal ists". Rather
than fighting them, and claiming no more need for "cuts", they are playing along with the
crowd. When the shortage hits, they can claim surprise and blame the EIA for over reporting.
Better price for the IPO.
If true, it seems likely to me that the Saudi's [and Russia?] are going to push the oil
price issue and the best interests of the West be damned. Looks to me like SS might get back
in the money next year.
I wonder if Trump will realize that now is not the time to have Exxon's ex-CEO as
Secretary of State. I think that Trump really wanted better relations with Russia [and Russia
wanted better US relations], but politics has totally destroyed that idea – and I think
that Russia now knows it.
I don't think the Saudis or Russians would be concerned too much about what happens in
the west. The upcoming supply shortage will happen, anyway. There is a lot of talk by the
Saudis of making sure prices don't rise too much, but I am sure that is fake concern.
They make it look like they are concerned shale production will gear up, which goes along
with what the pundits are saying. They are playing us like a violin. Much like their
purported "cuts". Jack production up several months, take it back to where it was before, and
call it a cut. We bought it, hook line and sinker.
I am sure this post does not apply to shale, because shale is a Wall Street phenomenon.
However, for us, a price spike will not immediately lead to drilling wells. First, after what
we have been going through the last three years, I would want to make sure the price is going
to hold. Yes, no way to know that really, but I can guarantee we would not be rushing out to
get permits.
Second, after this crash, we would want to heal some. Get cash balances higher, then maybe
actually take some decent draws. After all, we are in this for the income, not to see how
much we can produce. That is what always blows me away about Wall Street. They analyze
every metric imaginable when it comes to E & P's except the bottom line. I'd rather own
50 BOPD and make $50K per month than own 500 BOPD and lose $50K per month.
Third, there are some much cheaper things we can do to boost production than drilling new
wells. Workovers may not yield as much, but they cost 1/5 or less that of a new well.
I wonder, outside of shale, if we would see this type of attitude if there is a supply
crunch? Will all those high cost projects suddenly come back on line.
Finally, everyone and their dog is proclaiming the end of oil anyway. Everything is going
to electric in terms of transportation. Countries abolishing ICE vehicle production. Never
mind that is in 2040 mostly.
Now, why would I want to drill more wells knowing oil is nearing the end? Might as well
just try to make what I can off this existing ones. No reason to spend a bunch of CAPEX.
Is it possible that all of the end of oil talk actually helps cause a supply crunch?
Believe me, it is going through our minds now that maybe we need to be worried about
decreasing demand in our lifetimes due to EV's.
Saudi Aramco plans to make "the deepest
customer allocation cuts in its history" in oil supplies in November to help reduce global
inventories and balance the market.
State-run Saudi Arabian Oil Co., known as Aramco, will make an "unprecedented" cut of
560,000 barrels a day in its allocations to customers next month, the Saudi energy ministry
said in a statement. Aramco plans to supply 7.15 million barrels a day "despite very strong
demand" that exceeds 7.7 million barrels a day, it said.
"Saudi Arabia is once again demonstrating extraordinary leadership in its commitment to
re-balancing the market, as we approach the upcoming key meeting of November 30 in Vienna, by
restraining not only the top-line of production volume, but even more importantly the bottom
line of exports, which are what ultimately shape global inventories and market balances," the
ministry said. "The kingdom expects all other participants in the effort to follow suit and to
maintain the high levels of overall conformity achieved in August going forward."
Saudi Arabia, the world's top crude exporter, is leading the Organization of Petroleum
Exporting Countries and other producers including Russia in paring output under a deal that
helped propel oil into a bull market in September. Lower compliance with the curbs promised by
some nations combined with rising production in OPEC members Libya and Nigeria -- both exempt
from reducing output due to their internal strife -- have added pressure on Saudi Arabia to
make deeper cuts of its own.
Brent, the global benchmark, erased earlier declines to trade marginally higher at $55.62 a
barrel at 3:47 pm in London after the news of the Saudi oil allocations cuts.
The decrease in allocations for November "constitutes a full 290,000 barrels a day reduction
over and above the 486,000 barrels a day" that Saudi Arabia pledged to cut as part of its
commitment to the global output accord, the ministry said. This adds up "to a massive total of
almost 800,000 barrels a day" in cuts, it said.
Saudi Aramco plans
to make "the deepest customer allocation cuts in its history" in oil supplies in November to
help reduce global inventories and balance the market.
"Saudi Arabia is once again demonstrating extraordinary leadership in its commitment to
re-balancing the market, as we approach the upcoming key meeting of November 30 in Vienna, by
restraining not only the top-line of production volume, but even more importantly the bottom
line of exports, which are what ultimately shape global inventories and market balances," the
ministry said. "The kingdom expects all other participants in the effort to follow suit and to
maintain the high levels of overall conformity achieved in August going forward."
Saudi Arabia, the world's top crude exporter, is leading the Organization of Petroleum
Exporting Countries and other producers including Russia in paring output under a deal that
helped propel oil into a bull market in September. Lower compliance with the curbs promised by
some nations combined with rising production in OPEC members Libya and Nigeria -- both exempt
from reducing output due to their internal strife -- have added pressure on Saudi Arabia to
make deeper cuts of its own.
Brent, the global benchmark, erased earlier declines to trade marginally higher at $55.62 a
barrel at 3:47 pm in London after the news of the Saudi oil allocations cuts.
The decrease in allocations for November "constitutes a full 290,000 barrels a day reduction
over and above the 486,000 barrels a day" that Saudi Arabia pledged to cut as part of its
commitment to the global output accord, the ministry said. This adds up "to a massive total of
almost 800,000 barrels a day" in cuts, it said.
The quote attributed to Mark Twain and Yogi Berra "It's Difficult to Make Predictions, Especially About the Future"
still holds. This assessment by Pete Escobar about forthcoming bankruptcy of KAS need to be verified
in three years from now. It is unclear whether the key future events (such as prediction that the
current Crown Prince might be
deposed with the CIA help) will take place.
It is, nevertheless, clear that KAS economics is under considerable stress due to low oil prices
and that eventually can bankrupt the kingdom as foreign currency reserves shrink rapidly. What
such economic crisis might entail for KAS we can only guess by reshuffling at the top is quite
probably in this case. So in a way the future of KAS hangs on how soon oil prices will be
pushed back into $100 range.
Notable quotes:
"... MBS is surrounded by inexperienced thirty-something princes, and alienating just about everyone else. ..."
"... "the CIA is outraged that the compromise worked out in April, 2014 has been abrogated wherein the greatest anti-terrorist factor in the Middle East, Mohammed bin Nayef, was arrested." That may prompt "vigorous action taken against MBS possibly in early October." And it might even coincide with the Salman-Trump get together. ..."
"... Asia Times' Gulf business source stresses how "the Saudi economy is under extreme strain based on their oil price war against Russia, and they are behind their bills in paying just about all their contractors. That could lead to the bankruptcy of some of the major enterprises in Saudi Arabia. The Saudi Arabia of MBS features the Crown Prince buying a US$600 million yacht and his father spending US$100 million on his summer vacation, highlighted on the front pages of the New York Times while the Kingdom strangles under their leadership." ..."
"... MBS's pet project, the spun-to-death Vision 2030, in theory aims to diversify from mere oil profits and dependency on the US to a more modern economy (and a more independent foreign policy). That's completely misguided, according to the source, because "the problem in Saudi Arabia is that their companies cannot function with their local population and [are] reliant on expatriates for about 70% or more of their staff. Aramco cannot run without expatriates. Therefore, selling 5% of Aramco to diversify does not solve the problem. If he wants a more productive society, and less handouts and meaningless government jobs, he has to first train and employ his own people." ..."
"... The similarly lauded Aramco IPO, arguably the largest share sale in history and originally scheduled for next year, has once again been postponed – "possibly" to the second half of 2019, according to officials in Riyadh. And still no one knows where shares will be sold; the NYSE is far from a done deal. ..."
"... I n parallel, MBS's war on Yemen, and the Saudi drive for regime change in Syria and to reshape the Greater Middle East, have turned out to be spectacular disasters. ..."
"... The Islamic State project was conceived as the ideal tool to force Iraq to implode. It's now public domain that the organization's funding came mostly from Saudi Arabia. Even the former imam of Mecca has publicly admitted ISIS' leadership "draw their ideas from what is written in our own books, our own principles." ..."
"... Salafi-jihadism is more than alive inside the Kingdom even as MBS tries to spin a (fake) liberal trend (the "baby you can drive my car" stunt). The problem is Riyadh congenitally cannot deliver on any liberal promise; the only legitimacy for the House of Saud lies in those religious "books" and "principles." ..."
"... In Syria, besides the fact that an absolute majority of the country's population does not wish to live in a Takfiristan , Saudi Arabia supported ISIS while Qatar supported al-Qaeda (Jabhat al-Nusra). That ended up in a crossfire bloodbath, with all those non-existent US-supported "moderate rebels" reduced to road kill. ..."
"... In Enemy of the State, the latest Mitch Rapp thriller written by Kyle Mills, President Alexander, sitting at the White House, blurts, "the Middle East is imploding because those Saudi sons of bitches have been pumping up religious fundamentalism to hide the fact that they're robbing their people blind." That's a fair assessment. ..."
"... In terms of what Washington wants, the CIA is not fond of MBS, to say the least. They want "their" man Nayef back. As for the Trump administration, rumors swirl it is " desperate for Saudi money , especially infrastructure investments in the Rust Belt." ..."
"... This piece first appeared in Asia Times . ..."
No wonder, considering that the ousted Crown Prince Mohammed bin Nayef – highly regarded in the
Beltway, especially Langley – is under house arrest. His massive web of agents at the Interior Ministry
has largely been "relieved of their authority". The
new Interior Minister
is Abdulaziz bin Saud bin Nayef, 34, the eldest son of the governor of the country's largely Shi'ite
Eastern Province, where all the oil is. Curiously, the father is now reporting to his son. MBS
is surrounded by inexperienced thirty-something princes, and alienating just about everyone else.
Former King Abdulaziz set up his Saudi succession based on the seniority of his sons; in theory,
if each one lived to the same age all would have a shot at the throne, thus avoiding the bloodletting
historically common in Arabian clans over lines of succession.
Now, says the source, "a bloodbath is predicted to be imminent." Especially because "the CIA
is outraged that the compromise worked out in April, 2014 has been abrogated wherein the greatest
anti-terrorist factor in the Middle East, Mohammed bin Nayef, was arrested." That may prompt "vigorous
action taken against MBS possibly in early October." And it might even coincide with the Salman-Trump
get together.
ISIS playing by the (Saudi) book
Asia Times' Gulf business source stresses how "the Saudi economy is under extreme strain based
on their oil price war against Russia, and they are behind their bills in paying just about all their
contractors. That could lead to the bankruptcy of some of the major enterprises in Saudi Arabia.
The Saudi Arabia of MBS features the Crown Prince buying a US$600 million yacht and his father spending
US$100 million on his summer vacation, highlighted on the front pages of the New York Times while
the Kingdom strangles under their leadership."
MBS's pet project, the spun-to-death Vision 2030, in theory aims to diversify from mere oil
profits and dependency on the US to a more modern economy (and a more independent foreign policy).
That's completely misguided, according to the source, because "the problem in Saudi Arabia is that
their companies cannot function with their local population and [are] reliant on expatriates for
about 70% or more of their staff. Aramco cannot run without expatriates. Therefore, selling 5% of
Aramco to diversify does not solve the problem. If he wants a more productive society, and less handouts
and meaningless government jobs, he has to first train and employ his own people."
The similarly lauded Aramco IPO, arguably the largest share sale in history and originally
scheduled for next year, has once again been postponed – "possibly" to the second half of 2019, according
to officials in Riyadh. And still no one knows where shares will be sold; the NYSE is far from a
done deal.
I n parallel, MBS's war on Yemen, and the Saudi drive for regime change in Syria and to reshape
the Greater Middle East, have turned out to be spectacular disasters. Egypt and Pakistan have
refused to send troops to Yemen, where relentless Saudi air bombing – with US and UK weapons – has
accelerated malnutrition, famine and cholera, and configured a massive humanitarian crisis.
The Islamic State project was conceived as the ideal tool to force Iraq to implode. It's now
public domain that the organization's funding came mostly from Saudi Arabia. Even the former imam
of Mecca has publicly admitted ISIS' leadership "draw their ideas from what is written in our own
books, our own principles."
Which brings us to the ultimate Saudi contradiction. Salafi-jihadism is more than alive inside
the Kingdom even as MBS tries to spin a (fake) liberal trend (the "baby you can drive my car" stunt).
The problem is Riyadh congenitally cannot deliver on any liberal promise; the only legitimacy for
the House of Saud lies in those religious "books" and "principles."
In Syria, besides the fact that an absolute majority of the country's population does not
wish to live in a
Takfiristan , Saudi Arabia supported ISIS while Qatar supported al-Qaeda (Jabhat al-Nusra). That
ended up in a crossfire bloodbath, with all those non-existent US-supported "moderate rebels" reduced
to road kill.
And then there's the economic blockade against Qatar – another brilliant MBS plot. That has only
served to improve Doha's relations with both Ankara and Tehran. Qatari Emir Tamim bin Hamad Al Thani
was not regime-changed, whether or not Trump really dissuaded Riyadh and Abu Dhabi from taking "military
action." There was no economic strangulation: Total, for instance, is about to invest US$2 billion
to expand production of Qatari natural gas. And Qatar, via its sovereign fund, counterpunched with
the ultimate soft power move – it bought global footballing brand
Neymar for PSG , and the "blockade" sank without a trace.
"Robbing their people blind"
In Enemy of the State, the latest Mitch Rapp thriller written by Kyle Mills, President Alexander,
sitting at the White House, blurts, "the Middle East is imploding because those Saudi sons of bitches
have been pumping up religious fundamentalism to hide the fact that they're robbing their people
blind." That's a fair assessment.
No dissent whatsoever is allowed in Saudi Arabia. Even the economic analyst Isam Az-Zamil, very
close to the top, has been arrested during the current repression campaign. So opposition to MBS
does not come only from the royal family or some top clerics – although the official spin rules that
only those supporting Muslim Brotherhood, Turkey, Iran and Qatari "terrorism" are being targeted.
In terms of what Washington wants, the CIA is not fond of MBS, to say the least. They want
"their" man Nayef back. As for the Trump administration, rumors swirl it is "
desperate for
Saudi money , especially infrastructure investments in the Rust Belt."
It will be immensely enlightening to compare what Trump gets from Salman with what Putin gets
from Salman: the ailing King will
visit Moscow in late October. Rosneft is interested in buying shares of Aramco when the IPO takes
place. Riyadh and Moscow are considering an OPEC deal extension as well as an OPEC-non-OPEC cooperation
platform incorporating the Gas Exporting Countries Forum (GECF).
Riyadh has read the writing on the new wall: Moscow's rising political / strategic capital all
across the board, from Iran, Syria and Qatar to Turkey and Yemen. That does not sit well with the
US deep state. Even if Trump gets some Rust Belt deals, the burning question is whether the CIA and
its friends can live with MBS on the House of Saud throne.
War in Yemen is perfect destruction from internal problems facing Saudi regime. And Wahhabism
is like albatross around the neck on any attempts to reform the county. So as soon as oil ends
Saudi Arabia will end as a state too. that means it is unclear if they still exist in 2050 or
2100.
Perhaps the prince is purposefully driving us to distraction...
Intensified brutality has not been
limited to Saudi soil. As defense minister, Mohammed bin Salman was the architect of a more
interventionist posture for Saudi Arabia -- motivated far less by quashing terrorism than its
regional and sectarian rivalries. In particular, he shaped a policy that flagrantly violated
humanitarian norms against Yemen's civilian population. Even the most jaundiced skeptic about
the United Nations would regard Secretary-General Antonio Guterres as a highly credible voice
on humanitarian situations given that he is the former high commissioner for refugees and
former prime minister of Portugal. His special representative for children abused in wartime,
Virginia Gamba, has
documented hundreds of cases of Yemeni children killed and maimed by the Saudi's
indiscriminate use of force.
There will never be any science in Saudi Arabia. It isn't a part of their civilisation. It
has never been in history. The great Islamic science of the Middle Ages existed in entirely
different places: Iran, Mesopotamia, Syria and Egypt. The territory to the south has always
been a scientific desert. No "human rights" or feminism can change this fundamental historic
tradition.
It has to be said that this near-existential crisis sneaked up on OPEC nations rather
swiftly. I can't see how a pampered and indulged populace can get around to educating itself
and working for a living in short order. There is a lot of tumultuous years ahead for these
nations.
Saudi Arabia has no chance to emerge from the middle age unless it leaders admit that
their religion Wahhabism is obsolete and need to be revisited.
The trouble is that Wahhabismm and strict Sunnism, contrary to Shiism, forbids any attempt to
revisit the teaching of the Sunna ( Koran + Hadith). Wahhabism can't evolve.
Therefore Saudi Arabia is trapped in that scheme and can never get out of it. The only way
out is the total collapse of the kingdom as a whole. Maybe that is the real Vision!
And these are the sort of people Trump visited first and they are USA allies in
fratricidal war in Syria...there are actually lots of similarity between USA and Saudi
Arabia;they are both sadistic governments.
Since the actual military/defense/intelligence related spending is 1 trillion dollars a
year, including about 100 billion in interest we pay on it, if we cut the spending a little
and rely on national guard more since I've read it is cheaper to fund and if necessary
nationalize our oil and gas industry like a lot of other countries we could start paying off
our debt. :D
The whole world must prepare for the post-petroleum order. But it's not, so there will be
chaos and war. A country like Australia could fare better than most - if it could defend
itself.
Don't know whether you've have seen this article and the navettes of various
Iraqi Shi'a authorities to Riyadh, in particular Muqtada's visit this week:
When Sadr arrived in Jeddah, an anonymous Twitter user known as Mujtahid -- noted for his regular leaking of alleged developments within the secretive
House of Saud -- tweeted that the warm welcoming of Sadr "and prior to him al-Araji,
offering thousands of [hajj] visas to PMU [Popular Mobilization Units], celebrating
the [liberation] of Mosul, are all attempts to get closer to Iran so that they
can convince the Houthis to have mercy on bin Salman." Thamer al-Sabhan in a
July 31 tweet attacked "[Ayatollah Ruhollah] Khomeini's version of Shiism" and
praised what Sabhan called "genuine Shiism." Less than 24 hours later, however,
that tweet was removed. It is still unclear whether Sadr is really attempting
to mediate between Tehran and Riyadh. However, a senior Iranian official who
spoke to Al-Monitor on condition of anonymity expressed doubt that such an endeavor
would succeed in ending the rivalry between the two regional powers.
Don't know whether you've have seen this article and the navettes of
various Iraqi Shi'a authorities to Riyadh, in particular Muqtada's visit
this week:
When Sadr arrived in Jeddah, an anonymous Twitter user known as Mujtahid -- noted for his regular leaking of alleged developments within the secretive
House of Saud -- tweeted that the warm welcoming of Sadr "and prior to him
al-Araji, offering thousands of [hajj] visas to PMU [Popular Mobilization
Units], celebrating the [liberation] of Mosul, are all attempts to get closer
to Iran so that they can convince the Houthis to have mercy on bin Salman."
Thamer al-Sabhan in a July 31 tweet attacked "[Ayatollah Ruhollah] Khomeini's
version of Shiism" and praised what Sabhan called "genuine Shiism." Less
than 24 hours later, however, that tweet was removed. It is still unclear
whether Sadr is really attempting to mediate between Tehran and Riyadh.
However, a senior Iranian official who spoke to Al-Monitor on condition
of anonymity expressed doubt that such an endeavor would succeed in ending
the rivalry between the two regional powers.
Someone wanted the public to know that the new Saudi clown prince Mohammed Bin Salman (MbS)
took up his new position by unceremoniously disposing his predecessor Mohammed bin Nayef (MbN)
by force. The juicy details, true or not, were briefed
to
Reuters,
the
Wall Street Journal and
the
New York Times on the same day:
As next in line to be king of Saudi Arabia, Mohammed bin Nayef was unaccustomed to being told
what to do. Then, one night in June, he was summoned to a palace in Mecca, held against his
will and pressured for hours to give up his claim to the throne .
By dawn, he had given in, and Saudi Arabia woke to the news that it had a new crown
prince: the king's 31-year-old son, Mohammed bin Salman.
Bin Nayef was a darling of the CIA and his disposal was not welcome. It may well be that the
author of the tale of his ouster has his office in Langley, Virginia.
We had correctly
called
the MbN removal a coup and predicted that "the old al-Saud family king [..] will be
offed soon." From the current Reuters piece:
Quoting a witness at the palace, one Saudi source said King Salman this month pre-recorded a
statement in which he announces the transfer of the throne to his son. The announcement could
be broadcast at any time, perhaps as soon as September
We also wrote that "[m]any Arab peninsula citizens will want to see [the new clown prince's]
head on a pike."
The details of how MbS deposed the previous crown prince MbN will enrage further parts of
the Saudi citizens. Additional
leaks
about extensive MbS contacts
with Israel will increase the bad feelings against him. This especially as Israeli is further
encroaching
on the
al-Haram a-Sharif and the Al-Aqsa mosque on the (likely falsely) claimed Jewish temple
mount.
MbS' attempt to push Qatar around has,
as predicted
, failed. The four countries that had joined against Qatar
could not agree
to increase the pressure. The demands made to Qatar have now
been
retracted
. This is a huge loss of face for MbS and his Emirati mentor Mohammad bin Zayed.
The Saudi war against Yemen kills many civilians and costs lots of money but is militarily
lost. The announced big economic reforms have made no progress. The Gulf Cooperation Council is
defunct and may fall further apart.
Everything MbS has touched failed. His actions violate traditions and religious
commandments. His coup has set an example that can now be used against himself. It would not be
astonishing to see a revolt against Mohammed Bin Salman even before he is able to make himself
king.
thanks b.. i really resent the war on yemen by this asshole in power.. i hope he is gone soon
and for that matter - saudi arabia - israel - and all the rest of the rot contributing to
de-stability in the mid east all go the way of the dodo bird..
Recently, several articles, including the one above, at Southfront were republications of
items originating at a new--to me--site, other barflies may want to explore,
http://theantimedia.org/
JEDDAH: Saudi Arabia created a new apparatus for state security in Royal Decrees issued
Thursday.
The new body, State Security Presidency, will be cornered all matters related to state
security and be overseen by the king.
...
all matters related to combating terrorism and financial investigations to be separated
from the Ministry of Interior and added to the State Security Presidency.
Everything related to the Security Affairs Agency and other functions related to the
Ministry of Interior tasks including employees (civil and military), budgets, documents and
information are to be added to the State Security Presidency.
The (just newly installed) interior minister is said to be a friend of MbS but
he is from the family of MbN and thereby a danger. Must be disarmed ...
Sorry to monopolize the beginnings of this thread. At the end of his essay about events in
Mosul, Craig Murray has this to say about Saudi:
"The other interesting silence is from Saudi Arabia, which poses as the defender of Sunni
Islam throughout the world, but actually has no interest at all in it, except as a tool for
promoting the much more worldly interests of the Saudi elite....
"For the Saudi elite, the money they pumped into ISIS in Iraq was a trifle; Mosul ISIL
were pawns to be sacrificed and the Sunni civilian population of Mosul is no more important
to them. By the combination of funding the spread of Wahhabi ideology and providing unlimited
arms and organisational financing, the Saudis can pop up another Al Qaida, Al Nusra or ISIL
more or less anywhere, any time it seems useful. Meantime they are focused on cementing their
burgeoning axis of Saudi Arabia/Israel/USA to continue the violent promotion of Saudi
regional ambition."
https://www.craigmurray.org.uk/archives/2017/07/mosul-worse-srebrenica/
It now appears the Unipolarists are reduced to just 4 nations: Outlaw US Empire, UK,
Zionist Occupied Palestine, and Saudi Arabia. If Corbyn can become UK's PM, then that number
might get reduced to 3.
B: I think your last sentence is key. Some grown-ups, in the US and in the Gulf, leaked this
because they want to prevent current crown prince of becoming King, and hope to see him
replaced as future king before Salman bites the bullet.
I mean, Mohammed BS has shown how bad he is at managing slightly complex crises, be it Yemen,
current jihadi setbacks in Syria, or Qatar - the latter being the biggest indictment I
suppose, considering the long-term consequences. So, some smarter people want to push him out
before he can become king and weaken the Saudi kingdom to the breaking point.
Not sure what was meant by that, though: "on the (likely falsely) claimed Jewish temple
mount"
...According to our information, for the last 17 months (in other words, since the
announcement of the negotiations between Washington and Teheran, which have in fact been
proceeding for the last 27 months), Tel-Aviv has been engaged in secret negotiations with
Saudi Arabia. Extremely high-level delegations have met five times – in India, Italy
and the Czech Republic.
The cooperation between Tel-Aviv and Riyadh is part of the US plan to create a " Common
Arab Defence Force ", under the auspices of the Arab League, but under Israeli command.
This " Force " is already effective in Yemen, where Israeli pilots fly Saudi bombers within
the framework of an Arab Coalition whose headquarters have been installed by the Israelis
in Somaliland, a non-recognised state situated on the other side of the the Bab el-Mandeb
straits [1].
However, Riyadh does not intend to officialise this cooperation as long as Tel-Aviv
refuses the Arab Peace Initiative, presented to the Arab League in 2002 by Prince Abdullah
before he became king [2].
Israël and Saudi Arabia have reached agreement on several objectives.
On the political level :
To " democratise " the Gulf States, in other words, to associate the people in the
management of their countries, while affirming the intangibility of the the monarchy and
the Wahhabite way of life ; To change the political system in Iran (and no longer wage
war on Iran) ;
To create an independent Kurdistan in such a way as to weaken Iran, Turkey (despite
the fact that it is a long-standing ally of Israël), and Iraq (but not Syria, which
is already seriously weakened).
On the economic level :
To exploit the Rub'al-Khali oil-fields and organise a federation between Saudi
Arabia, Yemen, and perhaps Oman and the United Arab Emirates ;
To exploit the Ogaden oil-fields, under Ethiopian control, secure the Yemeni port of
Aden, and build a bridge linking Djibouti and Yemen.
In other words, while Tel-Aviv and Riyadh are making the best of a bad deal, and
accepting that two thirds of Iraq, Syria, and half of Lebanon will be controlled by Iran,
they intend :
To ensure that Iran gives up on the exportation of its revolution ;
To control the rest of the region by excluding Turkey, which took over from Saudi
Arabia in the supervision of international terrorism, and has just lost in Syria...
Do not underestimate the power of the religious autorities. When I was there (admittedly
many, many years ago), the monarchy was very careful to always have their agreement for any
policy change. Even now with the strict laws governing behaviour (ie. Women, TV and prayers)
their impact on ordinary Saudi society apparently hasn't changed much. It may have even got
worse.
So the Clown prince's closer ties with Israel - are going to be under close scrutiny.
Particularly if Netanyhu continues with the "isolation" and alienation of the Al-Aqsa mosque.
Note that the numbers of people hurt in IDF actions against demonstrators has been totally
under-reported, if at all. (reported 70 the first day and 35 another. Those wounded include
an Imam.)
This is going to pose an ethical problem for ALL the Gulf states. They will have to be seen
doing something to retain credibility.
On a jovial note; The traditional way, if the reigning Leader did not hand down part of
the money to the other tribesmen according to tradition - was to slit his throat. (The King
gets it all, then hands down part of it to Princes, who then hand down part of what they
recieved to tribesmen and so on right to the bottom. (widows in the Souk with no family).
When there is a lot this works fine. I do not know if this will work when there is less to go
round.)
"Israel is going to build a new field hospital in the Israeli-occupied part of the Golan
Heights in Syria. According to the Lieutenant Colonel Tomer Koler, the hospital will be
located on the Syrian side of the fence build by Israel in the Golan Heights and may become
operational next month."
The United Arab Emirates orchestrated the hacking of Qatari government news and social media
sites in order to post incendiary false quotes attributed to Qatar's emir, Sheikh Tamim Bin
Hamad al-Thani, in late May that sparked the ongoing upheaval between Qatar and its
neighbors, according to U.S. intelligence officials.
Officials became aware last week that newly analyzed information gathered by U.S.
intelligence agencies confirmed that on May 23, senior members of the UAE government
discussed the plan and its implementation . The officials said it remains unclear whether the
UAE carried out the hacks itself or contracted to have them done.
That the UAE and/or the Saudis were involved in the hack was pretty clear from the get go.
They were the only ones who had a clear motive. Qatar already
had
specific evidence
for the source of the hacking. Congressional anti-Russian sources ignored that and
accused
,
as
usual
, Russia and Putin.
Tillerson's real message is not the hacking accusation. The hacks themselves are not
relevant to the spat and to Tillerson's efforts to defuse it. The "leak" sets the UAE and Saudi
leadership on notice that the U.S. has sources and methods to learn of their government's
innermost discussions. The real threat to them is that other dirt could be released from the
same source.
It is doubtful that this threat will change the minds of these rulers. They believe in their
own invincibility. Ian Welsh describes the mindset in his prediction of
The Death of Saudi Arabia
and
other Gulf states:
This is fairly standard: all dynasties go bad eventually because the kings-to-be grow up in
wealth and power and think it's the natural state of things: that they are brilliant and
deserve it all, when it was handed them on a platter . Perhaps they are good at palace
intrigue and think that extends beyond the palace.
It doesn't.
Welsh comes to the same conclusion
as I did
when the recent GCC infighting broke out:
No matter how the spat with Qatar ends, the GCC unity has (again) been exposed as a sham. It
can not be repaired. Saudi "leadership" is shown to be just brutal bullying and will be
resisted. U.S. plans for a united GCC under Saudi leadership and U.S. control are in
shambles.
...
The Saudi under their new leadership overestimate their capabilities. So did Trump when he
raised their role. The Saudi "apes with Macbooks" do not have the capabilities needed for a
serious political actor in this world. Their money can paper over that for only so long.
The step Tillerson and some "intelligence officials" now took may be a sign panic. The
"leak" revealed "sources and methods". Like every other government the UAE senior officials
suspect that the U.S. is trying to listen to their internal deliberations. But they now know
for sure. The specific date given in the "leak" will help them to take some countermeasures.
Leaking "sources and methods" is not done lightly. That it has to resort to such measures shows
that the U.S. administration is not in control of the situation.
During the fall of the Ottoman empire Britain
created
today's
Saudi Arabia. Two world wars exhausted Britain's power. The U.S. took over the management of
the empire including the Gulf states. It needs Saudi Arabia for its fossil energy and the
related reserve currency status of the U.S. dollar. Unrest in Saudi Arabia is not in the U.S.
interest but such is now in sight. The "leak" is just a tactical measure of an inexperienced
administration. It is not enough to defuse or mitigate the conflict and its consequences.
What strategies will Washington develop to counter the foreseeable instability in Saudi
Arabia and other Gulf states?
The petro dollar has been around some time now and has given US control of the world trade
currency. As far rich kids being handed everything on a platter, the US government is no
different to the Saudi's. This will be interesting.
Nothing beyond sell them weapons and eavesdropping technology. But this only buys some
time, and time unfortunately for the GCC countries, isn't on their side.
With increasing swiftness, across the world technologies are being improved on and
invented which will eventually wean everyone off fossil fuels. This won't happen overnight,
and even when it does, petroleum will still have value as it is used in innumerable
applications. But the price will fall, making the latest crash look like a road bump. When
that happens, the show's over folks. The GCC countries will become ungovernable, then
uninhabitable. There simply are too many people, too few resources.
The only hope the GCC states have is to diversify their economies. Not MBS's 'Prosperity
through Austerity' but a multi-pronged tract to develop all critical sectors. The UAE and
Qatar are trying, but betting the house on finance and real estate to the detriment of
everything else. Petro dollars are still propping up those houses of cards. Oman is the only
one seemingly doing things right: good relations with neighbors, trade, and developing
domestic industry. If the rest of the GCC doesn't follow Oman's lead, they are simply
finished.
Thanks for calling the trolling. Its comment was almost 100% disinformation.
In answer to b's query, the Outlaw US Empire cannot save itself let alone any of its
vassals. They will be used until they are no longer of use. And that time is rapidly
approaching. Although, the Qataris seem best positioned to avoid extinction.
Now that I know of them, I get to purchase Mark Curtis's line of books documenting British
Imperialism and its association with terrorism. Thanks b!
The United States and the Kingdom of Saudi Arabia are ontologically inseparable. You can't
have one without the other. The penetration of the U.S. deep state by al-Saud -- whether it's
D.C. think tanks or Fortune 500 executive boards -- is complete.
Tillerson knows this, that's why his "woe is me"
shuttle diplomacy
is nothing more than Kabuki.
This doesn't mean that al-Thani is without wires into the U.S. deep state; it has plenty.
That's what makes this GCC throw-down so delightful. The U.S. is at a point where it can no
longer sublate all the contradictions produced by its hegemony.
Re: hack:
Perhaps we shouldnt accept claims about UAE just like that. Lets be honest.
I agree. Consider the source at WAPO. Some credibility gap there. I would guess that
Tillerson is not the sole source for whatever might have been leaked (if not invented).
Also, as far as sources and methods, it's one thing to burn an inside informer type of
asset, but leaking SIGINT in the form of general pronouncements without physical evidence
doesn't burn the source, only indicates a potential weakness in the cyber defenses of the
target. For all we know there was no hack, per se, given that a lot of US and allied
contractors were probably in on the installation and operation of UAE computer systems.
My impression, not to contradict b's analysis but to propose a direction of thought, is
that the WAPO is promulgating a brag, that the US can look up anyone's skirt anytime and tell
whatever they want. Thus, reminding the players that they'd better stay in line, as b
states.
Considering Saudi Arabia's creation, its falling to pieces would be considered Nature's
reaction to an artificial construct. Soon, instead of Saudis buying Outlaw US Empire
weaponry, it will be asking for handouts as it did during its formative years when the UK
held its reins. Given its role in the violent histories of the British and Outlaw US Empires,
the remaining nations of the planet will be quite pleased to see its demise--even more so
given that the three constitute the nest for Global Terrorism. Dan Glazebrook's series
detailing the history of "British collusion with sectarian violence" at RT, one of which b
linked to, are well worth the time; this links to the first installment,
https://www.rt.com/op-edge/338247-uk-extremists-syria-isis-violence/
It seems that it is not the US, but Israel which owns the most advanced spying hacking
technology. The US sublet fiber optic data interception to Israeli companies NARUS and
Verint. These companies have since been folded (hidden) into other multinational holding
companies, but still (Boeing, Carlisle Group).
When is this a good idea for "National Security" (which is the constant refrain when
withholding information from the public)?
It seems that it is not the US, but Israel which owns the most advanced spying hacking
technology. The US sublet fiber optic data interception to Israeli companies NARUS and
Verint. These companies have since been folded (hidden) into other multinational holding
companies, but still (Boeing, Carlisle Group).
When is this a good idea for "National Security" (which is the constant refrain when
withholding information from the public)?
The step Tillerson and some "intelligence officials" now took may be a sign >[of]<
panic.
Posted by b on July 17, 2017 at 02:33 PM | Permalink
The last monarch to get "mixed messages" from USA was the late Shah of Iran. Qatar and
"Saudi" Arabia, take note.
Voltaire network is pushing an interesting deep analysis that we are witnessing ex-Empire
strikes back, with the Occulted British ex-Empire putin' [haha] the finishing touches on
their expulsion of the ex-Colonial Empire from "their" sphere of influence (aptly named by
the slimy blood sucking limeys as "their" "Middle East").
The dismantling of the "Hyperpower" is nearly complete. Bankster power remains
untouched.
thanks b.. i have been yammering on about 2020 as a critical turning point in world events
and that saudi arabia is very central to all this.. in my astro comments on nov 2, 2013 i
stated "below is a chart for the next conjunction of saturn/pluto set to riyadh. this exact
conjunction happens only once in early 2020, but i suspect given how close it is to the astro
positions in the 1902 chart for saudi arabia, that if this chart has legs, this conjunction
is going to bring about a transformation of present day saudi arabia and it will probably not
be a pretty or easy transition given the issue of terrorism associated with these religious
groups i have also mentioned.. saturn and pluto have a connection to terrorism as i
understand it and were in the long opposition at the time of 9-11 as well... on the other
hand, perhaps it indicates a further clamp down on freedoms and a type of totalitarianism. i
suspect it will fluctuate between the two.. and, it is probably already in the process of
developing here in 2013.. " from
this thread..
@8 mike maloney... i fully concur to your words here: "The U.S. is at a point where it can
no longer sublate all the contradictions produced by its hegemony."
saudi arabia and the world by extension are going to look very differently come 2020...
lol - how is that for a lousy astro prediction? that is like saying, tomorrow things will
look differently.. of course i have mentioned this about saudi arabia in the past at
moa...
i enjoyed the article "The Death of Saudi Arabia".. it was fun reading the comments to
that post too.. i recognized a few regulars in the comment section from sst and moa..
The US continues the strategy they have started less than decade ago: Weaken Saudi Arabia to
the point it will accept a peace deal with Israel.
The US threw the Saudis into the Syrian quagmire, the Egyptian quagmire, then in the Yemen
quagmire, now in the Qatar quagmire.
When the Saudi kingdom will come out of these, it will be exhausted and in a state of terror
in front of the Iranian steadily growing political and economical strength. The threat of the
collapse to their family ruled system is looming.
The USA seems to have accepted that the Iran Islamic republic's semi-democratic system is
here to stay and evolve while the GCC autocratic monarchies are threatened of extinction.
Buying billions of weapons from the USA seems to give these dying entities the illusion that
the USA is on their side. In fact the USA has been backstabbing them continuously thus
weakening them by the day and preparation for their collapse.
The emirates will have make reforms of a democratic nature if they want to survive.
Saudi Arabia is doomed.
I have seen a lot of confusion/deception as to the nature/history of the Arabia. In order
to understand history properly, one must be willingly open-minded and examine as much
evidence as possible. Especially, evidence that is contrary to your understanding. This takes
intellectual honesty, critical thinking, and courage. History is written by the
winners/manipulators. You rarely hear from the other side. Meaning, you never get the
complete picture. Therefore, you cannot get historical accuracy unless you do a bit a honest
digging. Ex., Anybody with a working brain stem understands that the official story of 9-11
is a big pile of Donkey Doughnuts.
I am not a biblical scholar nor am I very religiously inclined. I prefer historical
accuracy over warm and fuzzy beliefs.
I realize there are many readers who are religious and may be ingrained in their beliefs.
What I am presenting below will challenge your root understandings. Please try to have an
open mind and use logic, reason, evidence(both pro and con), and patterns of behavior to
better your knowledge base. Below are links pertaining to the Arabia/Israel:
Second external link from above article. You need to use Google translate for this
article. The Israeli Govt loves to scrub inconvenient facts about their history.
http://www.hayadan.org.il/bible-no-evidence-291099/
To find a cure, one must address the root causes of the illness - Sloopyjoe
In May of last year I was attempting to figure out if there was an asymmetric play to be had
in the land of sand and black gloop. There were a lot of moving pieces to deal with. I think
it's worth revisiting but first it's worth reviewing what I thought just over a year ago. Much
has subsequently happened so we can piece a little bit more together now.
Only Two
Options For The Saudi Sheikhs
A few years ago, when living in Phuket, Thailand, a group of
Saudis stayed for a week's holiday in a neighboring villa. Outside of the religious and social
confines of the land of black gold and endless sand, this group made a bunch of spoiled 5-year
olds left to run amok in a candy shop without adult supervision look positively angelic. They
were very visible, with an entourage of young Thai "ladies" and a fleet of Land Cruisers to
haul them about. On one occasion, after my son witnessed one of the guys buying a beer and
throwing a US$100 bill at the waiter, telling him to keep the change, he asked me how come they
had so much money to waste. I explained that Saudi Arabia has two things in abundance: sand and
oil. And though the world doesn't need sand as much as it does oil, they have grown very
wealthy selling the oil to the rest of the world. Depending on whose numbers you take,
somewhere between 75% and 85% of Saudi Arabia's revenues come from oil exports, and fully 90%
of revenues come from oil and gas. Clearly the Kingdom is dependent on oil revenues in the same
way that an infant is dependent on its mother's milk. And unless you've been living under a
rock for the last few years, you'll have noticed that the price of oil has collapsed. Now, in a
"normal" market the reduced revenues would manifest in a weaker local currency as demand for
Riyals declines. But governments and central bankers don't believe in "normal" markets and so
the Saudi riyal has been pegged at 3.75 to the US dollar since 1986. It's not hard to see a
situation where Saudi Arabia may very well be forced to de-peg the currency to curb the fall in
the country's FX reserves should low oil prices persist. Let's look at some of the potential
catalysts for this.
Could Yellen Kill The Peg?
While the Sheiks contemplate how to deal
with their predicament from diamond encrusted cars and
golden toilets,
across the pond we find that monetary policy in the US has been tightening
albeit modestly. What's important to understand is that in order for Saudi Arabia to maintain
its currency peg it needs to follow FED monetary policy. By following Yellen the Saudis land up
sacrificing growth, and by diverging they sacrifice FX reserves in order to maintain the peg.
Clearly neither are attractive propositions. According to the Saudi Arabian Monetary Agency
(SAMA), for every 100 basis point increase in the Saudi Interbank Offered Rate (SIBOR) this
leads to a 90 basis point decline in GDP in the subsequent quarter, and a further 95 basis
points in the following quarter. Falling GDP in a country where over 60% of the population are
under 30 brings about its own set of problems. Political instability in the Kingdom has been
rising and the royal family is increasingly fighting for survival. After all, they had the
experience of watching the Arab Spring unfold on their flat screens. If, on the other hand,
they opt not to follow the stumpy lady, the gap between interest rates in the US and Saudi
Arabia will be quickly exploited by people like me as arbitrage opportunities open up. So this
is what we're all looking at right now: SAMA will have to buy riyals in the open market by
selling from its hoard of dollar reserves. Any rise in interest rates in the US will mean SAMA
will have to further deplete reserves. As I have mentioned before,
all pegs eventually break.
The
question is one of timing. How long do the Sheiks have under current oil prices? The falling
oil price since mid-2014, has significantly reduced Saudi Arabian revenues. So much so that the
scorecard for 2015 showed a deficit of $98bn, and SAMA is estimating a further $87bn deficit
this year. The Saudi government have been funding this deficit by drawing down on forex
reserves, spending $132bn in the year to January of this year. With current prices and current
reserves they can easily last another 4 years. Some things I'm thinking about:
Iran will bring additional supply to a market in surplus. Saudi Arabia will be forced to
keep the pedal to the metal on production, not wanting to lose any market share. And so I'm
not convinced we'll see oil rising in the next 12 to 24 months.
Internal domestic political pressures can be "addressed" with creating an external
pressure or conflict. It wouldn't be the first time.
We're in a US dollar bull market as I've stated
here,
here,
and
here
and many other times. Dollar strength will put pressure on the price of oil and thus
revenues to the Kingdom.
This could certainly get interesting and traders have begun
speculating on a de-pegging from the dollar. Should low oil prices persist for the next 3 to
4 years, Saudi Arabia will be forced to decide whether it prefers to either cut the
production or loosen the currency peg. I could be wrong but I feel like it's too early to
play this trade and the costs of entry are not astoundingly cheap. Saudi Arabia has almost no
debt and can easily access the credit markets. With debt to GDP of just 2% they have a lot of
room to move. Coupled with the upcoming partial listing of Aramco their ability to tap
international markets for capital is certainly a factor I'm not sure all currency speculators
are considering. What is worth watching are neighbour states. While Kuwait, Qatar, and the
UAE all have dollar pegs, they too have vast central bank reserves and sovereign wealth
funds. But what looks pretty precarious to me are Oman and Bahrain who could run out of
reserves in less than three years. Both these countries have resorted to issuing debt to
extend the longevity of their reserves but issuing dollar denominated debt which is
essentially asset underwritten by the price of oil in an environment of persistently low oil
prices certainly looks like a precarious bet to be making. Investors looking for asymmetry in
markets will do well paying attention to the currency markets, and existing dollar pegged
currencies in particular. As I mentioned before all pegs break, and the returns that can be
made in such situations are of the life changing variety. – Chris "If Saudi Arabia was
without the cloak of American protection, I don't think it would be around." – Donald
Trump
Ok, so that was over 12 months ago. Fast forward to today and we have some of the
answers... and we're a little further down the road.
Oil
Still looks like isht. The supply and demand setup hasn't gotten any better, and this is
not what the house of Saud wants. Nothing shocking to what we expected
anyway.
Rates
The tubby lady at the FED has gone ahead with a divergent policy (raising rates). As you
can see, I discussed in that article what effect the raising of rates could (or would have)
on the finances in Saudi Arabia. Again, nothing we never expected.
Conflict
I penned an article on
Qatar here.
I
do think the spat with Qatar has less to do with them than it has to do with Iran and with
the Saudi's domestic problems - both financial and political. In the article above, I
mentioned some stupid conflict but wouldn't have put it up there as a probability over 50%.
And yet now it's happening in real time. Does it subside, does it blow up, or something
else?
The question I think we need to ask ourselves today is this: now that the conditions
have been met that do nothing to assist the Saudis with their finances (and at the same
time they've chosen a path of "external" enemy) where does that leave us with original idea
of looking for an asymmetric payoff on the riyal having to de-peg their currency?
I'm watching the dollar index very, very closely. If we break higher, then the Saudis
will have a very, very serious problem on their hands as their balance sheet blows out.
This could get interesting... and profitable.
- Chris
"Rockefeller once explained the secret of success. Get up early, work late - and strike
oil." -- Joey Adams
"... Mohammed ben Nayef Al Saoud was considered as the US's man. He has been trained first in Oregon, then later by the FBI and Scotland Yard. He obtained results in struggles against Al-Qaeda dissidents. With his removal, the hopes of the Nayef branch coming to the throne have come to an end. ..."
"... Mohammed ben Salmane does not have an academic training. At the very most, he is the holder of a baccalaureate awarded by a local school, and we do not know if you actually need to study to obtain this qualification. ..."
"... Washington had approved the chosen solution to the issue of succession. This solution had been adopted by 31 of 34 members of the allegiance council (the Family Council). It skips two generations. Henceforth, Mohammad ben Salmane is placing young people at the head of different administrations of the country, a country where the average age of the population is 27 years. ..."
King Salmane ben Abdelaziz Al Saoud (81 years old) has removed from office 57 year old Emir Mohammed
ben Nayef Al Saoud. The latter was the Crown Prince, Vice-Prime Minister and the Minister of Home
Affairs, all at the same time.
De facto, the King's son, Prince Mohammed ben Salmane Al Saoud (31 years), will become the new
Crown Prince.
Mohammed ben Nayef Al Saoud was considered as the US's man. He has been trained first in Oregon,
then later by the FBI and Scotland Yard. He obtained results in struggles against Al-Qaeda dissidents.
With his removal, the hopes of the Nayef branch coming to the throne have come to an end.
Mohammed ben Salmane does not have an academic training. At the very most, he is the holder
of a baccalaureate awarded by a local school, and we do not know if you actually need to study to
obtain this qualification. He made his political debut as the assistant to his father, first
the Governor of Riyadh and then the Minister of Defense. When Salmane becomes king in 2015, Mohammed
succeeded his father as the Minister of Defense and engaged his country's troops in the disastrous
conflict in Yemen. Having royal power at his disposition, he launched a vast project for economic
reform (Vision 2030), which ushered in the privatization of Aramco (the country's only source of
revenue) and his country's development beyond the oil sector. He is particularly well known for his
jet-set life-style and for buying a yacht, Serene, for half a billion euro.
It seems that King Salmane should shortly abdicate, leaving his son in charge. Thus the difficult
question of succession is provisionally settled, in a country where up until now was governed by
a rule requiring the oldest son of the dynasty's founder to accede to power. Thus the current king,
King Salmane, is the 25th of Abdelaziz ben Abderrahmane Al Saoud's 53 sons.
At King Abdallah's death (January 2015), his half brother, Prince Moukrine ben Abdelaziz Al Saoud,
had been appointed Crown Prince. But three months later (April 2015), he had been rudely cut out
of the order of succession, something quite unprecedented. He was replaced by Prince Mohammed ben
Nayef, who in turn has just been removed from the picture.
As a consolation prize, the Nayefs secured that a son-in-law of Prince Mohammed ben Nayef replaces
him at the Ministry of Home Affairs. It would be a son-in-law and not a son, because Prince Mohammed
ben Nayef did not have male progeny.
The next king, Mohammed, could rule for about fifty years. But were he to die, then his eldest
son, also a minor, would succeed him.
Washington had approved the chosen solution to the issue of succession. This solution had been
adopted by 31 of 34 members of the allegiance council (the Family Council). It skips two generations.
Henceforth, Mohammad ben Salmane is placing young people at the head of different administrations
of the country, a country where the average age of the population is 27 years.
"... My point here is that Trump has pressed ahead with uncritical support for the Saudis because that has been the conventional hawkish position in Washington for years before he got there. He is catering to the existing warped desire to provide even more support to Riyadh than Obama did. It was conventional wisdom among many foreign policy pundits and analysts that Obama had not been "pro-Saudi" enough, and Trump apparently bought into that view. Trump's enthusiastic embrace of the Saudis is the result of endlessly berating Obama for not giving the Saudis absolutely everything they wanted. ..."
"... Until that changes and until Trump's excessive fondness for the Saudi leadership starts to become a major political problem for him, pleading with the arsonist's enabler to put out fires will have little effect. ..."
But one thing is already stunningly clear when it comes to his handling of foreign policy:
In two short years, as the deputy crown prince and defense minister, MBS has driven the Kingdom
into a series of royal blunders in Yemen, Qatar and Iran, and he has likely over promised what
Saudi Arabia is able and willing to do on the Israeli-Palestinian peacemaking front. Far from
demonstrating judgment and experience, he's proven to be reckless and impulsive, with little sense
of how to link tactics and strategy. And sadly, he's managed to implicate and drag the new Trump
administration into some of these misadventures, too.
Miller and Sokolsky are right about MBS' shoddy record, but their warning to the Trump administration
is very likely too late. They urge the administration to rethink its position before "its Middle
East policy becomes a wholly owned subsidiary of Saudi Arabia," but I fear that that already happened
at the Riyadh summit. Unfortunately, some top U.S. officials are only
just now realizing it and don't know how to stop it. There could be some belated efforts to undo
this, but Trump isn't interested. He doesn't seem to see anything wrong with identifying the U.S.
so closely with the Saudis, and he doesn't see their recklessness and destructive behavior for what
they are. Since he is impulsive, careless, and has poor judgment, it isn't surprising that he has
such an affinity for the aging Saudi despot and his favorite incompetent son. On top of all that,
MBS is a short-sighted, foolish hard-liner on Iran, and as far as we can tell Trump is much the same,
so we should expect them to be on the same page.
There's no question that every foreign policy initiative associated with MBS has "turned into
a hot mess," but this has been obvious in Yemen for the last two years. If no one in the Trump administration
noticed that before, what is going to make them realize it now? The authors are also right that Trump's
decision "to side with Saudi Arabia in its conflict with Qatar and in Yemen is akin to pouring gasoline
on a fire," but until very recently uncritical backing of the Saudis in their regional adventurism
enjoyed broad bipartisan support that helped make it possible for things to get this bad. There were
very few in Washington who thought that pouring gasoline on the fire was the wrong thing to do, and
for more than two years the U.S. poured a lot of gas on the fire in Yemen that has been consuming
thousands of lives and putting millions at risk of starvation.
My point here is that Trump has pressed ahead with uncritical support for the Saudis because that
has been the conventional hawkish position in Washington for years before he got there. He is catering
to the existing warped desire to provide even more support to Riyadh than Obama did. It was conventional
wisdom among many foreign policy pundits and analysts that Obama had not been "pro-Saudi" enough,
and Trump apparently bought into that view. Trump's enthusiastic embrace of the Saudis is the result
of endlessly berating Obama for not giving the Saudis absolutely everything they wanted.
There is now more open opposition to at least some aspects of U.S. policy in Yemen, as we saw
with the recent close vote on a Saudi arms sale. The Qatar crisis has prompted more criticism of
the Saudis from our government than two years of destroying and starving an entire country. Yet there
is still remarkably little scrutiny of the underlying U.S.-Saudi relationship despite growing evidence
that the kingdom has become a regional menace and a major liability to the U.S. Until that changes
and until Trump's excessive fondness for the Saudi leadership starts to become a major political
problem for him, pleading with the arsonist's enabler to put out fires will have little effect.
"... Trump is capricious, ignorant and impetuous. His understanding of international relations and history seems woefully inadequate. He also appears to be unscrupulous and reckless. It's all about making money that matters to him. ..."
"... From the earliest opportunity, the Saudi prince wheedled his way into Trump's court. He was greeted in the White House back in March, one of the first foreign leaders to do so. Then two months later, Trump ventured on his maiden foreign trip as president in which he made Saudi Arabia his first stop. ..."
"... The power-struggle antics among the absolute rulers of the House of Saud have promoted a prince who has a reckless outsized ego and lust for dominance. President Donald Trump seems cut from the same cloth. ..."
The United States' decades-long "special relationship" with Saudi Arabia has always carried major
downsides. Yes, the Saudis are a pillar in maintaining the American petrodollar system to prevent
the collapse of the US economy; and, yes, the Saudi rulers are lavish spenders on US weapons, which
props up the Pentagon military-industrial complex – another lifeline for American capitalism.
However, the Saudi rulers are also longtime
sponsors of Wahhabi fundamentalism which has injected deadly sectarian poison into the Middle
East region and beyond. Washington is complicit in fomenting sectarianism through its relationship
with Saudi Arabia, and the price for that Faustian pact is a world in turmoil from terrorism.
Donald Trump's presidency is an unfortunate marriage of interests with Saudi Arabia. Trump is
capricious, ignorant and impetuous. His understanding of international relations and history seems
woefully inadequate. He also appears to be unscrupulous and reckless. It's all about making money
that matters to him.
From the earliest opportunity, the Saudi prince wheedled his way into Trump's court. He was greeted
in the White House back in March, one of the first foreign leaders to do so. Then two months later,
Trump ventured on his maiden foreign trip as president in which he made Saudi Arabia his first stop.
Trump was royally received by the House of Saud with
sword-waving ceremony . And then the Saudis signed record arms deal with the US worth up to $350
billion – the biggest ever in history.
It was during Trump's Saudi visit that the policy of increased hostility towards Iran and isolation
of erstwhile Saudi and American ally Qatar was hatched. This reckless, clueless embrace of Saudi
Arabia by Trump has led to a dangerous escalation in tensions across the Middle East, which are seen
playing out in Syria and towards Iran and Russia.
Trump the tycoon and the Saudi upstart-prince are a duo who are plunging the world into danger
of all-out war. The pair are a match made in hell, both being rash and irresponsible in their behavior.
Nobody outside Saudi Arabia had heard of Crown Prince Mohammed bin Salman until his father become
king in January 2015 on the death of King Abdullah. In the space of two years, the young prince has
been made defense minister and de facto chief of Saudi's oil economy. Now, this week he has been
shunted into becoming heir to the throne, sidelining his elder cousin and nephew to the king.
The precocious prince has only enjoyed this meteoric rise in the House of Saud because of his
father's favoritism. Other more senior royals feel ousted and see the new Crown Prince as undeserving
of his assigned authority. In short, he is out of his depth.
In the Saudi succession rules, the royal line is supposed to pass from brother to brother. There
are still surviving brothers of the Saudi founding king, Ibn Saud, who have been removed from the
succession. The present King Salman
first broke the rules when he made his nephew Mohammed bin Nayef the Crown Prince back in April
2015. Now he has broken the rules again by making his own son the heir and unceremoniously pushing
bin Nayef to the side. Such are the hijinks of despots.
Crown Prince Mohammed bin Salman is the architect behind the disastrous war in Yemen, which is
turning into a Vietnam-style quagmire for Saudi Arabia, costing the kingdom billions of dollars every
month. He is also reportedly the architect behind the policy of renewed hostility towards Iran. In
an interview before Trump's Saudi trip, Mohammed bin Salman said he would never talk to Iran and
even threatened to unleash violence on Iranian territory. That threat was followed by the deadly
terror attack in Tehran on June 7 in which up to 17 people were killed by Daesh suicide squads.
The hiked-up hostile policy towards Iran has, in turn, led to Saudi Arabia blockading Qatar and
causing a bitter rift in the Persian Gulf because Qatar is perceived as being too soft on Iran.
The power-struggle antics among the absolute rulers of the House of Saud have promoted a prince
who has a reckless outsized ego and lust for dominance. President Donald Trump seems cut from the
same cloth. Courting the young Saudi heir may be lucrative for American weapons-dealing and no doubt
the Trump business brand in the oil-rich region. But the consequences of such capricious and clueless
"leadership" are throwing the region and the world into increasing conflict.
This week the US State Department flatly
contradicted Trump's policy of supporting the
Saudi-led
blockade on Qatar . It said it was mystified that the Saudis had not presented any evidence to
justify the blockade. This is just one example where Trump is being made to look a total fool by
following stupid Saudi policy – policy that is made by a prince who has gathered a record for disaster
in several other spheres.
What a double act. Saudi despotism marries Trump cluelessness. And the world is reaping the calamity
of clowns.
An attack from Saudi Arabia to Iran will mean the demise of the Kingdom of Saudi Arabia . And the intervention of the USA in support of Saudi Arabia would mean a war of the USA against the SCO (Shangai Cooperation Organization). Those are BAD odds.
Quote from article: "America's deepening and
reckless military involvement in Syria is a
result of Trump cozying up with the Saudi
despots."
America's deepening and reckless military
involvement in Syria is a result of Trump
obeying Israel's orders. America's military
was recklessly involved in Syria long before
Trump became president. The chaos in Syria was
instigated by USA. US military trained, armed
and supported terrorists, bombed Syrian
military and civilians and established
military base in Syria during Obama
presidency.
Trump is "cozying up with the Saudi despots"
because he got his orders from Netanyahu and
Israelis. Before he began "cozying up with the
Saudi despots", Trump ordered shooting
missiles into Syrian military airport because
his Zionist Jewish daughter and son-in-law
told him to do so. If Netanyahu and/or his
Zionist Jew son-in-law Jared Kushner were to
order Trump to bomb Saudi Arabia, Trump would
bomb Saudi Arabia.
All along, Trump was blaming Saudis for 9/11
inside job attacks and was threatening Saudis
that they should be coming up with more money
to USA just as he expected NATO members to pay
for US wars costs. He was badmouthing Saudis
until he got his orders from Netanyahu and
Israel.
Saudis are puppets of USA; Saudis do exactly
what USA wants them to do and USA does exactly
what Israel wants it to do. Note that the
Saudi demands against Qatar are to distance
itself from all who resist Israel, namely,
Lebanese Hezbollah, Hamas, Iran and Syria.
Also, Israel was very pleased that Trump
signed billions of dollars worth of weapons
agreement with Saudi Arabia because these
weapons will be used against Israel's
perceived enemies and some will be given to
terrorists Israel supports in that region.
Israel rules and Trump wants to make Israel
great.
"... A pipeline through Syria would have been a great boost to national economy for a number of years & could raise a port of the country to one of global importance, just at a time that Turkey started turning the spigot of Euphrates off ..."
"... Consider that Qatar would have been a captive ally for Syria, a commodity rather in short supply for that country. The best part of it is, perhaps, that Syria presumably had a natural aversion to the transit fees. ..."
"... There is another interesting story in this regard, which is to do with (at least) three rounds of exploration for gas in Saudi Arabia, all failed, and the special need for gas to service its petrochemical industry. If memory serves, the reason is they want to upgrade the heavy crude portion of their production, which has steadily been growing, and which the Saudis might have to sell as bunker oil at great discount, if they fail to find gas. ..."
"... the Qataris were told in no uncertain terms that their gas 'had to remain in the peninsula' (Arabian subcontinent) for consumption, to serve the oil sector. ..."
"... If this is right (honestly, I do not know), it might explain quite a bit about the rivalries of the extremist Moslem clergy, and their activities both within the Moslem world and abroad, why not, even developments in Europe & the States. ..."
|Jen@31 writes about the legendary Qatari pipeline. That story made its appearance early in
the conflict, and if anybody knows its origin, I would be keen to be let know.
That story goes that Assad would not let Qatar have its pipeline because, presumably, Russians
wanted to retain their stranglehold on European gas supplies.
The subtext is that those Russians
must be very hard task masters and Assad, the lowliest of low lives, a terrified thug. And when
the troubles started, Assad did not go back to the Qataris to discuss the matter over.
Sorry, I cannot square that.
A pipeline through Syria would have been a great boost to national economy for a number of
years & could raise a port of the country to one of global importance, just at a time that Turkey
started turning the spigot of Euphrates off (this is a sense I have, do not know if it is right)
& a protracted drought and economic hardship all hit the country at the same time.
Consider that
Qatar would have been a captive ally for Syria, a commodity rather in short supply for that country.
The best part of it is, perhaps, that Syria presumably had a natural aversion to the transit fees.
There is another interesting story in this regard, which is to do with (at least) three
rounds of exploration for gas in Saudi Arabia, all failed, and the special need for gas to service
its petrochemical industry. If memory serves, the reason is they want to upgrade the heavy crude
portion of their production, which has steadily been growing, and which the Saudis might have
to sell as bunker oil at great discount, if they fail to find gas.
The story was run in the English papers of the Gulf circa 2012, whereby the Qataris were told
in no uncertain terms that their gas 'had to remain in the peninsula' (Arabian subcontinent) for
consumption, to serve the oil sector.
Once I chanced on an article on the educational proclivities of the thousands of the Saudi
princes. Any guess? Yes, a good portion of them goes in for religious studies! Somehow I do not
think they aspire to be lowly priests; but if not, where might they wish to have their sees? What
if the other principalities of the Gulf have nobilities with similar outlooks & hopes?
If this is right (honestly, I do not know), it might explain quite a bit about the rivalries of
the extremist Moslem clergy, and their activities both within the Moslem world and abroad, why
not, even developments in Europe & the States.
@36 & @31 I think you are both right. The Pipelinistan angle is a major part of this feud.
A probable change of heart from Qatar who has seen the light that no regime change will happen
in Syria therefore making a Fars --> Iraq --> Syria -> Lebanon LNG pipeline a realistic endeavor
is causing panic in KSA/US/IS who are trying to pressure Qatar to back-off from any deals with
Iran..
If Turkey is firm on protecting Qatar then the ultimatum will come to pass and be null
and void..
Don Bass | Jun 24, 2017 1:34:34 AM | 57
@ Vic
Y'know, when I read a comment such as yours: "~ I don't reckon its got anything to do with
a pipeline ~" I immediately think of that old trope: Better to remain silent and be thought a
fool, than to open ones mouth and remove all doubts"
Vic: instead of visiting here to blatantly display your ignorance, how about more usefully
spending that typing time to research the topic, hmmm?
The Imperial drive to crush Syria has been in play since the early 1980s, when Assad senior
was in power.
"... "In my view this is a deep power struggle between Qatar and Saudi Arabia that has little to do with stated reasons regarding Muslim Brotherhood and Iran. The action to isolate Qatar was clearly instigated during US President Trump's recent visit in Riyadh where he pushed the unfortunate idea of a Saudi-led "Arab NATO" to oppose Iranian influence in the region. ..."
"... Moreover, Qatar was acting increasingly independent of the heavy Wahhabite hand of Saudi Arabia and threatening Saudi domination over the Gulf States. Kuwait, Oman, as well as non-Gulf Turkey were coming closer to Qatar and even Pakistan now may think twice about joining a Saudi-led "Arab NATO". Bin Salman has proven a disaster as a defense strategist, as proven in the Yemen debacle. ..."
"... Kuwait and Oman are urgently trying to get Saudi to backdown on this, but that is unlikely as behind Saudi Arabia stands the US and promises of tens of billions of dollars in US arms. ..."
"... This foolish US move to use their proxy, in this case Riyadh, to discipline those not "behaving" according to Washington wishes, could well be the turning point, the point of collapse of US remaining influence in the entire Middle East in the next several years." ..."
"... KSA could not have taken this course of action all by itself. Someone somewhere must be egging them on. But who? The US seems to have no interest in a Saudi-Qatari conflict. Israel might, but only if said conflict is resolved in Saudi favor. ..."
"... I am therefore coming to the conclusion that there is no longer clear leadership of US policy and there are different factions within the US government. The white house and CIA are supporting the Saudis while the Pentagon supports Qatar. This is just a hunch, but it seems like it could make sense. Perhaps this is what happens when a government is in a state of decompensation. ..."
"... It is mind boggling that a fundamental reshaping of the Middle East was most likely put in motion by Trump completely oblivious of what he was doing shooting from the hip on his Saudi trip. ..."
"... Outside of an outright invasion of Qatar by Saudi Arabia, it is hard to see this as a once in a life time geopolitical gift to Russia, Iran, Turkey, Syria, and Iran. ..."
"... Now when July 3 comes and goes, Saudi Arabia will look completely impotent in the eyes of the countries in the region. ..."
"... Gaddafi's speech to the Arab League in Syria 2008 was so prescient ..."
"... "We [the Arabs] are the enemies of one another I'm sad to say, we deceive one another, we gloat at the misfortune of one another, and we conspire against one another, and an Arab's enemy is another Arab's friend. ..."
"... I quite like the WWI parallel. Trump as Kaiser Wilhelm? There certainly are some striking similarities in character. ..."
"... "...gifted, with a quick understanding, sometimes brilliant, with a taste for the modern,-technology, industry, science -- but at the same time superficial, hasty, restless, unable to relax, without any deeper level of seriousness, without any desire for hard work or drive to see things through to the end, without any sense of sobriety, for balance and boundaries, or even for reality and real problems, uncontrollable and scarcely capable of learning from experience, desperate for applause and success, -- as Bismarck said early on in his life, he wanted every day to be his birthday-romantic, sentimental and theatrical, unsure and arrogant, with an immeasurably exaggerated self-confidence and desire to show off, a juvenile cadet, who never took the tone of the officers' mess out of his voice, and brashly wanted to play the part of the supreme warlord, full of panicky fear of a monotonous life without any diversions, and yet aimless, pathological in his hatred against his English mother." ..."
"... It also stands to reason if you simply consider Saudi's importance regionally: A lot is made of Iran's threat to Saudi influence, but Turkey - thanks in part to considerable investment by Qatar currently while investment from elsewhere has reduced massively -- is also very threatening to Saudi's influence, especially on the religious front. ..."
"... Iran representing Shia interests in the region and Turkey representing Sunni interests is not a difficult future to imagine. It would of course grate with Saudi Arabia given that it had poured vast amounts of money into the Turkish economy and the diyanet. ..."
"... Hassan Nasrallah has given his annual International Al-Quds Day speech with plenty of fire aimed at the usual suspects. The Daily Star reports: 'Nasrallah accused Saudi Arabia of "paving way for Israel" in the region. ..."
"... Actually, I hope for many more benefits will show up from this quarrel than improved profits for Iranian produce growers. It is worthwhile to observe that Dubai, a component emirate of UAE, has gigantic economic links with Iran, which must be tolerated by overlords from Abu Dhabi: they had to bail out their cousins after real estate collapse, so they have big money stake in Dubai being prosperous. Potentially, Dubai and especially the hapless vegetable and dairy producers in KSA can lose a bundle (the latter had to invest a lot in farms for Qatari market, it is not like letting cows graze on abundant grasslands plus planting cucumbers and waiting for the rain to water them). Aljazeera and Muslim Brotherhood are more irritating to KSA and UAE than an occasional polite missive to Iran. ..."
"... Qatar opened the Middle East's first centre for clearing transactions in the Chinese yuan on Tuesday, saying it would boost trade and investment between China and Gulf Arab economies. ..."
"... The only hope for Saudi Arabia is to re-denominate oil sales in multiple currencies such as the WTO drawing rights, of course based on another formula, perhaps based on the countries that purchase the most oil. This would be the only way for the royalty to gain longevity as rulers of the country. Any other scenario spells disaster. ..."
William Engdahls views. "In my view this is a deep power struggle between Qatar and Saudi
Arabia that has little to do with stated reasons regarding Muslim Brotherhood and Iran. The action
to isolate Qatar was clearly instigated during US President Trump's recent visit in Riyadh where
he pushed the unfortunate idea of a Saudi-led "Arab NATO" to oppose Iranian influence in the region.
The Saudi move, clearly instigated by Prince Bin Salman, Minister of Defense, was not about
going against terrorism. If it were about terrorism, bin Salman would have to arrest himself and
most of his Saudi cabinet as one of the largest financiers of terrorism in the world, and shut
all Saudi-financed madrasses around the world, from Pakistan to Bosnia-Herzgovina to Kosovo. Another
factor according to informed sources in Holland is that Washington wanted to punish Qatar for
seeking natural gas sales with China priced not in US dollars but in Renminbi. That apparently
alarmed Washington, as Qatar is the world's largest LNG exporter and most to Asia.
Moreover, Qatar was acting increasingly independent of the heavy Wahhabite hand of Saudi
Arabia and threatening Saudi domination over the Gulf States. Kuwait, Oman, as well as non-Gulf
Turkey were coming closer to Qatar and even Pakistan now may think twice about joining a Saudi-led
"Arab NATO". Bin Salman has proven a disaster as a defense strategist, as proven in the Yemen
debacle.
As to the future, it appears that Qatar is not about to rollover and surrender in face of Saudi
actions. Already Sheikh Tamim bin Hamad al-Thani is moving to establish closer ties with Iran,
with Turkey that might include Turkish military support, and most recently with Russia.
Kuwait and Oman are urgently trying to get Saudi to backdown on this, but that is unlikely
as behind Saudi Arabia stands the US and promises of tens of billions of dollars in US arms.
This
foolish US move to use their proxy, in this case Riyadh, to discipline those not "behaving" according
to Washington wishes, could well be the turning point, the point of collapse of US remaining influence
in the entire Middle East in the next several years."
KSA could not have taken this course of action all by itself. Someone somewhere must be egging
them on. But who? The US seems to have no interest in a Saudi-Qatari conflict. Israel might, but
only if said conflict is resolved in Saudi favor.
I am therefore coming to the conclusion that there is no longer clear leadership of US
policy and there are different factions within the US government. The white house and CIA are
supporting the Saudis while the Pentagon supports Qatar. This is just a hunch, but it seems like
it could make sense. Perhaps this is what happens when a government is in a state of decompensation.
It is mind boggling that a fundamental reshaping of the Middle East was most likely put in motion
by Trump completely oblivious of what he was doing shooting from the hip on his Saudi trip.
Outside
of an outright invasion of Qatar by Saudi Arabia, it is hard to see this as a once in a life time
geopolitical gift to Russia, Iran, Turkey, Syria, and Iran.
Now when July 3 comes and goes, Saudi Arabia will look completely impotent in the eyes of the
countries in the region.
I wonder if there is some sort of interest between Russia, Turkey, Qatar,
and Iran on a coup in Saudi Arabia. I can't imagine it would be that difficult. I know it is not
Putin's policy to play these types of games like the US Regime, but one has to assume that people
are just fucking done with the clowns running Saudi Arabia.
Gaddafi's speech to the Arab League in Syria 2008 was so prescient..
"We [the Arabs] are the enemies of one another I'm sad to say, we deceive one another, we
gloat at the misfortune of one another, and we conspire against one another, and an Arab's
enemy is another Arab's friend.
Along comes a foreign power, occupies an Arab country [Iraq] and hangs its President,and
we all sit on the sidelines laughing. Any one of you might be next, yes.
Peter AU "Is Qatar, like Turkey, already heading for a multi-polar world? For 25 years, the US
was the only game in town, but with Russia's move into Syria there are now options."
Hard to see the world heading in that direction:
Russia and China will no longer allow the US Regime to use the same tactics to start wars
against Iraq and Libya anymore.
China is methodically closing off the South China Sea to the US Regime
The Shanghai Cooperation Organization is starting to increase their shared defense
Europe is openly talking about creating its own independent defense force
I wonder if Qatar is already in talks with China about joining the Silk Road Initiative now
that it is openly moving into the Russia and Iran sphere.
@17 The best is yet to come. There's a chance Netanyahu will fly into Riyadh to tell everybody
what to do. I'm sure he wants what's best for the region.
I quite like the WWI parallel. Trump as Kaiser Wilhelm? There certainly are some striking
similarities in character.
Quote from Thomas Nipperdey:
"...gifted, with a quick understanding, sometimes brilliant, with a taste for the modern,-technology,
industry, science -- but at the same time superficial, hasty, restless, unable to relax, without
any deeper level of seriousness, without any desire for hard work or drive to see things through
to the end, without any sense of sobriety, for balance and boundaries, or even for reality
and real problems, uncontrollable and scarcely capable of learning from experience, desperate
for applause and success, -- as Bismarck said early on in his life, he wanted every day to
be his birthday-romantic, sentimental and theatrical, unsure and arrogant, with an immeasurably
exaggerated self-confidence and desire to show off, a juvenile cadet, who never took the tone
of the officers' mess out of his voice, and brashly wanted to play the part of the supreme
warlord, full of panicky fear of a monotonous life without any diversions, and yet aimless,
pathological in his hatred against his English mother."
Last month at the China-Arab Cooperation Forum in Doha, Chinese Foreign Minister Wang Yi postulated
that Qatar should take part in the realization of China's Silk Road Initiatives.
Yeah, you're right. I hadn't looked into the question sufficiently. Of course the Chinese are
looking for more external finance for the project. They don't want to be the only ones who pay.
Fat chance, though. The Qataris have been in austerity since the decline in the oil price. Someone
I know who works in the Qatar Museum has seen all her colleagues let go. And now the crisis with
Saudi.
The Qataris may even have signed contracts with China. But if you know anything about the Gulf,
there's a wide gap between signing a contract, and actually getting paid. It depends upon how
the prince concerned feels about the project when the question of payment comes up. A company
I worked for in the 80s took two years to get payment, even though they were experts in Gulfi
relations.
The issue of the threat regarding the Turkish base didn't surprise me much, though. I think
it's clear that if MB is the target, then of course Turkey has to become a target, and Qatar -
Turkey ties have to be broken. It stands to reason.
It also stands to reason if you simply consider Saudi's importance regionally: A lot is
made of Iran's threat to Saudi influence, but Turkey - thanks in part to considerable investment
by Qatar currently while investment from elsewhere has reduced massively -- is also very threatening
to Saudi's influence, especially on the religious front.
Iran representing Shia interests in the region and Turkey representing Sunni interests
is not a difficult future to imagine. It would of course grate with Saudi Arabia given that it
had poured vast amounts of money into the Turkish economy and the diyanet.
On a slightly different note there's a scandal going on in western Turkey, in Duzce, at the
moment because the local authority has unveiled a statue of Rabia - the four fingered Muslim Brotherhood
salute! :-)
Hassan Nasrallah has given his annual International Al-Quds Day speech with plenty of fire
aimed at the usual suspects. The Daily Star reports: 'Nasrallah accused Saudi Arabia of
"paving way for Israel" in the region.
You did not address the argument I made, namely, that Aljazeera editors apparently belong
to "Muslims, who immediately set out to support it [Darwinian theory of evolution] unaware
of the blasphemy and error in it." These guys pretend to be nice Wahhabis, dressing in dishdashas,
their womenfolks in abayas, but in fact they spread heretical and blasphemous doctrines. However,
I am more of a Khazar than a Wahhabi and I do not treat this argument seriously.
It is the fact that compared to other government supported TV/online venues, say RT or PressTV,
Aljazeera is well written and edited, has plenty of valuable material, etc. It is a worthwhile
place to check when you want to get a composite picture on some issues. And it irritates KSA
potentates in a myriad of ways, precisely because it targets "politically engaged Muslim".
It is a good example that pluralism has inherent positive aspects, devils that quarrel are
better than "One Ring to rule them all, One Ring to find them, One Ring to bring them all,
and in the darkness bind them."
====
Actually, I hope for many more benefits will show up from this quarrel than improved profits
for Iranian produce growers. It is worthwhile to observe that Dubai, a component emirate of UAE,
has gigantic economic links with Iran, which must be tolerated by overlords from Abu Dhabi: they
had to bail out their cousins after real estate collapse, so they have big money stake in Dubai
being prosperous. Potentially, Dubai and especially the hapless vegetable and dairy producers
in KSA can lose a bundle (the latter had to invest a lot in farms for Qatari market, it is not
like letting cows graze on abundant grasslands plus planting cucumbers and waiting for the rain
to water them). Aljazeera and Muslim Brotherhood are more irritating to KSA and UAE than an occasional
polite missive to Iran.
One pattern in Syrian civil war were persistent and bloody feuds between jihadists that formed
roughly four groups:
"salafi", presumably funded by KSA,
"brothers", presumably funded by Qatar and Turkey,
al-Qaeda/al-Nusra/something new that was forcing the first two groups to surrender some
weapons (and money?),
and ISIS that had more complex sources (or more hidden).
Medium term strategy of Syrian government and allies for the near future is to "de-escalate"
in the western part of the country and finish off ISIS, partitioning hitherto ISIS territories
in some satisfactory way, while maintaining some type of truce with the Kurds. Then finish off
the jihadists, except those most directly protected by Turkey. Finally, take care of the Kurds.
Some sufficiently safe federalism can be part of the solution, but nothing that would lead to
enclaves with their own military forces and their own foreign policy, like Iraqi Kurdistan.
That requires the opposing parties to exhibit somewhat suicidal behavior. A big time official
feud between "brothers" and "salafi + Kurds" (a pair that shares some funding but with scant mutual
affection" can help a lot. Most of all, a big time feud between Turkey and KSA can stabilize the
situation in which jihadists from Idlib and northern Hama observe a truce/de-escalation, while
their colleagues from south Syria get clobbered, and definitely will induce them to refrain from
attacking Syrian government while it is busy against ISIS. After Erdogan was prevented from marching
onto Raqqa, he has two options: "Sunnistan" in eastern Syria under domination of YPG or a much
smaller YPG dominated territory that can be subsequently digested. Option one is a true nightmare
for Erdogan, more than a mere paranoia. However, Erdogan is also "pan-Sunni" Islamist, so he could
be tempted to backstab infidels from Damascus, as he was doing before. An open feud with Sunnistan
sponsors should help him to choose.
Qatar opened the Middle East's first centre for clearing transactions in the Chinese yuan
on Tuesday, saying it would boost trade and investment between China and Gulf Arab economies.
"The launch of the region's first renminbi clearing center in Doha creates the necessary
platform to realise the full potential of Qatar and the region's trade relationship with China,"
Qatar's central bank governor Sheikh Abdullah bin Saud al-Thani said at a ceremony.
"It will facilitate greater cross-border renminbi investment and financing business, and
promote greater trade and economic links between China and the region, paving the way for better
financial cooperation and enhancing the pre-eminence of Qatar as a financial hub in MENA (Middle
East and North Africa)."
Industrial and Commercial Bank of China's (ICBC) Doha branch is the clearing bank for the centre,
which intends to serve companies from around the Middle East.
A clearing bank can handle all parts of a currency transaction from when a commitment is
made until it is settled, reducing costs and time taken for trading.
The centre "will improve the ease of transactions between companies in the region and China
by allowing them to settle their trade directly in renminbi, drawing increased trade through
Qatar and boosting bilateral and economic collaboration between Qatar and China," said ICBC
chairman Jiang Jianqing.
At present, Qatar and the Gulf's other wealthy oil and gas exporters use the U.S. dollar
much more than the yuan. Most of their currencies are pegged to the dollar, and most of their
huge foreign currency reserves are denominated in dollars.
Laguerre @27
Date of article April 24, 2017
In April 2015, Qatar opened Qatar Renminbi Centre (QRC), the region's first clearing centre
for the Chinese currency. This allows for trades priced in RMB to be cleared locally in Qatar
rather than in other centres such as Shanghai or Hong Kong.ICBC has since become the designated
clearance bank servicing the QRC, which has handled more than 350bn yuan ($52.6bn) since its inception.
http://emerge85.io/blog/the-middle-kingdoms-big-four-and-the-gulf
~ ~ ~ ~
Trending and not very far to seeing what is now held under the table. Oil will also be priced
in RMB because KSA, to maintain their share of exports to China, will need to get on board. For
now, it's been reaffirmed, SA does the whipping and USA protects the Royals.
About Sunni-Shia split. My impression is that this is mostly KSA + UAE obsession. For example,
there is a substantial Shia minority in Pakistan, but the dominant thinking among the Sunnis seems
to be "Muslim solidarity". There is a minority that is virulently anti-Shia, but they are politically
isolated and despised exactly on the account of breaking that solidarity. After all, Pakistan
forms the boundary of the Umma with non-Muslim India. I base that opinion on comments in online
Pakistani newspapers, and what I have heard from an acquaintance who was a religiously conservative
Sunni Pakistani. To him, the attack on Yemen by KSA was wrong "because they are Muslim". So even
if Pakistan is to a certain extend in Saudi pocket, and its deep state has an extremist Sunni
component, overt siding against "fellow Muslim" is out of the question.
Egypt is another case. One can find rather isolated anti-Shia outbursts, like writings of some
fossils in Al-Azhar (who are responsible for the state religion), but the government steers away
from that, and in spite of hefty subsidies, it joined Yemen war only symbolically and for a very
short time (unlike Sudan that really needs the cash for its mercenaries). As you move further
away from the Persian Gulf, the indifference to the "split" increases. As far as Qatar and Aljazeera
are concerned, probably no one detests them more than Egyptian elite, as they were valiantly fighting
Muslim Brotherhood for the sake of progress with some occasional large massacres (killing several
hundreds of protesters, issuing hundreds of death penalties to participants in a single protest,
in absentia! incredible idiocy+cruelty). That explains why al-Sisi joined KSA against Qatar.
However, the civil war in Libya that embroils Egypt is a classic case of unexpected alliances.
Egypt with a help from Russia, KSA and UAE supports the "eastern government" that bases legitimacy
on democratic parliament re-assembled in Tobruq on Egyptian border, and dominated by military
strongman Haftar. The latter has the best chance of all people to become a military strongman
of all Libya, but apparently has meager popularity and thus, too few troops. He patched that problem
by an alliance with a Salafi group that had a numerous militia, currently partitioned into smaller
units and incorporated into Haftar's brigades. Even with that, his progress on the ground is very,
very gradual. Against him is the government in Tripolis, legitimized by a more fresh parliament
and UN/EU, plus a military force that includes several militias. Part of the parliamentary support
stems from Muslim Brotherhood, and some part of military support comes from Salafi militias. There
are also aspects of a "war of all against all", seems that Saharan tribes collected a lot of fresh
blood feuds.
Thus Qatari+Turkish support for Tripoli government is aligned with EU, and Egyptian support
for Tobruq government is aligned with Russia and KSA.
I thought I might just throw this out there and see what sticks. US policy is based on power and
control. Saudi Arabia has been a good ally but it does not serve use policy or strategic goals
any longer. Not really. I think the grand prize for destabilizing the middle east is Saudi Arabia.
It would be the only way to truly control the development of other nations or more specifically,
to control their rivalries and save the the US from complete economic breakdown. The Saudi's are
being plumbed by the best of them, telling them they are you friends, we have your back and so
long as Saudi Arabia loses more money and keeps lossing money in needless wars etc.
The only hope for Saudi Arabia is to re-denominate oil sales in multiple currencies such
as the WTO drawing rights, of course based on another formula, perhaps based on the countries
that purchase the most oil. This would be the only way for the royalty to gain longevity as rulers
of the country. Any other scenario spells disaster. Of course, it would be a rough go for
them for a while, but in the end, a slight change in outlook and the unfair advantage given to
the US would go a long way, economically to stabilizing large blocks of countries. They also could
of course change their outlook on the world, but that is certainly a difficult challenge. If the
Muslim world came together based on their similarities, they could be a very powerful block.
The US no longer has the financial velocity it once maintained and this is much more due to
insane ideas about being a hegemon. I never thought revolution would be possible in the US, but
it is coming and it won't take much. The country does not appear to have intelligence peddle back
a number of policies, drunk on its own poison, it makes capitalism look disgusting. A new business
model is needed, one that developes mutual trade based on respect from within the exchange itself.
Saudi Arabia needs to cultivate multi-channel support for its biggest resource so that when the
returns are no longer there, they will have also developed multiple avenues to prosperity. Just
a thought.
They are that wasteful,
they never had to look for costs, they need foreign workers for anything
they do – that won't work out.
At the moment they have zero income without energy sector, if you don't
count the Hadsch around Mekka as income.
And they are too big to copy the Dubai model, just to build real estate as
an industry to live from.
They could go solar – but then they should start to invest billions in
infrastructure to sell the stuff to Europe and China now.
Iranian Supreme Leader Ayatollah Khamenei launched his latest rhetorical broadside at Iran's arch-rivals
in Saudi Arabia from a ceremony commemorating the Muslim holiday of Ramadan on Saturday. Khamenei
said the Saudi rulers are "worthless, inept, and villainous."
Khamenei also
insulted the Saudis as "idiots" for thinking they could purchase the friendship of "pagans and
enemies" with their oil money, describing them as "milk cows for the Americans."
Khamenei said the Muslim world is in "grave danger" because of leaders like the Saudis and their
"refusal to follow the Koran and lack of belief in the truth." The Saudi monarchy is a major force
in the world of Sunni Islam, while Iran's theocracy leads the Shiites, putting them on the opposite
side of a
religious schism that reaches back to the 7th Century.
That ancient conflict is mixed with contemporary geopolitical concerns, such as the civil war
in Yemen, which has become a proxy war between Iran and Saudi Arabia.
The Supreme Leader of Iran, which supports the Shiite Houthi insurgents against the internationally
recognized government of Yemen, blamed the Saudis for the continuing bloodshed in that war-torn country,
as well as the oppression of Shiites by the Sunni government of Saudi Arabia's allies in Bahrain.
Iran's Foreign Minister recently added another link to that chain of blame by
accusing U.S. President Donald Trump of emboldening the government of Bahrain to crack down on
Shiite demonstrators.
"They act cordially towards the enemies of Islam while having the opposite behavior towards the
Muslim people of Bahrain and Yemen. They will face certain downfall," Khamenei predicted.
He
blasted the Saudis for signing a multibillion-dollar arms deal with the "infidel" Americans,
saying that the money should have been used to "improve the lives of their own people."
Fox News notes that recently re-elected Iranian President Hassan Rouhani, whose more moderate
approach is frequently at odds with the "hardline" ayatollahs, has been calling for improved relations
with Sunni nations.
"We want the rule of moderation and rationality in the relations between countries and we believe
that a political solution should be a priority. The countries of the region need more cooperation
and consultations to resolve the crisis in the region and we are ready to cooperate in this field,"
Rouhani said during a telephone conversation with the Emir of Qatar.
Rouhani's outreach to Qatar might be a little on the opportunistic side, since the emirate is
currently experiencing a bit of
turbulence in its relationships with Saudi Arabia, Egypt, and other major Saudi states. In fact,
on Monday a minister from the United Arab Emirates
described the rift as a "severe" crisis that could pose a "grave danger" to the future of the
Gulf Cooperation Council.
Given Donald Trump's new commitment to support military adventurism by Saudi Arabia in Yemen and
more generally against Iran, it might be worth reconsidering how this alliance developed.
The beginning for Saudi Arabia was in 1744 when a wandering radical cleric, Mohammed bin Abdel-Wahhab
met up with a local chieftain, Mohammed bin Saud in the village of Diriyah, whose ruins are now located
in the suburbs of the current Saudi Arabian capital, Riyadh. Wahhab converted Saud to his cause of
spreading the strictest of the four Sunni shari'as, the Hanbali code, throughout the world, and this
remains to this day the ideology of the House of Saud, the ruling family of Saudi Arabia, with this
ideology widely known as Wahhabism. The territory ruled by the early Saudis expanded to cover a fair
amount of the Nejd, the central portion of the Arabian peninsula, but when they threatened control
of Mecca in 1818, ruled by Egyptians under the Ottomans who collected the moneys gained from pilgrims
visiting there, the Egyptian leader, Muhammed Ali, invaded the Nejd and destroyed Diriyah. The Saud
family moved to the next village over, Riyadh, and reconstructed their small state, which expanded
again in the mid-1800s, although near the end of the century they were defeated and exiled to Kuwait
by the rival Rashid family from Hail to the north of Riyadh.
In 1902 the 27 year old family leader, Abdulaziz bin al-Rahman bin Faisal al Saud, reconquered
Riyadh and would eventually establish the modern Kingdom of Saudi Arabia (KSA) through marital and
martial conquests, with its modern boundaries established in 1932, and Abdulaziz (known in the West
as "Ibn Saud") bearing the title of King and Protector of the Two Holy Places (Mecca and Medina),
which he had conqurered in 1924. He would have 43 sons, and today's king, 81-year old Salman, is
one of the last of them, and Abdulaziz would die in 1953. It should be noted that Saudi Arabia was
independent of the Ottoman Empire, and was one of the few parts of the Muslim world that did not
fall under the rule of a European power, along with Turkey, Persia/Iran, and Afghanistan.
In the early years, especially in the 1920s, he sought outside advice and support from the British,
especially St-John Philby, the rival at Whitehall of T.E. Lawrence, and the first European to cross
the Empty Quarter of the Arabian peninsula. Philby was especially helpful during the revolt by the
combined forces of the Rashidi and the Ikhwan (Muslim Brotherhood) whom Abdulaziz managed to defeat
in 1929, with the rebels pushing an ultra-fundamentalist line against Abdulaziz (an replay of this
revolt occurred 50 years later in 1979, with the Ikhwan seizing control of the Grand Mosque in Mecca
for a time). Philby would convert to Islam and take several wives. He was also the father of later
Soviet spy, Kim Philby.
The first interest by anybody in the US came out of two agreements in 1928 and 1929, the Red Line
Agreement that gave the territories of the former Ottoman Empire to a set of British and French companies,
and then the As Is agreement of 1929 between Sir Henri Deterding of Royal Dutch Shell, Baron John
Cadman of Anglo-Persian (now BP), and Walter Teagle of New Jersey Standard (now Exxon Mobil) at Deterding's
Achnacarry Castle in Scotland. These agreements amounted to an early effort to divide up the oil
producing world in a cartel. Out of this, Jersey Standard got Saudi Arabia, although at the time
oil had not been discovered there. It would be in 1938 by geologists from Jersey Standard, and agreements
for production with cash payments for Abdulaziz in gold bars were made. In 1948, Abdulaziz would
become the first leader of an oil-producing nation to succeed in getting a 50-50 profit sharing agreement,
and as oil production surged there in the 1950s and after, the money would begin to flow into Saudi
Arabia providing the basis for its modernization, even as it retained its highly traditional and
strict version of Wahhabist Islam and Hanbali shari'a law code.
While Saudi Arabia initially favored Nazi Germany at the beginning of World War II, much like
Iran then, it gradually shifted to the Allied side, with FDR declaring the protection of Saudi oil
reserves a US national interest in 1943, and the Saudis officially declaring war on Germany in early
1945. It is widely viewed in KSA that the alliance was sealed in 1945 when FDR was returning from
Yalta shortly before his death and met briefly on a boat in the Suez Canal with King Abdulaziz, producing
a famous photograph of the two of them smiling and shaking hands, shortly before FDR's death. And
indeed, despite some ups and downs, the alliance has held since, with oil at its center.
Given that, the nature of the relationship has changed substantially over time. One major change,
signaled initiallly by that 50-50 profit sharing agreement in 1948, was an increase in Saudi control
over the oil aspect of it, with OPEC founded in 1960, which would impose a quadrupling of oil prices
in 1973 in the wake of the Saudi oil export embargo against the US for the US supporting Israel in
the Yom Kippur war of that year. Prior to that embargo, KSA had managed to nationalize ARAMCO, the
Arabian-American Oil Company, which produced the oil in Saudi Arabia, the original owners of ARAMCO
being Jersey Standard, New York Standard (Mobil, now merged with Exxon), Texaco, and California Standard
(now Chevron). These companies, especially Exxon Mobil, continue to have an active relationship with
ARAMCO, but the Saudis have been in control of their oil and their oil industry since the beginning
of the 1970s. This shifted the relationship to being one more of the US becoming the protector of
KSA, providing it with arms as the petrodollars poured in, and this aspect of the relationship has
reached a new height with this latest visit and arms deal, arranged by former Exxon Mobil CEO and
now SecState, Tillerson.
It is worth noting also that for most of the postwar period probably the major irritant in the
Saudi-US relationship has been Israel, which even now KSA does not recognize, and Trump's flight
from Riyadh to Tel Aviv was the first such direct flight on that route ever. Israel supporters for
many years complained about "Arabists" in the US State Department who were more oriented to worrying
US oil interests in the Middle East and especially in Saudi Arabia. But today there is now an alliance
of convenience between KSA and Israel in their mutual dislike of Iran.
Which brings us to the current situation. I personally think that the current Saudi leadership
has gone off the rails in their anti-Iran attitudes. The differences are both sectarian and ethnic,
Sunni versus Shi'i Islam and Semitic Arabs versus Indo-European Iranians, with this manifesting itself
in a regional power struggle. But this is a relatively recent conflict, only getting going since
the 1979 Islamic Revolution in Iran, and only getting really hot with the overthrow of Saddam Hussein
by the US under George W. Bush. It was the Saudis who convinced Bush's dad not to go to Baghdad to
overthrow Saddam in the 1991 Gulf War, arguing that he kept a balance of power as a Sunni Arab leader
against Iran. And they argued with Bush, Jr. not to go in for the same reason, although they would
support the US effort modestly once it happened, even though it aggravated Osama bin Laden and al
Qaeda against the Saudi monarchy for supporting the US so openly (even though the US had supported
the decision by then Saudi intel chief, Turki bin Faisal, to send bin Laden to Pakistan to aid in
the anti-Soviet campaign in Afghanistan). But the replacement of a Sunni-led regime in Iraq by a
Shi'i led one supported by Iran has upset the Saudis greatly. They also do not like Iranian support
of Assad in Syria, who appears to have won his war against largely Sunni rebels, many of them supported
by KSA, and now the Saudis are bogged down in a war in Yemen against local Zaydi Shi'a, whom they
claim (not with full credibility) are being supported by Iran. So they, and the Israelis, want the
US to join them in an anti-Iran crusade.
I think we are at a dangerous moment here. The nuclear deal with Iran is the most importantdeal
that Obama made, and even the Saudis and Israelis know it. What they do not like about it is that
it meant that the economic sanctions on Iran were relaxed. But most of those sanctions were only
put on to get Iran to the nuclear negotiating table. There is no way they can be reimposed without
Iran returning to having a nuclear program. The most influential person in KSA now appears to be
the son of King Salman, 31-year old Mohammed bin Salman, Deputy Crown Prince and Defense Minister,
who gets lots of good press in the US. But for all the talk of reform, he has not moved to let women
drive or to desegregate workplaces by gender. He seems to be a warmongering hothead who has pushed
this so far fruitless and destructive war in Yemen, which has led to incipient famine in that nation
as well as its likely falling apart into pieces. He has even talked about "taking the war to Iran,"
which we can only hope that he will not be tempted to do with all those fancy arms that he is buying
from the US. Trump, or whoever is in charge of US foreign policy in the near term, will really have
to both defend the nuclear deal with Iran and resist this warmongering push by our longtime erstwhile
ally. Let us hope that this is done.
I'm not sure what the drivers of the US hate on Iran are, beyond beltway irritation at a smallish
country that refuses to acknowledge US supremacy. War is, I think, unlikely - Iraq nearly broke
the US army, and Iran would be much worse; Iran has an open backer in Russia, and a silent one
in China, and reasonable relations with all its neighbours (so nowhere to base an invading force).
It's also quite careful diplomatically - it does what it feels to be in its interests, but does
not go out of its way to provoke.
KSA could panic as the Shi'a consolidate power in Iraq and Syria and their prestige rises across
the Islamic world but, again, they lack the access, forces and local allies to do much - and can
they afford a defeat?
btw, Iran did not have a nuclear weapons program, and is unlikely to start one even if the
US reneges on the deal. Aside from religious objections, Russia and China would not approve, and
it would deprive Iran of a chance to split the EU from the US.
All that said, Bush II was staffed by some of the dumbest fucking guys on the planet, and they
were geniuses compared to Trump's picks.
Good stuff. But while Ikhwan means "Brethren" or "Brotherhod" and the Muslim Brotherhood's
name in Arabic contains the word "Ikhwan", I don't think the Saudi Ikhwan is related to the modern
Muslim Brotherhood in any way other than both using the word in their name.
The Ikhwan was the part of the Al-Saud military forces in the early 20th century who eventually
revolted against the Saudi regime when the Ikhwan felt the Saudi's had gone too "soft" in their
religion and refused to spread the Wahhabi creed via Jihad to the Trans-Jordan, Kuwait, and other
areas controlled by the British. When the Ikhwan raided British areas the Brits retaliated and
the Saudis didn't want trouble with the British so they fought the Ikhwan with the help of the
British. The Ikhwan were defeated with the help of British airplanes and military vehicles.
According to wikipedia the remnants of the Ikhwan formed what is today the Saudi Arabian National
Guard which is apparently tasked with protecting the royal family and crushing internal dissent.
Actually they had a nuclear weapons program that dated to the time of the Shah and that was
initially supported by, well, the US. It was shut down after the Islamic Revolution. Then it was
started up again under Rafsanjani in the late 1990s, only to be shut down about the time the US
invaded Iraq, arguably one of the few positive things to come out of that invasion. Official US
National Intelligence Estimates (NIE)s after then agreed that there was no active Iranian nuclear
weapons program. In effect what the Iran nuclear deal did was to scale back their capability to
have one, although they still have such a capability, and, of course, they have a civilian nuclear
power program that is very popular in Iran.
No argument - although I think the program under Rafsanjani was more exploration than active development.
Iranians are touchy about the civil nuclear program because for them it's a touchstone for respect
for their rights as an independent nation. In their view, they joined the IAEA, signed up to the
NPT, abided by all the rules and got sanctions, theft of frozen money and threats.
If the US priority were fighting terrorism, then Iran (and even Syria) would be better allies
than Saudi (or Pakistan). But history has its own inertia...
Total agreement with Peter T that if fighting terrorism is a priority, hostility to Iran makes
little sense. All the major terror groups are Shia with the exception of Hezbollah, but it not
a threat to the US or Europe.
Unknown said...
... All the major terror groups are Shia with the exception of Hezbollah, but it not a threat
to the US or Europe.
He means they are all Sunni with the exception of Hezbollah, which is Shia.
(In reality Hezbollah was never a terrorist group in the traditional sense of fostering attacks
against civilians. Their sin was fighting the Israelis.)
Saudi Arabia has reportedly canceled or restructured economic and
infrastructure projects worth billions of dollars.
Reuters in a report quoted government sources as saying that the Saudi
government had ordered ministries and organizations to review the projects to
either scrap or make them more efficient.
The report added that most of the projects that had been targeted were those
that had been devised during lavish government spending buoyed by crude oil
prices above $100 per barrel.
However, they would no longer be cost-efficient with oil at below $55 per
barrel.
Riyadh's Bureau of Capital and Operational Spending Rationalization is now
assessing the projects that are under 25 percent complete, the sources told
Reuters.
"Some projects could be retendered so they can be executed in partnership
with the private sector, possibly through build-operate-transfer (BOT)
contracts," one source familiar with the plan told the agency.
"Other projects could be suspended if they do not meet the current economic
objectives," the source said.
The finances of Saudi Arabia, the world's second largest crude producer
after Russia and largest oil exporter, have been hit by a downturn in oil
prices that were above $100 a barrel in 2014, but start to plunge to well below
$40 in 2016.
The plunge in global oil prices prompted Riyadh to rein in public spending
in a bid to save money. The kingdom's economic measures are being led by
Salman's son, Deputy Crown Prince Mohammad bin Salman Al Saud.
Earlier last year, the Riyadh regime cancelled financial perks for public
sector employees and slashed salaries of ministers and members of the
Consultative Assembly of Saudi Arabia, also known as the Shura Council.
It further froze major building projects and made unprecedented cuts to fuel
and utilities subsidies.
Ren Lugay
18
hours ago
Hmmm, no money to complete social infrastructure projects
but always spare cash to buy cluster munitions from the
Great Satan and Israel to bomb innocent civilians in
Yemen.
Saudi Arabia has launched a massive multi-billion-dollar plan which is
expected to increase the kingdom's production of electricity from renewable
sources by 10 percent within the next few years.
Reuters said in
a report that the plan envisaged the construction of 30 solar and wind projects
by 2023.
The projects – that would be meant to boost the kingdom's electricity
generation and reduce crude oil burning – could generate 9.5 gigawatt of
renewable energy.
The initiative involves investment estimated between $30 billion and $50
billion, Reuters reported.
On a related front, the news service said the Saudi Energy Minister Khalid
al-Falih on Monday announced the beginning of the bidding for a project to
produce 300 megawatt of solar power.
The project is expected to come online by 2018-2019.
"The energy mix to produce electricity will change, today the kingdom uses
large quantities of oil liquids, including crude, fuel oil and diesel," Falih
was quoted as saying.
"So the percentage of renewable energy by 2023 (will be) 10 percent of total
installed capacity in the kingdom."
Based on an ambitious economic reform program launched last year, known as
Vision 2030, Saudi Arabia is seeking to use non-oil means to generate much of
its additional future energy needs to avoid running down oil resources and
diversify its economy.
The kingdom is restructuring its energy sector as part of Vision 2030 and a
focus on renewable projects is a pillar of this transformation as it would help
develop the private sector and create thousands of jobs, Reuters added.
This article came out on February 28. I don't think it's been posted here.
Cooking The Books? Saudi Aramco Could Be Overvalued By 500% | OilPrice.com
: "WoodMac
puts Aramco's true value closer to $400 billion, eighty percent less than the Saudi
estimate, and it arrived at the figure by considering future demand and the anticipated
average price of oil (on which profits will depend), as well as Saudi Aramco's status as a
state-run company.
WoodMac doesn't dispute the figure of 261 billion barrels lying under Saudi Arabia and
just offshore; that figure has been confirmed by independent sources. Where things get
complicated, though, is in the management and taxation of Saudi Aramco, which does not
release financial statements."
Seems right to me. As I posted a short while back, in my opinion, no rational investor,
today, would pay anything for production that might occur more than 20 years in the
future. Therefore, only about 88 million bbl of reserves is in play. And those produced
20 years out [risked] have neglible net present value.
Does anybody know which independant sources confirmed the 261 billion barrels lying
under Saudi Arabia? I was under the impression we were just taking their word for it.
Who signed off on confirming it?
Bingo. And VERY OMINOUS that a firm like WoodM would fall for the "independent audit"
story.
Those auditors did not do core drilling. They did no exploration drilling. They
took Aramco data, added it up (accountants add things up) and declared 261 billion
barrels of reserves.
This is such silliness.
There is also the issue of who paid for the audit.
Low oil prices and an increasingly
costly war in Yemen have torn a yawning hole in the Saudi budget and created a crisis that has led
to cuts in public spending, reductions in take-home pay and benefits for government workers and a
host of new fees and fines. Huge subsidies for fuel, water and electricity that encourage
overconsumption are being curtailed. ...
Saudi Arabia expects to earn 46% more from oil revenues in 2017
compared to this year, with expectations of rising global demand
combining with the OPEC-led global production cut to push prices higher.
In its annual budget unveiled Thursday, the kingdom said its oil revenues
were projected to hit Riyals 480 billion ($128 billion) next year, up
from Riyals 328 billion ($88 billion).
The budget did not reveal any details about Saudi Arabia's oil production
plans or targets, nor does it say what price it expects to receive for
its oil, though it cited the International Monetary Fund's estimate of
2017 oil prices at $50.60/b. Oil prices in 2016 averaged $43/b, the
budget document said.
Overall revenues for 2017, including non-oil revenues, are expected to
rise 31% from 2016 levels to Riyals 692 billion.
With the budget laying out an expenditure plan for Riyals 890 billion
($237 billion), an 8% increase over this year, this means the kingdom
will be facing a deficit of 198 billion riyals ($53 billion), down 33%
from this year, as Saudi Arabia has had to tap into its reserves to
withstand the low oil price environment of the last two years.
"The 2017 budget was prepared in light of developments in the local and
global economy, including the estimated price of oil," the budget
document states, attributing the increases in projected revenues and
expenditures to energy pricing reforms.
"As the kingdom's economy is strongly connected to oil, the decrease in
oil prices over the past two years has led to a significant deficit in
the government's budget and has impacted the kingdom's credit rating."
Total national debt for 2016 was about Riyals 316.5 billion ($84
billion), or 12.3% of projected GDP.
"... Every OPEC nation is now producing at absolute maximum capacity. With the exception of the two countries, Libya and Nigeria, that have political production problems, they are all overproducing their reservoirs. They are doing this so when they are "forced" by OPEC to cut production, they can just cut back to normal production. ..."
"... People who still talk about "OPEC spare capacity" haven't a clue as to what the hell they are talking about. ..."
"... "Ultimately, our work on Saudi Arabia's fiscal balance suggests that the kingdom has a strong incentive to cut production to achieve a normalization of inventories, even if it requires a larger unilateral cut, consistent with comments last weekend by the energy minister," Goldman said in a note. ..."
OPEC oil production
comes primarily from conventional reservoirs. These reservoirs require
reservoir pressure management. Some have suggested that Saudi Arabia's
rationale for cutting production was to reverse the reservoir damage that
overproduction has, or may have, caused. Preservation of reservoir integrity
may ultimately limit "immediate" increases to inventories from OPEC.
Okay, will someone please tell me how Saudi Arabia could have any "spare
capacity" at all if their reservoirs have been damaged from overproduction? If
they are overproducing their reservoirs now, then to produce even more "spare
capacity", they would have to over-overproduce those reservoirs. That would be
an absurd proposal.
Every OPEC nation is now producing at absolute maximum capacity. With the
exception of the two countries, Libya and Nigeria, that have political
production problems, they are all overproducing their reservoirs. They are
doing this so when they are "forced" by OPEC to cut production, they can just
cut back to normal production.
People who still talk about "OPEC spare capacity" haven't a clue as to what
the hell they are talking about.
One of the biggest obstacles to Saudi Arabia's planned initial public
offering (IPO) for state oil giant Saudi Aramco has been the sensitive
requirement to subject Saudi oil reserves to public regulatory scrutiny. But
in an unconventional move, Riyadh is considering an approach to exclude
reserves from any formal accounting of Aramco's assets, according to
Petroleum Intelligence Weekly. Instead, it wants to value the company based
on financial returns from production over a period of years or decades.
While this approach risks lowering the valuation of the company and limiting
the foreign exchanges where it could have a listing, it has the advantage of
preserving an important state secret. The argument for this approach is that
the state owns the reserves, not Saudi Aramco, which is the monopoly
producer.
.
The reserves issue was always going to be thorny, and the current thinking
is to derive the value of the IPO from the value created from each barrel
produced, based on a revised tax and royalty scheme that the company has
been working on for months, according to Saudi industry sources. Investors
will be presented with details about Aramco's 12 million barrel per day
production capacity, which for the time being will not be expanded, its
average yearly production and profit per barrel - or "economic rent." Aramco
will only provide the unaudited 261 billion barrels of reserves that it
publishes in its annual reports, and uses in a bond prospectus, as it did in
October.
The justification for this unusual approach to the IPO is that Aramco does
not own the reserves, the state does. And while Aramco has a monopoly to
produce those barrels, it does not have the right to reveal what are the
kingdom's most important assets and a closely guarded secret. Inevitably, a
decision to avoid vetting reserves will reinforce suspicions by those that
already think Saudi Arabia has something to hide.
Goldman Sachs raised Friday its oil price forecasts for 2017 after
reassessing the likelihood that key global oil producers, led by Saudi
Arabia, will stick to output cut pledges under OPEC's efforts to clear the
oil market glut.
After analyzing Saudi Arabia's fiscal revenue outlook for 2017, the bank
said it sees the motivation for an average 84% compliance with the announced
collective OPEC and non-OPEC production cuts which it estimates at a total
1.6 million b/d.
"Ultimately, our work on Saudi Arabia's fiscal balance suggests that the
kingdom has a strong incentive to cut production to achieve a normalization
of inventories, even if it requires a larger unilateral cut, consistent with
comments last weekend by the energy minister," Goldman said in a note.
Saudi energy minister Khalid al-Falih on Saturday said his country was
prepared to slash production below 10 million b/d, after having previously
agreed to cut down to 10.058 million b/d.
Saudi Arabia expects to earn 46% more from oil revenues in 2017
compared to this year, with expectations of rising global demand
combining with the OPEC-led global production cut to push prices higher.
In its annual budget unveiled Thursday, the kingdom said its oil revenues
were projected to hit Riyals 480 billion ($128 billion) next year, up
from Riyals 328 billion ($88 billion).
The budget did not reveal any details about Saudi Arabia's oil production
plans or targets, nor does it say what price it expects to receive for
its oil, though it cited the International Monetary Fund's estimate of
2017 oil prices at $50.60/b. Oil prices in 2016 averaged $43/b, the
budget document said.
Overall revenues for 2017, including non-oil revenues, are expected to
rise 31% from 2016 levels to Riyals 692 billion.
With the budget laying out an expenditure plan for Riyals 890 billion
($237 billion), an 8% increase over this year, this means the kingdom
will be facing a deficit of 198 billion riyals ($53 billion), down 33%
from this year, as Saudi Arabia has had to tap into its reserves to
withstand the low oil price environment of the last two years.
"The 2017 budget was prepared in light of developments in the local and
global economy, including the estimated price of oil," the budget
document states, attributing the increases in projected revenues and
expenditures to energy pricing reforms.
"As the kingdom's economy is strongly connected to oil, the decrease in
oil prices over the past two years has led to a significant deficit in
the government's budget and has impacted the kingdom's credit rating."
Total national debt for 2016 was about Riyals 316.5 billion ($84
billion), or 12.3% of projected GDP.
And while the Saudis believe the country's budget deficit will fall modestly next year
even with an increase in spending
, it is still set to be a painful 8% of GDP
suggesting the Saudi cash burn will continue even with some generous oil price
assumptions
.
The budget deficit for 2017 is expected decline 33% to 198
billion riyals ($237 billion), or 7.7% of GDP, from 297 billion riyals or 11.5% of GDP
in 2016 year and 362 billion riyals in 2015, the Finance Ministry said in a
statement
on its website
on Thursday. In 2016, the finance ministry said its spending of 825
billion riyals ($220 billion) was under the budgeted 840 billion, and the 2016 budget
deficit came to 297 billion, below the 362 billion in 2015.
The Oil Mystery Behind Saudi Arabia's Production Cut
By
Nick Cunningham
- Dec 15, 2016, 4:56 PM CST
Saudi Arabia surprised the world by helping to engineer an unexpectedly
strong agreement from OPEC members to cut production by 1.2 million
barrels per day, followed by
additional cuts from non-OPEC members. While the two agreements
incorporate cuts from a wide range of oil producers, Saudi Arabia will do
much of the heavy lifting, cutting nearly 500,000 barrels per day and
even promising to go further than that should the markets warrant steeper
reductions.
Depending on one's perspective, Saudi Arabia demonstrated
its diplomatic prowess and made OPEC relevant again, succeeding in
talking up oil prices without sacrificing much. After all, Saudi Arabia
often lowers production in winter months. Other analysts look at it a
different way – Riyadh was actually pretty desperate for higher oil
prices, given the toll that the two-year bust has taken on the country's
economy. That led Saudi Arabia to shoulder most of the burden of
adjustment, achieving only small concessions from other OPEC members,
most notably Iran. Riyadh was the big loser of the deal, the thinking
goes, but ultimately had no choice as the government needed higher oil
prices.
There are arguments to made for both sides, but then there is a third
possibility: Saudi Arabia was motivated to pullback because it was
actually leaning on its oilfields too hard this year when it pushed
output up to 10.7 million barrels per day, an output level that might
have strained the reservoirs of some of its largest fields. Producing too
aggressively can ultimately damage the long-term recovery of oil
reserves. Reuters reports in an
exclusive report that Saudi Aramco could have been pushing its oil
fields to the limit this year, and had little choice to but to climb down
from record high output levels.
"... Saudi Arabia could produce more but it would likely come at the expense of optimal reservoir practices. They could certainly bring on new fields but this is a lengthy process (years) and expensive as well ..."
"... So far the kingdom is not adding any significant new producing capacity based on project announcements and rig activity but rather replacing the aforementioned 4 to 6 percent annual decline rate. ..."
"... As the chart below shows, in the past 2 years Saudi Arabia increased oil production by about 1 mb/d. The country was the main contributor to the current oil glut over that period. Now the Saudis pledge to remove from the market about half of this incremental supply. ..."
Article in Reuters explaining Saudi Arabia's shift from output maximization / market share defending
to price support policy.
There are also estimates of Saudi oil production capacity.
Cost of pump-at-will oil policy spurred Saudi OPEC U-turn
Saudi Arabia has long said it could produce as much as 12 million barrels per day (bpd) of
oil if needed, but that pump-at-will claim – which would require huge capital spending to access
spare capacity – has never been tested.
Sources say the kingdom may have stretched its current limits by extracting a record of around
10.7 million bpd this year, which could be one reason why Riyadh pushed so hard for a global deal
to cut production.
..
With tight resources, Saudi Arabia found itself weighing the prospect of investing billions of
dollars to raise oil output further if it wanted to gain more market share under a strategy adopted
in 2014.
Instead, cutting production amid a global glut and low prices to take the pressure off its oilfields,
secure better reservoir management and save itself unnecessary expenses, seemed the perfect deal.
"You invest in raising your production when prices are high, not when they are low," a Saudi-based
industry source said.
"Choices are tougher now. The question is, would the Saudi government with its tight budget put
huge investment in raising production or put it somewhere else where it's needed more?"
Under the deal, Saudi Arabia, de facto leader of the Organization of the Petroleum Exporting Countries,
will from January cut output to around 10 million bpd – well below the 12 million bpd that the
state has affirmed it can produce.
Saudi-based industry sources and market insiders say the kingdom cannot sustain historically high
output for long. State oil giant Saudi Aramco has never tested 12 million bpd and would find it
hard to keep the needed investments flowing with current low oil prices, they said.
Aramco, responding to a Reuters request for comment, said only that the company does not comment
on current production levels.
One source familiar with Aramco production management said the firm's capacity stood at 11.4 million
bpd and it was still working to boost that figure to 12 million by 2018.
"Twelve million bpd has been planned since 2008-2010 and every annual budget worked towards that
goal," the source told Reuters on condition of anonymity.
To achieve that goal, the company has annual operating expenses (opex) of $20 billion and capital
expenditure (capex) at around $40 billion, the source said.
"When the 12 million bpd plan is achieved
by 2018, the overall capex will fall to $20 billion," he added.
Aramco does not disclose its opex or capex figures.
SHIFT IN THINKING
In a note to clients in May, U.S. consultancy PIRA estimated Saudi Arabia's instantly available
capacity at that time at 10.5 million bpd, after tracing expansion plans since 2008 and calculating
an annual decline rate of 4 percent.
"Saudi Arabia could produce more but it would likely come at the expense of optimal reservoir
practices. They could certainly bring on new fields but this is a lengthy process (years) and
expensive as well," PIRA wrote.
"So far the kingdom is not adding any significant new producing capacity based on project announcements
and rig activity but rather replacing the aforementioned 4 to 6 percent annual decline rate."
Saudi oil officials have said they can produce up to 12 million or even 12.5 million bpd if needed,
particularly in the event of a sudden, global supply disruption.
Some say it is not a question of whether Saudi can do it, it is a matter of how soon.
Former oil minister Ali al-Naimi had said that to reach 12 million, Saudi Aramco would need 90
days to move rigs from exploration work to drill new wells and raise production.
Saudi Arabia has been working for most of this year towards boosting prices, rather than leaving
that job to market forces, a shift from the strategy it had championed since November 2014.
The pain of cheap oil was enough to bring other producers to the negotiating table, but industry
sources said the kingdom was also keen to seal a deal as it plans to offload a stake in Aramco
by 2018.
-----------------
My comment:
According to OPEC agreement, the Saudis pledged to cut supply by 486 kb/d from a reference
production level of 10,544 kb/d to 10,058 kb/d. According to Saudi official sources (shown as
"direct communication' in OPEC's monthly report), the country's crude output reached record level
of 10,720 kb/d in November. According to the IEA's estimate and Reuters survey, Saudi output was
also higher in November vs. October. By contrast, estimates from "secondary sources" (also shown
in OPEC's MOMR), indicate a slight decline to 10,512 kb/d.
In any case, important to note that in 2016, unlike the previous years, KSA's output has stayed
at elevated levels in 4Q despite the usual seasonal decline in winter when domestic consumption
of crude burning for power is less. Saudi crude exports have also been high in recent months.
Earlier this month, KSA cut January oil price to Asia to four-month low to keep market share.
It seems that the Saudis are trying to sell as much crude as they can before the planned cuts.
Meanwhile, Saudi Arabia has informed its clients in North America and Europe that their crude
oil deliveries in January will be lower, to reflect the country's compliance with the production
cut agreed by OPEC members.
As the chart below shows, in the past 2 years Saudi Arabia increased oil production by about
1 mb/d. The country was the main contributor to the current oil glut over that period. Now the
Saudis pledge to remove from the market about half of this incremental supply.
Saudi Arabia oil output and agreed production quota (mb/d)
source: OPEC Monthly Oil Market Report, December 2016
John Jenkins conveniently forgot export of Islamic extremists from Saudi
Arabia during Soviet occupation of Afghanistan and the USA and GB role in creation
of political Islam. I can't see any neo-Westphalian pragmatism of the Saudi state
in its actions in Syria and support of Turkey slide into islamization. But his point
that Iran does not represent a secular state either is well taken. It's just Shias
fundamentalism instead of Sunni fundamentalism.
Notable quotes:
"... There is no clear link between economic deprivation and radicalization. But the former doesn't help if it leads to idle hands and claims of social injustice. ..."
"... Sheikh Nimr advocated the destruction of the rulers of Saudi Arabia and Bahrain and the secession of the Eastern Province. His version of a righteous Islamic state is not a thousand miles from that of Abu Bakr al-Baghdadi (and a long way from the non-takfiri, non-caliphal, neo-Westphalian pragmatism of the Saudi state). He called for wilayat al-faqih, the heterodox Guardianship of the Jurisprudent espoused by Khomeini. ..."
"... The vengeful early years of the Islamic Republic, when clerics who previously would not have hurt a fly enthusiastically participated in the judicial murder of thousands in the name of righteousness, show some of the consequences. So does the arrest and humiliating mistreatment in 1982 of the venerable Ayatollah Shariatmadari, who stood up to Khomeini and dared to object to the implementation of any Islamic hudud punishments in the absence of the Hidden Imam. So does the continued rate of executions in Iran (nearly 700 by July last year, according to Amnesty International) and the Islamic Republic's own treatment of dissidents – and, indeed, of the ordinary protesters of 1999, 2009 and 2011. ..."
"... To Iran it was: Saudi citizens owe loyalty in tribal fashion to their king, not to foreign religious leaders or to some ideal of transnational Islamism, and we shall not tolerate interference. To the rest of the world it was: we shall not bend in the face of the storms raging round the region, if necessary alone. ..."
Now the Saudis face a period of sustained low energy prices at a time when
the costs of a newly interventionist and expeditionary foreign policy are rising
dramatically and when the need to restructure the economy to create perhaps
an extra four million new jobs by 2020 has become urgent. At the same time they
know that a small but significant section of the Sunni population of the kingdom
is vulnerable to the dark seductions of Islamic State, because they regard it
as more legitimately Islamic, or as the only organized Sunni group pushing back
against Iran, the Shia, or both. There is no clear link between economic
deprivation and radicalization. But the former doesn't help if it leads to idle
hands and claims of social injustice.
To cap it all, the Iranian nuclear deal angered the Saudis not because it
was a nuclear deal but because it was simply a nuclear deal, failing in their
view to address malign and subversive non-nuclear Iranian activities in Bahrain,
Iraq, Syria, Lebanon and Yemen, and rewarding Iran prematurely. They have felt
very abandoned by the US and other Western states. And they believe the apparent
pragmatism of the Rowhani government is a façade, offering privileged access
in return for the suspension of any critical faculty. That makes the issue of
the Vienna peace talks on Syria secondary. There will certainly be an impact.
Yet it is not as if the Saudis had disguised their deep scepticism. They had
been pressured to sit with the Iranians, but they had also insisted on continuing
to support opposition forces in the field and have not wavered in their insistence
that Assad needs to go.
You might think this is all special pleading. But before you say that the
matter is a straightforward one of a benighted justice system administering
medieval punishments to dissidents, reflect on this. Sheikh Nimr advocated
the destruction of the rulers of Saudi Arabia and Bahrain and the secession
of the Eastern Province. His version of a righteous Islamic state is not a thousand
miles from that of Abu Bakr al-Baghdadi (and a long way from the non-takfiri,
non-caliphal, neo-Westphalian pragmatism of the Saudi state). He called for
wilayat al-faqih, the heterodox Guardianship of the Jurisprudent espoused by
Khomeini.
The vengeful early years of the Islamic Republic, when clerics who previously
would not have hurt a fly enthusiastically participated in the judicial murder
of thousands in the name of righteousness, show some of the consequences. So
does the arrest and humiliating mistreatment in 1982 of the venerable Ayatollah
Shariatmadari, who stood up to Khomeini and dared to object to the implementation
of any Islamic hudud punishments in the absence of the Hidden Imam. So does
the continued rate of executions in Iran (nearly 700 by July last year, according
to Amnesty International) and the Islamic Republic's own treatment of dissidents
– and, indeed, of the ordinary protesters of 1999, 2009 and 2011.
The signals the Saudi state sought to send by executing 43 Saudi Sunnis convicted
of terrorism at the same time as Sheikh Nimr and his three fellow Shias reflected
all of this.
To their own citizens the message was: we shall enforce the judgment
of the courts on all those who seek to undermine the stability of the kingdom
and the legitimacy of its government, irrespective of sect, and on your
behalf we shall resist Iranian expansionism and Islamic State predation
with equal vigour.
To Iran it was: Saudi citizens owe loyalty in tribal fashion to
their king, not to foreign religious leaders or to some ideal of transnational
Islamism, and we shall not tolerate interference. To the rest of the world
it was: we shall not bend in the face of the storms raging round the region,
if necessary alone.
John Jenkins is a former British ambassador to Saudi Arabia, Libya, Iraq,
Syria and Burma. He is now executive director (Middle East) of the International
Institute for Strategic Studies, and is based in Bahrain
The Kingdom of Saudi Arabia (KSA) is expected to increase their defense spending from $48 billion
last year to $52 billion by 2019, IHS Janes Defense analysts reported
"... its current Islamist King, Salman, has been more mired in political and economic turmoil than at any time in the desert kingdom's history. Domestically, the country is suffering from royal discord and economic hardships, due to the drastic decline in oil prices, which constitute more than 90% of the state's revenues. Regionally, Saudi Arabia is stuck in a consuming and costly war in Yemen, the continued occupation of Bahrain and dangerous events which the Saudis cannot control or stop, such as the recent superpowers' rapprochement with Iran, the destabilizing conflicts in Iraq and Syria and the loss of like-minded dictatorial allies in other Arab and Muslim countries. ..."
"... The West recognized that the fast and widely- spreading extremism and terrorism are inspired by the globally detested Saudi/ Wahhabi Sunni doctrine; therefore, continuing to rely on and to protect the Saudi rulers unconditionally are no longer in the best interest of Western societies. ..."
"... In reality, the West is playing Iran off against Saudi Arabia to protect Western interests. ..."
E Tavares: Dr. Alyami, thank you for your being with us today.
Last October we spoke about the socio-political situation in the Kingdom of Saudi Arabia ("KSA"),
a hugely important country, and implications for the wider region. It seems very little has changed
as far as policies and governance are concerned, other than perhaps the current rulers becoming more
entrenched in power. Do you agree?
AA: Thank you for this opportunity and more so for your patriotism and understanding of the unprecedented
Islamist ideological threats facing us and the international community, including the majority of
Muslims. This is a fact that cannot be denied, ignored or belittled as the action of a few perverted
groups.
Since our interview, Saudi Arabia under its current
Islamist King, Salman, has been more mired in political and economic turmoil than at any time
in the desert kingdom's history. Domestically, the country is suffering from royal discord and economic
hardships, due to the drastic decline in oil prices, which constitute more than
90% of the state's revenues. Regionally, Saudi Arabia is stuck in a consuming and costly war
in Yemen, the continued occupation of Bahrain and dangerous events which the Saudis cannot control
or stop, such as the recent superpowers' rapprochement with Iran, the destabilizing conflicts in
Iraq and Syria and the loss of like-minded dictatorial allies in other Arab and Muslim countries.
ET: Indeed, Iran is consolidating its influence across the region, much to the detriment of the
KSA. Their alliance with Russia seems to be paying off in Syria, with the Islamic State ("ISIS")
in retreat, arguably in Iraq as well. The Houthis, their allies in Yemen, are giving the Saudis a
run for their money. The Iranian regime recently got a lot of money back as a result of the nuclear
deal with the US, and quick on the heels of that
it has
been testing ballistic missiles and related defense systems.
AA: As mentioned above, the superpowers' reconciliation with the Persian theocracy in Tehran has
given Iran more leverage regionally and globally, which the Iranians are using to strengthen their
influence in the region, slowly stripping the Saudi oligarchs of their domination over US and western
policies and economic interests in the Middle East. Notably, Western interest in reaching a nuclear
deal with Iran is not limited to concerns about nuclear weapons.
The West recognized that the fast and widely- spreading extremism and terrorism are inspired by
the globally detested Saudi/ Wahhabi Sunni doctrine; therefore, continuing to rely on and to protect
the Saudi rulers unconditionally are no longer in the best interest of Western societies. Furthermore,
the US and its Western allies may have concluded that it's only a matter of time before the Saudi
autocratic ruling family faces the same fate as its counterparts in other Arab countries. This does
not mean that the West is bolstering the Persian theocrats in Tehran to become the guardians of the
Gulf's economic and strategic resources. In reality, the West is playing Iran off against Saudi Arabia
to protect Western interests.
ET: However, that alliance of Iran and Russia is gaining prominence and effectively undermining
US interests in the region. The latest "casualty" appears to be the once close relationship between
the US and Turkey, with President Erdogan publicly courting Russia – quite an achievement after the
two countries almost came to blows last year because of the downing of a Russian jet. In your opinion,
is the US making the right moves in the region and how is this being perceived within the KSA?
AA: The recent rift between the US and Turkey is not the result of changes in US policy toward
Turkey as much as it is due to the unpredictability and sudden turns by President Erdogan, who has
been veering Turkey toward Islamist authoritarianism since his party acquired power in 2002. It's
worth mentioning here that the US/Turkey relationship began to erode more rapidly after King Abdullah
of Saudi Arabia visited Turkey in 2006 and committed to investing
$400 billion in the Turkish economy, a commitment that was finalized in 2010. President Erdogan's
recent visit to Russia to cultivate the goodwill of like-minded President Putin has very little to
do with US policy moves and more to do with Erdogan's unpredictability and blackmailing habits, especially
since the failed military coup against him and his unsuccessful demands that the US extradite the
Turkish cleric who Erdogan blames for the coup.
In my opinion, continuing to support absolute dictators whose policies are posing imminent threats
to our democracy and national security is neither feasible nor prudent, especially when the future
of the Middle East is being determined by its diverse peoples. Our government's "hands off" policy
in the region is based on two factors: one, very little can be done by outside military interventions
and two, the American people will not tolerate sending hundreds of thousands of young men and women
into an unwinnable war in a region most Americans loathe. The Saudi regime views the lack of deep
US involvement in the Middle East as a betrayal of an historical relationship, especially the protection
of the ruling family from external and internal threats.
ET: We often talk about the UK having a "special relationship" with the US. But some commentators
argue that the world's only special relationship today is the one between the KSA and the US. For
one, Obama would never dare to propose a domestic course of action (with an "or else" attached to
it) in Saudi soil like he did in the UK regarding the BREXIT vote. In light of what you detailed
above, what is the status of that relationship today and how critical is the forthcoming US election
in that regard? It appears that the two main candidates have very different views on how that relationship
should look like.
AA: I am not so sure that US/Saudi relations are that special. For one, it's based on a tit for
tat arrangement, US access to oil in return for defending an absolute and reactionary system whose
values are totally antithetical to everything America was founded on and stands for. The US/UK relationship
is based on strategic, cultural, religious, ethnic, transparency and above all, democratic values,
rule of law and freedom of all forms of expression. Due to this fact, US presidents can express their
views publicly without fear of inciting British citizens to overthrow their government by force.
I know for a fact that our presidents demand actions by the Saudis in private in order not to give
the impression that the US is abandoning its commitment to protect the Saudi regime, especially from
its oppressed population.
US/Saudi relations have been deteriorating since the September 2001 terrorist attacks on the US
by mostly Saudi nationals on the watch of President George Bush, who responded forcefully both politically
and militarily. However, Bush's rhetoric and actions wound down during his second term. President
Obama's first term started with an apologetic and appeasing (humiliating, even) approach to the Saudis
and the Muslim World in general. Conversely, Obama's second term can be characterized as the period
in US/Saudi relations when the US has the upper hand economically, politically and strategically.
Empowered by a recovering economy, falling oil prices (thanks to fracking) and shifting alliances,
while the Saudis are weakened by domestic, regional and global events, Obama used America's strengthened
position to put the Saudis in their place.
Given the current state of affairs in the Middle East, continued Saudi support for extremism and
terrorism and increasing Islamic terror attacks on Europe and the US, US/Saudi relations will continue
to deteriorate or remain in flux, regardless who wins the US Presidency in November 2016.
ET: As ISIS retreats in Syria and Iraq it is spreading into Afghanistan and many African countries,
as well as increasingly resorting to terrorism across much of the West. There have been persistent
rumors of Saudi and Turkish support to ISIS,
a fact that has been confirmed
by US Vice President Biden . Moreover, Christian and Yazidi women who were fortunate enough to
escape their enslavement at the hands of ISIS
reported being brutalized by Saudis . So the ties are there and at various levels. However, ISIS
is now behind terrorist attacks in both those countries. Is this another example of "
blowback
"?
AA: It's no secret that ISIS is inspired by and based on the Saudi/Wahhabi doctrine and practices
employed by the Saudi/Wahhabi allies, especially in the 18th to the 20th centuries. ISIS's objective
is identical to that held by most Muslims, including former Saudi King Abdullah:
spread Islam and the Shariah worldwide. Although the Saudis and the Turks have supported and
used ISIS, especially in Syria and Iraq, ISIS is turning against the governments of Saudi Arabia
and Turkey for two reasons: one, ISIS felt betrayed by the Saudis and Turks, whom ISIS considers
proxies for the West, which is waging a war against the Caliphate State; and two, ISIS's immediate
goal is to establish a Caliphate that includes all Muslims, headquartered in Islam's holiest site
of Mecca, Saudi Arabia.
Those familiar with the perfidious practices and mindset of Arab and Muslim despots understand
that by supporting ISIS, the Saudis and Turks expect the terrorist group to turn against them. This
is a tactic these regimes use to empower themselves, suppress their populations and convince the
West that they are likewise victims of terrorism when, in fact, they continue to support and use
extremists and terrorists against each other and to extract concessions from the international community.
ET: What's happening around the KSA provides some context for what is happening internally. As
far as human rights are concerned, it appears that things are getting worse, as recently evidenced
by a courageous – and shocking –
documentary by ITV in the UK
. What do you make of this?
AA: After King Salman inherited the Saudi Crown in January 2015, my organization, the Center for
Democracy and Human Rights in Saudi Arabia, wrote an analysis predicting human rights would suffer
under the new King reign. Of all his predecessors (6 Saudi kings), Salman is notorious for his
support of extremists in and outside the country and for his belief that the extremist Wahhabi
interpretation of Islam and its arbitrary Shariah law is the
true Islam . He considers the country his family's private property and opposes any political
reforms including his predecessor's cosmetic gestures. Given these documented facts, it's not surprising
that King Salman
purged the government of all less rigid members of his family and replace them with his like-minded
sons and nephews. Given the Saudi's economic hardships and the costly war engagement in Yemen, deteriorating
situation in Syria, Iraq, continued occupation of Bahrain, frequent terrorist attacks in different
parts of the country, human rights abuses in Saudi Arabia are likely to worsen.
ET: Another surprising fact is the abject poverty that many Saudis are living under. How is this
possible given all the petrodollars floating around the country?
AA: All state revenues are controlled and treated as property of the royal family. Only the king
and a few high-ranking royals have direct access to the state's income. Since there is no accountability,
transparency or public scrutiny, this small clique of royals decides on the distribution of funds.
The top spending priorities are internal security, namely the safety of the ruling family, stipends
for the thousands of members of the extended royal family, the armed forces and maintaining the institutions
of the religious establishment (universities, mosques, religious police and thousands of clerics.)
Given this arrangement, little of the national revenues is spent on citizens.
It's estimated that between 30-40% of Saudis live at or below the UN designated poverty level.
This is due to high unemployment, where it is estimated that between 70-80% of Saudi women and about
20-30% of Saudi men are unemployed. Given these numbers, it's culturally customary that those who
work support those who don't.
ET: There are over
9 million immigrants living in the KSA , representing more than a third of the population. Those
are not small figures. Yet many complain of abuse and violation of human rights. Why is this so?
AA: It's ironic that millions of Saudi men and women are unemployed, yet the public and private
sectors import millions of expatriates to do jobs that the Saudi people need and could do if women
were allowed to work and if the Saudis were paid decent salaries to feed their families. By importing
poverty stricken laborers who are willing to live in appalling conditions, accept subsistence wages
and have no benefits or rights under the Saudi judicial system, the Saudi employers make huge profits.
The
maltreatment of migrant workers by their Saudi employers has been compared to modern slavery
by Amnesty International, Human Rights Watch and many governments' agencies, including our Department
of State, have decried abuses of migrant workers in Saudi Arabia.
ET: Last time we spoke you mentioned that Saudi women are the most marginalized people on the
planet. The KSA has contributed between
$10-25m to the Clinton Foundation , possibly more. While we may never find out how much of that
can actually influence US politics, as suggested by
emails recently disclosed , if Hillary Clinton is elected US President can she do anything to
truly help Saudi women as a result? There could be a conflict there, it seems (not that the men who
preceded her have done much about it anyway).
AA: Despite her pronouncement that "women's rights are human rights," it's unlikely that
Saudi women will fare any better under Hillary Clinton if she were elected President of the United
States. Given the Saudis' generous gifts of
$41 million to the Clinton Foundation and millions to various universities, including the
University of Arkansas when Bill Clinton was President, Hillary Clinton is unlikely to deviate
from the Saudi appeasing policies she pursued as a Secretary of State.
Although promoting Saudi women's rights is unlikely to occur under a President Hillary Clinton,
empowering Saudi women not only promotes human rights, but would represent a major victory over extremism
and terrorism. Even under their current oppressive and inhumane conditions, Saudi women are intensely
engaged in fighting the zealot Saudi religious establishment. Empowering and liberating Saudi women
from the constricting chains of religio-male guardian systems would resonate throughout the Muslim
world, given Saudi Arabia's status as the birthplace of Islam and home to its holy shrines toward
which 1.5 billion Muslims pray 5 times a day.
Paul Kersey
SmedleyButlersGhost
Aug 27, 2016 7:22 PM Just wait until all those Saudi Salafis get control of tens of millions
of dollars worth of weapons the US war profiteering contractors sold the Saudi Royals.
"Salafis are fundamentalists who believe in a return to the original ways of Islam. The word 'Salafi'
comes from the Arabic phrase, 'as-salaf as-saliheen', which refers to the first three generations
of Muslims (starting with the Companions of the Prophet), otherwise known as the Pious Predecessors."
The Salafis are not our good friends.
Mustafa Kemal
Aug 27, 2016 8:00 PM There was no discussion of the fall of SA, especially its main bank, and
the petrodollar in relation to the improving relations between Russian, China and Iran, along with
their gold purchasing and de-petrodollarization.
Its a bit of a double bind I think. dogismycopilot
Aug 27, 2016 9:14 PM When ISIS took over Mosul, the place was full of White Toyotas with Saudi
License plates. Saudi is the mother ship. It must be destroyed.
"... Actually the opposite is true, they carefully manage water injection so as not to bypass any oil and, for example, in the past would rest Al Abqaiq field without production to allow the water contact to level out (that field might now be close to exhaustion). They have the best reservoir models in the world and will drill wells just to allow monitoring of the reservoir if needed. ..."
I have no idea what you are talking about. I don't remember any such discussion and I have followed
KSA production since about 2001. KSA has used water injection for way over half a century. That
is the only way they can keep the pressure up. It does not damage their fields other than normal
depletion.
From the wiki page on Saudi oil reserves- "Simmons also argued that the Saudis may have irretrievably
damaged their large oil fields by over-pumping salt water into the fields in an effort to maintain
the fields' pressure and boost short-term oil extraction". It was a theory that I saw regurgitated
when KSA was threatening to pump xx millions last year. Thought I saw it here; apologies if not.
Actually the opposite is true, they carefully manage water injection so as not to bypass any oil
and, for example, in the past would rest Al Abqaiq field without production to allow the water
contact to level out (that field might now be close to exhaustion). They have the best reservoir
models in the world and will drill wells just to allow monitoring of the reservoir if needed.
We usually inject salt water. I assume water being injected in Saudi Fields is mostly sea water.
As long as the waters are compatible and the water is oxygen and bacteria free then there's no
problem on the "chemistry" side.
Not knowing the detailed well layout and rock description it's hard for me to speculate with
authority. The key in these fields is to pump water to sustain reservoir pressure slightly above
the bubble point. Thus it's possible that an operator could inject too much, in the sense that
pressure would be kept a bit too high. This in turn reduces recovery factor a small amount.
By the way, I've seen countries where regulations don't allow fine tuning pressure, and we
are forced to operate at a pressure higher than optimum. The guys who wrote those regulations
simply didn't understand the way Mother Nature works.
"... Saudi Arabia is curtailing renewable-power targets as the world's biggest oil exporter plans to use more natural gas, backing away from goals set when crude prices were about triple their current level, according to Energy Minister Khalid Al-Falih. ..."
"... "Our energy mix has shifted more toward gas, so the need for high targets from renewable sources isn't there any more," Al-Falih said. "The previous target of 50 percent from renewable sources was an initial target and it was built on high oil prices" near $150 a barrel, he said. ..."
"... Saudi Arabian Oil Co., the state-run producer, set up several ventures with international partners to explore for gas, but results were disappointing and most of the companies withdrew from their ventures. Production of dry gas, or fuel for use in power plants or factories, will rise to 17.8 billion cubic feet per day from 12 billion, according to the plan. ..."
"... "Gas currently makes up around 50 percent of the energy mix in Saudi Arabia, and we have an ambition to see this grow to 70 percent in the future, either from local sources or from abroad," Al-Falih said. ..."
"... The Persian Gulf nation has previously scaled back its ambitions for renewables. In January 2015, it delayed by nearly a decade the deadline for meeting its solar-capacity goal, saying it needed more time to assess technologies. The kingdom's earlier solar program forecast more than $100 billion of investment in projects aimed at generating 41 gigawatts of power by 2040. ..."
Kingdom cuts renewables target to 10% of energy mix from 50%
Gas and renewables to free up more Saudi crude for export
Saudi Arabia is curtailing renewable-power targets as the world's biggest oil exporter
plans to use more natural gas, backing away from goals set when crude prices were about triple
their current level, according to Energy Minister Khalid Al-Falih.
The kingdom aims to have power generation from renewable resources like the sun make up 10
percent of the energy mix, a reduction from an earlier target of 50 percent.
"Our energy mix has shifted more toward gas, so the need for high targets from renewable
sources isn't there any more," Al-Falih said. "The previous target of 50 percent from renewable
sources was an initial target and it was built on high oil prices" near $150 a barrel, he said.
Saudi Arabia, which holds the world's second-largest crude reserves, will double natural gas
production, according to Al-Falih, and the government will expand the distribution network to
the western part of the nation. Generating more power from gas and renewables should make more
crude available for export, which would otherwise be burned for electricity for domestic use.
Saudi Arabia has for years sought to develop gas resources to provide fuel for power plants
and industries and to free up more oil to sell overseas. Saudi Arabian Oil Co., the state-run
producer, set up several ventures with international partners to explore for gas, but results
were disappointing and most of the companies withdrew from their ventures. Production of dry gas,
or fuel for use in power plants or factories, will rise to 17.8 billion cubic feet per day from
12 billion, according to the plan.
"Gas currently makes up around 50 percent of the energy mix in Saudi Arabia, and we have
an ambition to see this grow to 70 percent in the future, either from local sources or from abroad,"
Al-Falih said.
Achieving the targets will be a challenge, said Robin Mills, chief executive officer at consultant
Qamar Energy in Dubai. Gas projects usually require a lead time of at least three to four years
before production begins, said Mills, a fellow at the Brookings Institution in Doha.
Saudi Arabia is seeking to increase renewable-energy production to 9.5 gigawatts, according
to a plan announced in April. Saudi Aramco has a 10-megawatt solar installation on the roof of
a parking lot at its headquarters in Dhahran.
The Persian Gulf nation has previously scaled back its ambitions for renewables. In January
2015, it delayed by nearly a decade the deadline for meeting its solar-capacity goal, saying it
needed more time to assess technologies. The kingdom's earlier solar program forecast more than
$100 billion of investment in projects aimed at generating 41 gigawatts of power by 2040.
"... In July 2014 Saudi Arabia used 900,000 bpd of oil JUST for electricity, which was 63% higher than the previous year. In a weird twist a 2006 Royal Decree forced electricity generation from natural gas to oil. In 2007 nat gas accounted for 52% of electricity production, in 2012 it was down to 39% – all the rest is crude oil, fuel oil, and diesel. This change was the opposite of what I expected, and is a baffling policy decision… but it is Saudi Arabia, so maybe I shouldn't be surprised. ..."
"... Saudi uses a lot more oil to generate electricity than they used to because they simply do not have enough natural gas to run their power plants and desal plants on gas alone. When I was there in the early 80s natural gas was used almost exclusively to produce electricity and water. ..."
"... Rising Saudi electricity consumption and direct oil burn at power plants is mainly due to air conditioning during the Summer season ..."
I was curious how Ramadan impacts oil production and demand in the Middle East, so I did some
loose research. As everyone here probably knows the Islamic calendar is based on the 29.5 day
Lunar Cycle, so Ramadan is a few weeks "earlier" every year.
According to several articles I read electricity demand jumps by 50-60% during Ramadan especially
when it occurs during the summer. A combination of higher A/C demand as people rest inside during
the day-time fast and the lighting demand from nightly fast-breaking festivities drives this surge.
However Saudi Arabia is the only country that uses meaningful amounts of oil to produce electricity,
so we can just focus on Saudi Arabia.
In July 2014 Saudi Arabia used 900,000 bpd of oil JUST for electricity, which was 63% higher
than the previous year. In a weird twist a 2006 Royal Decree forced electricity generation from
natural gas to oil. In 2007 nat gas accounted for 52% of electricity production, in 2012 it was
down to 39% – all the rest is crude oil, fuel oil, and diesel. This change was the opposite of
what I expected, and is a baffling policy decision… but it is Saudi Arabia, so maybe I shouldn't
be surprised.
Saudi oil demand always spikes during the summer months, and Ramadan will combine with that
to cause a huge spike in domestic oil demand for June.
I tried digging into how Ramadan may impact drilling projects, but could not find much on Saudi
Arabia except an article that mentions the 2012 Saudi Aramco hack was made worse because most
Saudi Aramco employees were on holiday for Ramadan. Various other Muslim nations reduce work hours
for both Muslims and non-Muslims, and Algeria completely stops drilling during Ramadan. Long story
short, I could not find anything too conclusive.
It would be difficult to tell if Ramadan has an impact on oil production in Muslim countries
since it would be a delayed effect that doesn't sit squarely in a single month, and is drowned
out by other political, seasonal, and economic changes. I'm still very curious if there is a relationship
though.
Ramadan moves forward an average of 11.6 days per year. Nothing much changes during Ramadan except
Muslim workers don't work as hard or as long. But non-Muslim workers carry on as if nothing has
happened. Well except that they, during daylight hours, cannot eat, drink or smoke in the presence
of a Muslim.
Ramadan has little or no effect on the vacation of non-Muslim workers.
Saudi uses a lot more oil to generate electricity than they used to because they simply do
not have enough natural gas to run their power plants and desal plants on gas alone. When I was
there in the early 80s natural gas was used almost exclusively to produce electricity and water.
Their largest desal plants are evaporative plants though they do have a lot of reverse osmosis
desal plants that serve smaller areas.
The Saudi's new energy minister, Khalid Al-Falih, told reporters in Vienna that the Kingdom currently
can produce 12.5 million barrels of crude per day, but plans to keep some of this in reserve despite
the privatization of a small part of the company by 2018. He also told the reporters that the Saudis
will no longer be the world's "swing producer" and will no longer control prices by raising and lowering
production through OPEC quotas.
The Saudis are preparing to borrow some $15 billion by July to cover state budget deficits that
reached 15 percent last year. The government's new "National Transformation Plan" that will be unveiled
shortly envisions cutting subsidies and other measures that will produce $100 billion in non-oil
revenues. The Saudis are even talking about more women joining the work force – an anathema to religious
conservatives.
Saudi Aramco is planning to increase its cross-country pipeline that can now move some 5 million
b/d from the eastern oil fields to the west coast where it is planning to expand its refineries and
petrochemical plants.
The Saudi's deputy crown prince and de facto ruler of Saudi Arabia will be visiting Washington
in mid-June to discuss a number of growing frictions between the two countries.
"... No producer can afford to increase production at $50/B. Operating costs are much different than drilling costs. Most production is on a decline now. There are no capital expenditures to increase production, only to maintain production. The hydraulic fracturing play will be first to resume drilling when prices gradually increase. ..."
"... Iranian production has not increased - they are simply shipping stock tank oil. To increase actual field production at $50 per barrel is not economical. ..."
"... The economics of hydraulic fracturing will control crude pricing into the future. ..."
1) SA grossly misjudged the price reaction in raising production from 10 million to 10.3 million
per day.
2) No producer can afford to increase production at $50/B. Operating costs are much different
than drilling costs. Most production is on a decline now. There are no capital expenditures to
increase production, only to maintain production. The hydraulic fracturing play will be first
to resume drilling when prices gradually increase.
3) Iranian production has not increased - they are simply shipping stock tank oil. To increase
actual field production at $50 per barrel is not economical.
4) The economics of hydraulic fracturing will control crude pricing into the future.
novus_ordo 17 minutes ago
US is concerned, Oil transactions are not being done by an OPEC {Petro-dollars} Member. Russia
will NEVER join OPEC. The US should behave better with China, if the Chinese are pressed, the
possibility of the Chinese calling in the US debt to it, would be devastasting. US cannot pay,
and the Chinese know it. Result for USA would be similar to what happened when Wall St. called
in the Argentine debt in the 70's. Skyrocketing Inflation the main feature.
novus_ordo
Russia and China to release world from dollar peg Russia has outmaneuvered the Saudis in fight
for the Chinese oil market despite Western states' unity in sanctions opposition with Russia and
conspiracy theory on the US oil deal with Saudi Arabia. In April China increased oil import from
Russia 52%, while import from Saudi Arabia dropped 22%.
joe 5 hours ago
No outrage of human rights violations in Saudi Arabia because Congress, Billary Bamboozler and
Puppet President are bought and paid for. Remember when US boycotted South Africa?
Raygun 10 hours ago
Saudi is infested with Wahhabis on jihad and the government of Iran funds Hezbollah an Islamic
terror organization similar to Isis. When the oil runs out maybe this crazy totalitarian ideology
will die out because it's no longer funded.
"... "promoting Wahhabism, the radical form of Sunni Islam that inspired the 9/11 hijackers and that now inflames the Islamic State." ..."
"... "Saudi Arabia has frustrated American policy makers for years," ..."
"... In particular, the august US "newspaper of record", which can be taken as a barometer of official Washington thinking, accused Saudi Arabia and the other Persian Gulf monarchies of turning the Balkan country of Kosovo into a failed state. This was because the Saudis have sponsored "extremist clerics" who are "fostering violent jihad", thereby making it a "fertile ground for recruitment to radical ideology". ..."
"... "free riders" ..."
"... As for claims that the Saudis and other Persian Gulf states are sponsoring Islamic extremism, this conveniently obscures US covert policy since the 1970s and 80s in Afghanistan, when American planners like Zbigniew Brzezinski conceived of al Qaeda terrorist proxies to fight against the Soviet Union. ..."
"... The question is: how much can the strategic alliance between the US and its Saudi partner bear – before a straw breaks the camel's back? ..."
For months now, US-Saudi relations have become increasingly strained. The latest American aggravation
is blaming its Arab ally for turning Kosovo into an "extremist breeding ground". In an
article by the New York Times' editorial board last week, entitled 'The World Reaps What
the Saudis Sow' , the leading US publication castigated the Saudi rulers for "promoting
Wahhabism, the radical form of Sunni Islam that inspired the 9/11 hijackers and that now inflames
the Islamic State."
It was an astounding broadside of condemnation, articulated with palpable contempt towards the
Saudi rulers. "Saudi Arabia has frustrated American policy makers for years," the editorial
bitterly lamented.
In particular, the august US "newspaper of record", which can be taken as a barometer of official
Washington thinking, accused Saudi Arabia and the other Persian Gulf monarchies of turning the Balkan
country of Kosovo into a failed state. This was because the Saudis have sponsored "extremist clerics"
who are "fostering violent jihad", thereby making it a "fertile ground for recruitment to radical
ideology".
That Kosovo has become a hotbed of Islamic radicalism and a source of young militants going to
Syria and Iraq to join the ranks of the Islamic State and other terrorist groups is not in dispute.
Nor is it in dispute that the Saudis and other Gulf Arab states have pumped millions of dollars
into the Balkan territory to promote their version of Islamic fundamentalism – Wahhabism – which
is correlated with extremist groups.
... ... ...
US President Barack Obama riled the already-irked Saudi rulers when he referred to them as
"free riders" in a high-profile
interview published in April, suggesting that the oil-rich kingdom was overly reliant on American
military power. In the same interview, Obama also blamed Saudi Arabia for destabilizing Iraq, Syria
and Yemen.
The Saudis reacted furiously to Obama's claims. The White House then tried to back-pedal on the
president's criticisms, but it was noticeable that when Obama flew to Saudi Arabia for a summit with
Persian Gulf leaders later that month, he
received a chilly reception.
Since then, relations have only become even more frigid. The passage of a bill through Congress
which would permit American citizens to sue the Saudi state over alleged terrorism damages from the
9/11 events has provoked the Saudi rulers to warn that they will retaliate by selling off US Treasury
holdings.
Then there are strident calls by US politicians and media pundits for the declassification of
28 pages in a 2002 congressional report into 9/11, which reputedly indicate Saudi state involvement
in financially supporting the alleged hijackers of the civilian airliners that crashed into public
buildings in September 2001.
President Obama has said that he will veto the controversial legislation and publication of classified
information. Nevertheless, the Saudi rulers are incensed by the moves, which they see as treacherous
backstabbing by their American ally. An alliance that stretches back seven decades, stemming from
FDR and the first Saudi king Ibn Saud.
As American writer Paul Craig Roberts has
pointed out,
the latest twists in the 9/11 controversy appear to be efforts by the US "deep state" to
make the Saudis a convenient fall guy.
The same goes for Obama accusing Saudi Arabia for destabilizing Iraq, Syria and Yemen. Yes, sure,
the Saudis are involved in fomenting violence and sectarianism in these countries and elsewhere.
But, again, the bigger culprit is Washington for authoring the overarching agenda of regime change
in the Middle East.
As for claims that the Saudis and other Persian Gulf states are sponsoring Islamic extremism,
this conveniently obscures US covert policy since the 1970s and 80s in Afghanistan, when American
planners like Zbigniew Brzezinski conceived of al Qaeda terrorist proxies to fight against the Soviet
Union.
Blaming the Saudis over the failed state of Kosovo is but the latest in a long list of scapegoating
by Washington. No wonder the Saudis are livid at this American maneuver to dish the dirt. Washington
is setting the Saudi rulers up to take the rap for a myriad of evils that arguably it has much more
responsibility for.
The question is: how much can the strategic alliance between the US and its Saudi partner
bear – before a straw breaks the camel's back?
"... Timchenko's exit was designed to quell any concerns about his role in the company, as he was due to be named in a list of people with alleged links to the Kremlin sanctioned by the US after Russia's invasion of Crimea. ..."
Oil trading giant Gunvor handed its chief executive a $1bn dividend to fund a deal that
helped the company distance itself from US sanctions against Russia.
Torbjörn Törnqvist agreed to buy a 43% stake in the company, the fourth largest oil trader
in the world, from co-founder Gennady Timchenko in 2014 for an undisclosed fee.
Timchenko's exit was designed to quell any concerns about his role in the company, as he
was due to be named in a list of people with alleged links to the Kremlin sanctioned by the
US after Russia's invasion of Crimea.
But the sheer size of Gunvor, which pulled in revenues of $64bn (£44bn) last year despite
rock-bottom oil prices, meant Törnqvist could not fund the deal in one go.
The payment of a $1bn dividend, only part of which was used to fund the deal, allowed Törnqvist
to settle his remaining debt to Timchenko.
"... 18 months of pain for the Saudis, knocking out production, exploration and development everywhere. ..."
"... They lack the ability to produce at a higher rate for a long time, therefore this wasn't about increasing market share. They didn't stop the Iranians and Russians in Syria, which may have been a reason for the price war. They lost a ton of cash flow, will lose more in the future. They caused unemployment in the USA. ..."
"... "As far as I can see KSA has a volatile, unreliable, nutty dictatorship with very little idea of how to pull itself out of the overpopulation and religious nuttism it has been encouraging" ..."
"... that is probably the best explanation for their policy I have heard because no other has made any sense. I read a article yesterday that for the first time they are entering the world bond market to raise at least $15 billion, I guess one might say they too are borrowing money to drill wells. ..."
Are you sure? They lack the ability to produce at a higher rate for a long time, therefore this
wasn't about increasing market share. They didn't stop the Iranians and Russians in Syria, which
may have been a reason for the price war. They lost a ton of cash flow, will lose more in the
future. They caused unemployment in the USA.
As far as I can see KSA has a volatile, unreliable, nutty dictatorship with very little idea
of how to pull itself out of the overpopulation and religious nuttism it has been encouraging.
Their aims are being defeated, and they will be increasingly dangerous as a result.
"As far as I can see KSA has a volatile, unreliable, nutty dictatorship with very little idea
of how to pull itself out of the overpopulation and religious nuttism it has been encouraging"
that is probably the best explanation for their policy I have heard because no other has made
any sense. I read a article yesterday that for the first time they are entering the world bond
market to raise at least $15 billion, I guess one might say they too are borrowing money to drill
wells.
The new complex will allow to increase the output of diesel fuel of Euro-5 class.
The PM D. Medvedev will visit Volgograd on May 31st.
He will participate in the ceremony of start-up and commissioning works at the plant "Lukoil-Volgogradnetepererabotka".
The new complex of deep processing of vacuum gasoil with the capacity of 3,500 thousand tons a
year is to become the largest one in Russia. The complex comprises: a unit of vacuum gasoil hyrocracking;
a hydrogen production unit meant for hydrogen containing gas supply to the hydrocracking process;
a combined sulfur unit used for utilization of hydrogen disulfide containing amine solution of the
hydroracking process. With the putting of the complex into operation the output of diesel fuel
of class-5 will grow by 1.8 mln tons a year, oil processing efficiency will reach 95%.
Mohammad Al Sabban, the former Saudi representative to OPEC until 2014, insists Saudi Arabia
really has the ability to ramp up output to 12.5 million barrels a day.
Yet Al Sabban told Raymond James that only half of those barrels would be available immediately
within days or weeks. The rest could take up to six months.
Raymond James thinks investors should take those claims with a grain of salt.
"We don't buy the Saudi excess capacity argument," the firm wrote.
Raymond James points to three reasons why they think Saudi is lying. I like #3 the best.
3.) Saudi rig counts are surging: There is a camp in the oil industry that believes
Saudi Arabia's oilfields have gotten so old that they aren't as productive as they once were.
For instance, the Ghawar field - the world's largest with an estimated 75 billion barrels of oil
- is over 60 years old.
Skeptics point to the fact that rig counts in Saudi Arabia have tripled over the past decade
- even though output hasn't gone up nearly as much. At the same time, Saudi stockpiles of oil
have declined by around 30 million barrels since October 2015.
"If they only need to turn valves on to flood the market, why are Saudi oil inventories
falling?" Raymond James asks.
"... "Saudi Arabia's crude oil stockpiles fell in March for the fifth month in a row reaching the lowest level in 18 months as the kingdom kept shipping crude to meet customer demand while keeping a lid on production." ..."
"... Sinking rig counts worldwide doesn't correspond to these fantastic planned production increases – if it was that easy to crank up production, why has everyone hasn't done it before? ..."
"... And opening the chokes, damaging the oilfield only works short term before new infills / CO2 or other expensive stuff is necessary. ..."
What does this say about Saudi spare capacity, the Doha meeting and future supply (if anything):
"Saudi Arabia's crude oil stockpiles fell in March for the fifth month in a row reaching the
lowest level in 18 months as the kingdom kept shipping crude to meet customer demand while keeping
a lid on production."
Sinking rig counts worldwide doesn't correspond to these fantastic planned production increases
– if it was that easy to crank up production, why has everyone hasn't done it before?
And opening the chokes, damaging the oilfield only works short term before new infills / CO2
or other expensive stuff is necessary.
To me this means that Saudi Arabia has peaked. And crown prince Mohammed bin Salman's plan
to ween Saudi Arabia off oil is simply additional proof of this being the case.
What this means is simple: as a result of the budget imbalance driven by low oil prices,
largely a Saudi doing, the kingdom is forced to give workers an implicit pay cut. It also means
that since the government has to "pay" through the issuance of debt, that the liquidity crisis in
the kingdom is far worse than many had anticipated.
Which brings up the question of devaluation: how long until the SAR has to follow the Yuan and
see a substantial haircut. According to the market, 12 month SAR forward are now trading at a
price which implies a 12% devaluation in the coming months.
When that happens is, of course, up to the King Salman.
What it also means is that as Saudi Arabia is now scrambling to generate any incremental cash, it
too will be caught in the deflationary spiral of excess production as it will have no choice but
to outsell its competitors, especially those rushing to grab Chinese market share such as Russia,
as it seeks to make up with volume what it has lost due to lower prices. It also means that any
hopes of a production freeze by Saudi Arabia - and thus OPEC - are hereby snuffed for the
indefinite future.
Russian Q1 GDP came in better than expected but still showing contraction at -1.2 percent YoY
(versus -2.1 percent expected). A piece in the
Wall Street Journal today addresses the challenges experienced by Russia currently, as the government
is considering raising taxes to help ease its budget deficit. As the chart below illustrates, Russia's
reserve fund is being swiftly depleted – to levels not seen since the 2009 financial crisis – as
the government tries to plug the gap left by lost revenue from lower oil prices:
"... Russia is diversifying oil and gas exports towards rapidly rising Asian markets due to economic and security considerations. But cutting oil exports to Europe, even for one month, would be inefficient and self-destroying. ..."
"... There are also serious logistical issues. Russia exports oil to Asia from the fields in Eastern Siberia and Far East. The fields in West Siberia, Volga-Urals and Timan-Pechora regions are not linked by pipelines with Russia's eastern borders and transportation costs in this case would be too high. ..."
"... Cutting energy supplies to Europe, even for a month, would destroy Russia's reputation as a reliable supplier and result in multiple lawsuits and potential multi-billion fines. Note that Russian oil companies own significant assets in Europe, including refineries, oil terminals, storage facilities, etc. ..."
"... However, if Russia (even for economic reasons) began diverting supplies to Asia via pipelines, wouldn't that mean there would be less for the West to buy? Due to the laws of mathematics? ..."
"... Try putting together a spreadsheet with sources and sinks. Use transport costs to link these two. When you do you'll see the only difference is to change transport costs and security. I used to work and live in Russia and I'm sure they are using models like we did to understand the best options to move Russian oil. I'm a bit outdated, but what we see is a need to refine oil for internal consumption with a better kit. They need to improve their refineries to grind oil molecules for real. ..."
"... This is a very questionable assumption. Supply/demand dynamics, especially reckless financing of shale in the USA was a factor (as in "crisis of overproduction" - if we remember classic Marxist term ;-), but this is only one and probably not decisive contributing factor. Paper oil, HFT, Saudis oil damping and Western MSM and agencies (Wild cries "Oil Glut !!!", "OMG Oil glut !!!" supported by questionable statistics from EIA, IEA and friends) were equally important factors. It you deny this you deny the reality. ..."
"... I agree, but this not the whole story. Western MSM went to crazy pitch trying to amplify Saudi animosities and to play "young reckless prince" card toward Iran and Russia. Do you remember the interview the prince gave to Bloomberg just before the freeze ? Do you think that this was accidental? ..."
"... definitely $50-$60 price band is not enough to revive the US shale. LTO is dead probably on any level below $80 and may be even above this level. That does not exclude "dead chicken bounce". Moreover LTO is already played card for financial industries. In reality it probably needs prices above $100 to fully recover. ..."
"... neoliberals still dominates in Russia. Especially oil and economics ministries. Reading interviews of Russian oil officials is pretty depressing. They swallow and repeat all the Western propaganda one-to-one. Unfortunately. In this area they have a lot to learn from Americans :-). ..."
"... At the same time, increasing the volume of high additional value products such as plastics, rubber, composites, etc is in best Russia's interest. It is difficult to achieve though. I think creating the ability to withhold substantial amount of oil from the markets for the periods of say 6 to 12 month is more important. And here they can get some help from OPEC members, Saudi be damned. ..."
"... This is a tricky balancing solution, but still this is some insurance against the price slumps like the current one, when Russia was caught swimming naked and did not have any viable game plan. It is unclear what is the optimal mix, but in no way this 100% or even 80% raw oil. ..."
3) Russia's oil policy is driven by economic considerations. Cutting oil exports (and hence foreign
currency revenues) in order to "punish" the West is like shooting yourself in the foot.
Aleks,
I agree that a sustained embargo on the West by Russia is not realistic economically. Cutting
supplies for a month to send a message might be.
Or you could do something else…send your supplies via pipeline to Asia.
There by you get your money and decrease the supplies the West has access to.
I am sorry, but what you and likbez are saying here sounds naïve.
Russia is diversifying oil and gas exports towards rapidly rising Asian markets due to
economic and security considerations. But cutting oil exports to Europe, even for one month, would
be inefficient and self-destroying.
1) European customers could easily find alternative sources of supply. Saudi Arabia and
Iran would be happy to take Russia's share in the European market and it would be very difficult
to take it back.
2) It is impossible to redirect all Russian oil exports to Asia. Nobody there expects sharply
increased volumes of Russian oil. China has increased oil imports from Russia, but is not willing
to depend entirely on Russian supplies. There are also serious logistical issues. Russia exports
oil to Asia from the fields in Eastern Siberia and Far East. The fields in West Siberia, Volga-Urals
and Timan-Pechora regions are not linked by pipelines with Russia's eastern borders and transportation
costs in this case would be too high.
3) Contrary to what the western MSM is saying, Russia has never used energy exports as a political
weapon. The episodes when Russia was cutting gas supplies to Ukraine were related with prolonged
non-payments from that country. As soon as payments were resumed, Russia restarted gas supplies.
Today, when relations between Russia and Ukraine are worse than ever, Russia is supplying gas
to Ukraine as Ukraine is paying for it.
Cutting energy supplies to Europe, even for a month, would destroy Russia's reputation
as a reliable supplier and result in multiple lawsuits and potential multi-billion fines. Note
that Russian oil companies own significant assets in Europe, including refineries, oil terminals,
storage facilities, etc.
In general, Russia and Europe are so interdependent in the energy sector, that any drastic
steps there may have extremely negative consequences for both sides. Not surprisingly, the western
sanctions against Russia did not include a ban on the imports of Russian oil and gas. Russia,
on its side, will never cut its energy supplies to Europe.
"Russia is diversifying oil and gas exports towards rapidly rising Asian markets due to economic
and security considerations. But cutting oil exports to Europe, even for one month, would be
inefficient and self-destroying ".
Hey AlexS,
I think you are correct with the bolded part above.
However, if Russia (even for economic reasons) began diverting supplies to Asia via pipelines,
wouldn't that mean there would be less for the West to buy? Due to the laws of mathematics?
Unless of course Russia's Oil/Gas production is growing to offset the diversion.
Also, please note that my couch potato analysis was meant to be considered under Peak Oil/ELM
conditions. Not BAU as in today. I should have specified.
If there is anyone to trust on this point…It isn't me!!! LOL!
No. Try putting together a spreadsheet with sources and sinks. Use transport costs to link
these two. When you do you'll see the only difference is to change transport costs and security.
I used to work and live in Russia and I'm sure they are using models like we did to understand
the best options to move Russian oil. I'm a bit outdated, but what we see is a need to refine
oil for internal consumption with a better kit. They need to improve their refineries to grind
oil molecules for real.
The current oil price slump is due to supply/demand dynamics, not to western conspiracies
This is a very questionable assumption. Supply/demand dynamics, especially reckless financing
of shale in the USA was a factor (as in "crisis of overproduction" - if we remember classic Marxist
term ;-), but this is only one and probably not decisive contributing factor. Paper oil, HFT,
Saudis oil damping and Western MSM and agencies (Wild cries "Oil Glut !!!", "OMG Oil glut !!!"
supported by questionable statistics from EIA, IEA and friends) were equally important factors.
It you deny this you deny the reality.
Remember the key Roman legal principle "cue bono". And who in this case is the prime suspect?
Can you please answer this question.
And please remember that the originator of the word "conspiracies" was CIA (to discredit those
who questioned the official version of JFK assassination).
2) The Doha deal was torpedoed by Saudi Arabia, primarily due to its conflict with Iran
and the intention to defend market share.
I agree, but this not the whole story. Western MSM went to crazy pitch trying to amplify
Saudi animosities and to play "young reckless prince" card toward Iran and Russia. Do you remember
the interview the prince gave to Bloomberg just before the freeze ? Do you think that this was
accidental?
BTW I agree that this was a huge win of Western diplomacy and "low oil price forever" forces.
An increase in oil prices well above $50 this year is not in Russia's or Saudi interest,
as it could reverse the declining trend in LTO output.
Nonsense. First of all mankind now needs oil above $100 to speed up the switch to hybrid cars
for personal transportation, and Russia and Saudi are the part of mankind.
It is also in best Russia's and Saudi economic interests, contrary to what you read on Bloomberg
or similar rags. World oil production is severely damaged by low oil prices and 1MB/d that shale
it can probably additionally produce in best circumstances is not that easy to achieve after this
slump.
And definitely $50-$60 price band is not enough to revive the US shale. LTO is dead probably
on any level below $80 and may be even above this level. That does not exclude "dead chicken bounce".
Moreover LTO is already played card for financial industries. In reality it probably needs prices
above $100 to fully recover.
For probably the next five-seven years everybody will be too shy in financing shale and other
high risk oil production ventures. So the oil price will probably set a new record. After that
we will have another round of "gold rush" in oil as institutional memory about the current oil
price slump will gradually evaporate. Neoliberalism is an unstable economic system, you can bet
on that.
Russia's oil policy is driven by economic considerations. Cutting oil exports (and hence
foreign currency revenues) in order to "punish" the West is like shooting yourself in the foot.
Nonsense. No nation politics is driven only by economic consideration but Russia stupidly or
not tried to play the role of stable, reliable oil and gas supplier to people who would betray
you for a penny. And sometimes this desire to play nice with the West led to betraying its own
national interests.
If I were Putin I would create strategic reserves and divert part of oil export to them to
sell them later at higher prices. Buy low, sell high: is not this a good strategy :-)
Or play some other card by artificially restricting export of oil to Western Europe to refined
products (and to please the USA, as it so badly wanted Russia to restrict supplies to EU to damage
their long time strategic partner :-) and let the EU face consequences of their own polices.
But this is probably not a possibility as neoliberals still dominates in Russia. Especially
oil and economics ministries. Reading interviews of Russian oil officials is pretty depressing.
They swallow and repeat all the Western propaganda one-to-one. Unfortunately. In this area they
have a lot to learn from Americans :-).
Exports are reliable hard currency stream. But it not a stable stream, as Russia recently discovered.
At the same time, increasing the volume of high additional value products such as plastics,
rubber, composites, etc is in best Russia's interest. It is difficult to achieve though. I think
creating the ability to withhold substantial amount of oil from the markets for the periods of
say 6 to 12 month is more important. And here they can get some help from OPEC members, Saudi
be damned.
Upgrading oil refining capacity means that Russian oil companies are able to increase
the share of refined products in total exports at the expense of crude oil.
This is a tricky balancing solution, but still this is some insurance against the price
slumps like the current one, when Russia was caught swimming naked and did not have any viable
game plan. It is unclear what is the optimal mix, but in no way this 100% or even 80% raw oil.
"... Moody's cut the country's long-term issuer rating one notch to A1 from Aa3 after a review that began in March. ..."
"... Moody's lowered Oman to Baa1 from A3 and Bahrain to Ba2 from Ba1. The ratings agency did not downgrade Kuwait, Qatar, the United Arab Emirates or Abu Dhabi, but it assigned a negative outlook to each. ..."
...Moody's cut the country's long-term issuer rating one notch to A1 from Aa3 after a review
that began in March.
...Moody's Investors Service said Saturday that it also downgraded Gulf oil producers Bahrain
and Oman. It left ratings unchanged for other Gulf states including Kuwait and Qatar.
...Moody's lowered Oman to Baa1 from A3 and Bahrain to Ba2 from Ba1. The ratings agency did
not downgrade Kuwait, Qatar, the United Arab Emirates or Abu Dhabi, but it assigned a negative
outlook to each.
"... There should be some overall increased recovery, but mostly these techniques push out the peak. Saudi are looking at Safaniya Phase III development, which might be their last option for the offshore fields; once ESPs are installed in new completions on old fields, as was done in the 2012 upgrades, then you are pretty close to sucking up the dregs. Similarly for intelligent completions – I have worked on fields with horizontal producers in water flood with much simpler methods then Saudi are using but once the water contact started to rise past the producers production dropped over 60% in two years. There was a much slower decline thereafter, in fact almost a plateau for some time but it took more drilling to maintain it. H/L doesn't work in such circumstances. ..."
Using EOR methods such as artificial lift, as they have installed in Safaniya, and intelligent
multilaterals, as in Ghawar, it is possible to significantly increase production (i.e. not only
reduce decline rates but turn them into production acceleration and increased capture). But eventually
it catches up and the rates will crash, as was seen with nitrogen injection EOR on Cantarell.
There should be some overall increased recovery, but mostly these techniques push out the peak.
Saudi are looking at Safaniya Phase III development, which might be their last option for the
offshore fields; once ESPs are installed in new completions on old fields, as was done in the
2012 upgrades, then you are pretty close to sucking up the dregs. Similarly for intelligent completions
– I have worked on fields with horizontal producers in water flood with much simpler methods then
Saudi are using but once the water contact started to rise past the producers production dropped
over 60% in two years. There was a much slower decline thereafter, in fact almost a plateau for
some time but it took more drilling to maintain it. H/L doesn't work in such circumstances.
"... This is a very questionable assumption. Supply/demand dynamics, especially reckless financing of shale in the USA was a factor (as in "crisis of overproduction" - if we remember classic Marxist term ;-), but this is only one and probably not decisive contributing factor. Paper oil, HFT, Saudis oil damping and Western MSM and agencies (Wild cries "Oil Glut !!!", "OMG Oil glut !!!" supported by questionable statistics from EIA, IEA and friends) were equally important factors. It you deny this you deny the reality. ..."
"... I agree, but this not the whole story. Western MSM went to crazy pitch trying to amplify Saudi animosities and to play "young reckless prince" card toward Iran and Russia. Do you remember the interview the prince gave to Bloomberg just before the freeze ? Do you think that this was accidental? ..."
"... definitely $50-$60 price band is not enough to revive the US shale. LTO is dead probably on any level below $80 and may be even above this level. That does not exclude "dead chicken bounce". Moreover LTO is already played card for financial industries. In reality it probably needs prices above $100 to fully recover. ..."
"... neoliberals still dominates in Russia. Especially oil and economics ministries. Reading interviews of Russian oil officials is pretty depressing. They swallow and repeat all the Western propaganda one-to-one. Unfortunately. In this area they have a lot to learn from Americans :-). ..."
"... At the same time, increasing the volume of high additional value products such as plastics, rubber, composites, etc is in best Russia's interest. It is difficult to achieve though. I think creating the ability to withhold substantial amount of oil from the markets for the periods of say 6 to 12 month is more important. And here they can get some help from OPEC members, Saudi be damned. ..."
"... This is a tricky balancing solution, but still this is some insurance against the price slumps like the current one, when Russia was caught swimming naked and did not have any viable game plan. It is unclear what is the optimal mix, but in no way this 100% or even 80% raw oil. ..."
I doubt that Russian will so easily forgive the West the current price slump and sanctions.
Remember it was Russia which was one on the main initiators of "freeze" the US and EU managed
to derail.
My impression is that Russia wants to process most of its oil internally which will reduce
the amount of oil available for export significantly. That's now semi-official policy.
Production figures are less meaningful in this context then export volumes and are like a smokescreen
on the eminent move to oil shortages on world markets.
Yes, production might be stable or slowly declining. But exports will not be stable. They will
be declining. Now what ?
1) The current oil price slump is due to supply/demand dynamics, not to western conspiracies.
This is very well understood by Russian officials.
2) The Doha deal was torpedoed by Saudi Arabia, primarily due to its conflict with Iran and
the intention to defend market share.
3) The output freeze deal was intended at changing the sentiment in the market and prevent
further decline in oil prices. This objective was achieved: oil prices are up 70% from February
lows, which is partly due to the talks between Russia, Saudi Arabia and others that started in
February.
Nobody expected the Doha deal to help oil prices to return to $100 levels, as an output freeze
is not an output cut. Besides, the agreement should have been non-binding and there was no mechanism
to control its implementation.
An increase in oil prices well above $50 this year is not in Russia's or Saudi interest, as
it could reverse the declining trend in LTO output. Russia's government officials, management
of oil companies and experts generally think that rebalancing of the oil market should be left
to market forces, and any attempts to artificially cut supply would be counter-productive. Therefore,
nobody saw the failure of the Doha agreement as a tragedy, particulalry as prices are already
at acceptable levels.
3) Russia's oil policy is driven by economic considerations. Cutting oil exports (and hence
foreign currency revenues) in order to "punish" the West is like shooting yourself in the foot.
4) As Russian oil production was increasing in the past 15 years, and domestic demand remained
relatively stable, the country has been ramping up exports of both crude oil and refined products.
Upgrading oil refining capacity means that Russian oil companies are able to increase the share
of refined products in total exports at the expense of crude oil.
This results in changing structure of liquid fuel exports, not in the decrease in its combined
volume. In fact, the structure of petroleum exports depends on comparative profitability of crude
and product exports. Sometimes it is more profitable to export crude rather than diesel or fuel
oil.
The current oil price slump is due to supply/demand dynamics, not to western conspiracies
This is a very questionable assumption. Supply/demand dynamics, especially reckless financing
of shale in the USA was a factor (as in "crisis of overproduction" - if we remember classic Marxist
term ;-), but this is only one and probably not decisive contributing factor. Paper oil, HFT,
Saudis oil damping and Western MSM and agencies (Wild cries "Oil Glut !!!", "OMG Oil glut !!!"
supported by questionable statistics from EIA, IEA and friends) were equally important factors.
It you deny this you deny the reality.
Remember the key Roman legal principle "cue bono". And who in this case is the prime suspect?
Can you please answer this question.
And please remember that the originator of the word "conspiracies" was CIA (to discredit those
who questioned the official version of JFK assassination).
2) The Doha deal was torpedoed by Saudi Arabia, primarily due to its conflict with Iran
and the intention to defend market share.
I agree, but this not the whole story. Western MSM went to crazy pitch trying to amplify
Saudi animosities and to play "young reckless prince" card toward Iran and Russia. Do you remember
the interview the prince gave to Bloomberg just before the freeze ? Do you think that this was
accidental?
BTW I agree that this was a huge win of Western diplomacy and "low oil price forever" forces.
An increase in oil prices well above $50 this year is not in Russia's or Saudi interest,
as it could reverse the declining trend in LTO output.
Nonsense. First of all mankind now needs oil above $100 to speed up the switch to hybrid cars
for personal transportation, and Russia and Saudi are the part of mankind.
It is also in best Russia's and Saudi economic interests, contrary to what you read on Bloomberg
or similar rags. World oil production is severely damaged by low oil prices and 1MB/d that shale
it can probably additionally produce in best circumstances is not that easy to achieve after this
slump.
And definitely $50-$60 price band is not enough to revive the US shale. LTO is dead probably
on any level below $80 and may be even above this level. That does not exclude "dead chicken bounce".
Moreover LTO is already played card for financial industries. In reality it probably needs prices
above $100 to fully recover.
For probably the next five-seven years everybody will be too shy in financing shale and other
high risk oil production ventures. So the oil price will probably set a new record. After that
we will have another round of "gold rush" in oil as institutional memory about the current oil
price slump will gradually evaporate. Neoliberalism is an unstable economic system, you can bet
on that.
Russia's oil policy is driven by economic considerations. Cutting oil exports (and hence
foreign currency revenues) in order to "punish" the West is like shooting yourself in the foot.
Nonsense. No nation politics is driven only by economic consideration but Russia stupidly or
not tried to play the role of stable, reliable oil and gas supplier to people who would betray
you for a penny. And sometimes this desire to play nice with the West led to betraying its own
national interests.
If I were Putin I would create strategic reserves and divert part of oil export to them to
sell them later at higher prices. Buy low, sell high: is not this a good strategy :-)
Or play some other card by artificially restricting export of oil to Western Europe to refined
products (and to please the USA, as it so badly wanted Russia to restrict supplies to EU to damage
their long time strategic partner :-) and let the EU face consequences of their own polices.
But this is probably not a possibility as neoliberals still dominates in Russia. Especially
oil and economics ministries. Reading interviews of Russian oil officials is pretty depressing.
They swallow and repeat all the Western propaganda one-to-one. Unfortunately. In this area they
have a lot to learn from Americans :-).
Exports are reliable hard currency stream. But it not a stable stream, as Russia recently discovered.
At the same time, increasing the volume of high additional value products such as plastics,
rubber, composites, etc is in best Russia's interest. It is difficult to achieve though. I think
creating the ability to withhold substantial amount of oil from the markets for the periods of
say 6 to 12 month is more important. And here they can get some help from OPEC members, Saudi
be damned.
Upgrading oil refining capacity means that Russian oil companies are able to increase
the share of refined products in total exports at the expense of crude oil.
This is a tricky balancing solution, but still this is some insurance against the price
slumps like the current one, when Russia was caught swimming naked and did not have any viable
game plan. It is unclear what is the optimal mix, but in no way this 100% or even 80% raw oil.
"... Russia is not planning to significantly ramp production capacity. Energy Minister Novak said today that the country will be able to maintain long-term production levels within the range 525-545 million tons per year (10.5-10.9 mb/d). That's what Russian officials were saying earlier. ..."
"... According to the Saudi officials, planned expansion of the Khurais and Shaybah oil fields will only compensate for falling output at other fields. They claim that the country's "maximum sustainable output capacity is 12 million barrels per day and the nation's total capacity is 12.5 million bpd", but there are no plans to increase capacity and there is no evidence that this capacity really exists. ..."
Russia is not planning to significantly ramp production capacity.
Energy Minister Novak said today that the country will be able to maintain long-term production
levels within the range 525-545 million tons per year (10.5-10.9 mb/d). That's what Russian officials
were saying earlier.
According to the Saudi officials, planned expansion of the Khurais and Shaybah oil fields will
only
compensate for falling output at other fields. They claim that the country's "maximum sustainable
output capacity is 12 million barrels per day and the nation's total capacity is 12.5 million
bpd", but there are no plans to increase capacity and there is no evidence that this capacity
really exists.
I think that in reality Saudi Arabia is able to increase crude production from the current
10.2 mb/d to 10.5-10.6 mb/d during the peak season for local demand in the Summer, but not well
above those levels.
I agree with AlexS's assessment. In short, no not much further
increase in output will come from Russia and Saudi Arabia, certainly not
until oil prices rise above $70/b in 2018, and perhaps never.
The combined output of Russia and KSA will remain within +/- 2 Mb/d of
2015 C+C output levels until 2020 in my view.
This might be a new factor in US-Saudi relations, which indirectly might affect the price of oil....
Notable quotes:
"... Rep. Brad Sherman (D-Calif.) is criticizing the Obama administration as having tried to strong-arm a former senator who is pushing to declassify 28 pages of the 9/11 report dealing with Saudi Arabia. He recounted how Rep. Gwen Graham (D-Fla.) and her father, former Senate Intelligence Committee Chairman Bob Graham (D-Fla.), were detained by the FBI in 2011 at Dulles International Airport outside Washington. The message from the agents, according to the Grahams, was to quit pushing for declassification of the 28 pages. The FBI "took a former senator, a former governor, grabbed him in an airport, hustled him into a room with armed force to try to intimidate him into taking different positions on issues of public policy and important national policy, and the fact that he wasn't intimidated because he was calm doesn't show that they weren't trying to intimidate him," Sherman said in an interview with The Hill's Molly K. Hooper. ..."
"... If a nation expects to be ignorant & free, in a state of civilization, it expects what never was & never will be. The functionaries of every government have propensities to command at will the liberty & property of their constituents. There is no safe deposit for these but with the people themselves; nor can they be safe with them without information. Where the press is free and every man able to read, all is safe. ..."
"... The reason I believe the "28 pages" are so important is because it unquestionably demonstrates that senior members of the U.S. government care more about the public perception of Saudi Arabia, and protecting its terrorist spawn, than cares about the public interest. Indeed, focus on these pages is already beginning to achieve just that. ..."
"... A former Republican member of the 9/11 commission, breaking dramatically with the commission's leaders, said Wednesday he believes there was clear evidence that Saudi government employees were part of a support network for the 9/11 hijackers and that the Obama administration should move quickly to declassify a long-secret congressional report on Saudi ties to the 2001 terrorist attack. ..."
"... "There was an awful lot of participation by Saudi individuals in supporting the hijackers, and some of those people worked in the Saudi government," Lehman said in an interview, suggesting that the commission may have made a mistake by not stating that explicitly in its final report. "Our report should never have been read as an exoneration of Saudi Arabia." ..."
"... The 9/11 commission chairman, former Republican governor Tom Kean of New Jersey, and vice-chairman, former Democratic congressman Lee Hamilton of Indiana, praised Saudi Arabia as, overall, "an ally of the United States in combatting terrorism" and said the commission's investigation, which came after the congressional report was written, had identified only one Saudi government official – a former diplomat in the Saudi consulate in Los Angeles – as being "implicated in the 9/11 plot investigation". ..."
"... "Only one Saudi government official." Can you believe this? Meanwhile, that official was merely deported from the U.S. without ever being charged with a crime. More proof that the Saudis and bankers have been granted their own separate "justice" system. ..."
"... In the interview Wednesday, Lehman said Kean and Hamilton's statement that only one Saudi government employee was "implicated" in supporting the hijackers in California and elsewhere was "a game of semantics" and that the commission had been aware of at least five Saudi government officials who were strongly suspected of involvement in the terrorists' support network. ..."
"... The commissioner said the renewed public debate could force a spotlight on a mostly unknown chapter of the history of the 9/11 commission: behind closed doors, members of the panel's staff fiercely protested the way the material about the Saudis was presented in the final report, saying it underplayed or ignored evidence that Saudi officials – especially at lower levels of the government – were part of an al-Qaida support network that had been tasked to assist the hijackers after they arrived in the US. ..."
"... Zelikow fired a staffer, who had repeatedly protested over limitations on the Saudi investigation, after she obtained a copy of the 28 pages outside of official channels. Other staffers described an angry scene late one night, near the end of the investigation, when two investigators who focused on the Saudi allegations were forced to rush back to the commission's offices after midnight after learning to their astonishment that some of the most compelling evidence about a Saudi tie to 9/11 was being edited out of the report or was being pushed to tiny, barely readable footnotes and endnotes. The staff protests were mostly overruled. ..."
"... Zelikow, the commission's executive director, told NBC News last month that the 28 pages "provide no further answers about the 9/11 attacks that are not already included in the 9/11 commission report". Making them public "will only make the red herring glow redder". ..."
"... This from the guy who led the charge to intentionally whitewash the Saudi role and intentionally deceive the American public. Yet these people call Edward Snowden a traitor. ..."
"... But Kean, Hamilton and Zelikow clearly do not speak for a number of the other commissioners, who have repeatedly suggested they are uncomfortable with the perception that the commission exonerated Saudi Arabia and who have joined in calling for public release of the 28 pages. ..."
"... It's impossible to read the above and not conclude that senior U.S. government officials were, and continue to be, more interested in protecting their Saudi "allies" than providing justice for the thousands of innocents killed on 9/11 ..."
Rep. Brad Sherman (D-Calif.) is criticizing the Obama administration as having tried
to strong-arm a former senator who is pushing to declassify 28 pages of the 9/11 report dealing
with Saudi Arabia.
He recounted how Rep. Gwen Graham (D-Fla.) and her father, former Senate Intelligence
Committee Chairman Bob Graham (D-Fla.), were detained by the FBI in 2011 at Dulles International
Airport outside Washington. The message from the agents, according to the Grahams, was to quit
pushing for declassification of the 28 pages.
The FBI "took a former senator, a former governor, grabbed him in an airport, hustled
him into a room with armed force to try to intimidate him into taking different positions on issues
of public policy and important national policy, and the fact that he wasn't intimidated because
he was calm doesn't show that they weren't trying to intimidate him," Sherman said in an interview
with The Hill's Molly K. Hooper.
Critics of my repeated focus on highlighting the Saudi role in 9/11 claim that anything revealed
in the "28 pages" will be marginal at best, leaving many of the most important questions surrounding
the attacks shrouded in secrecy. I agree. What I disagree with is the conclusion
that aggressively pursuing a declassification of the 28 pages is therefore meaningless.
There's almost always a underlying reason behind my relentless pursuit of certain topics. One
of the key purposes of this website is to chronicle the myriad examples of U.S. government lies,
corruption and criminality on behalf of a handful of insiders at the expense of the citizenry. This
is because I agree wholeheartedly with Thomas Jefferson when he
wrote to Charles Yancey :
If a nation expects to be ignorant & free, in a state of civilization, it expects what
never was & never will be. The functionaries of every government have propensities to command
at will the liberty & property of their constituents. There is no safe deposit for these but with
the people themselves; nor can they be safe with them without information. Where the press is
free and every man able to read, all is safe.
The shadow government and its minions treat the general public as stupid malleable serfs, because
for the most large part, they are. This unfortunate state of affairs has been achieved over the decades
through absurd government propaganda slavishly peddled to the masses via mainstream media outlets.
The internet has allowed tens of millions to wake up, but hundreds of millions are necessary in order
to turn this thing around and bring forth an era of freedom, progress, creativity and spiritual renaissance.
This will never happen until people start to question and confront the unimaginably maniacal status
quo.
The reason I believe the "28 pages" are so important is because it unquestionably demonstrates
that senior members of the U.S. government care more about the public perception of Saudi Arabia,
and protecting its terrorist spawn, than cares about the public interest. Indeed, focus
on these pages is already beginning to achieve just that.
A former Republican member of the 9/11 commission, breaking dramatically with the commission's
leaders, said Wednesday he believes there was clear evidence that Saudi government employees were
part of a support network for the 9/11 hijackers and that the Obama administration should move
quickly to declassify a long-secret congressional report on Saudi ties to the 2001 terrorist attack.
The comments by John F Lehman, an investment banker in New York who was Navy secretary in the
Reagan administration, signal the first serious public split among the 10 commissioners since
they issued a 2004 final report that was largely read as an exoneration of Saudi Arabia, which
was home to 15 of the 19 hijackers on 9/11.
"There was an awful lot of participation by Saudi individuals in supporting the hijackers,
and some of those people worked in the Saudi government," Lehman said in an interview,
suggesting that the commission may have made a mistake by not stating that explicitly in its final
report. "Our report should never have been read as an exoneration of Saudi Arabia."
He was critical of a statement released late last month by the former chairman and vice-chairman
of the commission, who urged the Obama administration to be cautious about releasing the full
congressional report on the Saudis and 9/11 –
"the 28 pages" , as they are widely known in Washington – because they contained "raw, unvetted"
material that might smear innocent people.
The 9/11 commission chairman, former Republican governor Tom Kean of New Jersey, and vice-chairman,
former Democratic congressman Lee Hamilton of Indiana, praised Saudi Arabia as, overall,
"an ally of the United States in combatting terrorism" and said the commission's investigation,
which came after the congressional report was written, had identified only one Saudi government
official – a former diplomat in the Saudi consulate in Los Angeles – as being "implicated in the
9/11 plot investigation".
"Only one Saudi government official." Can you believe this? Meanwhile, that official was merely
deported from the U.S. without ever being charged with a crime. More proof that the Saudis and bankers
have been granted their own separate "justice" system.
Meanwhile, it's not even true…
In the interview Wednesday, Lehman said Kean and Hamilton's statement that only one
Saudi government employee was "implicated" in supporting the hijackers in California and elsewhere
was "a game of semantics" and that the commission had been aware of at least five Saudi government
officials who were strongly suspected of involvement in the terrorists' support network.
The commissioner said the renewed public debate could force a spotlight on a mostly unknown
chapter of the history of the 9/11 commission: behind closed doors, members of the panel's
staff fiercely protested the way the material about the Saudis was presented in the final report,
saying it underplayed or ignored evidence that Saudi officials – especially at lower
levels of the government – were part of an al-Qaida support network that had been tasked to assist
the hijackers after they arrived in the US.
In fact, there were repeated showdowns, especially over the Saudis, between the staff and the
commission's hard-charging executive director, University of Virginia historian Philip Zelikow,
who joined the Bush administration as a senior adviser to the secretary of state, Condoleezza
Rice, after leaving the commission. The staff included experienced investigators from the FBI,
the Department of Justice and the CIA, as well as the congressional staffer who was the principal
author of the 28 pages.
Zelikow fired a staffer, who had repeatedly protested over limitations on the Saudi
investigation, after she obtained a copy of the 28 pages outside of official channels. Other staffers described an angry scene late one night, near the end of the investigation,
when two investigators who focused on the Saudi allegations were forced to rush back to the commission's
offices after midnight after learning to their astonishment that some of the most compelling evidence
about a Saudi tie to 9/11 was being edited out of the report or was being pushed to tiny, barely
readable footnotes and endnotes. The staff protests were mostly overruled.
However, the commission's final report was still widely read as an exoneration, with a central
finding by the commission that there was "no evidence that the Saudi government as an institution
or senior Saudi officials individually" provided financial assistance to Osama bin Laden's terrorist
network. The statement was hailed by the Saudi government as effectively clearing Saudi officials
of any tie to 9/11.
Zelikow, the commission's executive director, told NBC News last month that the 28 pages "provide
no further answers about the 9/11 attacks that are not already included in the 9/11 commission
report". Making them public "will only make the red herring glow redder".
This from the guy who led the charge to intentionally whitewash the Saudi role and intentionally
deceive the American public. Yet these people call Edward Snowden a traitor.
But Kean, Hamilton and Zelikow clearly do not speak for a number of the other commissioners,
who have repeatedly suggested they are uncomfortable with the perception that the commission exonerated
Saudi Arabia and who have joined in calling for public release of the 28 pages.
It's impossible to read the above and not conclude that senior U.S. government officials were,
and continue to be, more interested in protecting their Saudi "allies" than providing justice
for the thousands of innocents killed on 9/11 . It should make everyone infinitely more
distrustful of our crooked government.
If that's all the "28 pages" drama achieves, I'd call that a success.
"... Something just does not make sense to me. They are saying that at current production levels, they can supply oil for the next 165 years. So why do they have to diversify? I can almost see it if they said that they wanted more citizens to be employed. But, they are diversifying into industrial jobs. Chemical plant joint ventures. Their huge shipbuilding effort to produce tanker and "oil rigs," etc. Those jobs will be filled largely by foreign workers and robots. ..."
"... IMHO this young prince currently in power is a typical adventurist. He is an excellent illustration of the danger of absolute monarchy or any too high concentration of power in single hands :-) ..."
"... If so, why on Earth they are selling their strategic resource for peanuts? Is this kind of madness or what? Unless their plan is to move royal family to France. And even in this case it is a stupid plan. ..."
Something just does not make sense to me. They are saying that at current production levels,
they can supply oil for the next 165 years. So why do they have to diversify? I can almost see
it if they said that they wanted more citizens to be employed. But, they are diversifying into
industrial jobs. Chemical plant joint ventures. Their huge shipbuilding effort to produce tanker
and "oil rigs," etc. Those jobs will be filled largely by foreign workers and robots.
If they said that they were going to establish a "silicon valley" of the Mid-east, well, I
could see that. Teach their kids high-tech skills.
Since they have already "found" the oil, and have the infrastructure in place, it would be
highly likely that if the world reduced consumption to 10 million bbl/day, that it would all come
from Saudi Arabia. Their costs would just always be far below anyone else.
World demand is currently nearly 96 million barrels (oil and liquid fuels) per day or say 35 billion
barrels per year. Do you think it's likely world consumption can be reduced to 10 million bbl/day?
And, perhaps Saudi pronouncements are best taken with a grain of sand, sorry, salt.
Saudi pronouncements are best taken with a grain of sand, sorry, salt.
IMHO this young prince currently in power is a typical adventurist. He is an excellent
illustration of the danger of absolute monarchy or any too high concentration of power in single
hands :-)
Other then religious tourism (which brings less then 10 billion a year) all their efforts are
just reshuffling the chairs of the deck of Titanic. Remove oil and gas and they are bankrupt and
probably will not last long as an independent nation.
If so, why on Earth they are selling their strategic resource for peanuts? Is this kind
of madness or what? Unless their plan is to move royal family to France. And even in this case
it is a stupid plan.
Russia is bleeding hard currency but still its oil industry is the best shape among OPEC
nations, despite low oil prices and sanctions. It might well be that Russia will preserve the level
of oil production which it reached in 2015 in 2016.
While discussing major factors influencing the oil market at the Forum, the speakers agreed
the geopolitics have become an essential factor, although the condition of the world economy and
market forces along with the technological advancement seemed to still be taking a lead in
driving oil prices.
"We must understand that the oil prices cannot change drastically because we are now reaching the
projected output level that we set out to achieve with the investments that we historically made
six, five, four years ago, and the production cannot be curtailed," said Vagit Alekperov,
LUKoil's Chief Executive Officer. According to Alekperov, last year LUKoil spent 300 billion
rubles on investments in the industry, and 112 billion rubles of investments in the first quarter
of 2016.
Related: ISIS Working On Driverless Car Causes More Worry Than Necessary
Alekperov also said that the complex geopolitical situation in the Persian Gulf has caused the
OPEC members from the Middle East to compete harder for their share of the oil market.
"What we see here, is that amidst the oil prices slump the Persian Gulf countries attempt to
increase their production output to cover their budget deficits caused by slashed oil revenues,
including compensating for the part of budget they need for procuring arms", Alekperov noted.
However, LUKoil's CEO believes oil prices are passed their lowest point, and the equilibrium
price should fluctuate around $50 per barrel for the rest of 2016 and first half of 2017. Prices
should then rise in the second half of 2017 as demand begins to exceed supply.
The Chairman of the Russian Union of Industrialists and Entrepreneurs, Alexander Shohin,
described a litany of geopolitical issues affecting oil prices. "The fact that the Saudis
rejected freezing the output blaming it on Iran's absence from the negotiations and its refusal
to cooperate by announcing intention to raise the production back to pre-sanctions level of 5
million bpd plus a couple million bpd on top of that; turmoil in Libya's political situation, and
a lack of a legitimate government there ; let alone the conspiracy plots that impact oil prices
in countries that may be regarded as 'unfriendly'…all this definitely points to a high role of
geopolitics in global oil market," he said.
Some incoherent blah-blah-blah about Saudi "defending their market share" should be ignored, but
new "Margaret Thatcher of Saudi Arabia" is a gambler that pursue very risky policies. He endanger his
own county, by depleting currency reserved, he undermines OPEC. It is interesting what he is getting
in return and from whom.
The new oil minister is another step is Prince Mohammed attempt to take the full control over Saudi
oil
The elephant in the room is the level of depletion of Saudi oil reserves. land reserved probably
are in terminal stages of depletion, but off-shore might still be not. Iran ayatollahs also pursue
suicidal policy of oil production extraction despite low oil prices as if delay in six month really matter in
the longer scheme of things. So Saudi-Iran reginal rivalty was experty played and due to stupidity of
both sides that main winner is the USA, EU, China and Asian tigers.
Notable quotes:
"... Ali al-Naimi was also sympathetic to the concerns of other OPEC member nations in regards to low oil prices. Venezuela and Nigeria, among others, pressed hard for production cuts, or at a minimum, a freeze in output. Al-Naimi was open to this avenue, but Prince bin Salman is more hawkish, and seems to be much more content with a period of low oil prices. Naimi was able to countenance coordinated action with OPEC and non-OPEC producers, including Russia. The young prince is taking a tougher line, particularly when it comes to Iran. In fact, many view his opposition to a deal in Doha as at least in part motivated by the Saudi geopolitical rivalry with Iran. ..."
"... He doesn't feel the economic burden to have to cooperate with OPEC ..."
In a surprise move, Saudi Arabia sacked its long-time oil minister over the weekend, an event
that illustrates the near-total control that the new young Saudi prince has obtained over the country's
energy industry.
For many years, Ali al-Naimi, the outgoing Saudi oil minister, was the voice of Saudi Arabia's oil
industry and policy. Even seemingly insignificant remarks from al-Naimi could move oil prices up
or down. But the 80-year old oil minister has seen his power eclipsed by the 30-year old Deputy Crown
Prince Mohammed bin Salman. In April, when al-Naimi was forced to backtrack on the Doha oil freeze
deal, reportedly at the behest of the Deputy Crown Prince, it was clear that his time at the helm
was coming to an end.
Over the weekend, al-Naimi was pushed out in favor of Khalid al-Falih, the head of the state-owned
oil company Saudi Aramco. The swap was expected and had been previously announced, but the timing
came as a surprise. The move leaves the Deputy Crown Prince with undisputed control over Saudi Arabia's
energy strategy, as well as its broader economy.
... ... ...
Ali al-Naimi was also sympathetic to the concerns of other OPEC member nations in regards
to low oil prices. Venezuela and Nigeria, among others, pressed hard for production cuts, or at a
minimum, a freeze in output. Al-Naimi was open to this avenue, but Prince bin Salman is more hawkish,
and seems to be much more content with a period of low oil prices. Naimi was able to countenance
coordinated action with OPEC and non-OPEC producers, including Russia. The young prince is taking
a tougher line, particularly when it comes to Iran. In fact, many view his opposition to a deal in
Doha as at least in part motivated by the Saudi geopolitical rivalry with Iran.
"Mohammed bin Salman has changed everything," Helima Croft, head of commodities strategy at RBC Capital
Markets, told the WSJ. "He doesn't feel the economic burden to have to cooperate with OPEC."
"... From the Iranian side, I have no doubts that an increase of another 1m barrels a day is precisely what they hope will happen, but the reality will surely be different. For all oil production, whether it is from an independent oil company or a sovereign nation, capital expenditures will determine the increase or decrease that can be achieved. Iran has a decidedly arthritic oil infrastructure, slowed by the lack of Western technology and the impact of a decade of sanctions. Their own economy is too weak to generate anywhere near the capex required to increase another 1 million barrels in the next year, and their overtures to foreign oil companies for leases inside Iran has been met cooly by prime contenders Total (TOT) and Eni (E). There is a lagged amount of already developed barrels that Iran can push onto the global market – perhaps 300,000 barrels a day; but by my reckoning, already 150,000 of those barrels have been added – making their ultimate targets very unlikely indeed to be reached. ..."
"... It wouldn't be consistent to believe that for the last year and a half, the Saudis have been capable of increasing their production by another 20 percent, but have so far kept that potential under wraps. Instead, I am fully of the opinion that the Saudis are near, if not at their full production potential right now. ..."
"... The oil market seems to agree – in February, if the threat of another 3 million barrels of oil hitting the global market had been unleashed, oil might have reached below $20 a barrel; today, oil is getting very close to rallying towards $50 a barrel instead. ..."
In light of the missed opportunity at Doha to curb OPEC production, angry statements have emerged
from both Iran and Saudi Arabia on oil production – the Iranians saying that they cannot be stopped
in increasing their exports another 1m barrels a day in the next 12 months, the Saudi oil minister
in turn threatening to increase production another 2m barrels a day. Both of these statements need
to be taken with not a grain, but a 5-pound bag of salt.
From the Iranian side, I have no doubts that an increase of another 1m barrels a day is precisely
what they hope will happen, but the reality will surely be different. For all oil production, whether
it is from an independent oil company or a sovereign nation, capital expenditures will determine
the increase or decrease that can be achieved. Iran has a decidedly arthritic oil infrastructure,
slowed by the lack of Western technology and the impact of a decade of sanctions. Their own economy
is too weak to generate anywhere near the capex required to increase another 1 million barrels in
the next year, and their overtures to foreign oil companies for leases inside Iran has been met cooly
by prime contenders Total (TOT) and Eni (E). There is a lagged amount of already developed barrels
that Iran can push onto the global market – perhaps 300,000 barrels a day; but by my reckoning, already
150,000 of those barrels have been added – making their ultimate targets very unlikely indeed to
be reached.
The Saudis do not have any of the capex or technology problems that plague the Iranians. But the
question of how much capacity the Saudis actually do have comes into play when they threaten to increase
production by another 2 million barrels. For my entire career in oil, there has always been a dark
question on Saudi 'spare capacity' – How much could the Saudis ultimately pump, if they were willing
to open the spigots up fully? For years, the speculation from most oil analysts was near to 7.5m
or 8m barrels a day – a number that was blown out in the last two years as Saudi production rocketed
above 10m barrels a day.
But the strategy the Saudis have pursued has been clear – they have been working towards full
production and an aggressive fight for market share since the failure of the Vienna OPEC meeting
in November of 2014. It is very difficult to believe that the Saudis have had much, if any, remaining
capacity to easily put on the market since that time, or if any spare capacity could be developed
at all. It wouldn't be consistent to believe that for the last year and a half, the Saudis have been
capable of increasing their production by another 20 percent, but have so far kept that potential
under wraps. Instead, I am fully of the opinion that the Saudis are near, if not at their full production
potential right now.
The oil market seems to agree – in February, if the threat of another 3 million barrels of oil
hitting the global market had been unleashed, oil might have reached below $20 a barrel; today, oil
is getting very close to rallying towards $50 a barrel instead.
Prince Muhammad Bin Salman, 30, the deputy crown prince of Saudi Arabia laid out his vision
for Saudi Arabia on Monday in a plan called "Vision 2030." He wants to get Saudi Arabia off
its oil dependence in only 4 years, by 2020, and wants to diversify the economy into manufacturing
and mining.
…As long as Saudi Arabia produces so much petroleum, it is unclear how it can industrialize
in the sense of making secondary goods.
…It ran a $100 bn. budget deficit in 2015. Saudi Arabia has big currency reserves, but I
doubt it can go on like this more than five or six years.
…So it seems to me that the Vision for 2030 is mostly smoke and mirrors… Saudi Arabia probably
cannot replace the money it will lose if oil goes out of style and so is doomed to downward
mobility and very possibly significant instability. It has been a great party since the 1940s;
it is going to be a hell of a hangover.
Prince Muhammad
Bin Salman, 30, the deputy crown prince of Saudi Arabia
laid out his vision for Saudi Arabia on Monday
in a plan called
"Vision 2030." He wants to get Saudi Arabia off its oil dependence
in only 4 years, by 2020, and wants to diversify the economy into
manufacturing and mining.
In an interview with Al Arabiya,
the prince said the future of the kingdom would be based on:
1. Its possession of the Muslim shrine cities of Mecca and
Medina and the "Arab and Muslim depth" that position gave the
kingdom
2. The kingdom's geographical centrality to world commerce, with
30 percent of global trade passing through the 3 major sea routes
that Saudi Arabia bestrides (not sure what the third is, after the
Red Sea and the Persian Gulf).
3. The creation of a $2 trillion sovereign wealth fund through a
sale of 5 percent of shares in Aramco, the world's largest oil
company.
Prince Muhammad said Monday that he thought these assets would
allow the kingdom to cease its dependence on petroleum in the very
near future.
"The planned economic diversification also involved localizing
renewable energy and industrial equipment sectors and creating
high-quality tourism attractions. It also plans to make it easier
to apply for visas and hoped to create 90,000 job opportunities in
its mining sector."
Saudi Arabia's citizen population is probably only about 20
million, so it is a small country without a big domestic market. It
is surrounded in the general region by huge countries like Egypt
(pop. 85 million), Iran (pop. 75 million) and Turkey (75 million),
not to mention Ethiopia (pop. 90 million) Without petroleum, it is
difficult to see what would be distinctive about Saudi Arabia
economically.
The excruciatingly young prince, who was born in 1985, has a BA
in Law from a local Saudi university and his way of speaking about
the elements of the economy is not reassuring. Take his emphasis on
the maritime trade routes that flow around the Arabian Peninsula.
How exactly does Saudi Arabia derive a dime from them? The only
tolls I can think of are collected by Egypt for passage through the
Suez Canal. By far the most important container port in the region
is
Jebel Ali
in the UAE, which dwarfs Jedda. His estimate of 30
percent of world trade going through these bodies of water strikes
me as exaggerated. Only about 10 percent of world trade goes
through the Suez Canal.
As for tourism, in a country where alcohol is forbidden and
religious police report to the police unmarried couples on dates,
that seems to me a non-starter outside the religious tourism of
pilgrimage to Mecca. The annual pilgrimage
brought in $16.5 billion or 3 percent
of the Saudi GDP four
years ago, but that number appears to be way down the last couple
of years. Unless the prince plans to highly increase the 2-3
million pilgrims annually, religious tourism will remain a
relatively small part of the economy.
He also spoke about the new bridge planned from Saudi Arabia to
Egypt as likely to drive trade to the kingdom and to make it a
crossroads. But the road would go through the Sinai Peninsula,
which is highly insecure and in the midst of an insurrection. And
where do you drive to on the other side? You could maybe take
fruits and vegetables by truck from Egypt to countries such as
Qatar and the United Arab Emirates. Would Saudi Arabia collect
tariffs on these transit goods? I can't see how that generates all
that much money. The big opportunity for overland transport would
be to link Egypt to a major market like Iran (pop. 77 million), and
via Iran, Pakistan and India. But Prince Muhammad and his circle
are hardliners against Iran and unlikely to foster trade with it.
Saudi Arabia suffers from the Dutch disease, i.e. its currency
is artificially hardened by its valuable petroleum assets. They may
eventually not be worth anything if hydrocarbons are replaced by
green energy or even outlawed. But in 2016, they are still
valuable, and they make the riyal expensive versus other
currencies. The result is that anything made in Saudi Arabia would
be unaffordably expensive in India (the rupee is still a soft
currency). As long as Saudi Arabia produces so much petroleum, it
is unclear how it can industrialize in the sense of making
secondary goods.
As for the sovereign wealth fund, let's say the ARAMCO partial
IPO actually realizes $2 trillion. Let's say it gets 5 percent on
its investments after overhead and that all $2 trillion are
invested around the world. That would be $100 billion a year, or
1/6 of Saudi Arabia's GDP last year. It doesn't replace the oil.
Saudi Arabia's Gross Domestic Product in 2014 was $746 bn., of
which probably 70 percent was petroleum sales. In 2015 it was only
$653 bn., causing it to fall behind Turkey, the Netherlands and
Switzerland. It will be smaller yet in 2016 because of the
continued low oil prices.
All this is not to reckon with the profligate spending in which
the kingdom is engaged, with a direct war in Yemen and a proxy war
in Syria, neither cheap. (Both wars are pet projects of Prince
Muhammad bin Salman). It also has a lot of big weapons purchases in
the pipeline, one of the reasons for President Obama's humiliating
visit last week. It ran a $100 bn. budget deficit in 2015. Saudi
Arabia has big currency reserves, but I doubt it can go on like
this more than five or six years.
Yemen in particular has proved to be a quagmire, and the Houthi
rebels still hold the capital of Sanaa. The only new initiative is
that Saudi and local forces have kicked al-Qaeda in the Arabian
Peninsula out of the port of Mukalla. This campaign shows a sudden
interest in defeating al-Qaeda, which had been allowed to grow in
Yemen while the main target was the Shiite Houthis, which Riyadh
says are allied with Iran (the links seem minor).
So it seems to me that the Vision for 2030 is mostly smoke and
mirrors.... Saudi Arabia probably cannot replace the money it will
lose if oil goes out of style and so is doomed to downward mobility
and very possibly significant instability. It has been a great
party since the 1940s; it is going to be a hell of a hangover.
Based on OPEC figures Saudi had produced 136.5 billion through 2014, so about 142 to date and, assuming
no decline, 160 by the end of 2020. Obviously their reserves are unknown outside a select few, but
news does get out including upgrades on existing fields, some new non-associated gas fields coming
on line, development of shale gas, offshore exploration and some minor discoveries. But never reported
is a major new oil field discovery or development. Pretty much all onshore areas have been fully
explored, only deep sea remains, which appears to have been a disappointment from initial results.
From wiki and other places the URR for their giant fields (Ghawar, Safaniya, Shaybah, Abqaiq,
Berri, Manifa, Abu-Sa'fah, Khurais, Neutral Zone) is 190 billion barrels; if true they could be up
to 75% through, and should be well past peak, but are managing to retain a plateau. I think that
Matt Simmons got things mostly right that there would be a collapse, but missed their ability (technically
and economically with oil at $100 plus) and need to keep pushing the peak out.
So for Ghawar that would involve continuing with multilateral, intelligent wells, re-completions,
possibly tertiary EOR methods, and new drilling up-dip where needed etc. Assume Ghawar is 90% depleted
and its infrastructure suddenly disappeared, there would still be 7 to 10 billion barrels left, probably
still representing one of the more attractive development opportunities around.
For Safaniyah there was a major upgrade project in 2012 with a new platform, wellhead upgrades,
ESPs etc. Manifa is a complicated reservoir bought fully on line a few years ago. All the reservoirs
have the best available models to allow optimum management.
There may be minor declines in their main fields, but not what would be expected given their age
and depletion. They are expanding al Shaybah and Khurais by a total of 550,000 bpd over 4 to 5 years
to 2018, which would compensate for 1 to 1.5% overall decline; to compensate for the rest would have
to come from field management (e.g. using the intelligent wells) and in fill drilling. Between 2005
and 2014 they averaged 434 well completions per year, compared to 280 the previous 10 years, which
is probably connected with this. (Note Kuwait went from 120 in 2000 through 2010 to 560 average since
2010, I'm not sure what that represents).
Eventually they are going to run out of options, the more they push things out the faster the
crash is going to be. The signals seem to be that 2020 might be it.
"... "There is a realization among many Saudis that the economic challenges that the kingdom is facing are daunting," said Fahad Nazer, who worked at the Saudi embassy in Washington and is now a political analyst at JTG Inc. "Given the fact that some 70 percent of Saudis are under the age of 30, Prince Mohammed's penchant for making quick decisions and holding officials accountable for their performance – or lack thereof - does have wide support among Saudis. ..."
"... "The foremost challenge Mohammed bin Salman faces over time is the inevitable need to restructure the Al Sauds' relationship with the Wahhabis," ..."
"... "Within Saudi Arabia, the main challenges MbS will face will involve not the substance of oil policy but rather resistance within the royal family to so much power being concentrated in the hands of one prince of his generation," he said. ..."
After decades of talk of diversification, more than 70 percent of Saudi government revenue came from
oil in 2015 and the state still employs two-thirds of Saudi workers. Foreigners account for nearly
80 percent of the private-sector payroll.
"The issue really is how to get the Saudi private sector
to hire locals, how to make the numbers on that right, since so much of the Saudi private sector
has had business models based on lower-wage foreign labor," said Gause.
In response to the country's weakened fiscal position, Prince Mohammed's plan is to raise non-oil
revenue by $100 billion by 2020. The government announced cuts in utility and gasoline subsidies
in December. Including future reductions, authorities expect the restructuring to generate $30 billion
a year by 2020.
"There is a realization among many Saudis that the economic challenges that the kingdom is
facing are daunting," said Fahad Nazer, who worked at the Saudi embassy in Washington and is now
a political analyst at JTG Inc. "Given the fact that some 70 percent of Saudis are under the age
of 30, Prince Mohammed's penchant for making quick decisions and holding officials accountable for
their performance – or lack thereof - does have wide support among Saudis."
Past rulers of Saudi Arabia have largely avoided seeking additional revenue from their citizens.
As water prices surged after the reduction in subsidies, Saudis turned to social media to express
their anger at the government. King Salman fired the water minister on Saturday.
Saudi leaders also have unique social challenges that other nations implementing economic changes
didn't have to manage. While steps have been taken to get women into the workforce, the kingdom still
prohibits them from driving. The country's feared religious police, despite having their powers to
arrest curbed this month, still enforce gender segregation and prayer times.
"The foremost challenge Mohammed bin Salman faces over time is the inevitable need to restructure
the Al Sauds' relationship with the Wahhabis," said James Dorsey, a senior fellow in international
studies at Nanyang Technological University in Singapore. "This restructuring is inevitable both
to be able to truly reform the economy and because the increasing toll identification with the puritan
sect is taking on Saudi Arabia's international reputation."
His efforts to shake up the economy come against the backdrop of mounting domestic security threats
and regional turmoil, with the Sunni-ruled kingdom bogged down in a war in Yemen against Shiite rebels
it says are backed by Iran. He has also consolidated more power than anyone in his position since
the founding of the kingdom.
"Within Saudi Arabia, the main challenges MbS will face will involve not the substance of
oil policy but rather resistance within the royal family to so much power being concentrated in the
hands of one prince of his generation," he said.
So perhaps the spiking money-market rates are more indicative of the potential for social unrest?
"... To me it sounds like Crown Prince Mohammed bin Salman is preparing his citizens for the day of reckoning. Why is bringing up this topic right now - probably because Saudi oil production is peaking right now. And whatever "transforming the economy away from oil" entails, the Saudi population won't like it. ..."
"... Well if KSA were going to sell wall-to-wall carpet for all these decades, maybe they can start selling the vacuum cleaners for it… and continue to put disaster capitalism to work for the kings and princes… ..."
"... "Here at Your Kingdom of Saudi Arabia™, we have just the right kind of nice soft sand for your sea-level-rise beach-replenishment projects. We also offer special discounts for all our low-lying island archipelago customers. Let us help you fill the holes that you dig yourselves out of. Wallahi, let it be YKSA." ..."
Riyadh (AFP) – Saudi Arabia said Monday it would create the world's largest sovereign investment
fund and sell shares in state energy giant Aramco under a vast plan unveiled to transform its
oil-dependent economy.
"We will not rest until our nation is a leader in providing opportunities for all through
education and training, and high quality services such as employment initiatives, health, housing
and entertainment," Mohammed wrote in an 84-page booklet outlining the plan.
If it works, Saudi Arabia "can live without oil by 2020".
To me it sounds like Crown Prince Mohammed bin Salman is preparing his citizens for the
day of reckoning. Why is bringing up this topic right now - probably because Saudi oil production
is peaking right now. And whatever "transforming the economy away from oil" entails, the Saudi
population won't like it.
Well if KSA were going to sell wall-to-wall carpet for all these decades, maybe they can start
selling the vacuum cleaners for it… and continue to put disaster capitalism to work for the kings
and princes…
"Here at Your Kingdom of Saudi Arabia™, we have just the right kind of nice soft sand for
your sea-level-rise beach-replenishment projects. We also offer special discounts for all our
low-lying island archipelago customers. Let us help you fill the holes that you dig yourselves
out of. Wallahi, let it be YKSA."
"We will not rest until our nation is a leader in providing opportunities for all through education
and training*, and high quality services such as employment initiatives**, health, housing and
entertainment***,"
* except for women and shiites
** for imported Indian and Pakistanis who live in slave-like conditions
*** And DON'T forget the entertainment! Maybe they could introduce NASCAR.
My wife, teaching a course in mathematical physics in a Swedish university, tossed a pair of
Saudi students out of her class (permanently) owing to their utter disrespect: constant disruptive
and insulting comments. In the end the Saudi embassy tried to intervene but the university stood
firm. The incident might have adversely affected Swedish-Saudi relations for awhile but the fact
remains: respect for women by Saudis doesn't exist; even a modicum of respect for a female teacher
is an impossible concept for them.
About 70 percent of the population of Saudi Arabia is under 30, and more
than 30 percent of that is unemployed. Five million new jobs would mean one
new job for roughly every six people in the country.
Riedel said he
expects to see just the outline of a plan. "They will announce a cautious
series of reforms, including opening up Aramco a little bit. They will
announce probably some cutbacks in subsidies." He said it's unclear whether
there will be any further detail on the sovereign wealth fund yet.
... ... ...
Since the sharp drop in oil prices, Saudi Arabia has been running
deficits and has dipped into its foreign reserves to cover shortfalls. It
has also floated debt, and this week it borrowed $10 billion from a
consortium of global banks in its first international loan deal in a quarter
century. The bank deal was seen as a step toward an international bond deal.
Prior to the oil price collapse, Saudi Arabia needed about $100 a barrel to
meet its budget, and that number has only dipped slightly.
Bin Salman has a great deal invested in the plan to broaden the kingdom's
revenue base while reducing unemployment and curbing subsidies. Second in
line to the throne, he has been seen as a rival to his cousin, Crown Prince
Muhammad bin Nayef, the heir apparent to 80-year-old King Salman.
"I think about this transformation plan. It makes him the center of
everything. It really does make him the most powerful person in that
country," Croft said.
Bin Salman has been seen as acquiring more power than his cousin, but
he's viewed as unpredictable.
"I think the longer this goes on, the more time he has to entrench
himself, the more power he amasses, the more he becomes inevitable. I find
his political skill craft genius. Just the sheer ability to consolidate
power with tremendous speed. He's like Frank Underwood on steroids," said
Croft, referring to the central figure in Netflix's "House of Cards," who
schemed his way into the presidency.
Bin Salman is different than other Saudi leaders in that he was educated
in the kingdom. He wears traditional dress and is popular with young Saudis.
"They see in Mohammad bin Salman someone of their own generation moving
up the ladder very quickly. He has a certain degree of popularity. He's
also grated a lot of people in the family who see him as abrasive,
inexperienced, undisciplined, impulsive," said Riedel. "In the long
run, the way Saudi Arabia works is it's more important to be important in
the family than it is in the street. This is an absolute monarchy."
... ... ...
Oppenheimer energy analyst Fadel Gheit said he is skeptical that
investors will see the transparency they would like when Aramco ultimately
comes to market. "It's going to be an enigma surrounded by secrecy," he
said. "Why would I invest in Aramco, if I could buy Shell, BP where there's
democracy, transparency." Gheit said he doubts much information on Aramco
compensation or capital spending authorization would become public.
"The reason they want to do this IPO is it will give them another window
in the global capital markets," he said. "I do not take this as a sign of a
healthy economy."
The kingdom has named JP Morgan and Michael Klein as advisors on the
Aramco deal.
"... The interview was presumably meant to be reassuring to the outside world, but instead it gives an impression of naivety and arrogance. There is also a sense that Prince Mohammed is an inexperienced gambler who is likely to double his stake when his bets fail. This is the very opposite of past Saudi rulers, who had always preferred, so to speak, to bet on all the horses. ..."
"... This is the second area in which Prince Mohammed's interview suggests nothing but trouble for the Saudi royal family. He suggests austerity and market reforms in the Kingdom, but in the context of Middle East autocracies and particularly oil states this breaches an unspoken social contract with the general population. People may not have political liberty, but they get a share in oil revenues through government jobs and subsidised fuel, food, housing and other benefits. Greater privatisation and supposed reliance on the market, with no accountability or fair legal system, means a licence to plunder by those with political power. ..."
"... This was one of the reasons for the uprising in 2011 against Bashar al-Assad in Syria and Muammar Gaddafi in Libya. So-called reforms that erode an unwieldy but effective patronage machine end up by benefiting only the elite. ..."
German intelligence memo shows the threat from the kingdom's headstrong defence minister
At the end of last year the BND, the German intelligence agency, published a remarkable one-and-a-half-page
memo saying that Saudi Arabia had adopted "an impulsive policy of intervention". It portrayed Saudi
defence minister and Deputy Crown Prince Mohammed bin Salman – the powerful 29-year-old favourite
son of the ageing King Salman, who is suffering from dementia – as a political gambler who is destabilising
the Arab world through proxy wars in Yemen and Syria.
Spy agencies do not normally hand out such politically explosive documents to the press criticising
the leadership of a close and powerful ally such as Saudi Arabia. It is a measure of the concern
in the BND that the memo should have been so openly and widely distributed. The agency was swiftly
slapped down by the German foreign ministry after official Saudi protests, but the BND's warning
was a sign of growing fears that Saudi Arabia has become an unpredictable wild card. One former minister
from the Middle East, who wanted to remain anonymous, said: "In the past the Saudis generally tried
to keep their options open and were cautions, even when they were trying to get rid of some government
they did not like."
The BND report made surprisingly little impact outside Germany at the time. This may have been
because its publication on 2 December came three weeks after the Paris massacre on 13 November,
when governments and media across the world were still absorbed by the threat posed by Islamic State
(IS) and how it could best be combatted. In Britain there was the debate on the RAF joining the air
war against IS in Syria, and soon after in the US there were the killings by a pro-IS couple in San
Bernardino, California.
It was the execution of the Shia cleric Sheikh Nimr al-Nimr and 46 others – mostly Sunni jihadis
or dissenters – on 2 January that, for almost the first time, alerted governments to the extent to
which Saudi Arabia had become a threat to the status quo. It appears to be deliberately provoking
Iran in a bid to take leadership of the Sunni and Arab worlds while at the same time Prince Mohammed
bin Salman is buttressing his domestic power by appealing to Sunni sectarian nationalism. What is
not in doubt is that Saudi policy has been transformed since King Salman came to the throne last
January after the death of King Abdullah.
The BND lists the areas in which Saudi Arabia is adopting a more aggressive and warlike policy.
In Syria, in early 2015, it supported the creation of The Army of Conquest, primarily made up of
the al-Qaeda affiliate the al-Nusra Front and the ideologically similar Ahrar al-Sham, which won
a series of victories against the Syrian Army in Idlib province. In Yemen, it began an air war directed
against the Houthi movement and the Yemeni army, which shows no sign of ending. Among those who gain
are al-Qaeda in the Arabian peninsula, which the US has been fruitlessly trying to weaken for years
by drone strikes.
None of these foreign adventures initiated by Prince Mohammed have been successful or are likely
to be so, but they have won support for him at home. The BND warned that the concentration of so
much power in his hands "harbours a latent risk that in seeking to establish himself in the line
of succession in his father's lifetime, he may overreach".
The overreaching gets worse by the day. At every stage in the confrontation with Iran over the
past week Riyadh has raised the stakes. The attack on the Saudi embassy in Tehran and its consulate
in Mashhad might not have been expected but the Saudis did not have to break off diplomatic relations.
Then there was the air strike that the Iranians allege damaged their embassy in Sana'a, the capital
of Yemen.
None of this was too surprising: Saudi-Iranian relations have been at a particularly low ebb since
400 Iranian pilgrims died in a mass stampede in Mecca last year.
But even in the past few days, there are signs of the Saudi leadership deliberately increasing
the political temperature by putting four Iranians on trial, one for espionage and three for terrorism.
The four had been in prison in Saudi Arabia since 2013 or 2014 so there was no reason to try them
now, other than as an extra pinprick against Iran.
Saudi Arabia has been engaging in something of a counter attack to reassure the world that it
is not going to go to war with Iran. Prince Mohammed said in an interview with The Economist: "A
war between Saudi Arabia and Iran is the beginning of a major catastrophe in the region, and it will
reflect very strongly on the rest of the world. For sure, we will not allow any such thing."
The interview was presumably meant to be reassuring to the outside world, but instead it gives
an impression of naivety and arrogance. There is also a sense that Prince Mohammed is an inexperienced
gambler who is likely to double his stake when his bets fail. This is the very opposite of past Saudi
rulers, who had always preferred, so to speak, to bet on all the horses.
A main reason for Saudi Arabia acting unilaterally is its disappointment that the US reached an
agreement with Iran over Tehran's nuclear programme. Again this looks naive: close alliance with
the US is the prime reason why the Saudi monarchy has survived nationalist and socialist challengers
since the 1930s. Aside from the Saudis' money and close alliance with the US, leaders in the Middle
East have always doubted that the Saudi state has much operational capacity. This is true of all
the big oil producers, whatever their ideological make-up. Experience shows that vast oil wealth
encourages autocracy, whether it is in Saudi Arabia, Iraq, Libya or Kuwait, but it also produces
states that are weaker than they look, with incapable administrations and dysfunctional armies.
This is the second area in which Prince Mohammed's interview suggests nothing but trouble for
the Saudi royal family. He suggests austerity and market reforms in the Kingdom, but in the context
of Middle East autocracies and particularly oil states this breaches an unspoken social contract
with the general population. People may not have political liberty, but they get a share in oil revenues
through government jobs and subsidised fuel, food, housing and other benefits. Greater privatisation
and supposed reliance on the market, with no accountability or fair legal system, means a licence
to plunder by those with political power.
This was one of the reasons for the uprising in 2011 against Bashar al-Assad in Syria and
Muammar Gaddafi in Libya. So-called reforms that erode an unwieldy but effective patronage machine
end up by benefiting only the elite.
Oil states are almost impossible to reform and it is usually unwise to try. Such states should
also avoid war if they want to stay in business, because people may not rise up against their rulers
but they are certainly not prepared to die for them.
"... Since King Salman succeeded to power in January, Saudi Arabia has orchestrated a military coalition to intervene in neighbouring Yemen to limit Iranian influence, increased support for Syrian rebels and made big changes in the royal succession. ..."
"... Germany's BND pointed to efforts by the two rivals to shape events in Syria, Lebanon, Bahrain and Iraq, with Saudi Arabia increasingly prepared to take military, political and financial risks to ensure it does not lose influence in the region. ..."
"... Iran, a major ally of Assad, denies having expansionist aims and accuses Saudi Arabia of undermining regional stability through its backing of Syrian rebels and intervention in Yemen. ..."
"... It pointed to risks stemming from the concentration of power in Prince Mohammad, who it said could get carried away with efforts to secure the royal family succession in his favour. ..."
"... Saudi Arabia faces a budget deficit that economists estimate could total $120 billion or more this year. This has led the Finance Ministry to close its national accounts a month early to control spending. ..."
"... Prince Mohammed, who is second-in-line to rule, is also the Saudi defence minister and head of a supercommittee on the economy. The young prince has enjoyed a dizzying accumulation of powers since his father became king and placed him in the line of succession ahead of dozens of cousins. ..."
BERLIN (Reuters) - Germany's BND foreign intelligence agency, in an unusual public statement issued
on Wednesday, voiced concern that Saudi Arabia was becoming impulsive in its foreign policy as powerful
young Deputy Crown Prince Mohammad bin Salman asserts himself.
The BND also said that with Saudi Arabia - the world's No. 1 oil exporter - losing confidence
in the United States as a guarantor of Middle East order, Riyadh appeared ready to take more risks
in its regional competition with Iran.
Since King Salman succeeded to power in January, Saudi Arabia has orchestrated a military coalition
to intervene in neighbouring Yemen to limit Iranian influence, increased support for Syrian rebels
and made big changes in the royal succession.
Riyadh has long viewed Iran as aggressive and expansionary and regarded its use of non-state proxies
such as Lebanon's Hezbollah and Iraqi Shi'ite militias as aggravating sectarian tensions and destabilising
the region. But under Salman, it has moved more assertively to counter its regional foe.
Germany's BND pointed to efforts by the two rivals to shape events in Syria, Lebanon, Bahrain
and Iraq, with Saudi Arabia increasingly prepared to take military, political and financial risks
to ensure it does not lose influence in the region.
"The thus far cautious diplomatic stance of the elder leaders in the royal family is being replaced
by an impulsive interventionist policy," the BND said, adding the Saudis remain committed to the
removal of Syrian President Bashar al-Assad.
Iran, a major ally of Assad, denies having expansionist aims and accuses Saudi Arabia of undermining
regional stability through its backing of Syrian rebels and intervention in Yemen.
The BND issued the 1-1/2 page report, entitled "Saudi Arabia - Sunni regional power torn between
foreign policy paradigm change and domestic policy consolidation", to some German media. Reuters
also obtained a copy.
It pointed to risks stemming from the concentration of power in Prince Mohammad, who it said could
get carried away with efforts to secure the royal family succession in his favour.
The BND said there was a risk he would irritate other royal family members and the Saudi people
with reforms, while undermining relations with friendly, allied states in the region.
Saudi Arabia faces a budget deficit that economists estimate could total $120 billion or more
this year. This has led the Finance Ministry to close its national accounts a month early to control
spending.
Prince Mohammed, who is second-in-line to rule, is also the Saudi defence minister and head of
a supercommittee on the economy. The young prince has enjoyed a dizzying accumulation of powers since
his father became king and placed him in the line of succession ahead of dozens of cousins.
(Reporting by Andreas Rinke; Writing by Paul Carrel; Editing by Noah Barkin/Mark Heinrich)
King Salman's son Mohammad seems to be piloting Saudi
Arabia into a series of ever more risky adventures.
In the past year, the Kingdom of Saudi Arabia has abandoned the cautious
fence-sitting that long characterised its diplomatic style in favour of an
unprecedented, hawkish antagonism. That this transformation coincides with the
meteoric rise of a previously little known prince – 30 year-old Mohammad bin Salman –
is no accident; it seems that the prince is now the power behind the throne.
Since the death of the first king of modern Saudi Arabia, Abdulaziz, in 1953, the
kingdom has been ruled by an increasingly elderly succession of six of his 45 sons;
the last incumbent, Abdullah, died last January aged 90 and was replaced by the
present king, Salman, who is 81 and rumoured to be suffering from dementia. The
youthful, sabre-rattling Prince Mohammad, insiders say, is Salman's favourite son by
his third and favourite wife, Fahda.
Salman has one remaining brother – 75 year-old Muqrin – who would normally have
been next in line for the throne. Whether alone, or at the instigation of others,
Salman
removed Muqrin from the succession three months after he became king. Prince
Mohammad now moved up the line of succession to become 'deputy Crown Prince', with
only his 56 year-old cousin, Mohammad bin Nayef between him and the throne.
King Salman then bestowed an astonishing array of portfolios and titles on his
inexperienced son, making him Defence Minister and Deputy Prime Minister – the very
same posts Salman himself occupied prior to inheriting the throne – as well as head
of the Economic Guidance Council and Chief of the Royal Court. Within weeks, bin
Nayef's court was merged with the Royal Court, now supervised by Prince Mohammad, and
one of his closest advisers was removed from the ruling cabinet.
No wonder Prince Mohammad feels mandated to pilot the kingdom into a series of
ever more risky adventures, earning himself the unofficial nickname 'Reckless'
and unfavourable comparisons with his highly intelligent half-brother, 56 year-old
Prince Sultan bin Salman, who became the first Arab astronaut in 1986 and is
currently languishing in obscurity as head of the Saudi Tourist Board.
At the heart of all Sunni Saudi Arabia's current woes is its longstanding
sectarian and political rivalry with the Shi'a republic of Iran. The toppling of the
Shah by the 1979 Islamic revolution struck fear into the Saudi royals' hearts and
consolidated Riyadh's political and military dependence on the west.
Just as King Salman got comfortable on the throne,
everything started to go wrong.
Until very recently, Iran was isolated and under heavy sanctions, the bête
noire of the west, harbouring nuclear ambitions and an aggressive attitude
towards 'the great Satan', America, and its client state, Israel. Meanwhile, Saudi
Arabia could do no wrong – despite its appalling
human
rights record,
oppression of women and rampant
corruption. Pliable and
passive in its regional politics, Washington's willing ally eagerly swapped billions
of petro-dollars for sophisticated military hardware, aircraft and weapons. Margaret
Thatcher had a special department for pushing through the
al-Yamamah
arms deal which involved record amounts of dollars and corruption. This 'special
relationship' endured: the flag over Buckingham Palace flew at half-mast when King
Abdullah passed on in January last year and David Cameron, Barack Obama and François
Hollande were among many world leaders who travelled to Riyadh for the late monarch's
memorial.
But just as King Salman got comfortable on the throne, everything started to go
wrong for the desert kingdom.
First, the west suddenly woke up to how deeply entrenched the Islamic State (IS)
had become on both sides of the Iraq/Syria border as it set about building its
'Caliphate'; this problem now replaced the removal of Syrian President Bashar
al-Assad as regional priority number one. Before this complication, alignment in
Syria had been relatively simple and along sectarian fault lines: the Alawite (a
branch of Shi'ism) Assad regime was backed by Iran, Iraq, Russia and China, while the
mainly Sunni opposition was championed by Saudi Arabia, most Gulf states, Turkey, the
US, UK and several European countries.
Recognising the growing predominance of Islamic extremists within the opposition
(a situation actively fostered by Saudi Arabia) the west now preferred a political
solution to the Syrian civil war and reluctantly conceded – largely under Russian
pressure – that this could not be achieved without Iran. Furthermore, it looked
increasingly likely that IS could not be defeated without the co-operation of the
Syrian army, transforming Assad – temporarily at least – from the problem to part of
the solution.
To the dismay of the Saudis, Washington began to court Tehran, creating a vehicle
for rapprochement by bump-starting the
nuclear limitation agreement which had been stalled for thirteen years but now
accelerated to the finishing line in a matter of months. Concluded in July, it was
finally signed by President Obama in October last year and Tehran was invited to the
Vienna conference on Syria the same month. In addition, Iranian assets were unfrozen
and sanctions lifted.
Not only did the Saudis feel betrayed, but they now faced another problem as a
result. Since November 2014, they had been exerting their considerable influence on
OPEC to keep pumping oil at levels
above the agreed ceiling, despite falling prices. Ostensibly aimed at pricing the
American fracking industry out of the market, it was also political, intended to harm
the economies of oil-rich Iran and Russia – both under international sanctions at the
time. Tehran now called Saudi Arabia's bluff, announcing that as soon as sanctions
were lifted it would
pump a million extra barrels a day. Suddenly the tables were turned and it was
the Saudi economy that was at risk, with the
IMF warning in October 2015 that the nation would bankrupt itself within five
years – despite its gargantuan sovereign funds – if it did not reverse its policy.
Nor is this the only drain on Saudi finances. Since March it has been bombarding
the Iranian-backed Houthi rebels
in Yemen, presumably at the instigation of Prince Mohammad (with his defence
minister hat on). Saudi Arabia has no history or experience of unilateral armed
intervention – it sent 3,000 soldiers to each of the major Arab-Israeli wars and a
few more to the first Gulf War – yet the prince believed that the Houthis would be
defeated in a matter of days. Ten months on, with no plan B and no exit strategy,
nothing has been achieved but the devastation of the poorest country in the Middle
East and the deaths of thousands of innocent civilians. Analysts estimate that the
financial cost of this adventure has already topped $60 billion. With oil revenues at
rock bottom, the Saudi treasury has sold billions of dollars' worth of European
stocks to meet the ongoing costs of this unwinnable war.
The question is why, when the world stands at the
brink of a catastrophic conflict, take any side at all?
Things took an even more hawkish turn last week when the Saudi regime took the
decision to behead a well-known dissident Shi'a cleric,
Sheikh Nimr al-Nimr. There were riots in Tehran where the
Saudi Embassy was set on fire; Riyadh immediately cut all
diplomatic ties with Iran and shortly afterwards a Saudi
airstrike damaged the Iranian embassy in Sanaa, Yemen. The resulting tension has
sent shock-waves through the region, with many fearing a war between the two powers
as the Saudis seek to enlist the support of fellow Sunni nations.
With the headstrong Prince Mohammad at the helm, backing down does not appear to
be an option… and if the war-chest runs out, contingencies are in place. In an
interview last week with The
Economist, Prince Mohammad revealed a plan to float Aramco – the trillion
dollar nationalised oil company and the country's most valuable asset – on the
international markets and sell billions worth of nationally-owned prime land for
private development. In addition, subsidies for the needy will be slashed and the
education and healthcare systems privatised, putting them out of reach for the
poorest members of society.
In Gulf countries, autocratic systems are generally tolerated due to an unspoken
contract between government and the people that everyone benefits from the nation's
wealth (albeit extremely unequally); Prince Mohammad's Thatcherite vision, if
implemented, risks widespread civil unrest. In addition, the restive Shi'a population
in the east is sitting on top of the country's largest oil fields and distribution
centres.
Saudi influence abroad has always been predicated on its wealth and can be
expected to diminish along with its coffers. Nevertheless, Prince Mohammad adopted
the diplomatic style of George W. Bush in his search for allies: 'Who's not with us
is against us'. The right wing press has apparently already made its decision: the
Daily Telegraphdeclared that "Britain Must Side With Saudi Arabia",
whileRoger
Boyesin The Timesopined "execution by sword is
brutal but Riyadh remains our best hope for peace in the Middle East"… well that's
not what they say about the Islamic State. In fact, the past year saw a record number
of beheadings in Saudi Arabia and 157 executions in all.
None of this is to say that Iran is any better – both theocracies are intolerant,
oppressive and cruel. The question is why, when the world stands at the brink of a
catastrophic conflict, take any side at all? Shouldn't Britain and America,
supposedly 'developed' countries claiming to be beacons of progress and democracy, be
brokering the rapprochement between these two extremist regimes that is key to
regional peace, and a political solution to the Syrian crisis? Shouldn't the west be
exercising the undoubted influence it still possesses in the Royal Palace to urge
more caution, more debate?
If the west persists, instead, in following a deluded prince into an unwinnable
battle against a fabricated monster, it might as well champion Don Quixote tilting at
windmills and declaring "a righteous war and the removal of so foul a brood from off
the face of the earth is a service God will bless".
"As the source close to Riyadh advances, "the real nuclear option for
the Saudis would be to cooperate with Russia in a new alliance to cut back oil production
20% for all of OPEC, in the process raising the oil price to $200.00 a barrel to make up
for lost revenue, forced on them by the United States." This is what the West fear like
the plague. And this is what the perennial vassal, the House of Saud, will never have the
balls to pull off. "
That's silly. He is definitely a leftee,
but, in case you do not know, Pravda no longer exists.
And that does not disqualifies him any more then Bloomberg shilling for Saudi and
all other disingenuous "low oil price forever" MSM. We should be able to filter out outright
propaganda, aren't we?
I am more interested in new facts that he reports and which might well be true, like
A famous 3 am call did take place in Doha on Sunday. The young Salman called the
Saudi delegation and told them the deal was off. Every other energy market player
was stunned by the reversion.
So, if true, it looks like somebody played young gambler prince card again to prevent/slow
down the process of normalization of oil prices.
That makes it more difficult to deny that the collapse of oil prices was not, at least
in part, an engineered event.
"... "They (Saudis) have the ability to raise output significantly. But so do we," Russian Energy Minister Alexander Novak told journalists on the sidelines of an international energy conference in Moscow. ..."
"... He said Russia was "in theory" able to raise production to 12 or even 13 million bpd from current record levels of close to 11 million bpd. ..."
"... Russian oil output has repeatedly surprised on the upside over the past decade, rising from as low as 6 million bpd at the turn of the millennium. Oil experts have repeatedly predicted an unavoidable decline but it has yet to happen. ..."
"... we are headed for some incredibly rough times. We need for oil to be just like Goldilock's porridge, not to hot, not too cold, not too plentiful and cheap, not too scarce and expensive, for at least another couple of decades. ..."
Russia said on Wednesday it was prepared to push oil production to new historic highs, just
days after a global deal to freeze output levels collapsed and Saudi Arabia threatened to flood
markets with more crude.
The deal had been meant to help the market rebalance by removing a large chunk of oversupply
and a stockpile glut.
But Saudi Arabia said it could jack up output instead – by as much as 2 million barrels per
day (bpd) to over 12 million, which would allow it to overtake Russia as the world's largest producer.
"They (Saudis) have the ability to raise output significantly. But so do we," Russian
Energy Minister Alexander Novak told journalists on the sidelines of an international energy
conference in Moscow.
He said Russia was "in theory" able to raise production to 12 or even 13 million bpd from
current record levels of close to 11 million bpd.
Russian oil output has repeatedly surprised on the upside over the past decade, rising
from as low as 6 million bpd at the turn of the millennium. Oil experts have repeatedly predicted
an unavoidable decline but it has yet to happen.
"Oil experts have repeatedly predicted an unavoidable decline but it has yet to happen."
This is a "WHEN" question, rather than an "if" question. Let's hope and pray to the Sky Daddy
or Sky Mommy of our choice that the supply of oil holds up well enough, long enough, for the renewables
and electric car industries to grow up.
Otherwise, we are headed for some incredibly rough times. We need for oil to be just like
Goldilock's porridge, not to hot, not too cold, not too plentiful and cheap, not too scarce and
expensive, for at least another couple of decades.
"... It was US intervention in the Middle East, say the Saudis, that led us to create first al-Qaeda and then ISIS. The US attack on Iraq tipped the balance in the region in favor of Iran and counter-measures needed to be taken. ..."
"... This is nothing new. The CIA helped create and back the Mujahideen in Afghanistan to counter the 1979 Soviet invasion. And the CIA knew about (at the least) Saudi plans to counter Iran's rise in the region and the uncertainty produced by US-instigated "Arab Spring" beginning in 2011. ..."
It was US intervention in the Middle East, say the Saudis, that led us to create first
al-Qaeda and then ISIS. The US attack on Iraq tipped the balance in the region in favor of Iran
and counter-measures needed to be taken.
This is nothing new. The CIA helped create and back the Mujahideen in Afghanistan to
counter the 1979 Soviet invasion. And the CIA knew about (at the least) Saudi plans to counter
Iran's rise in the region and the uncertainty produced by US-instigated "Arab Spring" beginning
in 2011. The lesson? Interventionism has consequences, some intended and some unintended.
Usually counter to the stated objectives. Trying to order the world, the central planners have
only created chaos.
Blast from the past (this article was published in april 2014 -- two years ago)
Notable quotes:
"... To decrease oil and gas prices significantly, which would be a serious blow to Russia's state treasury, and to achieve substantial reductions in the consumption of Russian oil and gas by the West. ..."
"... However, the rulers of the KSA want much more, and above all, they want Assad's regime to be destroyed, and American help in order to stop the growing influence of Iran, as well as to form a "Shiite Arc" in the region. Only then can Riyadh recover from the strongly shaken position of the kingdom in the Islamic world. And the overthrow of Assad and capturing Damascus by the pro-Saudi Islamist opposition in Damascus are the only things that can strengthen the position of Saudi Arabia as a leader among the Arab states. This would allow the implementation of its plans for further regional expansion – from establishing a Jordanian-Palestinian federation to the formation of an anti-Shiite league from the Arabian Peninsula to India. ..."
"... Thus, while B. Assad stays in power, the construction of the gas pipeline from Qatar to the Mediterranean coast of Syria is impossible. Energy experts calculated back in 2009-2010, that if Sunnis came to power in Syria, instead of the Alawite regime of Bashar Assad, the gas pipeline 'Qatar – Saudi Arabia – Jordan – Syria – Turkey' would be built in two years. This would result in huge financial losses for Russia, whose gas cannot compete with Qatari gas, due to the extremely low cost of the latter. Hence, Saudi Arabia is trying to subdue Qatar, through a conflict within the GCC, in order to cut off another option – the construction of a gas pipeline from Iran (South Pars) through Iraq and Syria, which could be a joint project with Russia. Doha would play only a secondary, supporting role, being dependent on Tehran. ..."
"... Earlier, American billionaire George Soros said that the U.S. strategic oil reserves are more than twice larger than the required level, and the sale of a part of these reserves would allow exerting pressure on Russia. That is, the blows would hit Moscow from two directions – from the United States and from the Persian Gulf. However, later on, the U.S. Secretary of Energy denied this possibility. ..."
"... However, there is the question: Did the U.S. President manage to agree with Saudi Arabia to increase oil supplies to the world market to bring down prices? Does the KSA have a possibility to offer significant volumes of oil on the world market, for example up to 3-4 million b/d? ..."
"... The fact is that the price of $110 per barrel is just the thing that Saudi Arabia needs, because the leadership of the kingdom has extensive socio-economic obligations. And if the standard of living of the Saudis decreases somewhat, due to the fall in oil prices and due to the fall of oil income, the country would be very much at risk to fall into the situation of the "Arab Spring", like it was the case in Tunisia, Libya, Egypt. And the Saudis are afraid of a repetition of the Arab revolutions ..."
"... Alexander Orlov, political scientist, expert in Oriental Studies, exclusively for the online magazine "New Eastern Outlook" . http://journal-neo.org/2014/04/02/rus-zachem-obama-priezzhal-v-e-r-riyad/ ..."
The deterioration of the situation in Ukraine made substantial changes in the agenda of talks
of U.S. President Obama with Saudi leadership in Riyadh on March 28 this year. The main subject of
the discussion included the situation around Ukraine, possible joint steps to decrease energy prices,
in order to weaken Russia's economy, promotion of Iran's moving to a more pro-Western position, to
weaken Tehran's cooperation with Moscow, and only then about Syria and the situation in the GCC.
Obama's support of the coup in Ukraine and the tough American opposition towards Russia in Ukrainian
affairs, led to Washington developing the idea of urgent mobilization of the resources of its rich
Arab allies – to oppose Moscow. This is because it turned out that the U.S. and its allies in NATO
and the EU had no financial or political leverage, for exerting pressure on Russia.
That is why the White House's decision, urgently to revive its relations with those major Arab
partners, with whom they have not been good recently, seems logical. The more so that, although Riyadh
and Washington had differences in the approaches to some international and regional issues, the two
countries reduced neither their energy nor military cooperation, as well as intelligence interaction
was not stopped in the war being conducted by the United States and the Kingdom of Saudi Arabia against
Iran and Syria. In addition, the White House decided to try to form a united front with the leading
country in the Arab world against Moscow, and to neutralize Tehran at the same time.
As it became known, in the course of the conversation, Obama suggested that the ruling Saudi dynasty
"take vengeance" on Russia for Crimea, by making strikes on three fronts. In Syria, in order to take
it out of the orbit of influence of Moscow and Tehran, and to put the whole Levant under the U.S.
and Saudi control. To provide financial assistance to the new government in Kiev, in order to make
Ukraine an outpost of anti-Russian activities in Eastern Europe. To decrease oil and gas prices
significantly, which would be a serious blow to Russia's state treasury, and to achieve substantial
reductions in the consumption of Russian oil and gas by the West.
Washington is well aware that Obama cannot act in any of these areas without Riyadh, especially
in terms of using the "energy weapon" against Moscow. In exchange, Obama offered to "give a free
hand" to the KSA in the Middle East and the Persian Gulf. The more so, that Riyadh has been granted
the right to build a special relationship with Egypt, after the overthrow of Mursi's government.
In general, the U.S. and the West have turned a blind eye to the harsh crushing of the protests of
Shiites in Bahrain and the Eastern Province of the KSA. The Saudis received the right to carry out
an operation to "subdue" Qatar and to defeat the Muslim Brotherhood. Moreover, the White House has
admitted Riyadh to work on the question that is the most important issue for it and Israel, i.e.,
the Israeli-Palestinian settlement, by giving the Saudis a "green light" to work with Jordan, which
now has a special role in the new scheme to settle the Palestinian issue.
However, the rulers of the KSA want much more, and above all, they want Assad's regime to
be destroyed, and American help in order to stop the growing influence of Iran, as well as to form
a "Shiite Arc" in the region. Only then can Riyadh recover from the strongly shaken position of the
kingdom in the Islamic world. And the overthrow of Assad and capturing Damascus by the pro-Saudi
Islamist opposition in Damascus are the only things that can strengthen the position of Saudi Arabia
as a leader among the Arab states. This would allow the implementation of its plans for further regional
expansion – from establishing a Jordanian-Palestinian federation to the formation of an anti-Shiite
league from the Arabian Peninsula to India.
In addition, the Saudis have their own logic here – since Syria can play a key role in supplying
Qatari gas to Europe. In 2009-2011, Damascus was the main obstacle to the implementation of a project
for the construction of a pipeline from Qatar's North Field to the EU, which would have allowed a
strike at "Gazprom", via a sharp increase in supplies of cheap Qatari gas to Europe. For various
reasons, Damascus did not consent to laying of a gas pipeline through its territory from Qatar to
Turkey and the Mediterranean coast of the SAR for further transit to the EU. Thus, while B. Assad
stays in power, the construction of the gas pipeline from Qatar to the Mediterranean coast of Syria
is impossible. Energy experts calculated back in 2009-2010, that if Sunnis came to power in Syria,
instead of the Alawite regime of Bashar Assad, the gas pipeline 'Qatar – Saudi Arabia – Jordan –
Syria – Turkey' would be built in two years. This would result in huge financial losses for Russia,
whose gas cannot compete with Qatari gas, due to the extremely low cost of the latter. Hence, Saudi
Arabia is trying to subdue Qatar, through a conflict within the GCC, in order to cut off another
option – the construction of a gas pipeline from Iran (South Pars) through Iraq and Syria, which
could be a joint project with Russia. Doha would play only a secondary, supporting role, being dependent
on Tehran.
Therefore, in Obama's negotiations with the Saudi rulers, the latter sought U.S. consent to a
large increase in the comprehensive assistance provided to Syrian rebels. In particular, to supply
heavy weapons and man-portable air defense systems (MANPADS), which would reduce to naught the superiority
of the Syrian government forces in terms of firepower, and its complete superiority in the air, and
thereby change the military balance in favor of "the anti-Assad opposition". After that, it would
be possible to act under the tested scheme: the creation of no-fly zones near Turkish and Jordanian
borders, turning this area into a stronghold of militants, supplying arms and sending large mercenary
forces there and the organization of a march on Damascus. In this case, according to the logic of
the Saudis, Iran would be forced to move to a strategic defense, which would satisfy Riyadh at this
stage, before the next move – arranging a coalition aimed at stifling the Islamic regime in Tehran.
Obama asked the Saudis to give $15 billion, in return for all that, in order to support current Ukrainian
authorities, explaining that the KSA would be compensated for these financial costs and a temporary
drop in oil prices later, by the energy "isolation" of Russia and Iran.
The more so, that there was a precedent for this, when President Reagan and Saudi King caused
a sharp decline in oil prices by the dumping of Saudi oil on the world market in the mid-1980s, because
Soviet troops were sent into Afghanistan, which ultimately led to the disintegration of the Soviet
Union, because of the subsequent economic problems. Today, a much smaller decrease in oil prices
– from the current $107 per barrel to around 80-85 dollars – would be enough to make Russia suffer
huge financial and economic damages. This would allow the U.S. president not only to get revenge
for Crimea, but also to undermine significantly the economy of the Russian Federation, which would
be followed by negative domestic political consequences for the current Russian government.
Earlier, American billionaire George Soros said that the U.S. strategic oil reserves are more
than twice larger than the required level, and the sale of a part of these reserves would allow exerting
pressure on Russia. That is, the blows would hit Moscow from two directions – from the United States
and from the Persian Gulf. However, later on, the U.S. Secretary of Energy denied this possibility.
However, there is the question: Did the U.S. President manage to agree with Saudi Arabia to
increase oil supplies to the world market to bring down prices? Does the KSA have a possibility to
offer significant volumes of oil on the world market, for example up to 3-4 million b/d?
The fact is that the price of $110 per barrel is just the thing that Saudi Arabia needs, because
the leadership of the kingdom has extensive socio-economic obligations. And if the standard of living
of the Saudis decreases somewhat, due to the fall in oil prices and due to the fall of oil income,
the country would be very much at risk to fall into the situation of the "Arab Spring", like it was
the case in Tunisia, Libya, Egypt. And the Saudis are afraid of a repetition of the Arab revolutions.
Apparently, the Saudis are not going to offer additional oil on the market in order to bring down
the price, just due to the hatred of the United States for the Russian Federation – as this is not
profitable for them at all. They could agree on other things, including Qatari gas, Syria and Iran.
In addition, the available production capacity of the KSA is not engaged now. This is about 4 million
barrels per day. However, it would be impossible to do this quickly. It could take up to one month
to increase the production. This is about as much as Iran produced at one time. However, now Iran
is going to increase its production, due to lifting a part of the sanctions, and the Saudis are likely
not to increase, but to reduce their production to keep oil prices high. And the prices will remain
within the range they have been for quite a long time already. They will be in the range from 100
to 110, as this is the most comfortable range for both consumers and producers. Many countries, especially
those that can influence the prices, via some manipulations with supply, are extremely interested
in having high level of prices. Socio-economic programs are carried out in Venezuela at a price level
of about $120 per barrel. In Iran, this figure is 110, and the same in Saudi Arabia. Thus, no one
is interested in bringing down prices.
As for Iran, only one thing is clear for the time being: President Barack Obama has reassured
Saudi King Abdullah that he would not agree to a "bad deal" with Iran on the nuclear issue. That
is, Riyadh did not get what it wanted even on the Iranian issue. After the two leaders discussed
their "tactical disagreements", they both agreed that their strategic interests coincide, said an
administration official. The statement of the White House on the results of the two-hour talks reads
that Obama reaffirmed the importance for Washington of strong ties with the world's largest oil exporter.
At the same time, the administration official said that the parties had no time to discuss the situation
with human rights in Saudi Arabia during their negotiations. In addition, a trusted source in the
U.S. State Department said that Washington and Riyadh also discussed the conflict in Syria. According
to him, the two countries carried out good joint work aimed at reaching a political transition period,
and the support of moderate factions of the Syrian opposition. As for a possible supply of man-portable
air defense systems to opposition militants, an informed source in Washington said that the U.S.
still was concerned regarding the provision of such weapons to the rebels. However, there is information
that Obama's administration is considering the possibility of lifting the ban on the supply of MANPADS
to the Syrian opposition. According to this source, the recent successes of the Syrian Army against
the opposition forces may force the U.S. president to change his point of view.
Apparently, Obama and King Abdullah failed to reach clear and specific agreements on all issues
on the agenda. There are differences, and the financial and economic interests are more important
to Saudi Arabia than helping Washington in implementing its "revenge" on Russia for Crimea. Riyadh
is well aware that Moscow and its partners on energy matters have things with which to respond to
Saudi Arabia if the kingdom is blindly led on a string by the White House. And it is aware even more
that Moscow has levers of political influence in the Middle East and the Persian Gulf. The U.S.,
in turn, is not ready to resume its confrontation with Iran, especially when Tehran is fulfilling
agreements to freeze its nuclear uranium enrichment program. In addition, Washington cannot work
actively on Syrian affairs now, in the conditions of ongoing tensions in Ukraine. In addition, the
chemical arsenal of the SAR has been half destroyed. And, apparently, Obama saw for himself during
his, albeit short, stay in the kingdom that great changes are coming there, associated with the upcoming
replacement of the current elderly generation of rulers by another one, which might be accompanied
by unpredictable internal perturbation in the KSA. Hence, there is almost complete absence of victorious
statements about the "historical" success of the U.S. President's visit to Saudi Arabia.
"... A famous 3 am call did take place in Doha on Sunday. The young Salman called the Saudi delegation and told them the deal was off. Every other energy market player was stunned by the reversion. ..."
US President Barack Obama landed in Saudi Arabia for a GCC petrodollar summit and to proverbially
"reassure Gulf allies" amidst the oiliest of storms.
The Doha summit this past weekend that was supposed to enshrine a cut in oil production by OPEC,
in tandem with Russia – it was practically a done deal – ended up literally in the dust.
The City of London – via the FT – wants to convey the impression to global public opinion that
it all boiled down to a dispute between Prince Mohammed bin Salman – the conductor of the illegal
war on Yemen - and Saudi Oil Minister Ali Al-Naimi. The son of - ailing - King Salman has been dubbed
"the unpredictable new voice of the kingdom's energy policy."
A famous 3 am call did take place in Doha on Sunday. The young Salman called the Saudi delegation
and told them the deal was off. Every other energy market player was stunned by the reversion.
Yet the true story, according to a financial source with very close links to the House of Saud,
is that "the United States threatened the Prince that night with the most dire consequences if he
did not back down on the oil price freeze."
So – predictably - this goes way beyond an internal Saudi matter, or the Prince's "erratic" behavior,
even as the House of Saud is indeed racked by multiple instances of fear and paranoia, as I analysed
here .
As the source explains, an oil production cut would have "hindered the US goal of bankrupting
Russia via an oil price war, which is what this is all about. Even the Prince is not that erratic."
Iran had made it more than clear that after the lifting of sanctions it does not have any reason
to embark on a production cut. On the contrary; oil contributes to 23% of Iran's GDP. But as far
as the House of Saud is concerned – feeling the pain of a budget deficit of $98 billion in 2015 -
a moderate cut was feasible, along with most of OPEC and Russia, as Al-Naimi had promised.
Another key variable must also be taken into account. Not only the whole saga goes way beyond
an internal Saudi dispute; no matter what Washington does, the
oil price has not crashed as expected. This would indicate that the global surplus of oil has
been largely sopped up by falling supply and increasing demand.
As a GCC-based oil market source reveals, "have you noticed how much attention Kerry and Obama
have been giving Saudi Arabia out of all proportion to the past to keep that oil price down? Yet
WTI is up and holding over $40.00 a barrel. That's because oil demand and supply is tightening."
The oil market source notes, "oil surplus is now probably less than a million barrels a day." So
the only way, in the short to medium term, is up.
Blowback from His Masters' Voice?
The House of Saud, by flooding the market with oil, believed it could accomplish three major feats.
1) Kill off competition – from Iran to the US shale oil industry.
2) Prevent the competition from stealing market share with key energy customer China.
3) Inflict serious damage to the Russian economy. Now it's blowback time – as it could come from
none other than His Masters' Voice.
The heart of the whole matter is that Washington has been threatening Riyadh to freeze Saudi assets
all across the spectrum if the House of Saud does not "cooperate" in the oil price war against Russia.
That reached the tipping point of the Saudis shaking the entire turbo-capitalist financial universe
by issuing
their own counter threat ; the so-called $750 billion response.
The - burning - issue of freezing all Saudi assets across the planet has come up with the US Congress
considering a bill exposing he Saudi connection to 9/11.
The declassification and release of those
notorious 28 pages would do little to rewrite recent history; 9/11 – with no serious investigation
- was blamed on "Islamic terror", and that justified the invasion of Afghanistan and the bombing/invasion/occupation
of Iraq, which had no connection to 9-11 nor any weapons of mass destruction.
The 28 pages did intimidate the House of Saud and Saudi intelligence though. Especially because
the odd sharp brain in Riyadh could make the connection; the 28 pages were being paraded around in
Western corporate media before the OPEC meeting to keep the Saudis in line on the oil war against
Russia. That may have been yet another Mafia-style "offer you can't refuse"; if the House of Saud
cuts oil production, then it will be destroyed by the release of the 28 pages.
So we are now deep into Mutually Assured Threat (MAT) territory, more than Mutually Assured Destruction
(MAD).
No one really knows how much Saudi Arabia has tied up in US Treasuries – except for a few insiders
in both Riyadh and Washington, and they are not talking. What is known is that the US Treasury bundles
Riyadh's holdings along with other GCC petrodollar monarchies. Together, that amounted to $281 billion
two months ago.
Yet the Saudis are now saying they would get rid of a whopping $750 billion. A New York investment
banker advances that "six trillion dollars would be more like it." Earlier this year,
I revealed on Sputnik how the House of Saud was busy unloading at least $1 trillion in US securities
on the market to balance its increasingly disastrous budget. The problem is no one was ever supposed
to know about it.
The fact is the US and the West froze $80 billion in assets that belonged to the deposed head
of the Egyptian snake, Mubarak. So a freeze tied up with framing Saudi Arabia for terrorism would
not exactly be a hard sell.
The nuclear option
For all the pledges of eternal love, it's an open secret in the Beltway that the House of Saud
is the object of bipartisan contempt; and their purchased support, when push comes to shove, may
reveal itself to be worthless.
Now picture a geopolitical no exit with a self-cornered House of Saud having both superpowers,
the US and Russia, as their enemies.
Obama's visit is a non-event. Whatever happens, Washington needs to sell the fiction that the House
of Saud is always an ally in the "war on terra", now fighting ISIS/ISIL/Daesh (even if they don't.)
And Washington needs Riyadh for Divide and Rule purposes – keeping Iran in check. This does not mean
that the House of Saud may not be thrown under the bus in a flash, should the occasion arise.
As the source close to Riyadh advances, "the real nuclear option for the Saudis would be to cooperate
with Russia in a new alliance to cut back oil production 20% for all of OPEC, in the process raising
the oil price to $200.00 a barrel to make up for lost revenue, forced on them by the United States."
This is what the West fear like the plague. And this is what the perennial vassal, the House of Saud,
will never have the balls to pull off.
"... Historically, feuding within the royal family has weakened its grip on power, and it was familial infighting that caused the second Saudi state's collapse in the late 1800s. ..."
"... The prince – whose age seems to be a well protected state secret, but lies somewhere between 27 and 34 years – has few merits. Through the appointment, Salman violates a number of key royal norms: all previous kings have promoted their own sons in terms of power and wealth, but within reasonable limits. ..."
"... Salman's tough and militaristic foreign policy – known as the "Salman Doctrine" – can be seen in light of his consolidation of power. ..."
"... The decision to bomb the Huthis was arguable partly driven by the king's desire to consolidate the position of Muhammad bin Salman, who, besides being deputy crown prince, is the world's youngest minister of defence. ..."
On April 29th 2015 the official Saudi Press Agency announced a royal decree stating that
the king's half-brother, Muqrin, had been replaced as the new heir apparent by Muhammad bin
Nayif, the king's nephew and interior minister. At the same time Muhammad bin Salman, son of
King Salman, was appointed deputy crown prince, while Foreign Minister Prince Sa'ud al-Faysal
was replaced by Adil al-Jubayr, the Saudi ambassador to the U.S. King Salman's reshuffling
will arguably not bring more stability to Saudi Arabia, but rather increase the long-term risk
of political instability. It underpins the notion that the Al-Sudayri clan of the royal family
has carried out a "palace coup". The survival of a dynastic regime like the Al-Sa'ud depends
on unity within the elite. Because of Salman's reshuffling of key positions the Sudayris are
now on their own at the helm of the kingdom. The new king's ultimate goal seems to be to
consolidate the succession within his branch of the family and for his favourite son. Salman's
recent appointments will probably trigger considerable dissatisfaction within the royal
family, and nurture future rivalry and potential conflicts among the various family factions.
In particular, the appointment of Muhammad bin Salman is likely to be a source of discord.
On April 29th 2015 the official Saudi Press Agency announced a royal decree stating that the
king's half-brother, Muqrin, had been replaced as the new heir apparent by Muhammad bin Nayif,
the king's nephew and interior minister. Salman relieved Crown Prince Muqrin of his post
reportedly "upon his own request". This is the first time that a grandson of the founder of the
modern kingdom, King 'Abd al-'Aziz (Ibn Sa'ud) rather than a son has been appointed crown prince,
marking a generational change at the top of the ruling house. At the same time Muhammad bin
Salman, King Salman's son, was appointed deputy crown prince, while Foreign Minister Prince Sa'ud
al-Faysal, who had held this important ministerial post since 1975, was replaced by Adil al-Jubayr,
who is not a member of the royal family, but has served as the Saudi ambassador to the U.S.
King Salman's reshuffling of top posts might increase the long-term risk of political
instability in Saudi Arabia. It underpins the notion that the Al-Sudayri clan of the royal family
has carried out a "palace coup". Although none of the members of the family has aired any
discontent publicly, with the exception of a single tweet by the notorious loose cannon Prince
Talal, it is highly likely that King Salman's recent moves have created considerable tension
within the royal family. The reshuffling alters the balance between the various family fractions.
Historically, feuding within the royal family has weakened its grip on power, and it was
familial infighting that caused the second Saudi state's collapse in the late 1800s.
It is not surprising that Muqrin was deposed as crown prince – given that he has a weak
personal power base and that his mother was a concubine of Yemeni descent. The need for King 'Abd
Allah to explicitly stipulate in the decree appointing Muqrin that the decision could not be
altered or changed in the future by any party clearly indicates that the late king was aware that
the appointment of his half-brother would be met with resistance from within the family. That
said, Salman's prompt decision to sideline Muqrin challenges established norms within the royal
house: it is neither common that a new king sets aside the heir apparent appointed by his
predecessor nor that he overrules a royal decree issued by the late king. Neither did it come as
a surprise that Muhammad bin Nayif was promoted to crown prince, although his appointment as
deputy crown prince in January was controversial within the royal family. He is one of the
seniors among Ibn Sa'ud's grandsons and has a reputation as a skilled leader. However, what came
as a surprise was the appointment of the young wunderprince Muhammad bin Salman as deputy crown
prince.
The prince – whose age seems to be a well protected state secret, but lies somewhere
between 27 and 34 years – has few merits. Through the appointment, Salman violates a number of
key royal norms: all previous kings have promoted their own sons in terms of power and wealth,
but within reasonable limits.
In 1964 King Sa'ud was deposed by his own brothers partly because he sought to amass power in
the hands of himself and his sons at the expense of other powerful members of the royal family.
Age, experience and kingly qualities have always been the basis for the choice of a successor to
the throne. According to the "Basic Law", which is the closest Saudi Arabia comes to a
constitution, each of Ibn Sa'ud's grandsons has the right to be king, and they number around 200.
By appointing his own son Salman has bypassed numerous other royals who are both older and far
more experienced. After Salman became king 'Abd Allah's family branch and the former king's
allies have lost political influence. Khalid al-Tuwaijri, the former head of the royal court, was
the first one to be deposed. Two sons of 'Abd Allah, who were deposed as governors of the key
provinces of Riyadh and Mecca, followed him. Currently Mitab bin 'Abd Allah, who is minister and
commander of the Saudi Arabian National Guard, is the only one among the late king's sons who has
retained an important position, and it will not come as a huge surprise if he too has his
political wings clipped. Muqrin, the now-deposed crown prince, was also among the late king's
closest aides.
One should not read too much into the replacement of Sa'ud al-Faysal, who was first appointed
in 1975, making him the world's longest-serving foreign minister, and who has struggled with
health problems. Faysal "asked to be relieved of his duties due to his health conditions", said
the royal decree, which may well be correct. However, it is known that there was disagreement
between Faysal and the younger princes Muhammad bin Nayif and Muhammad bin Salman over the
decision to bomb the Huthi rebels in Yemen, with Faysal arguing for a diplomatic rather than a
military approach.
Salman's tough and militaristic foreign policy – known as the "Salman
Doctrine" – can be seen in light of his consolidation of power.
The decision to bomb the Huthis was arguable partly driven by the king's desire to consolidate
the position of Muhammad bin Salman, who, besides being deputy crown prince, is the world's
youngest minister of defence.
Throughout the military campaign Saudi media loyal to the king have
painted a picture of the young prince as a decisive military commander. In Saudi Arabia rumours
are saying that Prince 'Abd al-'Aziz bin Salman, the fourth son of King Salman, could soon
replace the current oil minister, 79-year-old technocrat 'Ali al-Na'imi. If this happens, the
prince, who was promoted from assistant oil minister to deputy oil minister earlier this year,
would be the first member of the royal family to run this important ministry – another move that
arguably would strengthen the king's line.
Former kings have appointed non-royals to this ministerial post to avoid creating the notion
that one family branch controls the country's main source of income and the source of the royal
family's wealth. The survival of a dynastic regime like the Al-Sa'ud depends on unity within the
elite. King Salman and former king 'Abd Allah were known for having a rather bad relationship on
a personal level. Because of Salman's reshuffling of key positions the Sudayris are now on their
own at the helm of the kingdom. The new king's ultimate goal seems to be to consolidate the
succession within his branch of the family and for his favourite son. Salman's recent moves to
enhance the power of his own line will probably trigger considerable dissatisfaction within the
royal family, and nurture future rivalry and potential conflicts among the various family
factions. In particular, the appointment of Muhammad bin Salman is likely to be a source of
discord, and he will find it very difficult to become a respected and unifying figure within the
family. Time will show how long it will take for a backlash to occur, which might be when the
king and his Sudayri companions are facing such a dire situation that they will need the support
of the rest of the Al-Sa'ud.
The royal decree that announced the promotion of Muhammad bin Salman underlines the young
prince's qualifications, the needs of the state and the support of the majority of the members of
the Allegiance Council, in addition to the granting of a month's extra pay to all military and
civilian security personnel. The fact that these details are included probably reflects some
anticipation by King Salman that the appointment might be met with scepticism both within and
outside the royal elite. In February and March there was a drop of as much as $36 billion dollars
in the kingdom's net foreign currency reserves, equivalent to around 5% of the total, the largest
recorded two-month decline ever, which was partly due to the extra pay. Besides "buying the
support" of the people, the king has sought backing from conservative elements within the clergy
– who were sidelined by late king 'Abd Allah – by appointing conservative clerics to important
positions and reinvigorating his predecessor's efforts to crush the Muslim Brotherhood in Egypt.
Finally, it is ironic that Salman is the one making these controversial appointments, which
eventually might upset the stability of Saudi Arabia.
For five decades – when he was governor of Riyadh Province – Salman played an important role
in terms of maintaining unity within the royal family; it was often him the royals turned to when
they needed to resolve family conflicts or deal with other family matters.
Stig Stenslie is assistant deputy general and head of the Asia Division of the Norwegian
Defence Staff. He has held visiting fellowships at, among others, the Norwegian Institute for
Defence Studies in Oslo, the National University in Singapore and Columbia University in New
York. He holds a doctorate on royal family politics in Saudi Arabia from the University of Oslo.
He is the author of several publications on the contemporary Middle East and China, the most
recent being, with Marte Kjær Galtung, 49 Myths about China (Rowman & Littlefield, 2014), Regime
Stability in Saudi Arabia: The Challenge of Succession (Routledge, 2011) and, with Kjetil Selvik,
Stability and Change in the Modern Middle East (IB Tauris, 2011). Disclaimer The content of this
publication is presented as is. The stated points of view are those of the author and do not
reflect those of the organisation for which he works or NOREF. NOREF does not give any
warranties, either expressed or implied, concerning the content. THE AUTHOR The Norwegian
Peacebuilding Resource Centre Norsk ressurssenter for fredsbygging Email: [email protected] -
Phone: +47 22 08 79 32 The Norwegian Peacebuilding Resource Centre (NOREF) is a resource centre
integrating knowledge and experience to strengthen peacebuilding policy and practice. Established
in 2008, it collaborates and promotes collaboration with a wide network of researchers,
policymakers and practitioners in Norway and abroad. Read NOREF's publications on
www.peacebuilding.no and sign up for notifications. Connect with NOREF on Facebook or @PeacebuildingNO
on Twitter
Poor President Barack Obama flew to Saudi Arabia this past week but its
ruler, King Salman, was too busy to greet him at Riyadh's airport.
This snub was seen across the Arab world as a huge insult and violation of traditional desert
hospitality. Obama should have refused to deplane and flown home.
Alas, he did not. Obama went to kow-tow to the new Saudi monarch and his hot-headed son, Crown
Prince Muhammed bin Nayef. They are furious that Obama has refused to attack Iran, Hezbollah in Lebanon,
and Syria's Assad regime.
They are also angry as hornets that the US may allow relatives of 9/11 victims to sue the Saudi
royal family, which is widely suspected of being involved in the attack.
Interestingly, survivors of the 34 American sailors killed aboard the USS Liberty when it was
attacked by Israeli warplanes in 1967, have been denied any legal recourse.
The Saudis, who are also petrified of Iran, threw a fit, threatening to pull $750 billion of investments
from the US. Other leaders of the Gulf sheikdoms sided with the Saudis but rather more discreetly.
Ignoring the stinging snub he had just suffered, Obama assured the Saudis and Gulf monarchs that
the US would defend them against all military threats – in effect, reasserting their role as western
protectorates. So much for promoting democracy.
Saudi Arabia and the Gulf states have been de facto US-British-French protectorates since the
end of World War II. They sell the western powers oil at rock bottom prices and buy fabulous amounts
of arms from these powers in exchange for the west protecting the ruling families.
As Libya's late Muammar Kadaffi once told me, "the Saudis and Gulf emirates are very rich families
paying the west for protection and living behind high walls."
Kadaffi's overthrow and murder was aided by the western powers, notably France, and the oil sheiks.
Kadaffi constantly denounced the Saudis and their Gulf neighbors as robbers, traitors to the Arab
cause, and puppets of the west.
Many Arabs and Iranians agreed with Kadaffi. While Islam commands all Muslims to share their wealth
with the needy and aid fellow Muslims in distress, the Saudis spent untold billions in casinos, palaces
and European hookers while millions of Muslims starved. The Saudis spent even more billions for western
high-tech arms they cannot use.
During the dreadful war in Bosnia, 1992-1995, the Saudis, who arrogate to themselves the title
of 'Defenders of Islam" and its holy places, averted their eyes as hundreds of thousands of Bosnians
were massacred, raped, driven from their homes by Serbs, and mosques blown up.
The Saudi dynasty has clung to power through lavish social spending and cutting off the heads
of dissidents, who are routinely framed with charges of drug dealing. The Saudis have one of the
world's worst human rights records.
Saudi's royals are afraid of their own military, so keep it feeble and inept aside from the air
force. They rely on the National Guard, a Bedouin tribal forces also known as the White Army. In
the past, Pakistan was paid to keep 40,000 troops in Saudi to protect the royal family. These soldiers
are long gone, but the Saudis are pressing impoverished Pakistan to return its military contingent.
The US-backed and supplied Saudi war against dirt-poor Yemen has shown its military to be incompetent
and heedless of civilian casualties. The Saudis run the risk of becoming stuck in a protracted guerilla
war in Yemen's wild mountains.
The US, Britain and France maintain discreet military bases in the kingdom and Gulf coast. The
US Fifth Fleet is based in Bahrain, where a pro-democracy uprising was recently crushed by rented
Pakistani police and troops. Reports say 30,000 Pakistani troops may be stationed in Kuwait, the
United Arab Emirates and Qatar.
Earlier this month, the Saudis and Egypt's military junta announced they would build a bridge
across the narrow Strait of Tiran (leading to the Red Sea) to Egypt's Sinai Peninsula. The clear
purpose of a large bridge in this remote, desolate region is to facilitate the passage of Egyptian
troops and armor into Saudi Arabia to protect the Saudis. Egypt now relies on Saudi cash to stay
afloat.
But Saudi Arabia's seemingly endless supply of money is now threatened by the precipitous drop
in world oil prices. Riyadh just announced it will seek $10 billion in loans from abroad to offset
a budget shortfall. This is unprecedented and leads many to wonder if the days of free-spending Saudis
are over. Add rumors of a bitter power-struggle in the 6,000-member royal family and growing internal
dissent and uber-reactionary Saudi Arabia may become the Mideast's newest hotspot.
Eric S. Margolis is an award-winning, internationally syndicated columnist. His articles have
appeared in the New York Times, the International Herald Tribune the Los Angeles Times, Times of
London, the Gulf Times, the Khaleej Times, Nation – Pakistan, Hurriyet, – Turkey, Sun Times Malaysia
and other news sites in Asia. http://ericmargolis.com
"... the Arabian peninsula now accounts for nearly 30 percent of all active rigs outside North America, up from less than 18 percent when the slump began ..."
"... Does this not sound exactly like the red queen situation? I think it completely supports Ron's contention that they are producing flat out - and having trouble keeping their current production level up. ..."
"The rig count has increased by 50 since oil prices started to fall in mid-2014 and has almost
doubled over the last five years"
"As a result, the Arabian peninsula now accounts for nearly 30 percent of all active rigs
outside North America, up from less than 18 percent when the slump began "
Does this not sound exactly like the red queen situation? I think it completely supports Ron's
contention that they are producing flat out - and having trouble keeping their current production
level up.
Saudi Arabia single-handedly ruined the Doha meeting, knowing beforehand that Iran would not participate.
The Russians and others agreed to proceed without Iran, planning to include them at a later date. Why
did the Saudi's take a huge risk of alienating from Russia and the OPEC community?
Was it simply stupid yong gambler at the help? Or was it hostility toward Iran?
Notable quotes:
"... saudi arabia has 268 billion barr ..."
"... Nothing is proven in this figure. The real figure is a state secret. Most probably this estimate is a plain vanilla propaganda like a lot of other Saudi statistics. Saudis oil deposits are extremely depleted and they definitely entered the phase of Red Queen Race, when they need to drill more and more wells just to keep the output from falling. With this new reckless young prince they also depleted their currency reserves. That's why they are now talking about converting their economy away from oil. One of the key problems with the absolutism that one misfit on the throne can take the country down, unless promptly deposed or killed. Saudi oil sector now is facing deep uncertainty in the wake of sweeping changes to the governance of the oil ministry and the state energy company Saudi Aramco by King Salman, who ascended to the throne in January, 2015 and delegated much of his power on his 30 year old son Prince Mohammed Bin Salman: Naive, Arrogant Saudi Prince Is playing With Fire ( http://www.mintpressnews.com/prince-mohammed-bin-salman-naive-arrogant-saudi-prince-is-playing-with-fire/212660/ ) ..."
"... My impression is that all this talk about lessening KSA dependence of oil is a pipe dram: KAS is built on oil and will not be able to restructure on something else without dramatic drop of standard of living and elimination of Saudi monarchy. ..."
saudi arabia has 268 billion barrels of 'proved' reserves.
Nothing is proven in this figure. The real figure is a state secret. Most probably this estimate
is a plain vanilla propaganda like a lot of other Saudi statistics. Saudis oil deposits are extremely
depleted and they definitely entered the phase of Red Queen Race, when they need to drill more
and more wells just to keep the output from falling. With this new reckless young prince they
also depleted their currency reserves. That's why they are now talking about converting their
economy away from oil. One of the key problems with the absolutism that one misfit on the throne
can take the country down, unless promptly deposed or killed. Saudi oil sector now is facing deep
uncertainty in the wake of sweeping changes to the governance of the oil ministry and the state
energy company Saudi Aramco by King Salman, who ascended to the throne in January, 2015 and delegated
much of his power on his 30 year old son Prince Mohammed Bin Salman: Naive, Arrogant Saudi Prince
Is playing With Fire (
http://www.mintpressnews.com/prince-mohammed-bin-salman-naive-arrogant-saudi-prince-is-playing-with-fire/212660/
)
At the end of last year the BND, the German intelligence agency, published a remarkable one-and-a-half-page
memo saying that Saudi Arabia had adopted "an impulsive policy of intervention". It portrayed
Saudi defence minister and Deputy Crown Prince Mohammed bin Salman – the powerful 29-year-old
favourite son of the ageing King Salman, who is suffering from dementia – as a political gambler
who is destabilising the Arab world through proxy wars in Yemen and Syria.
My impression is that all this talk about lessening KSA dependence of oil is a pipe dram:
KAS is built on oil and will not be able to restructure on something else without dramatic drop
of standard of living and elimination of Saudi monarchy. Despite BBC claims:
"But talk of the collapse of the House of Saud seems premature. It is after all a huge structure,
with an estimated 7,000 princes."
"... An unresolved question remains whether a listing will include the division of Aramco that includes its vast reserves of crude oil. It manages, but doesn't own, the kingdom's 260 billion barrels of reserves, the most in the world. ..."
"... I don't think it will ever happen, not even 5%. 5% of ARAMCO would have to include 5% of reserves. And there would have to be confirmation that those reserves actually exist. And of course they do not exist, not 266 billion barrels of reserves anyway. ..."
"... I have had exactly the same thought. How can KSA "cash in" on ARAMCO without the public disclosure required? But maybe they will find a way. Maybe they can sucker investors into believing their reserve numbers? Maybe they can do their offering in a country with less stringent regulations? I don't know much about how that works and I could be way off base, but I do know that where there's a will (and tons of money) there often is a way. And KSA has a BIG TIME desire to cash in, which should tell anyone all they need to know about the state of their economy. ..."
"... Bloomberg does seem rather cozy with the Saudis lately. ..."
"... Smoke and mirrors … they are burning massive amounts of money today, they have about 3-4 years left at the current burn rate. And Saudi invests have been such great things as growing wheat in the desert, destroying their aquifers. ..."
still no mention of "if" any partial float would include reserves ?
potentially – this could enable the game to be played a little longer ?
Saudi Aramco IPO Could Be 5% of Value
22/04/2016 03:05AM AEST
PARIS-Saudi Arabian Oil Co., the largest energy firm in the world, is considering listing up
to 5% of its value on a stock exchange in New York within the next year, a top Saudi oil official
said Thursday.
By listing even a tiny fraction of the company, known as Saudi Aramco, the offering would create
one of the world's most valuable energy firms. Estimates of Saudi Aramco's value have varied,
but using a conservative number of $2.5 trillion, a 5% listing would give it a potential value
of $125 billion-bigger than BP PLC and French oil titan Total SA.
The Saudis are considering listing Aramco at a time when the kingdom is trying to raise cash
during a period of sharply lower oil prices and transition to a world that is less dependent on
oil. Deputy Crown Prince Mohammed bin Salman is overseeing a "National Transformation Plan" to
promote private-sector growth and reduce government reliance on petroleum revenues.
New York has emerged as the leading place for an Aramco listing, but London and Hong Kong are
also being considered, said Ibrahim Muhanna, a top adviser at the Saudi oil ministry. Mr. Muhanna
said the kingdom wouldn't list the company only on Saudi Arabia's bourse, the Tadawul, because
it was too small.
"The Saudi market cannot take a company like this," Mr. Muhanna said on the sidelines of a
conference in Paris.
He didn't disclose which firms were working on the listing for Aramco. He said a price for
the stock was still being determined and that it may take another year for a listing to be completed.
Pricing "has to be decided by international markets," Mr. Muhanna said. "It has to be competitive."
An unresolved question remains whether a listing will include the division of Aramco that
includes its vast reserves of crude oil. It manages, but doesn't own, the kingdom's 260 billion
barrels of reserves, the most in the world.
Saudi Aramco Chairman Khalid al-Falih has sent conflicting signals about whether the reserves
will be include. Mr. Muhanna didn't address the issue.
A number of Saudi experts and insiders have said Saudi Arabia wouldn't include its production
assets in any listing. Aramco is essentially an instrument of state policy, and its methods and
reserves tantamount to state secrets.
The company produces more than 10% of the world's oil supply every day and controls a large
chain of refineries and petrochemical facilities to complement its exploration and production
operations.
I don't think it will ever happen, not even 5%. 5% of ARAMCO would have to include 5% of reserves.
And there would have to be confirmation that those reserves actually exist. And of course they
do not exist, not 266 billion barrels of reserves anyway.
Ron Wrote:
"I don't think it will ever happen, not even 5%. 5% of ARAMCO would have to include 5% of reserves.
And there would have to be confirmation that those reserves actually exist. And of course they
do not exist, not 266 billion barrels of reserves anyway."
I think they will fangle a way around the reserve reporting problem. Didn't Brazil's Petrobras
over state its reserves, yet was able to raise over $100 billions in capital.
Jan 29, 2016:
"Brazil's state-controlled oil producer Petrobras slashed its oil and natural gas reserves 20
percent on Friday, hit by a plunge in energy prices, a heavy debt load, high costs and a corruption
scandal."
I have had exactly the same thought. How can KSA "cash in" on ARAMCO without the public disclosure
required? But maybe they will find a way. Maybe they can sucker investors into believing their
reserve numbers? Maybe they can do their offering in a country with less stringent regulations?
I don't know much about how that works and I could be way off base, but I do know that where there's
a will (and tons of money) there often is a way. And KSA has a BIG TIME desire to cash in, which
should tell anyone all they need to know about the state of their economy.
There are people with money willing to believe just about anything.
Eight unprecedented hours with "Mr. Everything," Prince Mohammed bin Salman.
Peter Waldman, Bloomberg, April 21, 2016
For two years, encouraged by the king, the prince had been quietly planning a major restructuring
of Saudi Arabia's government and economy, aiming to fulfill what he calls his generation's
"different dreams" for a postcarbon future .
from your link: "The likely future king of Saudi Arabia says he doesn't care if oil prices
rise or fall. If they go up, that means more money for nonoil investments, he says. If they go
down, Saudi Arabia, as the world's lowest-cost producer, can expand in the growing Asian market."
Smoke and mirrors … they are burning massive amounts of money today, they have about 3-4 years
left at the current burn rate.
And Saudi invests have been such great things as growing wheat in the desert, destroying their
aquifers.
"The rig count has increased by 50 since oil prices started to fall in mid-2014 and has almost
doubled over the last five years"
"As a result, the Arabian peninsula now accounts for nearly 30 percent of all active rigs outside
North America, up from less than 18 percent when the slump began"
Does this not sound exactly like the red queen situation? I think it completely supports Ron's
contention that they are producing flat out - and having trouble keeping their current production
level up.
This is a typical Council of Foreign Relations propaganda. Omissions (Yemen
problem, oil price problems for the US shale industry were not even mentioned),
foreign policy recommendations has definite neocon
focus... As
Daniel Larison aptly said on April 21, 2016, 3:16 PM "Keeping
the Saudis happy isn't worth the price of enabling war crimes and implicating
the U.S. in the senseless devastation and starvation of an entire country
(Yemen)." Compare with "the lowbrow whores at the Brookings Institute are always
willing to take Gulf money" -
Mr. Obama goes to Riyadh: Why the United States and Saudi Arabia still need each
other
The Saudis are the major money behind the war on Syria. They are building
ISIS and Al-Qaeda not only in Syria but also
in Yemen and elsewhere. A former Saudi foreign minister, quoted in
in
yesterdays Financial Times (see
here), admitted this fact: "Saud al-Feisal, the respected Saudi foreign
minister, remonstrated with John Kerry, U.S. secretary of state, that "Daesh
[ISIS] is our [Sunni] response to your support for the Da'wa" - the Tehran
aligned Shia Islamist ruling party of Iraq." See also
America's War for the Greater Middle East A Military History Andrew J. Bacevich
Notable quotes:
"... The Saudis would like a commitment from Obama to defang Iran, change the balance of power in the Syrian civil war to the detriment of Bashar Assad and resolve the Israeli-Palestinian conflict. ..."
"... Beyond that, Obama comes armed with no real new U.S. Middle East policy, apart from the latest developments in the Iran nuclear deal-which is not anything the Tehran-phobic Saudis want to talk about. ..."
"... America has no desire for nation-building even among nations it helped to destroy such as Iraq and Libya. ..."
"... As far as containing Iran, while America may not go as far as resuming ties with Iran as the Gulf regimes fear, it is not beyond reaching tactical accommodations with Tehran in places such as Iraq and on issues such as dealing with the Islamic State. ..."
"... Ray Takeyh is a Senior Fellow at the Council on Foreign Relations and the co-author of The Pragmatic Superpower: Winning the Cold War in the Middle East. ..."
Barack Obama traveled to Saudi Arabia on Tuesday in what could be his
last-and likely most futile-visit as president. It's not just that there's
bad blood over Congress' effort to make Riyadh liable for lawsuits from the
families of 9/11 victims. These days, when the United States and Saudi
Arabia look at the region, they see two completely different landscapes and
conflicting sets of interests. Riyadh sees a series of conflicts that the
United States must resolve and a series of failing states that it must
rehabilitate. The Saudis would like a commitment from Obama to defang
Iran, change the balance of power in the Syrian civil war to the detriment
of Bashar Assad and resolve the Israeli-Palestinian conflict.
... ... ...
Beyond that, Obama comes armed with no real new U.S. Middle East
policy, apart from the latest developments in the Iran nuclear deal-which is
not anything the Tehran-phobic Saudis want to talk about. Obama, who
recently expressed his pique over U.S. allies he called "free riders,"
plainly is not eager to get any more embroiled in the region than he already
is; he has expressed a vague desire that Iran and Saudi Arabia should "share
the neighborhood" without saying how he hopes that will be accomplished. And
after much investment, the administration seems disinclined to resume its
peacemaking efforts between Israel and the Palestinian entity. America
has no desire for nation-building even among nations it helped to destroy
such as Iraq and Libya.
As far as containing Iran, while America may not go as far as
resuming ties with Iran as the Gulf regimes fear, it is not beyond reaching
tactical accommodations with Tehran in places such as Iraq and on issues
such as dealing with the Islamic State. For the Obama administration,
its nuclear agreement with Iran is truly a landmark achievement, testifying
to benefits of reaching out to an ideologically implacable adversary. It is
perhaps the first time that America does not seem to object to the Islamic
Republic's aggrandizement in the strategically vital Persian Gulf.
... ... ...
The Saudis see in the latest congressional effort to grant the families
of 9/11 victims the opportunity to sue the kingdom as another indication
that Washington no longer values the alliance (despite a veto threat from
the White House). By threatening to withdraw their assets from the United
States in retaliation they are sending their own message that they will be
prone to act in a manner that shows as little disregard for the alliance as
that they feel America is demonstrating.
Ray Takeyh is a Senior Fellow at the Council on Foreign Relations and
the co-author of The Pragmatic Superpower: Winning the Cold War in the
Middle East.
"... There is a LOT of food for thought in it. Russia may soon peak as as oil producer, but gas production is another story. Russia may now turn out to be the swing producer in some respects. ..."
"... I read that the Russian government is selling a 19.5% stake in Rosneft and looking for a "non-greedy" partner for the interest. Russia also says do not expect prices to rise after Doha meeting. I believe we discussed this back in February. The goal is not necessarily to return prices back to 2011-14 levels, but to stop the speculators driving the prices into the $20s and below. ..."
"... I wish they shale guys would say they need $70 to survive. Then OPEC and Russia would be ok with $60, and $60 WTI would be just fine by us for quite awhile. ..."
"... Wait, you're playing the speculator card? I thought those HFT engines were all that was putting it at $110. ..."
This link is a longer one ( not for sound bite fans ) going into some substantial detail concerning
Russia as an energy exporting country, and what it means to the rest of the world politically
and economically.
Read it for insight. There is a LOT of food for thought in it. Russia may soon peak as as oil
producer, but gas production is another story. Russia may now turn out to be the swing producer
in some respects.
Russia can sell pipeline gas cheaper than we yankees can sell LNG overseas for instance.
I read that the Russian government is selling a 19.5% stake in Rosneft and looking for a "non-greedy"
partner for the interest. Russia also says do not expect prices to rise after Doha meeting. I
believe we discussed this back in February. The goal is not necessarily to return prices back
to 2011-14 levels, but to stop the speculators driving the prices into the $20s and below.
I wish they shale guys would say they need $70 to survive. Then OPEC and Russia would be
ok with $60, and $60 WTI would be just fine by us for quite awhile.
"... He is bluffing. His remarks are aimed at financiers of higher cost non-conventional production. Saudis and Russians are not afraid of other conventional producers they are terrified by the possibility of higher cost non-conventional oil flooding the market using debt-fueled growth. ..."
"... In order to keep banks in check, Prince takes to the media to warn of consequences, but in essence he is bluffing. Saudis cannot increase and sustain production above current levels. ..."
"... Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars' worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks. ..."
The KSA prince say they could increase output to 11.5 million barrels a day immediately and go to
12.5 million in six to nine months "if we wanted to".
Is he: 1. Dreaming 2. Confused 3. Just playing around and bs everyone 4. Thinking it can be done
5. Don't know the what the hell he is talking about
I know there as been dissuasion here on how the actual reserves look like. Whats your thoughts?
He is bluffing.
His remarks are aimed at financiers of higher cost non-conventional production. Saudis and Russians
are not afraid of other conventional producers they are terrified by the possibility of higher cost
non-conventional oil flooding the market using debt-fueled growth.
In order to keep banks in check, Prince takes to the media to warn of consequences, but in essence
he is bluffing. Saudis cannot increase and sustain production above current levels.
"WASHINGTON - Saudi Arabia has told the Obama administration and members of Congress that it will
sell off hundreds of billions of dollars' worth of American assets held by the kingdom if Congress
passes a bill that would allow the Saudi government to be held responsible in American courts
for any role in the Sept. 11, 2001, attacks."
What the chance we will see the conclusions before Oil exports fro KSA tank?
"... Another possibility is differences between Saudi officials themselves on how to approach Doha. Doubts over a potential success in Doha surfaced in recent weeks following comments from Saudi Arabia's Deputy Crown Prince Mohammed bin Salman, who laid out Saudi Arabia's position not to freeze without Iran following suit. He reiterated those comments three days before the meeting. "If all major producers don't freeze production, we will not freeze production," Prince Salman said on April 14. "If we don't freeze, then we will sell at any opportunity we get." ..."
One possibility is that Saudi Arabia had at least some intention of signing
up to the freeze, but let its antipathy towards Iran get in the way at the last
minute. "The fact that Saudi Arabia seems to have blocked the deal is an indicator
of how much its oil policy is being driven by the ongoing geopolitical conflict
with Iran," Jason Bordoff, the director of the Center on Global Energy Policy
at Columbia University,
told Bloomberg.
Another possibility is differences between Saudi officials
themselves on how to approach Doha. Doubts over a potential success in Doha
surfaced in recent weeks following comments from Saudi Arabia's Deputy Crown
Prince Mohammed bin Salman, who laid out Saudi Arabia's position not to freeze
without Iran following suit. He reiterated those comments three days before
the meeting. "If all major producers don't freeze production, we will not freeze
production," Prince Salman said on April 14. "If we don't freeze, then we will
sell at any opportunity we get." Much of the world, including many negotiators,
again thought that this was bluster.
The Wall Street Journal
hinted at the fact that Saudi Arabia's delegation to Doha, led by the
iconic oil minister Ali al-Naimi, had quite a different tone from the
powerful young prince. As late as Saturday, the Saudi delegation appeared to
be "willing to sign a deal despite what they described as political
statements from Prince Salman," the WSJ wrote, based on comments from its
sources familiar with the talks. On Sunday, al-Naimi unexpectedly
backtracked, and the Doha negotiations dragged on for hours before
ultimately falling apart. Although it is unclear what caused the change, one
would have to wonder if Prince Salman ultimately prevailed over his
country's delegation to take a hard line over Iran.
Separately, Kuwait's oil workers could do more for the markets than any
OPEC production freeze. While oil traders are focusing on the failed Doha
talks, Kuwait's oil production dropped by half this weekend because of a
worker strike. Kuwait Oil Company reported that its oil production
fell to a staggering 1.1 mb/d after workers began a strike over wages.
"... Looks more like while they initialed the price slump, they were quickly taken for a ride by "paper oil producers", who promptly assume control and drove the price to the current price band. And intend to maintain it as long as possible (look at all "low oil price forever" propaganda in Western MSM). ..."
…..Why would a price spike above $40 be a bad thing for Saudi Arabia?
Because it would provide a life support to American frackers who have undermined the pricing
power of the Kingdom these days, as was discussed in a previous piece here.
The predatory pricing initiated by KSA in mid 2014 was not directed against the USA frackers and
in no way directed at establishing $30-40 per barrel price band. They viewed US frackers as a
useful balancing mechanism (and this was stressed several times by high level Saudi officials),
that allow to establish and maintain $70-$80 or so price range. and that probably was their initial
intention. But they quickly lost control to Wall Street, which has other plans.
And they think that this price range is also OK for the world economy. I can't find quotes
now but there were such quotes by Saudi oil minister.
Looks more like while they initialed the price slump, they were quickly taken for a ride by
"paper oil producers", who promptly assume control and drove the price to the current price band.
And intend to maintain it as long as possible (look at all "low oil price forever" propaganda
in Western MSM).
That's why Saudis were forced to ally with Russia in "freezing production" scheme.
likbez – "Looks more like while they initialed the price slump, they were quickly taken for a
ride by "paper oil producers", who promptly assume (sic) control and drove the price to the current
price band." This theory makes the "paper oil producers" God like.
Since the early 1970's I have heard almost nothing except that the "paper oil producers" have
artificially made oil much more expensive than it should be. Of course, during that same period
of time, with respect to farm products, all I heard was that the "paper farmers" were artificially
making farm product prices cheaper than they should be. They must all be Gods.
Thus, I have never paid attention to what "paper" people are doing. Rather, I try to look at
the fundamentals. For example, assume that we are "paper" traders [with access to billions of
$'s], and we think that the price of oil should be $70. But, we get together and hatch a plan.
At $70 we will sell short billions of $ of oil contracts and that will force the market down and
force Saudi Arabia and Russia to keep cutting their prices and we will make a fortune. That sounds
like a reasonable plan – NOT!!
It is like when oil got to $70, you bet me a billion $'s that prices would go down and I took
your bet, thinking that they would not go down. So you told OPEC and Russia about our bet and
they took your side.
"All oil producing countries … now started accelerated development of petrochemical industry.
This is probably the most important consequence of this oil price slump.
They all want to export more refined products and products with substantial added value (plastics,
composites)."
This process started at least 10 years ago and has nothing to do with the drop in oil prices.
See, for example, the chart below:
Russia's crude oil and refined products exports (million tons)
Not so fast. I remember that Sechin on one of International conferences had proudly pumped
his chest explaining how good a player Russia is in a sense that they are just exporting raw oil
instead of refined products. This guy dumped huge amount of money into Arctic shelf instead of
building refineries and other chemical plants which would help enormously in 2015.
Can you please compare that with KSA dynamics. Because that will tell us how backward in this
respect Russians were up to this day in comparison with Arab sheikhs.
The recent refinery built in KSA (0.4 Mb/d):
Yanbu Aramco Sinopec Refining Company (YASREF) Ltd. King Salman and Chinese President Xi
Jinping inaugurate YASREF Refinery Riyadh, Saudi Arabia, January 20, 2016 The Custodian of
the Two Holy Mosques King Salman bin Abdulaziz Al Saud, the King of Saudi Arabia and His Excellency
Xi Jinping, the President of the People's Republic of China today jointly inaugurated the Yanbu
Aramco Sinopec Refining Company (YASREF)refinery.
https://lnkd.in/eCBZ4PZ W.J
I do not know what you remember, but there are statistical facts.
The share of refined products in Russia's oil and product exports increased from 25-30% in 2000-2005
to 41-42% in 2014-2015.
In volume terms, exports of refined products increased by 174% (almost 3 times) between 2000 and
2015.
Given that Russia has sufficient primary distillation capacity, there was an intensive modernization
program.
Saudi Arabia has also been developing refining capacity and currently covers all its domestic
needs. In 2015, refining products accounted for 13% of total crude and products exports.
Saudi Arabia's crude and refined product exports (mb/d)
source: JODI
As you mentioned Sechin, here is a brief summary of Rosneft's refinery modernization program:
"Rosneft is implementing the most ambitions modernization program in RF: more than 30 construction
projects, reconstruction of re-refinery units. The Company's refineries are implementing the modernization
program that implies significant increase of the refining depth and improvement of the produced
petroleum products (all motor fuels will correspond to the European environmental class Euro-5).
The capacity of the modernization program projects:
primary processing – 12.0 million tons/year;
conversion processes – 23.6 million tons/year;
reforming processes – 35.9 million tons/ year.
At present, within the framework of implementation of the program, reconstruction and construction
works are being performed with respect of the following:
reforming, isomerization, alkylation plants for production of high-octane gasoline components;
catalytic cracking plants for production of high-quality gasoline components and oil conversion
rate increase;
hydrocracking plants for production of high-quality diesel fuel components, jet fuel and oil conversion
rate increase;
hydrotreatment plants for compliance with the requirements of the Technical Regulations of the
Customs Union in terms of sulfur content in the products."
"... even if LTO output starts to recover, its annual growth rate will never return to previous high growth rate of 1 mb/d. ..."
"... Potential 300-400 kb/d annual growth in LTO output will be much less than 1.2mb/d projected growth in global demand. ..."
"... I do not dispute Russian companies are cash flow positive. My point is, what do Russian oil and gas industry workers make in salary and benefits, in relation to their US peers? If it is substantially less, is this why, in part, Russian oil and gas companies are still cash flow positive? ..."
"... Yes, salaries in Russia are generally much lower than in the U.S., not just in the oil industry. Especially, if they are measured in dollar-terms, rather than in real purchasing power. Locally produced equipment, pipes, other materials, electricity, services, etc. are also much less expensive, especially after the depreciation of the local currency. ..."
"... Finally, and particularly important, Russia produces higher volume of C+C with a much less number of wells. The number of new wells drilled annually is also several times less than in the U.S. ..."
"... Old conventional onshore fields are on average less mature. There is almost no stripper wells. There is much less (high-cost) deep offshore production. And almost no LTO output. ..."
"... I do not know a lot about Russian oil and gas production, but it does appear to me that a combination of lower costs, and less mature fields, is keeping Russian oil and gas companies generally profitable, despite the downturn. ..."
"... Maybe too simplistic, but there was a time, from 1986-2004, where we would have been cheering $40 WTI. A combination of lower production volumes, combined with much higher costs, make $40 WTI a money loser in most onshore US fields, or at least not enough for new wells. I guess maybe Russia is just where the US was 30 years ago? 30 years ago, $40 WTI would have been very profitable in most US onshore fields. ..."
"I read Russian companies are still making money, but the purchasing power of their currency is
much less than it was."
shallow sand,
Their revenues are mostly in dollars, and 90% of costs are in rubles. So the decline of the
ruble's rate versus the dollar is very positive for the Russian companies, as it partially mitigates
the negative effect of low oil prices.
Which means that OPEC decision not to cut output was correct. One year more of relatively low
oil prices ($40-50) and LTO will not be a threat to other producers.
The excess supply will be eliminated by that time. And even if LTO output starts to recover,
its annual growth rate will never return to previous high growth rate of 1 mb/d.
Potential 300-400 kb/d annual growth in LTO output will be much less than 1.2mb/d projected
growth in global demand.
I do not dispute Russian companies are cash flow positive. My point is, what do Russian
oil and gas industry workers make in salary and benefits, in relation to their US peers? If it
is substantially less, is this why, in part, Russian oil and gas companies are still cash flow
positive?
I do not know the answer, maybe you could provide some information in that regard?
Yes, salaries in Russia are generally much lower than in the U.S., not just in the oil
industry. Especially, if they are measured in dollar-terms, rather than in real purchasing power.
Locally produced equipment, pipes, other materials, electricity, services, etc. are also much
less expensive, especially after the depreciation of the local currency.
Finally, and particularly important, Russia produces higher volume of C+C with a much less
number of wells. The number of new wells drilled annually is also several times less than in the
U.S.
Old conventional onshore fields are on average less mature. There is almost no stripper
wells. There is much less (high-cost) deep offshore production. And almost no LTO output.
Thanks. I always appreciate your comments on this site.
I do not know a lot about Russian oil and gas production, but it does appear to me that
a combination of lower costs, and less mature fields, is keeping Russian oil and gas companies
generally profitable, despite the downturn.
Maybe too simplistic, but there was a time, from 1986-2004, where we would have been cheering
$40 WTI. A combination of lower production volumes, combined with much higher costs, make $40
WTI a money loser in most onshore US fields, or at least not enough for new wells. I guess maybe
Russia is just where the US was 30 years ago? 30 years ago, $40 WTI would have been very profitable
in most US onshore fields.
Fernando, I also agree on the spending part, but I doubt you will find many places more consumer
spending driven than the US. But I am going to refrain from further comment on this topic, as
last time I discussed it, I put both feet in my mouth. And we need to stick to the oil topic.
LOL!
"... KSA is the primary driver into the turmoil in Syria. KSA is sitting on vast NatGas fields underneath their oil fields. However, producing NatGas from these fields would cause severe Oil production issues, so they won't tap the NatGas until their Oil fields are tapped out. KSA needs to path to get its NatGas into Europe, which requires a pipeline through Syria. So if they are pressing to remove Assad from power, I suspect that KSA production problems aren't too far into the future. ..."
"... Iran & KSA appear to be gearing up for war. Both nations are buying military equipment and are running multiple proxy wars. I believe KSA is now has the 4 or 5 biggest military budget for 2016. Both KSA and Iran also have a limited number of nuclear weapons. Should the proxy wars turn into a hot war, then it really doesn't matter how much oil is left to be produced. ..."
"... I have wondered this for awhile too. They appear to handle so much water. As I have stated, handling water is a major expense in producing oil. I wonder how much chemical KSA has to use and as well how much electricity. I also wonder what pressure is required on the injected water. There are very few water floods in the US with LOE much under $15 per BOE. Most are well over $20. Same applies to steam floods, CO2 and polymer floods. ..."
"... What happens as the "old" big fields that provided decades of oil comes to an end of their economic life, shortened by the collapse in the oil price and the lasting low oil price? Generally the discoveries that wait in line for development are smaller, so to keep the level and/or grow becomes THE Red Queen race. Then throw in that several of the majors have had a Reserves Replacement Ratio (RRR) of less than 100%, meaning reserves are depleted faster than they are being replaced. ..."
"... Let's say Ghawar begins to decline, that is one field, I imagine that you believe it is unlikely that all the large fields in the World will begin their decline phase simultaneously. So let's assume they do not. For simplicity we will assume Ghawar produces about 5 Mb/d and that it will decline at 3%/ year (similar to US before LTO production started from 1985-2004), we will also assume each year the equivalent of one Ghawar begins to decline until all World production is eventually declining at 3% per year. For simplicity we will assume all fields decline at 3% (in reality some will be more than this and some will be less and the rate won't be constant over time. This is a very simple model. ..."
"... I expect than when the Oil column dips some where between 10 feet and 3 feet, Production is going to collapse at a much faster rate than 3% per year, Perhaps as high 10 to 20% per year. I think as the remaining Oil column shrinks its going to be much harder to extract oil since it will be difficult to steer laterals to follow the uneven remaining oil column. The water cut will grow increasing problematic, and drilling will need to increase to keep laterals on near the top of the oil column. ..."
"... My understanding average large fields are declining at a rate of 5% to 7% per year. Horizontal and other advance drilling\extraction tech has prevented significant production declines so far, but this trend isn't sustainable. At some point I believe we will see shocking decline rates no matter what tech is developed, or how much the Price of Oil increases into. ..."
"... Yes. But I think KSA would likely go to war first as a diversion to internal unrest. Ron Patternson would be a better source than me, since I never visited or worked in KSA. Ron has. So far KSA is using brutal tactics to prevent protests and uprisings. ..."
"... Will economic and social problems become a crisis before Oil production collapses begin? Lots of nations are downing in debt, have aging population with no or inadequate retirement savings, and younger labor pools unequipped (educated/skilled) to meet the needs of businesses. I can't image that the global economy can be sustained for much longer (EU, Asia & South America in recession & the US teetering on the end of another recession). Since when in history have major industrial powers have negative interest rates? ..."
"... I believe the most of the Ghawar formation has a profile where its narrow at the bottom and much wider at the top. There is more volume at the top of the formation than at the bottom. So the decline in oil column depth is not linear. ..."
"... "The 2009 study focused on 331 giant oil fields from a database previously created for the groundbreaking work of Robelius mentioned above. Of those, 261 or 79 percent are considered past their peak and in decline." "The average annual production decline for those 261 fields has been 6.5 percent. " ..."
"... "Now, here's the key insight from the study. An evaluation of giant fields by date of peak shows that new technologies applied to those fields have kept their production higher for longer only to lead to more rapid declines later. As the world's giant fields continue to age and more start to decline, we can therefore expect the annual decline in their rate of production to worsen. Land-based and offshore giants that went into decline in the last decade showed annual production declines on average above 10 percent." ..."
"... The increased use of in-fill drilling (e.g. moving horizontal producers up dip) and IOR/EOR techniques was foreseen with it's effect on prolonging the plateau, we are yet to see if the sudden collapse that was also predicted. The thing that was missed in the predictions around 2009 to 2013 was a flood of free money and with it the ability of the oil industry to ramp up non-conventional production, and I'd also say for Iraq. ..."
"... Great post George: an excellent summary of PO describing rapid ongoing production decline from most key fields that has been temporarily deferred by enormous pulse of infill drilling and EOR paid for via free money leading to current situation. What else do we need to know? ..."
"... As I have repeated many times on this blog, Saudi has been able to mask the decline of its old giant oil fields by bringing old oil previously mothballed fields back on line. These fields are Shaybah, Khurais and Manifa. ..."
"... to even suggest that Ghawar might go into decline is preposterous. Ghawar has long been into decline. I am shocked that you are ignorant of that fact. ..."
"... I have no idea what Ghawar's current production numbers are because it is a Saudi state secret. But I would guess somewhere in the neighborhood of 3 million barrels per day. But if it were not a state secret and Saudi were proud of the numbers, then it would be in the neighborhood of 5 million barrels per day. ..."
"... "Although Saudi Arabia has about 100 major oil and gas fields, more than half of its oil reserves are contained in eight fields in the northeast portion of the country…The Ghawar field has estimated remaining proved oil reserves of 75 billion barrels" ..."
"... The EIA estimates Saudi Arabia's oil production capacity (ex NGLs) at around 12 mb/d, including ~300kb/d in the Saudi part of the Neutral zone. The latest estimate by the IEA is 12.26 mb/d ..."
"... Alex, Ghawar can in no way produce anywhere near 5.8 million barrels per day. But then if you believe anything that is printed on the internet then….. ..."
"... Incidentally, the EIA agrees with Saudi Arabia on their proven reserves of 266 billion barrels. Which says nothing other than "We take Saudi's word for everything. ..."
"... The recent increase in Saudi Arabia's oil production was largely due to higher utilization of production capacity. The last large increase in capacity was in 2009, when Khurais field capacity was increased to 1.2 mb/d. The start of the Manifa field in 2013 and its ramp-up in 2014 largely offset declining production at the mature fields. ..."
"... If we assume a 6.5% annual decline rate since 2009 we would be at 3.4 Mb/d in 2015. At some point Saudi Arabia as a whole will begin to decline, when this will happen I do not know. Just as in the US where there has been extensive infill drilling and secondary, tertiary recovery methods employed and decline rates have remained under a 3% annual rate, the same is likely to be true of other large producing nations with a combination of on shore and offshore projects. ..."
"... The best analogy for Ghawar is probably Cantarell, they have both been developed with the best available secondary and tertiary recovery methods. Cantarell production dropped like a stone once those techniques were exhausted (about 15% per year in 2006 to 2008). My guess is Ghawar will go (or is going) even faster as the IOR/EOR techniques and software models available for its development are more advanced and it is onshore, making their application easier. Daqing might go the same way. Samotlor has been declining at around 5%. ..."
"... I know this is probably an impossible question but how long do you think it will take to deplete the remaining oil column? If it is correct that it took 10 years to drop from 100 to 25 feet (assuming this is correct too) then that doesn't bode well for future production from Ghawar over the next decade. ..."
"... The next five years should tell a lot if the oil column is now that thin. 5 mbopd can't continue forever, nor can 3% decline in a permeable reservoir under water flood. When the water mostly reaches the top, the oil stained water becomes too expensive to separate out and production stops at greater than a 3% rate. ..."
1. Ghawar started with a Oil column of ~1300. I believe by 2005, the Oil column shrunk to about
100 feet. Today its about 20-25 feet. The remaining Oil is floating on water and KSA is using
horizontal drilling to extract it. In some regions of Ghawar they are on their second or third
string of horizontal wells as the water column flood above the wells, and they had to drill above
to get back into the Oil column.
2. KSA restarted production in existing wells that have already been depleted decades ago.
Better tech and mapping information permitted them to sweep up trapped oil in these wells.
3. KSA is now using advanced Oil recovery in Ghawar and other fields (CO2/Nitrogen injection)
in order to free up trapped oil.
4. Saudi Americo, posts tech articles (quarterly) on their website. They usually don't include
which fields they are discussing, but with a little bit of effort, its not to difficult to determine
which fields discussed. This is where I found the three above items. I posted excerpts on this
blog over the past couple of years from SA tech articles.
5. KSA is the primary driver into the turmoil in Syria. KSA is sitting on vast NatGas fields
underneath their oil fields. However, producing NatGas from these fields would cause severe Oil
production issues, so they won't tap the NatGas until their Oil fields are tapped out. KSA needs
to path to get its NatGas into Europe, which requires a pipeline through Syria. So if they are
pressing to remove Assad from power, I suspect that KSA production problems aren't too far into
the future.
FWIW: Its just not KSA that is the problem. Most of the global production has been maintained
from old depeleted wells, using new tech to sweep up trapped oil. Obviously this can't be continued
indefinitely. I fear that at some point all of the major fields will begin to see sharp declines
as remains of trap oil is extracted, an newer technology isn't going to extract Oil that doesn't
exist. With the extremely low oil prices, no one is developing any new fields (deep water, arctic,
etc). By the time oil prices recover that makes it profitable resume these expensive projects
it will be too late and there will likely be permanent crisis. It may take 5 to 7 years to develop
new project to produce Oil. 5 to 7 years is a long lag time, which depletion continues to march
on.
That said, its possible that other problems trump Oil production problems, such as, the Debt
crisis or the demographic crisis (aging populations). We are very close to another major debt
crisis as gov'ts start going bankrupt (ie rest of the PIGS – Portugal, Spain, Italy), China, Japan,
Most of South America, and perhaps a lot of US cities and even US states (Puerto Rico, Illinois,
Pennsylvania, West Virginia, and perhaps California).
Iran & KSA appear to be gearing up for war. Both nations are buying military equipment
and are running multiple proxy wars. I believe KSA is now has the 4 or 5 biggest military budget
for 2016. Both KSA and Iran also have a limited number of nuclear weapons. Should the proxy wars
turn into a hot war, then it really doesn't matter how much oil is left to be produced.
I have wondered this for awhile too. They appear to handle so much water. As I have stated,
handling water is a major expense in producing oil. I wonder how much chemical KSA has to use
and as well how much electricity. I also wonder what pressure is required on the injected water.
There are very few water floods in the US with LOE much under $15 per BOE. Most are well over
$20. Same applies to steam floods, CO2 and polymer floods.
What happens as the "old" big fields that provided decades of oil comes to an end of their
economic life, shortened by the collapse in the oil price and the lasting low oil price? Generally
the discoveries that wait in line for development are smaller, so to keep the level and/or grow
becomes THE Red Queen race. Then throw in that several of the majors have had a Reserves Replacement
Ratio (RRR) of less than 100%, meaning reserves are depleted faster than they are being replaced.
Let's say Ghawar begins to decline, that is one field, I imagine that you believe it is
unlikely that all the large fields in the World will begin their decline phase simultaneously.
So let's assume they do not. For simplicity we will assume Ghawar produces about 5 Mb/d and that
it will decline at 3%/ year (similar to US before LTO production started from 1985-2004), we will
also assume each year the equivalent of one Ghawar begins to decline until all World production
is eventually declining at 3% per year. For simplicity we will assume all fields decline at 3%
(in reality some will be more than this and some will be less and the rate won't be constant over
time. This is a very simple model.
Chart below has World C+C output in Mb/d on left axis and annual decline rate (dashed line)
on right axis. It is assumed in this scenario that a nuclear war in the middle east does not occur.
I expect than when the Oil column dips some where between 10 feet and 3 feet, Production
is going to collapse at a much faster rate than 3% per year, Perhaps as high 10 to 20% per year.
I think as the remaining Oil column shrinks its going to be much harder to extract oil since it
will be difficult to steer laterals to follow the uneven remaining oil column. The water cut will
grow increasing problematic, and drilling will need to increase to keep laterals on near the top
of the oil column.
My understanding average large fields are declining at a rate of 5% to 7% per year. Horizontal
and other advance drilling\extraction tech has prevented significant production declines so far,
but this trend isn't sustainable. At some point I believe we will see shocking decline rates no
matter what tech is developed, or how much the Price of Oil increases into.
That said I don't have a crystal ball or a time machine that shows me what is going to happen.
George Kaplan Asked:
"Do you think there is a significant risk of internal disruption"
Yes. But I think KSA would likely go to war first as a diversion to internal unrest. Ron
Patternson would be a better source than me, since I never visited or worked in KSA. Ron has.
So far KSA is using brutal tactics to prevent protests and uprisings.
"Based upon your thoughts, what do you think that the average cost per barrel is for KSA oil?"
I don't have a clue. I would imagine production costs are constantly rising.
Rune rhetorically asked:
"What happens as the "old" big fields that provided decades of oil comes to an end of their
economic life, shortened by the collapse in the oil price and the lasting low oil price?
yes, that was the point I was leading to. That said: Will economic and social problems
become a crisis before Oil production collapses begin? Lots of nations are downing in debt, have
aging population with no or inadequate retirement savings, and younger labor pools unequipped
(educated/skilled) to meet the needs of businesses. I can't image that the global economy can
be sustained for much longer (EU, Asia & South America in recession & the US teetering on the
end of another recession). Since when in history have major industrial powers have negative interest
rates?
Dave P asked:
"I know this is probably an impossible question but how long do you think it will take to deplete
the remaining oil column?"
I don't' have a clue. I believe the most of the Ghawar formation has a profile where its
narrow at the bottom and much wider at the top. There is more volume at the top of the formation
than at the bottom. So the decline in oil column depth is not linear.
"The 2009 study focused on 331 giant oil fields from a database previously created for
the groundbreaking work of Robelius mentioned above. Of those, 261 or 79 percent are considered
past their peak and in decline." "The average annual production decline for those 261 fields has
been 6.5 percent. "
"Now, here's the key insight from the study. An evaluation of giant fields by date of peak
shows that new technologies applied to those fields have kept their production higher for longer
only to lead to more rapid declines later. As the world's giant fields continue to age and more
start to decline, we can therefore expect the annual decline in their rate of production to worsen.
Land-based and offshore giants that went into decline in the last decade showed annual production
declines on average above 10 percent."
The increased use of in-fill drilling (e.g. moving horizontal producers up dip) and IOR/EOR
techniques was foreseen with it's effect on prolonging the plateau, we are yet to see if the sudden
collapse that was also predicted. The thing that was missed in the predictions around 2009 to
2013 was a flood of free money and with it the ability of the oil industry to ramp up non-conventional
production, and I'd also say for Iraq.
Great post George: an excellent summary of PO describing rapid ongoing production decline
from most key fields that has been temporarily deferred by enormous pulse of infill drilling and
EOR paid for via free money leading to current situation. What else do we need to know?
Dennis, Ghawar is not one oil field, it is five. That is not even counting Fazran. There are
Ain Dar, Shedgum, Uthmaniyah,
Hawiyah, and Haradh. Four of the five Gahwar fields are in decline and the fifth, Haradh,
is on a plateau.
To even suggest that Ghawar "might" begin to decline shows an astonishing ignorance of Saudi
oil production capabilities.
As I have repeated many times on this blog, Saudi has been able to mask the decline of
its old giant oil fields by bringing old oil previously mothballed fields back on line. These
fields are Shaybah, Khurais and Manifa.
Dennis, for God's sake, to even suggest that Ghawar might go into decline is preposterous.
Ghawar has long been into decline. I am shocked that you are ignorant of that fact.
I have no idea what Ghawar's current production numbers are because it is a Saudi state
secret. But I would guess somewhere in the neighborhood of 3 million barrels per day. But if it
were not a state secret and Saudi were proud of the numbers, then it would be in the neighborhood
of 5 million barrels per day.
But it is a state secret and it is not, in my estimation, anywhere near 5 million barrels
per day.
"Although Saudi Arabia has about 100 major oil and gas fields, more than half of its oil
reserves are contained in eight fields in the northeast portion of the country…The Ghawar field
has estimated remaining proved oil reserves of 75 billion barrels"
The EIA estimates Saudi Arabia's oil production capacity (ex NGLs) at around 12 mb/d, including
~300kb/d in the Saudi part of the Neutral zone.
The latest estimate by the IEA is 12.26 mb/d
more than half of its oil reserves are contained in eight fields in the northeast portion of
the country
More than half no less. Well hell, I cannot argue with that.
Alex, all your listed fields come to 11.75 million barrels per day. And that is more than
half. Wow! Alex, do you really believe that shit?
That does not include Berri? How could they not count Berri? Or Safah? Or any of the
other fields that would be giant fields in any other country? If you add them all up it would
likely come to at least 15 to 20 million barrels per day. Which is a joke of course. Saudi is
now producing flat out.
Alex, Ghawar can in no way produce anywhere near 5.8 million barrels per day. But then
if you believe anything that is printed on the internet then…..
If 11.75 is more than half then they likely figure around 20 million barrels per day
is possible. Yeah right!
Incidentally, the EIA agrees with Saudi Arabia on their proven reserves of 266 billion
barrels. Which says nothing other than "We take Saudi's word for everything.
Ron, I am actually rather skeptical about EIA's international statistics. Obviously, I'm not saying
that those numbers are correct.
Do you think they may have included NGLs (given that KSA produces more than 2 mb/d of NGLs)?
Alex, the EIA does have a tendency to include NGLs in their estimates. That is likely here since
Saudi is producing nowhere near what they say their their major fields are capable of.
But no one has any idea what each individual field in Saudi is producing. They have only Saudi's
word for it. Which is worth about the same as a bucket of warm spit.
The recent increase in Saudi Arabia's oil production was largely due to higher utilization
of production capacity. The last large increase in capacity was in 2009, when Khurais field capacity
was increased to 1.2 mb/d. The start of the Manifa field in 2013 and its ramp-up in 2014 largely
offset declining production at the mature fields.
Saudi Arabia's oil production and capacity (mb/d)
source: IEA (capacity), JODI (production)
I do not know the output of Ghawar, nor it's decline rate as we have no data. If the output
is 3 Mb/d, it is less of a factor than if output was 5 Mb/d. Yes there are several fields that
are grouped together and called Ghawar. All fields will decline eventually, the "might" is only
about when those declines occur. The simple illustrative model is to show what happens
when all fields don't start their decline at one moment in time. The 5 Mb/d was chosen simply
because at one time "Ghawar" supposedly produced 5 Mb/d in 2009 (according to the Wikipedia article).
What is your source for your 3 Mb/d estimate?
If we assume a 6.5% annual decline rate since 2009 we would be at 3.4 Mb/d in 2015. At
some point Saudi Arabia as a whole will begin to decline, when this will happen I do not
know. Just as in the US where there has been extensive infill drilling and secondary, tertiary
recovery methods employed and decline rates have remained under a 3% annual rate, the same is
likely to be true of other large producing nations with a combination of on shore and offshore
projects.
A lower URR oil shock model (3000 Gb including 500 Gb oil sands) still has an annual decline
rate under 2%/year.
Your analogy of the USA with Ghawar is not applicable. Aggregates of differently aged individuals
do not behave like an oversized average of those individuals. A country does not represent a basin,
a basin does not represent a field and a field does not represent an individual well.
The best analogy for Ghawar is probably Cantarell, they have both been developed with the
best available secondary and tertiary recovery methods. Cantarell production dropped like a stone
once those techniques were exhausted (about 15% per year in 2006 to 2008). My guess is Ghawar
will go (or is going) even faster as the IOR/EOR techniques and software models available for
its development are more advanced and it is onshore, making their application easier. Daqing might
go the same way. Samotlor has been declining at around 5%.
Burgan is probably the best placed of the super giants as it has natural water drive and didn't
use secondary recovery until 2010, and still not much, so there is a lot of potential to accelerate
production and arrest the decline (at the expense of rapid decline later of course). Note however
that wiki indicates 14% decline there, but with no citation so maybe just a guess.
I am comparing US with Saudi Arabia. I expect when Saudi Arabia begins to decline the annual
rate of decline will be 3% per year or less.
Cantarell was pushed much harder than Ghawar, relative to reserves and is an exceptional case.
In any case I do not know what will happen to the fields that make up Ghawar, I don't have any
data so I will not speculate any further. World output will be determined by the output of all
fields, Ghawar is important, but if Ron's estimate is correct, it is 4% of World output.
The 3000 Gb scenario above with 2500 Gb of C+C less oil sands (or extra heavy oil) and 500
Gb of extra heavy (XH) oil is based on Jean Laherrere's 2013 estimate of XH oil and a Hubbert
Linearization of C+C-XH from 1993 to 2015 in chart below.
Dennis – you state "For simplicity we will assume Ghawar produces about 5 Mb/d and that it will
decline at 3%/ year (similar to US before LTO production started from 1985-2004)", and then say
"I am comparing US with Saudi Arabia. I expect when Saudi Arabia begins to decline the annual
rate of decline will be 3% per year or less.". Which one is it, because they aren't both correct?
"Cantarell was pushed much harder than Ghawar" Please provide details of how you know this.
Thanks Techguy, that was an interesting post. I know this is probably an impossible question
but how long do you think it will take to deplete the remaining oil column? If it is correct that
it took 10 years to drop from 100 to 25 feet (assuming this is correct too) then that doesn't
bode well for future production from Ghawar over the next decade.
Much as I love Dennis' charts, I just don't see his 3% continuing very long, if Ghawar is indeed
down to a thin layer of oil over water. There could just be a clunk as the field is shut down
after a short period of steeper decline.
The next five years should tell a lot if the oil column is now that thin. 5 mbopd can't
continue forever, nor can 3% decline in a permeable reservoir under water flood. When the water
mostly reaches the top, the oil stained water becomes too expensive to separate out and production
stops at greater than a 3% rate.
There will be fields that decline more than 3% and fields that will decline less, the average
will roughly match the US decline (the most mature large oil producing nation) from 1986 to 2004
which was less than 3% per year.
Ghawar is several fields, Tech Guy's comments probably do not apply to all the fields of Ghawar.
People also seem to forget that new fields will continue to be developed and infill drilling
and EOR will continue in many fields. These factors will reduce the rate of decline for overall
World C+C output.
5. KSA is the primary driver into the turmoil in Syria. KSA is sitting on vast NatGas fields
underneath their oil fields. However, producing NatGas from these fields would cause severe Oil
production issues,
I assume you are referring to the Kluff nat gas field under lying the Ghawar oil field. I know
the Kluff field was being produced, but not sure if it was near its potential or very restricted
flow. I remember a discussion with some Exxon reservoir people, on the liquids being produced,
and how to define them. Oil or condensate. The Saudis chose condensate as they were not counted
in the export quotas at the time.
Are you saying that Kluff is in communication the Ghawar? If they were surely there would be
pressure issues in the upper field.
I believe there is communication in the water table between Burgan and Safaniya, but that is
a different issue.
It is hard to see where the production of an under lying gas field would affect an over lying
oilfield, apart from a few drilling issues of under pressure thief zones, which can be dealt with
by casing design, mud properties, and maybe even a little managed pressure drilling if required.
"Are you saying that Kluff is in communication the Ghawar? If they were surely there would
be pressure issues in the upper field."
I was just referred to what I read in Saudi Americo's tech articles. If I recall, correctly,
several fields in KSA had NatGas reserves. The article(s) I recall reading referred to delaying
production of NatGas to avoid impacting Oil production. I don't recall the exact details, and
I don't believe that the article(s) mention which fields they are delaying NatGas Production.
These Saudi Americo tech articles do not disclose which fields they are about.
Toolpush wrote:
"It is hard to see where the production of an under lying gas field would affect an over
lying oilfield, apart from a few drilling issues of under pressure thief zones"
I would image drawing down the NatGas would alter the levels were the Oil is located. Since
most of the Oil is now extracted via horizontal wells. I am speculating on how it impacts production.
Perhaps there are more details in the articles than I recall. You can read them as the are publicly
available on SA's website.
Thanks for the feedback. Do you have a link to where these reports are located?
As for gas communication. If the reservoir has a gas cap, then this gas cap can't be drawn
down without effecting the pressure in the reservoir, and therefore oil production. The fact that
most if not all the fields have water injection to maintain well bore pressure, we can assume
pressure maintenance is at a premium.
Now if as you described and I know the Kluff field conforms to this line. The gas is in a separate
trap, separated by it's own cap rock from the oil, then there can't be any communication. If there
was, the gas would ride to the high oil reservoir, and as the gas in at a greater depth than the
oil, is will also have a pressure. If this higher pressure was allowed to communicate with the
upper reservoir, then the upper reservoir would become over pressured, and this over pressure
would have been discovered in the exploration wells.
So I will be very interested to read their explanation to gas production being held back from
under lying gas reserves, rather than any gas bubbles sitting on top of the oil currently being
produced.
Regarding ToolPush Question about NatGas reserves in Oil Fields:
Yes, you have the correct link. I don't recall which article had discuss delaying natGas production
from their oil fields, I read through over a dozen their Tech Publications.
I have found where Kluff has been widely discussed, but not other gas fields, though I have
only scratched the surface. I can see I have a lot of reading to do, but I know I will learn a
lot by the time i am finished.
One little point I noticed. The unconventional gas they talk about, seems to be in carbonates!
Yet to see any shale mentioned, but i will keep going. Closer to Austin Chalk than Eagle Ford.
"... However, if there is no deal, oil could trade lower immediately. West Texas Intermediate crude futures settled just above $40 per barrel Monday, and Brent was just under $43. Blanch expects Brent to trade at around $47 per barrel this summer and above $50 at year-end. ..."
"... This is a clear and present danger, if they don't get oil prices higher. Maybe Mohammed bin Salman doesn't care, but these other GCC countries care ..."
"... If Saudi Arabia does not agree to a freeze, the prince could find himself at odds with Putin. Russia has said it would support a freeze, and it is reported to be interested in brokering a deal between Saudi Arabia and Iran ..."
"... The gambler prince has crashed the Saudi economy and is too arrogant to change course ..."
"... 30 years old = he did not earn his power and position, he inherited it. That's about the biggest slap in the face I can imagine. Knowing no one around you really respects you, and that the only reason you matter on a planet of 6 billion people is because of who your daddy is. ..."
"... House Minority Leader Nancy Pelosi on Sunday said she wants 28 redacted pages declassified from a 2003 congressional report on the intelligence community's prepaparedness for and response to the 9/11 attacks. ..."
"... Seems like a huge number of paragraphs to simply confirm the general consensus on SA's position. All wrapped up in "wild card" grabbers that mean...nothing. ..."
"... I used to pad reports in school to meet word count requirements. But I did a much better job. ..."
In a five-hour interview with Bloomberg, bin Salman recently laid out his position on a freeze
deal, saying Saudi Arabia would participate only if major producers, including Iran, also participate.
... ... ...
Iran has said it would participate in the Doha meeting this weekend, but it will not freeze production.
Iran is working to return oil to market, now that it is no longer under sanctions for its nuclear
program, and its goal is to bring back 1 million barrels in a year.
"If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers freeze
production, we will be among them," bin Salman told Bloomberg. He also said that Saudi Arabia was
not threatened by the drop in oil prices. Analysts say that comment signaled a willingness to persevere
with low prices as long as it takes to end the supply glut.
... ... ...
"It's going to require creativity this week. I think the effort will be made ... you have the
Kuwaitis out there, saying 'We're going to get a deal.' You have these other GCC (Gulf Cooperation
Council) countries still holding out hope. I think they're invested in trying to get this thing done,"
said Croft. "I think what they're looking to do is close their fiscal gap ... they are all concerned
about increased borrowing costs."
... ... ...
Francisco Blanch, Bank of America Merrill Lynch's head of global commodities and derivatives research,
said he sees a slight chance Iran could agree to something, possibly a production cap just slightly
above its current 3.2 million barrels a day output.
... ... ....
"The downside risk is the Doha meeting ends up being another big disappointment, like the previous
OPEC meetings have been. There is risk of that. We know there's a proposal on the table. We know
the market has bounced somewhat on that proposal. It's also somewhat on the back of other seasonal
factors that are driving prices higher. I still think even if we get some kind of freeze agreement
and OPEC stops talking the market down, that leaves us where we are," said Blanch.
However, if there is no deal, oil could trade lower immediately.
West Texas Intermediate crude futures settled just above $40 per barrel Monday, and Brent was
just under $43. Blanch expects Brent to trade at around $47 per barrel this summer and above $50
at year-end.
... ... ...
Croft said the message from Saudi Arabia has changed, with more conciliatory comments previously
from Saudi Oil Minister Ali al-Naimi, now overshadowed by bin Salman's remarks. But Morse said Naimi
left the door open to disagree when he said the Saudis would supply any customers who are looking
for oil.
"This is a clear and present danger, if they don't get oil prices higher. Maybe Mohammed bin Salman
doesn't care, but these other GCC countries care," said Croft.
She said Russia is also looking for a deal. "I think the Russians, they're incentivized to get
this done from the standpoint of a fiscal position," she said. "Russia's been pretty adamant about
getting this done."
If Saudi Arabia does not agree to a freeze, the prince could find himself at odds with Putin.
Russia has said it would support a freeze, and it is reported to be interested in brokering a deal
between Saudi Arabia and Iran, but Morse said a deal could have come over Syria but that could
prove elusive since the Russians have pulled out of Syria.
Or... Saudi Arabia stands alone as the only holdout and Russia pushes them out of OPEC. Something
is going to happen at this meeting, because all of the other OPEC members are really hurting really
bad.
Don't assume things remain status quo. That is a huge mistake.
There you go assuming things stay status quo. Russia produces as much oil as the Saudis. If you
understand how and why OPEC was created, you will understand where I'm going with this.
xdir
The gambler prince has crashed the Saudi economy and is too arrogant to change course,
the price Saudi Arabia paid to "kill" shale has to be the biggest phyrric victory in business,
they spent around a $Trillion to hurt their competition and achieved nothing.
INSERTSCREENNAMEHERE
30 years old = he did not earn his power and position, he inherited it. That's about
the biggest slap in the face I can imagine. Knowing no one around you really respects you, and
that the only reason you matter on a planet of 6 billion people is because of who your daddy
is.
DreWhite
House Minority Leader Nancy Pelosi on Sunday said she wants 28 redacted pages
declassified from a 2003 congressional report on the intelligence community's prepaparedness
for and response to the 9/11 attacks.
Obama Under Pressure to Declassify the 9/11 Report's Secret 28 Pages
The 28 pages are believed to expose a number of links between various officials in Saudi
Arabia and the 9/11 hijackers
I wonder if Obama will bow before the King again.....hmmm
Andylit
Seems like a huge number of paragraphs to simply confirm the general consensus on SA's
position. All wrapped up in "wild card" grabbers that mean...nothing.
I used to pad reports in school to meet word count requirements. But I did a much better
job.
…..Why would a price spike above $40 be a bad thing for Saudi Arabia?
Because it would provide a life support to American frackers who have undermined the pricing
power of the Kingdom these days, as was discussed in a previous piece here.
But there's another, more important problem: high crude prices can help Russia and Iran raise
the funds they need to support insurgent movements that threaten the Kingdom's regime………
Saudi Arabia and Russia are by no means at the end of their finances as can be seen from their
still unabated drilling activity, buying refineries in the US, investing in Europe…:
Heinrich, your assertion that I am trying to prevent people from expressing their opinion is insulting
as well as misplaced. I did nothing of the sort. Also, I certainly don't consider Forbes to be
good company on pretty much any subject. SA's foreign exchange reserves dropped from about $740
billion in Oct 2014 to about $590 billion today, having dropped $9 billion in February alone.
I'm not saying they are on the ropes yet, but the Kingdom is scaling back on social welfare payments.
They are running a massive budget deficit. Anyone who thinks this is part of some brilliant strategy
is misguided.
Your assertion that unabated drilling activity is a sign of financial strength is not supported
by the link you provided. That's about investing in LNG facilities. What does that have to do
with oil production?
…..Why would a price spike above $40 be a bad thing for Saudi Arabia?
Because it would provide a life support to American frackers who have undermined the pricing
power of the Kingdom these days, as was discussed in a previous piece here.
The predatory pricing initiated by KSA in mid 2014 was not directed against the USA frackers and
in no way directed at establishing $30-40 per barrel price band. They viewed US frackers as a
useful balancing mechanism (and this was stressed several times by high level Saudi officials),
that allow to establish and maintain $70-$80 or so price range. and that probably was their initial
intention. But they quickly lost control to Wall Street, which has other plans.
And they think that this price range is also OK for the world economy. I can't find quotes
now but there were such quotes by Saudi oil minister.
Looks more like while they initialed the price slump, they were quickly taken for a ride by
"paper oil producers", who promptly assume control and drove the price to the current price band.
And intend to maintain it as long as possible (look at all "low oil price forever" propaganda
in Western MSM).
That's why Saudis were forced to ally with Russia in "freezing production" scheme.
"... Looks like this is what the West wants Russia to want, not what Russia wants :-). I think in reality Russia wants $80 or higher, but with capex reduced most Russian oil companies for some short period might be content with $50-$60 range. ..."
"... If we are talking about a fair price of oil globally, I believe this is $80 per barrel. Keep in mind that a significant part of oil – about a third – is produced offshore, where the cost can be high. And there is a deep-water shelf, for example, in Brazil, where one of the first well cost more than $300 million. Subsequent wells would of course cost less, around the half the price, but still very expensive. ..."
Russia and Saudi Arabia gave signals that they want to have a price of no more than USD 45
per barrel as this prevents high cost oil to gain market share for some time.
Thus, Saudi Arabia prefers to export 10 mill bbl/d at USD 45 per barrel rather than 5 mill
bbl/d at USD 90 per barrel. Saudi Arabia has still 2 mill bbl/d as reserve capacity, which will
take some time to come to the market, yet I think the Saudis are ready to use this. USD 45 per
barrel is a comfortable price for Saudi Arabia and Russia.
As a conclusion, it could take – depending on the Saudis – a long time until prices can go
up again, which is clearly a disadvantage for shale. It is now up to the shale production to reduce
capacity and bring prices up again.
Russia and Saudi Arabia gave signals that they want to have a price of no more than USD
45 per barrel as this prevents high cost oil to gain market share for some time.
Looks like this is what the West wants Russia to want, not what Russia wants :-). I think
in reality Russia wants $80 or higher, but with capex reduced most Russian oil companies for some
short period might be content with $50-$60 range. See interview of the President of the Union
of oil and gas Industrialists of Russia Gennady Shmal (
http://peakoilbarrel.com/open-thread-petroleum-oil-natural-gas/#comment-565010 ):
A: If we are talking about a fair price of oil globally, I believe this is $80 per barrel.
Keep in mind that a significant part of oil – about a third – is produced offshore, where the
cost can be high. And there is a deep-water shelf, for example, in Brazil, where one of the
first well cost more than $300 million. Subsequent wells would of course cost less, around
the half the price, but still very expensive. Therefore, the capex of this oil extraction
is high enough. The breakeven price of our oil production without taxes is around $10 per barrel,
nationally. But when we include taxes, we get around $30 per barrel. But this cost is not no
tragedy for us. I remember a time when a barrel of oil was less than $10. Then we dreamed about
the price rising to $20.
When the three-year average cost of oil was above $100 per barrel, we got too used to it.
But the high price has one big drawback – it can negatively affect demand and stimulates production.
And that's what basically happened.
Therefore, now our oil companies might be now content with the price around $50-60 per barrel.
And I think in general, globally it would be OK price for both producers and consumers.
Even for the United States that would be an acceptable price. Canadians with their oil sands
would need a higher price – up to $80. But as the Canadian oil going to the United States,
anyway, losses can be compensated with the domestic shale production and they would have to
come to a common denominator.
I have to laugh at the argument that today's low oil prices are something Saudi Arabia wants in
order to (1) punish LTO producers in the U.S or (2) punish Russia or (3) punish other OPEC producers
or (4) punish (insert country name here). There is no way SA wants low prices and their economy
is suffering. They are burning through their foreign reserves. So why are the continuing to produce
flat out as Ron insightfully informs us?
Because they have no choice! They need every dollar they can get and they don't control the
price of oil. If they export less the price of oil will go up somewhat, of course, but not enough
to increase their net take. In other words, their profitability would go up but their total profit
would decrease.
Now it's true that SA has made statements that make it look like this is part of some strategy,
but I believe that is all just public relations. Putting lipstick on a pig, if you will (apologies
to Muslim readers). If prices remain low we could be looking at some big time internal and regional
disruption as poor Saudi's (and there are lots of them) become desperate and the privileged Saud
class finds their standard of living declining. Saudi Arabia has been a pillar of stability (yes,
repressive stability) in the mid east for decades. If that changes many bad things could happen.
But please, stop with the talk that SA wants low oil prices.
If KSA cut production by 3 million barrels per day (for example), I'd bet my life savings that
oil prices would at least double to say 70 or even 80 USD per barrel – and I think that is being
conservative. That cut would totally eliminate the current rate of oversupply.
That sacrifice would reduce their volume of oil exported by about 30%, but revenue from that
oil would double – with that production providing greater profit margins as well for the same
given revenue.
I don't think it is accurate to say that a) they couldn't control the price of oil at least
directionally, and b) that their total profit would decrease – it simply wouldn't, it would increase.
How else did OPEC work in the past if that was not the case?
Well, you can make your bet and I'd make mine. When I say control the price of oil I mean CONTROL
the price - not just influence it. Any producer can influence the price at some marginal level.
But Saudi Arabia is seen by many as holding the key to world prices. So your assertion is that
KSA could cut back and increase the price sufficiently to more than make up for the lost exports.
So why aren't they? To hurt the US frackers? To hurt Russia? To hurt Iran? I just don't but it.
They are burning through their foreign exchange reserves at a blistering pace. And if they someday
decide to cut production and increase world prices, won't that just bring back the other producers?
It's all my opinion, of course, and we are all entitled to one, but I don't see how KSA is
operating on some kind of brilliant strategy.
I have to laugh at the argument that today's low oil prices are
something Saudi Arabia wants in order to (1) punish LTO producers in the U.S or (2) punish Russia
or (3) punish other OPEC producers or (4) punish (insert contry name here). There is no way SA
wants low prices and their economy is suffering. They are burning through their foreign reserves.
So why are the continuing to produce flat out as Ron insightfully informs us?
KSA used predatory pricing to drive down oil prices. This is undisputable. It takes two for
tango and they were supported by growth of US shale production and the heavy artillery of the
USA MSM claiming "Oh my God, oil glut, oil glut !" as well as disingenuous statistics from EIA
and IEA (both controlled by the same people).
It looks that oil glut did occurred, mainly due to condensate overproduction for the second
half of 2014 and the first half of 2015 and this fact was used to drive oil prices from over $100
to below $30 or three times. Wall Street guys are called "masters of the universe" for a reason.
That put most oil producing nations in a very precarious situation with several countries balancing
of the wedge of bankruptcies. This also was equivalent to huge monetary stimulus for the Western
and Asian economies. For the USA it was equivalent to the continuation of the Fed stimulus program.
Probably around 600 billion per year worldwide were redistributed from oil producing nations
to oil consuming nations.
KSA actions also created tensions between two groups of OPEC nations - Gulf monarchies and
everybody else to the extent that OPEC now exists only formally (not withstanding that cheating
OPEC quotas was widespread practice even before).
In February the situation looked really grim for oil producing nations and Russians became
really concerned that Wall Street manipulators (aka paper oil producers) will manage to drive
oil to $20 (you can almost sense the level of panic in Sechin speech in London
http://www.rosneft.com/attach/0/57/51/pdf_10022016_en.pdf
)
Our message about the gap between the financial instruments of the oil market which, in
fact, determine the prices and specifics of the actual industry development has been clearly
confirmed. The financial market observes its own interests, and they are often abstracted from
the problems of sustainable development of the industry. In this market, prices can both fall
to the "bottom" where any development or stable functioning are impossible, and climb to unreasonably
high levels.
Financial players have tools that allow them making profit on both rise and fall in prices.
Today, the financial technique implies that decisions are often made by robots at the trading
platforms, and the programs managed by them impersonally respond instantly to such short-term
changes of the situation or information on the oil reserves movements;
Link of the price dynamics with the parameters of production is primarily important to the
producers who have a long-term horizon of decision-making, investment and implementation of
major projects, and the consumers who are also interested in predictability. In the past year,
we saw developments in which producers were split up, and some of them announced a "price war"
setting up a mission to oust "ineffective" suppliers from the market and take their place at
the market, in fact, this price war should have determined who is "ineffective".
In these circumstances, it is quite expected that the financial market players went bears
while the related (if not affiliated) think tanks helpfully prompted lower and lower price
benchmarks to the market.
Who was the main beneficiary of the current crisis? Apparently, not consumers because the
retail prices fell by less than 20% on average, but rather financial players who, by the way,
have not redirected $250-300 bln investments released from oil sector into projects in other
sectors of the economy so far.
Slide 5. Explosive growth of shale oil production in the US in 2013-2014 ceased in 2015
As we know, the explosive growth of shale production in the US in 2013-2014 became another
crucial factor, and even the "trigger" of the crisis.
In 2013-2014, this growth was probably unprecedented in the world history in terms of its
scale and pace. We have already noted that this reflected the advantage of the developed
US market with its financial instruments (large-scale hedging of risks, availability of cheap
investment, propensity of investors to take prompt decisions, use of land pledge and encumbrances,
etc.), and its capacities in drilling, service and transportation.
In late 2014, some of the leading oil producers from the Middle East followed the example
of the US strategy in increasing oil production.
As the result, the problems of excess oil on the market, long-time decline in oil prices,
falloff in capacity of commercial shale oil production in the US have become worse.
Slide 6. OPEC actions gave backing to imbalance in the oil market
There is every reason to believe that these producers have deliberately created and continue
to maintain a surplus of supply over demand claiming their commitment to the policy of low
prices. The consequences of this policy, even if it is changed or adjusted, will have affect
for a certain time.
Slide 7. Positions of major speculators in the oil futures markets
We have to admit we underestimated the fact that the financial market players have no restrictions
in dealing with their sheer financial objectives and are ready to "test" any price levels –
for example, 27$ in January – down to $10 per barrel as it was recently announced by a reputable
investment structure. What is it if not "an invitation to the irresponsible game" for an unlimited
price drop?
That's why all those talks about freeze started in February - this was a meek attempt of damage
control of KSA reckless gambit from which other oil producing nations suffered greatly (and Saudis
decided to get on board of this initiative for a simple reason that events got out of control
and they also feel really threatened by the possibility of $20 oil).
The most interesting is the fact that Saudis cooperated with Russia (whom they consider their
enemy). Russia in turn decided to cooperate with KSA not out of good will toward KSA. They consider
Wahhabism a mortal threat for Russia and you can get in jail if you just get Wahhabi literature
in Russia, to say nothing about openly declaring yourself to be adherent of this dominant in KSA
sect (it is considered to be criminal organization in Russia). That tells us something about the
precarious situation in which oil producing nations has found themselves in February.
In any case, in February it looked like oil producing nations will be taken for a ride by Wall
Street for 2016 and probably 2017. And financially raped.
That's why this freeze agreement was announced and it helped to push prices slightly higher
even before it full ratification which might occur in late April despite all the efforts by the
West to torpedo the agreement (and somewhat duplicitous behavior of Iran, which it seems does
not understand that producing 4 Mb/day at $30 is equivalent to producing 2 Mb/d at $60).
Russia also launched a national program of development of their petrochemical industry which
will eventually reduce the amount of oil available for export, even if production remains flat.
Saudis did the same and actually on much larger scale. So their internal consumption will be
rising faster then their production capacities.
To get out this KSA induced fiasco with oil prices this cocky and impulsive new Saudi prince
is now trying to save his butt pretending to be Margaret Thatcher of Saudi Arabia. He is trying
to launch the program of privatization of state assets including part of Aramco to lessen the
draw of foreign reserves due to budget deficit (currently around $100 billion a year; KAS needs
around $90 per barrel to balance the budget; Russia needs around $60).
So either with gentle encouragement of Obamoids or on their own initiative this new prince
( who actually rules the county instead of his father king who is suffering from dementia ) essentially
destroyed around one third of the country foreign reserves, engaged in destructive war in Yemen,
deteriorated relations with the major geopolitical rivals such as Iran (via war in Yemen and the
execution of Shiite cleric) and Russia (by supporting and financing (indirectly) Syria jihadists)
and got nothing in return.
Moreover he managed even to cool relations with the USA - the major beneficiary of his actions.
That clearly demonstrates the grave danger inherent in absolute monarchy - a lot depends on
the man at the top.
…..Why would a price spike above $40 be a bad thing for Saudi Arabia?
Because it would provide a life support to American frackers who have undermined the pricing
power of the Kingdom these days, as was discussed in a previous piece here.
But there's another, more important problem: high crude prices can help Russia and Iran raise
the funds they need to support insurgent movements that threaten the Kingdom's regime………
Saudi Arabia and Russia are by no means at the end of their finances as can be seen from their
still unabated drilling activity, buying refineries in the US, investing in Europe…:
Heinrich, your assertion that I am trying to prevent people from expressing their opinion is insulting
as well as misplaced. I did nothing of the sort. Also, I certainly don't consider Forbes to be
good company on pretty much any subject. SA's foreign exchange reserves dropped from about $740
billion in Oct 2014 to about $590 billion today, having dropped $9 billion in February alone.
I'm not saying they are on the ropes yet, but the Kingdom is scaling back on social welfare payments.
They are running a massive budget deficit. Anyone who thinks this is part of some brilliant strategy
is misguided.
Your assertion that unabated drilling activity is a sign of financial strength is not supported
by the link you provided. That's about investing in LNG facilities. What does that have to do
with oil production?
"... This is a typical Bloomberg "low oil price forever" propaganda trick. BTW Saudi Arabia produced on average 11.6 million bbl/d of total petroleum liquids in 2013. ..."
"... The question is who and when in Aramco said that (taking into account their growing depletion rate and changes in quality of extracted oil - trend toward producing more of heavy oil) ? And what will be NGL share in this new production? Actually oil is only 9.5 of 10 Mb/d total KSA CC+NLG production ..."
"... There are currently no plans to increase oil production capacity. Saudi Arabia's long-term goal is to further develop its lighter crude oil potential and maintain current levels of production by offsetting declines in mature fields with newer fields. ..."
"…State-owned Saudi Aramco says this will let it ease pumping from older fields yet maintain a
production capacity of more than 12 million barrels per day, 2 million barrels above its current
rate.
For Kuwait and the U.A.E., the goals are even higher. Kuwait plans to raise production capacity
by 5 percent from 3 million barrels a day by the third quarter, and to reach 4 million barrels
by 2020. Abu Dhabi means to lift production capacity to 3.5 million barrels a day by 2017 from
about 3 million."
"…State-owned Saudi Aramco says this will let it ease pumping from older fields yet maintain
a production capacity of more than 12 million barrels per day, 2 million barrels above its current
rate.
This is a typical Bloomberg "low oil price forever" propaganda trick. BTW Saudi Arabia produced
on average 11.6 million bbl/d of total petroleum liquids in 2013.
The question is who and when in Aramco said that (taking into account their growing depletion
rate and changes in quality of extracted oil - trend toward producing more of heavy oil) ? And
what will be NGL share in this new production? Actually oil is only 9.5 of 10 Mb/d total KSA CC+NLG
production now:
http://www.saudiaramco.com/en/home/about/key-facts-and-figures.html
Production and reserves
•Recoverable Crude Oil & Condensate (billions of barrels): 261.1
•Recoverable Gas (Associated and Nonassociated) (trillions of standard cubic feet): 294.0
•Crude Oil Production (annual/billions of barrels): 3.5; (daily/millions of barrels): 9.5
•Crude Oil Exports (millions of barrels): 2,544
•Delivered Sales Gas and Ethane Gas (trillions of standard cubic feet): 4.1; (trillions of
Btu, British thermal unit per day) Sales Gas: 8.4; Ethane Gas: 1.4
•NGL from Hydrocarbon Gases (millions of barrels): 471.3
•Raw Gas to Gas Plants (billions of standard cubic feet per day): 11.3, up 3% compared to 2013
•Refined Products Production (millions of barrels): 561
•Refined Products Exports (millions of barrels): 168
According to EIA Saudi Arabia consumed 2.9 million barrels per day (bbl/d) of oil in 2013,
almost double the consumption in 2000 (in three years). Chief Executive Officer of Saudi Aramco,
Khalid al-Falih, said that domestic liquids demand was on pace to reach more than 8 million bbl/d
of oil equivalent by 2030 if there were no improvements in energy efficiency.
There are currently no plans to increase oil production capacity. Saudi Arabia's long-term
goal is to further develop its lighter crude oil potential and maintain current levels of production
by offsetting declines in mature fields with newer fields.
Moscow isn't sowing Middle East chaos to drive up oil prices.
Russia's leaders certainly do care about oil prices, and with good reason. Plunging oil prices
decrease the ruble's value, which closely follows oil prices. Oil exports are important to Russia's
federal budget and to its overall balance of trade. Indeed, when monthly average Brent oil prices
peaked at about $125 per barrel in March 2012, the ruble was close to its own peak, at approximately
twenty-nine rubles to every U.S. dollar. When Brent prices fell to $30.70 per barrel in January 2016,
the ruble had fallen to about eighty rubles to the dollar. It is easy to examine this currency-resource
correlation by comparing U.S. Energy Information Administration oil price data with Russian Central
Bank ruble values. As a result, the Russian government has imposed sweeping budget cuts that will
now affect defense expenditures as well as social programs and other areas.
... ... ...
On the contrary, Russia has been working with Riyadh to contain prices and announcing a withdrawal
from Syria and a new focus on peace talks there. If Russia were determined to play the oil card,
it could do so in many different ways. For example, one option might be to step up support for Assad's
government to win a comprehensive military victory over its foes. If Russia looked seriously at this
option, the changing conditions could draw Saudi Arabia and other supporters of the Syrian opposition
more deeply into the conflict and perhaps expand it. This is much more likely to raise oil prices
than what Moscow has done in the past. But Syria is not a major oil producer or exporter. So perhaps
Russia's policy in Syria is not oil centric, but its approach to other problems could. Unfortunately,
there is not much evidence to support this argument either.
One of the strongest counterarguments to the oil-price theory of Russian foreign policy is
the recent Iran nuclear agreement, known as the Joint Comprehensive Plan of Action (JPCOA). If higher
oil prices were Russia's principal goal in dealing with Iran-which has the world's fourth-largest
proven oil reserves-why facilitate the JPCOA at all? It would be far better to block the agreement
in hopes of forcing a showdown between Washington and Tehran, possibly including U.S. military action.
Alternatively, Russia could have agreed to Western proposals to tighten sanctions on Iran's
energy sector, further limiting oil supplies. Or Moscow could have delayed the talks, hoping that
this would create sufficient uncertainty to raise oil prices. Instead, at a time when Russia was
already suffering economically from low oil prices and from Western economic sanctions, President
Vladimir Putin decided to support an agreement that would only further decrease oil prices.
... ... ...
...Russia did much less to oppose U.S. and NATO air strikes in Libya in 2011-so maybe this proves
that Moscow wanted disorder there to increase oil prices? It doesn't look that way. First, then-president
Dmitry Medvedev agreed to accept the strikes after intense pressure from President Obama and appeared
to do so in large part to appease the United States. Second-perhaps more importantly-then-prime minister
Putin criticized Medvedev's decision to order Russian diplomats to abstain in United Nations Security
Council vote, prompting a rebuke from Medvedev. Since Putin has been controlling Russian foreign
policy for most of the last sixteen years, Medvedev's move was likely an exception rather than the
rule. Finally, oil prices were already quite high in early 2011 when Medvedev made his choice. Even
if moving oil prices upward was a top priority in Russian foreign policy, it would have been much
less necessary at this specific time.
While oil prices are important for Russia, they are generally not a driving factor of Russian
leaders' key decisions. Thus, Russia does seek to shape oil prices, but does so through routine diplomatic
processes. There are many reasons for this, but one of the most significant is that Russia sees
critical national-security interests in the Middle East that override its concerns over oil prices.
In fact, in each of the above cases-Syria, Iran and Iraq-President Putin has pursued policies that
appear intended to produce stability. So Russia's supposed secret plans to boost oil prices
may produce entertaining conversation, but they don't lead to much else.
Paul J. Saunders is Executive Director at the Center for the National Interest and a Research
Scientist at CNA Corporation.
Borgþór Jónsson > Guest
You are correct,except the US wars are not so secret.
They are there for everyone to see.
Sinbad2 > Borgþór Jónsson
Americans don't see their wars. The US Government keeps the American people in a cocoon of
ignorance.
O_Pinion > Guest
Who needs secret wars when you can have secret bank accounts?
So the US fracking oil boom never happened, iraq's oil output didn't increase to an all time
high, there are no macroeconomic forces cooling demand and the law of supply and demand is a fiction.
it is all simply a grand conspiracy cooked up by Saudi Arabia and the US.
Serge Krieger > Sinbad2
It is very complex topic. I think too many things came together to create this perfect
storm. Frankly, new oil reserves are not profitable at anything below $70.
I guess it was both market overproduction with Canadian sands and US fracking and Saudis and
possibly even Russian oil production that caused this. I do not think Saudis alone would be capable
of such fit.
Sensible analysis, its much more likely Russia is just preparing the way to make sure it doesn't
end up with an American boot stamping on its face forever.
Because of this Russia is in the cross hairs of the Anglo-Zionists who can only survive if they
tear apart Russia and take control of its vast resources.
China and the US who are the 2 biggest purchasers of energy in the world, have been doubling
their investments in renewable energy!
Castlerock58
The US,Turkey and Saudi Arabia are promoting the instability in the Middle East.
Bankotsu
"Moscow isn't sowing Middle East chaos...."
I think the writer confused Russia with U.S.
Pacemaker4
Russia oil and gas industry accounts for 15% of their GDP.... that fact is lost on the
author.
Kalinin Yuri > HotelQuebec
All the vessels in the ocean instead of Diesel should use some nuclear reactors, right? The
trucks that move all the goods - also batteries? Has anybody calculated emissions from power
stations in order to charge a car that runs 80 km? Also how much does it cost to recycle the
batteries?
Sinbad2 > Kalinin Yuri
The silicon used in solar panels, is one of the dirtiest refining processes on the planet.
Hippies are well meaning critters, but not very smart.
Gregory Anbreit
Oh wow, so it was Russia who started all the chaos in the Middle East? Is this a joke? Who
invaded Iraq in 2003? Who has destroyed Libya? Who was supporting "Arab springs"? Who sends
weapons to AQ and ISIS in Syria?
But yeah, blame Russia.....how typical.
deadman449
Russia exports two things. Oil and weapons. If you think about it, it makes sense to cause
mischief in other countries near oil production. Question is, then why is the oil price so
low?
Andre
If Russia really wanted to use conflict to raise oil prices and achieve irridentist
ambitions at the same time, it would launch a Crimean/Donbas-type dirty war in northern
Kazakhstan with a view to annexing the Russian-inhabited areas. Kazakhstan occupies a similar
position with respect to oil production as Libya did in 2011 and its cost of production is not
too much more than many Gulf Arab states. Kazakhstan is also non-aligned and quite frankly
indefensible. From a geopolitical standpoint I see this move as much more likely than some
dangerous play in the Baltics which would yield little in terms of added Russian citizens or
resources.
Andre
If Russia really wanted to use conflict to raise oil prices and achieve irridentist ambitions at
the same time, it would launch a Crimean/Donbas-type dirty war in northern Kazakhstan with a view
to annexing the Russian-inhabited areas. Kazakhstan occupies a similar position with respect to
oil production as Libya did in 2011 and its cost of production is not too much more than many
Gulf Arab states. Kazakhstan is also non-aligned and quite frankly indefensible. From a
geopolitical standpoint I see this move as much more likely than some dangerous play in the
Baltics which would yield little in terms of added Russian citizens or resources.
Roman Lvovskiy > Andre
you're like Tom Clancy reborn, honestly
Andre > Roman Lvovskiy
Tom Clancy was remarkably prescient among techno-thriller writers, although some works were much
better than others, particularly "The Hunt for Red October", "Red Storm Rising" and "SSN".
You may consider my opinions fanciful, but look at the academic debate: there is an assumption
that Russian military intervention in Georgia and Ukraine poses a threat to NATO, and that the
Syrian adventure merely compounds this.
In comparison, I maintain the view that while Putin can be reckless - a common human flaw - his
aggression has been highly targeted to interests that have been articulated for many years,
including prior to his presidency e.g. absorbing the ethnic Russian diaspora bordering the RF,
halting NATO expansion, regaining global prestige.
Both Georgia and Ukraine were non-aligned countries when he invaded, and there is every
indication that he is aware of the distinction between NATO and non-NATO members. Therefore, if
he is planning on intervening anywhere, I would expect that country to: (a) be a "core interest",
(b) be non-aligned and (c) feature developments that challenge Russian interests. Belarus and
Kazakhstan both meet all these criteria, as each is drifting away from Russia. In Kazakhstan's
case, the recent policies concerning the official use of Kazakh and Russian are increasingly
discriminatory toward Russian-speakers, more so than any policies even contemplated by the
post-Maidan Ukrainian government. Unlike Belarus, Kazakhstan features immense natural resources
and many more ethnic Russians...
Roman Lvovskiy > Andre
i suspect it, that 'Red Storm Rising' is your fave. i like it as well, despite the fact that it's
hardly accurate when it comes to wording out actual features possessed by the Soviet hardware of
that period, described thereby.
one thing that eludes you always is that Putin can not afford to subjugate anyone. that would be
stretching beyond capacity, both financially and politically. also, there's hardly that much of
anyting that is in Kazakhstan's possession presently or in short-to-midterm perspective to make
Putin even think about considering the risks.
so i'm guessing it's just your wishful thinking. i'd also suggest reading something more
profound, like something by Vonnegut or Trumbo. there's more to American culture than your garden
variety of trash usually presented on TV, sadly - less and less with each passing year.
Andre > Roman Lvovskiy
You're correct that Putin can't afford a grinding counter-insurgency, and he seems to have taken
in the Soviet experience in occupying East-Central Europe, as well as the quagmires in
Afghanistan and Chechnya. Interestingly, as soon as it became apparent that support for union
with Russia was not as warm in Donbas as Crimea, the Novorossiya project was quietly buried.
But Putin certainly has his eye on Belarus and Kazakhstan, and Astana's been taking an
increasingly independent line. There is a demographic and economic case, as I've laid out in
prior comments. But this is not a "call", after all, Crimea was annexed 20 years after analysts
were worried about it.
I'll be honest with you - I've never read a Clancy book all the way through - I've read many
papers on military technology and strategy, but I still find Clancy too dry. There are more
contemporary American authors that are great, McCarthy being one.
dennis powell
There seems to be a lot of russian supporters , who are seeing the world thru rose colored
glasses , commenting here. Russia would love nothing more then to see oil higher. Inside their
own country the fall of the ruble isn't as much a big deal as it is when they try and conduct
business outside of russia.
They are paying for their actions in the ukraine. The annexation of
crimea was a just move to take back what should have never been given away. Their mistake was in
how it was done. Their move into syria wasn't about right and wrong but about protecting their
military interests. Any one who says anything different is being foolish. Their subsequent
withdrawal is an indication that they have satisfied that end. It also , I suspect , is to
contain the costs of such an operation. Russia is a gas station parading as a country.
Their only
claim to significance is their nuclear arsenal. They have an overblown view of themselves which
masks their deep paranoia. Take away their nuclear arsenal and they wouldn't be anymore
significant then brazil.
Frank Blangeard > dennis powell • 6 days ago
The last three lines of your comment seem to apply more to the United States than to Russia.
Randal > dennis powell • 7 days ago
"They are paying for their actions in the ukraine."
How
have Russia's actions in the Ukraine caused the oil price to fall
dramatically? The US sphere sanctions are an irrelevant pinprick in
comparison.
"The annexation of crimea was a just move to take back what
should have never been given away. Their mistake was in how it was
done."
I'd love to hear how you think it could possibly have been done
any other way.
"Their move into syria wasn't about right and wrong but about
protecting their military interests. Any one who says anything
different is being foolish."
What military interests? Surely you aren't talking about the
Tartus base? Have you actually seen it? Apart from that they had
almost zero military interests in Syria before the commencement of
the regime change attempt there.
"Their subsequent withdrawal is an indication that they have
satisfied that end. It also , I suspect , is to contain the costs
of such an operation."
Given the trivial costs in Russian budgetary terms of their
relatively small operation in Syria, how do you justify claiming
that would be an overwhelming factor in their decision making?
"Russia is a gas station parading as a country."
That pretty much discredits you terminally as any kind of
objective observer on Russia, I think.
"Their only claim to significance is their nuclear arsenal.
They have an overblown view of themselves which masks their deep
paranoia. Take away their nuclear arsenal and they wouldn't be
anymore significant then brazil."
Oh, really? Do feel free to explain exactly how their nuclear
arsenal enabled them to intervene successfully in Syria, in stark
contrast to the US regime's repeated failures. And while you are
about it, feel free also to explain the utility of their nuclear
arsenal in recovering the Crimea, or any of Russia's other recent
activities.
Presumably you think Brazil could have done both, if it only had
a nuclear arsenal like Russia's.
Borgþór Jónsson > dennis powell
Of course Putin went to Syria to protect the bases,but there are also several other
reasons.
Putin wanted to protect the sovereignty of Syria.
He did not want a state similar to Libya so close to his boarders.
That is exactly what would have happened if he did not intervene.
It would have happened ,because that is what the US wanted. They wanted to grow a terrorist
state close to Russia borders.
Putin also went to Syria because he wanted to fight terrorism in area where they would be
easier to defeat than in Caucasus.
Imagine the trouble it had cost him if he had a terrorist state in Syria constantly supplying
terrorists and weapons to the Caucasus.
That was one of the aims of the US,that is the reason they fed the terrorists with weapons.
The final goal was that they would later use those weapons against Russian people.
Same goes for the Ukraine.
The final goal there is that the Ukrainian Nasis will finally attack Russia.That is the
reason for the Us cooperation with Ukrainian nationalists. Ukrainian nationalists are violent
idiots on par with ISIS as you know.
You are not the only person that are obsessed with that misunderstanding that Russia is a
gas station. This misunderstanding is the reason the US sanctioned Russia. But it does not
work,because after all, the oil is only 12% of the Russian GDP. It is uncomfortable because it
is so big part of the export, but Russia is in no way going to collapse because of it.
In fact the Russian economy is exceptionally strong,I believe that no other nation on
earth would have been able to withstand such hardship as the sharp fall of their export and at
the same time sanctions from the western powers.
Later this year or next year their economy will most likely start growing again. Well
done Russia.
Borgþór Jónsson > Borgþór Jónsson
I forgot to address another misunderstanding of yours. Russia has not left Syria.
In the beginning Russia used SU 24 and SU 25 plains for strategic bombing. What it means is
that they were used for taking out the oil business of the terrorists and also their weapons
depots,their control stations and training facilities. That is now over and those plains are
sent home.
Now they have the SU 34 And SU 35 that are more suitable for assisting the Syrian Army in
their offence. On top of that they have the MI 28 attack helicopters and of course the
the dreaded KA 52. All those plains and helicopters played a vital role in the liberation of
Palmyra.
The Russians are not home yet,they will stay in Syria and fight the terrorists till the end.
Valhalla rising
its not the jewish NeoCohens and liberal Hawks that destabilized the Middle East.Nope the
Russians are goyim -- The Russians are evil goyim -- Czar Putin shuts us down --
The Russians disposed Muhammad Gaddafi --
The Russians supported the Muslim Brotherhood in egypt --
The Russians supported the islamic onslaught against Assad --
... ... ...
http://www.dailystormer.com/gl...
The Russian energy ministry sees the very real possibility that Russian oil production enters
long-term decline, possibly even falling by half by 2035. Russia's major oil fields are decades
old, so it will be increasingly difficult to prevent output from falling. At the same time,
Russian oil companies are not discovering new sources of supply that could replace that lost
output. The Arctic offers one area where very large reserves could be exploited, but western
sanctions have blocked the participation of major international oil companies, which could help
Russian companies pull off the expensive and tricky Arctic drilling operations.
Meanwhile, Russia's natural resources minister said in late March – with an eye on the Doha
meeting – that Rosneft will likely lower its output this year. Rosneft actually did not comment
on his remarks, but the minister's comments were likely meant to demonstrate Russia's willingness
to cooperate with OPEC in Doha.
... ... ....
Russian output is expected to decline by 20,000 barrels per day on average this year,
according to OPEC's latest assessment.
See an interesting interview (slightly edited Google translation). Looks like the new oil reserves
in Russia are very expensive, on par with the US shale and the old are mostly depleted.
The President of the Union of oil and gas Industrialists of Russia Gennady Shmal told "Izvestia"
about what oil price is needed for Russia and when the industry will overcome dependence on imported
equipment
Q: OPEC believe that soon the price of oil should stabilize at a "normal", but not a too
high level. What do you think, what level of oil prices can be considered normal for Russia today?
A: If we are talking about a fair price of oil globally, I believe this is $80 per barrel.
Keep in mind that a significant part of oil – about a third – is produced offshore, where the
cost can be high. And there is a deep-water shelf, for example, in Brazil, where one of the first
well cost more than $300 million. Subsequent wells would of course cost less, around the half
the price, but still very expensive. Therefore, the capex of this oil extraction is high enough.
The breakeven price of our oil production without taxes is around $10 per barrel, nationally.
But when we include taxes, we get around $30 per barrel. But this cost is not no tragedy for us.
I remember a time when a barrel of oil was less than $10. Then we dreamed about the price rising
to $20.
When the three-year average cost of oil was above $100 per barrel, we got too used to
it. But the high price has one big drawback – it can negatively affect demand and stimulates production. And that's
what basically happened.
Therefore, now our oil companies might be now content with the price around $50-60
per barrel.
And I think in general, globally it would be OK price for both producers and consumers. Even
for the United States that would be an acceptable price. Canadians with their oil sands would
need a higher price – up to $80. But as the Canadian oil going to the United States, anyway,
losses can
be compensated with the domestic shale production and they would have to come to a common denominator.
Q: You're talking about this level of prices, without taking into account the Arctic shelf
projects?
A: Arctic shelf – it is quite another matter. My point of view on this issue is different from
the most popular view that exists today. I believe that we need to engage the shelf in terms of
prospecting, exploration. We generally do not even know that there, how much oil we have on the
shelf. We have so far only preliminary estimates of reserves – C2, C3 (preliminary estimated reserves,
potential reserves). And in order to have A, B, C1 (proven reserves), it is necessary to drill.
I am sure that we are not ready to work on the Arctic shelf both technically and technologically,
nor economically.
We do not have qualified people for that too. First of all, we need several platforms. One
platform for "Prirazlomnoe" that we now have been built for more than 15 years, and we sank into
it about $4 billion
And this one is not a new one, this is a second hand equipment. In order to seriously develop
the shelf, we need not one, but dozens of platforms, support vessels. Also offshore operations
must have the regulatory framework.
That means all the necessary technical regulations, standards. We have nothing. But the main
thing – the cost effectiveness of this oil: it is necessary to consider how profitable in today's
environment to produce Arctic oil. So, I think we now have enough things to do on land – in Eastern
Siberia, for example, before we need to jump with two legs into arctic oil extraction.
Q: How record oil production that Russian oil companies demonstrate in the past few years,
affects the structure of the Russian economy?
A: First of all, I believe that there are no records. Yes, we produced 534 million tons. But
in 1987 the Russian Federation has produced 572 million tons. Compared to the 1990s there is a
certain growth in recent years, but I would not talk about records. Second, the question about
optimal production volumes is a very complex one. The main question to which I have no answer
today: how much oil we need to extract?
Without answer on this question it is impossible to say whether we produced too little oil
or too much. If we consider that in 2015 we extracted more then 246 million tons, then, I would
say
we produced too much. This is not the way this business should be run. The fact is that Russia
can not influence the world oil price too much because we make only 19-20% of the market. But
we can and should make the country less dependent on raw oil price fluctuations. We could process
all extracted oil and export mainly gasoline and diesel fuel, as well as products with high added
value in the form of chemicals, petrochemicals, composite materials.
That means that we need to adopt a different approach to the structure of our industrial production.
For example, China in the last twenty years has built a series of petrochemical plants, and
today they have the chemical products sector with total value of production about $1.4 trillion,
or around 20% of China GDP. It should be noted that China's GDP is eight times more than ours.
Our chemical sector production is around $80 billion – 1.6% of Russia's GDP. In 2014 alone BASF
Chemicals (which is a single German company) produced 1.5 times more than all the chemical enterprises
of Russia. Petrochemicals may be the critical link, pulling which we could change the whole structure
of industrial production in Russia.
Q: If we talk about production prospects, what we levels of production we can expect in
the future, based on our today's oil reserves
structure?
A: Unfortunately, today we do not have a reliable statistics. According to some estimates,
of
those oil reserves that are under development, about 70% are so-called hard-to-extract oil. That
is, stocks, where oil production is complicated mining and geological, geographical conditions.
In these fields there might be tight reservoirs, reservoirs with low permeability, viscous
oil, etc. By the way, today we have no any clear definition of hard-to-extract inventory, although
this defines the benefits that can be granted to companies to work on the fields with such
reserves. Therefore we need serious work on the classification and definition of reserves that
will be put into the hard-to-extract category.
By the way, the current production mostly (about
70%) relies on the old fields, which now have a high water content, high percentage of
depletion of reserves. Of course, they will not last forever. Therefore, sooner or later, will
have to enter the development of the fields with hard to recover reserves.
Q: Extraction of hard inventory requires new technologies, which in Russia does not fully
have. What are the tools the government has to encourage their development?
A: The state has a lot of tools to stimulate those technological developments. Our tax
system can perform stimulating role along with fiscal and re-distributive functions. However,
our tax system currently performs mostly fiscal function and only slightly – re-distributive
function. Simulative
function is not yet here. As an illustration, take Texas, USA: if the well there gives 500 liters
of oil per day, it is considered a cost-effective – this way the tax system is built. For us a
well, which gives 4000 liters per day, is already viewed as unprofitable, and is moved into the
idle fund. Now, of course, some work is being done in respect of incentives for low producing
wells – MET rates introduced.
But I believe that the future of our oil industry is largely dependent on whether we are
able to create the technology of oil production from the Bazhenov Formation or not. Because the
geological reserves of the Bazhenov Formation in Western Siberia are more than 100 billion tons
of oil. Even at a conservative estimate, if it is possible to extract around 40-60 billion tones
of oil with the current technologies.
And please remember that all we have in Russia today, all C2 stocks, are just around 28
billion tons So if we find the necessary technology that can be applied to the
Bazhenov Formation,
the peak oil production issue for Russia can be resolved for a sufficiently long period of time.
And in respect of the help from the state it could be such measures such as tax holidays, tax
exemption, reduction in mineral extraction tax, etc.
But currently the Ministry of Finance is interested only in filling the budget. We need to
make sure that taxes are fair. For this, they must be applied to the end result of production.
In our country today we have taxes on earnings – up to 65-70% of the average withdrawal. Norway,
for example, has high taxes too, but they are levied on profits.
Taxes should be applied to profits, not revenue, the latter for us looks like the absolutely
wrong approach.
Q: According to various estimates, in the Russian oil and gas industry today up to 45-50%
of the equipment are imported. Will Russian oil companies to move away from this dependence
in view of sanctions. And what should be role of the state in achieving this results?
A: At the request of "Lukoil" we did last year such a study. We've got that on average
53% of drilling equipment in Russia is imported. Of course, we must bear in mind that, for
example, pipes, with rare exceptions, we can produce domestically. But today there are some
technological segments where there is a high dependence of Russian oil from foreign suppliers.
Those segments include: software control, automation and remote control.
Today, the Ministry of Energy to the Ministry of Industry set up working groups that
are engaged in import substitution. And we have already been there for some equipment that is
competitive with foreign models. So, one of the factories in Perm began to produce excellent pumps,
which match in quality the best foreign analogues. Some factories in Bashkortostan started the
production of valves, cut-offs switches and other fittings for any type of drilling. But it is
not necessary to replace all the foreign oil production equipment. And, of course, we can not
do this.
We make good tanks, but we do not produce luxury cars like Mercedes. We just don't produce
them. I believe that if we had a dependence on imports in the range of 20-25%, it would be acceptable
and probably close to optimal.
Today we can get rigs from China. Our experts say that they are of a sufficient level of quality.
We also have a factory, which in 1990 produced drilling rigs – "Uralmash". Then, the plant produced
365 sets of drilling equipment per year. In the past year – only 25.
Therefore we need to rely on the Chinese oil extracting equipment, as they have learned to
make a decent drilling equipment. And for the price, no one can match them. I believe that we
need to very clearly define few areas of oil extraction equipment, which are critical for us.
and then pay close attention and allocate resources to those areas. We do not need to cover everything.
And I am sure that before the end of 2020 Russia could reduce this dependence on foreign equipment
to 25-30%.
"... That honestly sounds like a difficult way to make a living, but I guess oil-industry networking is so lucrative that it drives people to crime. ..."
"... Right now there is an aura of fear among the general population and even the expats in Saudi. The police throw people in jail for the slightest provocation. No one dares to protest or even speak against the regime. They could be jailed or even publically whipped. But if things get really bad and enough people lose their fear of the police, then all hell could break loose. ..."
"... Then there are the mullahs. They have authority over the populace which the authorities allow in order to keep the peace, and to keep the people in their place. I have seen them hit people with a cane for window shopping during prayer time. All stores must close during prayer time. ..."
"... Saudi Arabia is basically a police state with the mullahs acting as if they are part of the police. But there is a deep resentment among the people with little money and no power. It is a powder keg that could blow if things get really bad. And when oil production starts to slide things could get bad very fast. ..."
Saudi Arabia may be preparing for a post-oil world now, but back in 2014 the oil industry
was so hot that the founder of an oil-industry networking site allegedly hacked into another
oil-industry networking site (that he had also founded!) to steal customer information, solicit
new customers, and ultimately sell his new company to his old company. That honestly sounds
like a difficult way to make a living, but I guess oil-industry networking is so lucrative
that it drives people to crime.
Alleged crime. Was so lucrative. Anyway here is the criminal
case against the founder, David Kent, who founded Rigzone in 2000, sold it to DHI Group in
2010 "for what ended up being about $51 million," founded Oilpro after his non-compete expired,
and allegedly hacked into Rigzone to get customers.
Outside of the oil industry - by which
I mean, "on Finance Twitter" - Oilpro is perhaps best known for its delightful Instagram account,
which I hope will be maintained regardless of the outcome of this case.
Saudi Arabia is getting ready for the twilight of the oil age by creating the world's
largest sovereign wealth fund for the kingdom's most prized assets.
Over a five-hour conversation, Deputy Crown Prince Mohammed bin Salman laid out his vision
for the Public Investment Fund, which will eventually control more than $2 trillion and help wean
the kingdom off oil. As part of that strategy, the prince said Saudi will sell shares in Aramco's
parent company and transform the oil giant into an industrial conglomerate. The initial public
offering could happen as soon as next year, with the country currently planning to sell less than
5 percent.
"IPOing Aramco and transferring its shares to PIF will technically make investments the source
of Saudi government revenue, not oil," the prince said in an interview at the royal compound in
Riyadh that ended at 4 a.m. on Thursday. "What is left now is to diversify investments. So within
20 years, we will be an economy or state that doesn't depend mainly on oil." Almost eight decades since the first Saudi oil was discovered, King Salman's 30-year-old son is
aiming to transform the world's biggest crude exporter into an economy fit for the next era. As
his strategy takes shape, the speed of change may shock a conservative society accustomed to decades
of government handouts.
Buying Buffett and Gates
The sale of Aramco, or Saudi Arabian Oil Co., is planned for 2018 or even a year earlier,
according to the prince. The fund will then play a major role in the economy, investing at home
and abroad. It would be big enough to buy Apple Inc., Google parent Alphabet Inc., Microsoft Corp.
and Berkshire Hathaway Inc. - the world's four largest publicly traded companies.
I would bet that Deputy Crown Prince Mohammed bin Salman is a believer in peak oil.
I bet they think the political risk of being invested in a nation loaded with would be terrorists
is too high. They plan to park a chunk of cash offshore and wait for the shoe to drop. I wouldn't
invest in Aramco given this reality.
There can never be a transition from oil in Saudi Arabia. When the oil starts to seriously decline
there will be turmoil in Saudi.
Right now there is an aura of fear among the general population and even the expats in Saudi.
The police throw people in jail for the slightest provocation. No one dares to protest or even
speak against the regime. They could be jailed or even publically whipped. But if things get really
bad and enough people lose their fear of the police, then all hell could break loose.
Then there are the mullahs. They have authority over the populace which the authorities allow
in order to keep the peace, and to keep the people in their place. I have seen them hit people
with a cane for window shopping during prayer time. All stores must close during prayer time.
Saudi Arabia is basically a police state with the mullahs acting as if they are part of the
police. But there is a deep resentment among the people with little money and no power. It is
a powder keg that could blow if things get really bad. And when oil production starts to slide
things could get bad very fast.
"... Maybe they know they're peaking and this is a big psy-op/economic warfare to confuse the competition, maybe it's a tumultuous power transition that lacks strategic continuity and the new king/clique is not a good strategist ..."
"... This hypothesis along with "hurt Russia" hypothesis (which simultaneously hurt their main regional rival Iran) are the most plausible IMHO. Please note that KSA is a vassal of the USA. So by extension it looks like "team Obama" is not a good strategist either. ..."
"... A recent WikiLeaks revelation cited a warning from a senior Saudi government oil executive telling that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels, or by nearly 40%!" the American political analyst underscores. ..."
"... "Where Americans' interests are concerned, while President Obama has been parlaying trendy terms like 'renewable energy' and his supposed climate change agenda, the fact is petroleum still powers 96% of all transportation in America," Butler emphasizes. ..."
"... To paraphrase the old song, oil makes the world go round… ..."
Does anybody have any insight or interesting ideas on Saudi Arabia? I believe they are disingenuous
with their 'market share' explanation…. I'm just using made up numbers here but my point is that
they have sacrificed 90 billion in profit to get 30 billion in market share. Last time I checked
business was about profits not about market share. If the IMF report I saw is correct then SA
needs $106/barrel to balance the national budget (not sure how that works at $106/barrel when
their 2015 budget was $229 billion but expenditures in 2015 ended up being $260 billion
http://www.bloomberg.com/news/articles/2015-12-28/a-breakdown-of-the-2016-saudi-budget-and-its-implications
). For the sake of argument lets call their national budget 'corporate overhead'. I suspect
SA is at a crossroads of some kind. Drilling rigs are up quite a bit the last couple years but
production is up slightly/wobbly.
Maybe they know they're peaking and this is a big psy-op/economic warfare to confuse the
competition, maybe it's a tumultuous power transition that lacks strategic continuity and the
new king/clique is not a good strategist….. I could go on. The intrigue could be deep or
shallow. Anybody have a good theory or read on where SA is at and going to? My guess is 30 million
people soon to be on foot headed for Europe.
The World C+C output has either peaked (in 2015) or will do so within 10 years, we will have
to wait 10 years to find out. Oil guys such as Fernando Leanme have claimed that a rise in oil
prices to $150/b (in 2015$) will make a lot more of existing oil resources profitable to produce,
whether this is enough to offset depletion is an open question as is the level of oil prices that
the World economy can afford.
On oil prices we can do the following back of napkin estimate. World real GDP at market exchange
rates about $80T 2015$ and assume 2% real GDP growth for the next 5 years which would bring us
to about $88T real GWP in 2015$ in 2020. Let's assume the world can only spend 4% of GWP on oil
without causing a recession and that C+C output remains at 80 Mb/d in 2020 (29 Gb/year).
The 4% of 88T is $3520B and we divide by 29B and get $121/b in 2020. An oil price of $150/b would
be close to 5% of GWP and would likely cause a recession.
I will let the oil guys comment on whether $120/b is enough to bring on adequate oil supply
to avoid a recession, a crisis will eventually occur as I expect that demand will eventually outrun
supply in the short term (next 10 years) and oil prices will spike above $150/b and lead to a
global recession. At that point the peak may finally be clear to all and a transition away from
oil will begin in earnest.
maybe it's a tumultuous power transition that lacks strategic continuity and the new king/clique
is not a good strategist
This hypothesis along with "hurt Russia" hypothesis (which simultaneously hurt their main
regional rival Iran) are the most plausible IMHO. Please note that KSA is a vassal of the USA.
So by extension it looks like "team Obama" is not a good strategist either.
A recent WikiLeaks revelation cited a warning from a senior Saudi government oil executive
telling that the kingdom's crude oil reserves may have been overstated by as much as 300bn
barrels, or by nearly 40%!" the American political analyst underscores.
Butler refers to a phenomenon called "peak oil." According to M. King Hubbert's theory,
peak oil is the point in time when the maximum rate of extraction of petroleum is reached and
the crude capacity will only decline.
Whether one likes it or not, peak oil has been reached, the analyst underscores.
However, while the global oil reserves are decreasing steadily, Riyadh has been pumping
its crude faster than anyone.
And here is the root cause of Saudi Arabia's warmongering. To maintain its status quo, the
Saudi kingdom has established an alliance with
Turkey , planning to
seize Syria and Iraq's
oil fields.
Still, it's only half the story, since the global economy also remains petroleum-centered.
"Where Americans' interests are concerned, while President Obama has been parlaying
trendy terms like 'renewable energy' and his supposed climate change agenda, the fact is petroleum
still powers 96% of all transportation in America," Butler emphasizes.
To paraphrase the old song, oil makes the world go round…
The question then arises, whether we are on the doorstep of new "energy wars."
In terms of a C&C peak pushed out for 10 years my question would be "Where's the oil?" even at
$120 per barrel.
Apologies that the following is too long, with no charts for many (or any) to read all the
way but some parts may be of interest.
The last few years have shown declining oil discoveries since 2010. What has been found is
more often than not deep water and relatively small. Such fields generally have short plateaus
and steep decline rates (not much better of those seen in LTO for fields less than about 150 million
barrels). The larger basins found offshore have been in the 5 to 10 mmboe range rather than around
50 found in the earlier days.
I don't have access to IHS or Rystad databases but picking amongst recent press releases I'd
say 2013 was about eight billion, 2014 nine or so and 2015 four or five. This year maybe only
three discoveries with a significant amount of oil – Kuwait might be significant. More gas than
oil is being found
There has been a noticeable reduction in development times for projects in GoM and North Sea
in recent years from around 7 years down to as low as 3. That to me indicates a dearth of good,
large projects to choose from.
Of some of the main producers:
Saudi; 50% increase in rig count since 2012 to keep production just about steady, announced
"the most fields discovered" in 2012 or 2013 but a combination of oil and gas and they didn't
give quantities, have spoken of developing tight gas and solar to allow increased oil exports.
Russia; some conflicting announcements but it looks like a decline next year, largest recent
find was by Repsol at about 240 mmboe. Sanctions have had an impact and may continue to do so,
especially offshore.
Canada; very little drilling activity, four fields coming on over the next 2 to 3 years will
add up to 400,000 bpd, but then nothing planned and at least 4 year lead times for tar sands projects.
Tar sands projects have long plateaus but it appears some of the earliest mining operations are
starting to see thinner seams so decline will become more evident.
Brazil; cut backs in developments and may start to decline next year, they have mostly deep
water production with high decline rates and rely on continuous stream of new projects to maintain
production – the oil price, 'carwash' scandal, debt/bankruptcy problems and (maybe) just running
out of suitable projects have stopped this, expect 6 to 10% decline through 2017.
Mexico; EOR developments seem to have run out of steam and not much interest in their opening
up the industry to outsiders, expect at least 4% per year decline.
USA; discussed a lot here, some expansion in GoM through 2017, unknown response to LTO drillers
depending on price and credit availability, liquids from gas have been another significant and
rapid boost to production recently which EIA indicate are still rising (mostly for NGLs), but
surely must run out of steam sometime soon. Possibly some shut in stripper wells won't be worth
restarting.
China; reliant on EOR recently to maintain plateau (including a lot of steam flood from the
EIA report) but predicting 5% decline next year, no great success on offshore discoveries.
North Sea; saw a spate of projects recently, mostly heavy oil, with a few more to come over
the next two years and then Johan Sverdrup and Johan Castberg but these only delay decline for
2 or 3 years, recent discoveries especially in UK sector have been very poor.
Offshore Africa; Nigeria and Angola have a number of projects this year and next ( a bit more
oil than gas), but after that I'm not clear, political unrest might be particularly important
here as well. That said recent exploration success has been relatively good in Africa overall
(e.g. Kenya, Ghana).
Venezuela; not sure if their numbers can be trusted but they seem to be in decline, I know
little of their particular technical issues but assume that in order to increase extra heavy oil
production they would need new upgraders and possibly a source of natural gas, like Canada, and
possibly dedicated refineries to handle the heavy metal content (and assuming they can find willing
creditors and EPC partners).
Iran and, possibly, Iraq and Kuwait look like the only likely areas that can show some increase,
but Iran is developing South Pars gas field more than oil and Iraq/Kurdistan might have run out
of impetus. Burgan field in Kuwait looks in better shape than other aging super giants and Kuwait
has an active exploration and development program. And of course maybe US LTO takes off again,
$80 appears a threshold but that is for WTI, ND oil has a $10 discount, the lighter LTO oil everywhere
may be lower still and overall away from the sweet spots above $100 might be nearer the mark.
The seven largest oil majors have shown declining reserves of 1 and then 2 billion barrel equivalent
over the last two years – this may be purely price related, but I'm not so sure especially with
BP, Shell and Chevron looking to sell assets, also I don't have the figures but I'd guess that
they have lost more in oil reserves as some of their big finds have been for gas.
To ramp up of production is going to be dependent on a work force which was aging and retiring
in 2014 and now has been decimated by layoffs and recruitment cut backs. Increasing prominence
of environmental issues may hinder both future recruitment efforts and the pace at which projects
can be developed. Significant new oil, including reserve growth, has to come from deep water –
those rigs are complicated and very expensive to run, a lot are currently being stacked.
Ramp up also needs the main stakeholders to regain their acceptance of financial risk, which
is currently as low as I can remember, and significantly higher sustained prices. The other side
to the equation for prices is demand. The world economy doesn't look great to me, we're due a
recession based on approximate 8 year cycles, TPTB have chucked everything but the kitchen sink
at it and industrial output is definitely in decline or growing only slowly (I don't know how
energy use is split for service versus manufacturing but I'd guess it's of smaller relative importance
in the service sector). A relatively small oil price increase might be enough to kick a recession
off properly.
Hubbert Linearization of C+C less oil sands suggests about 2500 Gb for a URR, in the past this
method has tended to underestimate the URR, we have produced about half of this so far. There
is also about 600 Gb of URR in the oil sands of Canada and Venezuela. The USGS estimates TRR of
C+C less oil sands at about 3100 Gb, I use the average of the HL estimate and USGS estimate with
a URR of 2800 for C+C less oil sands and oil sands URR of 600 Gb. Total C+C URR is 3400 Gb in
my medium scenario. If extraction rates continue to grow at the rate of the past 6 years and then
level off we get the scenario below.
Model based on Webhubbletelescope's Oil Shock Model.
I personally believe Saudi Arabia's oil production strategy since 2014 has 3 pillars:
1. Maintaining market share: This is Saudi Arabia's primary asset – the ability to exert power
over other countries via its oil supply. Saudi Arabia has the power to cripple rivals by flooding
the market, and can also cripple OECD countries by limiting supply. Without the PERCEPTION that
this is true Saudi Arabia's only genuine political leverage evaporates.
2. Group Think: The behavior of the new Saudi King Salman, the revolt within the Royal Family
as a result of his policies, and the breaking of tradition to name his "ambitious" 31 year old
son as the heir apparent all suggest a breakdown of technocratic, informed policy. Say what you
will about Saudi Arabia, but its political structure was technocratic until January 2015. Since
then I believe there is a significant influence of Group Think, and there's consensus that the
young son if currently deciding policy, and often chooses against the advice of experienced council.
This 31 year old who doesn't listen to expert advice, who has caused a revolt within the House
of Saud, may very well believe that Saudi oil fields can produce any quantity of oil, for however
long he demands without consequence or depletion issues. It's important to note that the previous
King and Council decided on the current "market share" strategy, and deep animosity toward Iran
as it re-enters the market may influence SA's strategy to their own detriment.
3. There were several long-term projects such as Manifa and Khurais that were coming online
regardless of a glut. These mega-projects were guaranteed to put a floor under production numbers.
In concert with the sustained high rig counts to win the "maintain market share" strategy SA's
production reached record levels.
It is important to note that it took a truly herculean effort, record rig counts, and re-developing
several mathbolled fields to raise production from 9.5 mbpd in 2008 to 10.25 mbpd in 2015. They
threw in the kitchen sink and got 750,000 bpd of extra production.
That is telling in and of itself.
SA has followed an explicit strategy of maintaining market share i.e. producing every barrel
they possibly can. SA took on a multi-year effort to push their production as high as possible.
We now know SA's maximum possible production, and the incredible effort required to maintain it.
I personally do not believe SA will ever be capable of producing 11 mbpd.
It is not at all unknown for an aggressive minded political leader to bite off more than he can
chew, and choke on it, due to being unwilling to listen to expert advice.
Hitler almost for sure could have won a substantial empire and Germany could probably have
kept control of it for a quite a long time, if he had been ten percent as talented in military
terms as he was in political terms ( not to mention being a world class evil character of course)
IF he had LISTENED to his very capable senior military guys.
Brian is probably right. This young SA guy, King Salman , may be in the process of making the
same mistake, namely failing to listen to his technical guys.
Even if Salman realizes he is not going to be able to increase production much if any, or even
maintain it at current levels mid to long term, he may still be full of testosterone, and willing
to bet his kingship, and potentially his entire country, on his current policies.
It is well known, a trusim or cliche, that one of the best ways a leader in trouble can maintain
and consolidate his power is to go to war, and SA is (obviously in the opinion of many observers
) fighting an economic war with rival oil producing countries.
I have long believed that SA is a powder keg awaiting a spark. One serious mistake on the part
of the leadership could set it off. One random event could set it off. The House of Saud has made
many a bargain with the devil in the guise of the super conservative priesthood which enables
it ( SO FAR! ) to maintain control of the country without resorting to the business end of rifles.
Radical change is coming to SA, because it information moves too freely in the modern world
to keep the people in the dark much longer. Too many privileged young folks are traveling, and
doing to suit themselves, and too many poor people are growing more radical by the day. Too many
outsiders are working in the country.
If it weren't for oil, and to a much lesser extent, some other mineral wealth, the rest of
the world would barely notice even the existence of that mostly desolate patch of sand.
This is purely anecdotal. For the past three years, we have rented our unused bedrooms to several
Saudi students, here to study in the US. They first go to a language school, and then on to a
university. In just this brief time, they speak of the Saudi government no longer footing the
bill for this. This means that the student's families must send money. For some, this is clearly
not a problem, but for many it is.
The young guy is Mohammed bin Salman, second in line to the throne last I looked, Defense Minister,
in charge of an overlook body for Saudi Aramco, and other things. He may, as you say, not be listening
to his technical advisors–may in fact be a loose cannon–and he is widely considered to be the
power behind the throne.
He isn't the king, though. That's Salman himself, and he is often said not always to know where
he is or what he has just said. Scary situation there, you bet.
There was an interesting documentary on Saudi Arabia last night on Frontline.
Lots of Saudis living in poverty, women begging in the street to feed their families, while
very nice cars drive by. Shiite minorities in the eastern (oil-producing) region protesting and
being repressed by the government.
There was hidden-camera footage inside a shopping mall - much like a mall in the US, with a
Cinnabon, Victoria's Secret, high-end makeup counter, etc, but very few people. But what the mall
also had was religious police beating people who buy the stuff, and it showed them beating what
appeared to be a plump middle-aged housewife, covered head-to-toe in a black burqa, who was buying
makeup. So the government is simultaneously allowing the mall to sell this stuff and paying religious
police to beat those who buy it.
It very much looked like a powder keg that could blow at any time.
Frontline documentaries are a personal favorite of mine. Always stellar, genuine investigative
news journalism. Even on subjects I think I am fairly knowledgeable about I always come away having
learned a lot.
It is 2nd only to Ken Burns' documentaries, but it's hard to compare since his documentaries
are history documentaries and Frontline is investigative news.
For just and obvious reasons, it's illegal under U.S. law for
foreign governments to finance individual candidates or political
parties.
Unfortunately, this doesn't stop them from
bribing politicians and bureaucrats using other opaque channels.
Russia's oil output hit a post-Soviet record of 10.9 mb/d in January 2016, but that could be a
ceiling as the country's massive oil fields face decline. The bulk of Russia's oil output
comes from its aging West Siberian fields, which require ever more investment just to keep output
stable. The depreciation of the ruble has helped a bit, lowering the real cost of spending on
production and allowing Russian companies to increase investment by one-third this year. However,
some long-term projects are being pushed off due to the financial squeeze from western sanctions
and low oil prices. An estimated 29 projects, amounting to 500,000 barrels per day in new
production, have been delayed. With most of Russia's large oil fields having been under
production since the Soviet era, and with precious few new sources of supply, Russia is facing
long-term decline.
"... But Saudi Arabia is also prioritizing refined product exports, which fetch higher prices. It hopes to double refining capacity to 10 mb/d. Additionally, while Saudi Arabia may have lost market share in some places, it is also taking stakes in large refineries around the world, helping it to lock in customers for its crude. ..."
Over the past three years, Saudi Arabia has lost market share in nine out of the top 15 countries
to which it exports oil, according to the
FT. That comes despite a ramp up in production since November 2014. For example, Saudi Arabia's
share of China's oil imports declined from 19 percent in 2013 to near 15 percent in 2015. Likewise,
Saudi Arabia saw its market share in the U.S. drop from 17 to 14 percent over the same timeframe.
But Saudi Arabia is also prioritizing refined product exports, which fetch higher prices. It hopes
to double refining capacity to 10 mb/d. Additionally, while Saudi Arabia may have lost market share
in some places, it is also taking stakes in large refineries around the world, helping it to lock
in customers for its crude.
Meanwhile, according to the latest data, Saudi Arabia's cash reserves
dwindled to $584 billion as of February as the oil kingdom tries to keep its economy afloat and
preserve its currency. That is down from a peak of $737 billion in August 2014.
"... "The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking." ..."
"... Phil Butler, is a policy investigator and analyst, a political scientist and expert on Eastern Europe, exclusively for the online magazine "New Eastern Outlook" . http://journal-neo.org/2016/03/10/key-crisis-point-is-saudi-arabia-running-out-of-gas/ ..."
Saudi Arabia's ever increasingly hostile stance toward neighbors may not be as secular as some have
suggested. Given the nature of the country's oil reserves, and almost unlimited production for decades,
it's possible the Saudis could simply be running out of gas. Here's a candid look at the Saudi situation,
one which should be thought provoking. If the world has really reached the "peak oil" threshold,
a Middle East war may be inevitable.
Saudi Arabia has been a sort of model country for much internal
progress since the oil embargo of 1973 catapulted the members of the organization of petroleum exporting
countries (OPEC) into immeasurable profitability. Not the least of "progress" aspects derived from
oil money has been the elevated living standard of the nation's people. For a bit of a history lesson
on this, I revert to the bid by OPEC in the mid 70's.
The 1970's Happened
Be the end of the oil embargo imposed by OPEC, the price of oil had risen from $3 per
barrel to nearly $12 globally. In the US we felt the sting even more significantly as I recall.
The crisis literally shocked America, and later the 1979 "second oil shock" was to do even more catastrophic
damage. This was in the aftermath of several key events, but the Nixon administration's discovery
America could no longer keep up production of oil was the most significant. The story is a deep one,
but Saudi Arabia coming out on top as a world energy power was the end result. It was at about this
time Saudi production went into overdrive, and Saudi leaders soon became billionaires. Here's where
my story gets interesting.
Americans will remember an economic theory of the US President Ronald Reagan at about this time.
The so-called "Trickle Down Theory" was the catch phrase that captivated the masses then. Part joke,
part real economics, the idea of the fabulously wealthy getting richer, and their win filtering down
to poor people – well, it caught on big time. Reagan was one of the most popular presidents ever,
and for a time his economics worked. Trickle Down worked in Saudi Arabia too, in fact all the oil-exporting
nations accumulated vast wealth. That is until the bubble busted recently. I'll address the Saudi
social empowerment in a moment, but the effects of OPEC on the Cold War bear scrutiny here as well.
The United States' hegemony prior to the oil crisis was solely focused on the Soviet Union and China,
but with OPEC's bid at emergence, Washington faced a new "third world" threat. Drastic measures were
undertaken as a result, measures we see the effects of now in Syria, Ukraine, with regard to Russia
and Iran, and worldwide. For one thing, NATO and the rest of the leagues of nations were forced to
be far more "pro-Arab" than ever before. While this was a very good thing in many respects, nations
of these coalitions refocused strategies accordingly. The Saudis and others became increasingly dependent
on defense by the United States, which in turn led us to the veritable vassal state situation in
Europe.
Sputtering Oil Fields
Returning to my original argument, Saudi Arabia is now going broke via an American bid to reshuffle
the economic and policy deck. America's last shale reserves are being pumped dry in an effort to
break Russia and other nations dependent on exporting energy resources for their economies. And while
Russia could probably overcome any hardship out of sheer necessity, Saudi Arabia has nothing but
oil to rely on. Saudi royalty has for decades built a civil system relying on lavish schemes and
placating the masses, paid for by an unsustainable commodity. While the western press touts Wahhabi
desires to eliminate vestiges of Shia religiosity within Saudi's sphere of influence as a causal
point in Saudi aggressiveness of late, going broke would seem the greater fear to me. Assuming my
theory has merit, let's turn to Saudi oil reserves, and to recent austerity moves by the leadership.
New VAT and other taxes are in the wind, funding for external projects has slumped, and business
in Riyadh has screeched to a halt in some sectors. New projects like the lavish architectural creations
looming in the deserts have halted, the Saudis are not happy people like they were. Even the filthy
rich there have their own forms of austerity, which involve emptying their swimming pools, swapping
gas-guzzling SUVs for more economical transport, and even turning off the AC. Last month the Wall
Street Journal reported that dashed oil prices have already wiped out the Saudi budgetary plan.
RT reports
of debt defaults already looming large, so one can only imagine what will happen if the oil truly
runs out. By way of an illustration the Ghawar Field, largest in the world, is running out after
about 65 years of continuous production. Reports the Saudi Aramco will be starting the CO2-EOR process
to extract the last of the field's oil, they tell us this field will be depleted totally soon. Once
this happens, Saudi Arabia will return to an almost medieval third world status. Either this or those
billions horded by Saudi princes will have to be used to placate or to subdue the people.
Click on the picture to enlarge
This August, 2015 The Telegraph piece by author
Ambrose Evans-Pritchard notwithstanding, Saudi Arabia going broke due to low oil prices may not
be the issue really. To the point, a recent Citigroup study suggested that Saudi Arabia may actually
run out of óil by the year 2030. Furthermore, a recent WikiLeaks revelation cited a warning from
a senior Saudi government oil executive telling that the kingdom's crude oil reserves may have been
overstated by as much as 300bn barrels, or by nearly 40%! With the world having reached a threshold
known as "peak oil" already, we can easily ascertain "why" the Saudis, the US hegemony, and other
players seem desperate for war nowadays. For those unaware of what I am talking about, let me frame
what "peak oil" really means.
Peak oil refers to an event based on M. King Hubbert's theory, where the maximum
rate of extraction of oil is reached. After this date, oil capacity will fall into irreversible decline.
Hubbert was one of those genius types who was a significant geoscientist noted for his important
contributions to geology, geophysics, and petroleum geology. He worked with Shell Oil at their labs
back in Houston, and is quoted as saying about our overall dependency:
"We are in a crisis in the evolution of human society. It's unique to both human and geologic
history. It has never happened before and it can't possibly happen again. You can only use oil
once. You can only use metals once. Soon all the oil is going to be burned and all the metals
mined and scattered."
Hubbert's "peak oil" prognosis was actually supposed to take hold back in 1995, and it is my sincere
belief that it did. His science is essentially irrefutable. If you run down his theory of "peak oil"
you'll inextricably come to a graphic of a bell curve of world oil production. For my part, I have
taken Hubbert's math and overlaid other "depletive" curves for production and resource allocation
simply to satisfy my own scientific curiosity. I studied environmental geography under one of the
world's most renowned former Shell geologist,
Dr. Mitch Colgan. That said, the graph you see from Hubbert's
1956 report to the
American Petroleum Institute, on behalf of Shell Oil, shows Ohio oil production, which mirrors Texas,
or any other region where such a resource is depleted. The "fact" the world will run out of oil is
incontestable, like I said. And the Saudis have been pumping massive quantities of oil longer, and
faster than anyone.
There's not space here for an exhaustive study of whether or not we've achieved the "peak oil"
threshold. I would like to leave off on M. King Hubbert here with an ironic note,
a case I discovered
concerning his association in World War II with the US Board of Economic Warfare. Hubbert was evidently
a candidate for helping this Washington D. C. agency, but was somehow deemed "ineligible" or undesirable,
which in turn caused some controversy. You will no doubt find the letter from the chairman of the
economic warriors interesting. I'll wager most people never even knew America has such departments.
But I need to sum up.
Now What, More War?
Where Americans' interests are concerned, while President Obama has been parlaying trendy terms
like "renewable energy" and his supposed climate change agenda, the fact is petroleum still powers
96% of all transportation in America. Furthermore, fossil fuels 44% of the industrial sector, and
coal provides 51% of the nation's electricity still. Nuclear provides this biggest chunk of electricity
after coal, just to be clear here. Denial that peak oil has been reached is not only idiotic, it
may end up being catastrophic. The Saudi leadership is drawing back with austerity measure against
the people. Saudi militarism is on a gigantic upswing, as we see in Yemen and with the Turkey innuendo.
Evidence Obama and other western leaders know of the "peak oil" crisis abounds. A recent Department
of Energy request to expert Robert Hirsch in 2005 revealed a damning truth. I quote
from the report, which mysteriously disappeared in PDF and other forms from the web:
"The peaking of world oil production presents the U.S. and the world with an unprecedented
risk management problem. As peaking is approached, liquid fuel prices and price volatility will
increase dramatically, and, without timely mitigation, the economic, social, and political costs
will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but
to have substantial impact, they must be initiated more than a decade in advance of peaking."
Within the various reports by
Hirsch (PDF) and other, we find statements like the one from Dr. Sadad al-Husseini, a retired
senior Saudi Aramco oil exploration executive, who went on record saying, "that the world is heading
for an oil shortage." The world consumes 85 billion barrels of oil each day. That's about 40,000
gallons per hour, and demand is not slowing, but increasing exponentially. Geologists have already
determined that more than 95% of all the recoverable oil has already been found.
Saudi aggression in Yemen, the recent siding with Turkey, and the withdrawal of aid earmarked
for military purchases by
Lebanon are all clear signs of a nation in big trouble. If my theory is correct and if these
Saudi oil fields are running out, then rumors of a
re-Islamification of Turkey make the Saudi alliance meaningful. Oil fields in Syria and Northern
Iraq may in fact be a vision of continued Saudi wealth gathering. So the deepening of strategic ties
in between Turkey and Saudi Arabia, and against the Russian and Iranian interests in Syria, may reveal
another unseen plan. Or at least the only feasible way any nation totally dependent on oil exports
might survive in tact. Washington likes to make religion the source of all conflict, or Vladimir
Putin one, but the reality is, Saudi Arabia is "probably" running out of gas.
"... A recent WikiLeaks revelation cited a warning from a senior Saudi government oil executive telling that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels, or by nearly 40%!" the American political analyst underscores. ..."
"... "Where Americans' interests are concerned, while President Obama has been parlaying trendy terms like 'renewable energy' and his supposed climate change agenda, the fact is petroleum still powers 96% of all transportation in America," Butler emphasizes. ..."
"... To paraphrase the old song, oil makes the world go round… ..."
A recent WikiLeaks revelation cited a warning from a senior Saudi government oil executive
telling that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels,
or by nearly 40%!" the American political analyst underscores.
Butler refers to a phenomenon called "peak oil." According to M. King Hubbert's theory, peak oil
is the point in time when the maximum rate of extraction of petroleum is reached and the crude capacity
will only decline.
Whether one likes it or not, peak oil has been reached, the analyst underscores.
However, while the global oil reserves are decreasing steadily, Riyadh has been pumping its crude
faster than anyone.
And here is the root cause of Saudi Arabia's warmongering. To maintain its
status quo, the Saudi kingdom has established an alliance with
Turkey, planning to seize
Syria and Iraq's oil fields.
Still, it's only half the story, since the global economy also remains petroleum-centered.
"Where
Americans' interests are concerned, while President Obama has been parlaying trendy terms like 'renewable
energy' and his supposed climate change agenda, the fact is petroleum still powers 96% of all transportation
in America," Butler emphasizes.
To paraphrase the old song, oil makes the world go round…
The question then arises, whether we are on the doorstep of new "energy wars."
"... The most significant event of the last decade regarding crude oil has been the rise of U.S. shale oil as a credible and long-lasting competitor to the OPEC. The shale oil boom has led to an almost doubling of production in the U.S. in the last 10 years. Booming oil prices, easy credit, consistently rising demand and improved technological methods of fracking led to the current production rate, which would have increased further had OPEC cut their production. ..."
Quite simply, the Saudis want to maintain their market share, but their means to control that
are dwindling.
The whole internet is jam-packed with analysis portraying Saudi Arabia and OPEC as villains for
the oil price collapse. On a closer look, however, the Saudi's could have taken no reasonable
steps to avert this situation. This is a transformational change that will run its full course,
and the major oil producing nations will have to accept and learn to live with lower oil prices
for the next few years.
Why the Saudi's are not to blame
(Click to enlarge)
As seen in the chart above, barring the period during the last
supply glut, the Saudi's have more or less maintained constant oil
production, increasing production only modestly at an average of
roughly 1 percent per year.
The most significant event of the last decade regarding crude oil has been the rise of U.S.
shale oil as a credible and long-lasting competitor to the OPEC. The shale oil boom has led to an
almost doubling of production in the U.S. in the last 10 years. Booming oil prices, easy credit,
consistently rising demand and improved technological methods of fracking led to the current
production rate, which would have increased further had OPEC cut their production.
"... The rising clamor at home from the crashing shale sector and the banks that financed it; the resilience of Russia in spite of sanctions and its exclusion from Western capital markets; Russia's entrance into the Syrian take-down attempt having put Russia into a new position of influence in the Middle East; demands for higher prices from more and more OPEC members; Russian and Iranian resistance to demands that they agree to limit production; Kuwait refusing to limit production; Venezuela and Mexico nearing default; Ukraine melting down politically, financially, and militarily: financial tremors at home and in Europe; and the rise of Trump and Bernie as an election nears, - these factors have led Western leaders to stop suppressing the price of crude. ..."
IMHO, the rise in crude prices is evidence that the West has blinked and is giving up on its
attempt to bankrupt Russia in order to make Putin kowtow to the West.
The rising clamor at home from the crashing shale sector and the banks that financed it; the
resilience of Russia in spite of sanctions and its exclusion from Western capital markets; Russia's
entrance into the Syrian take-down attempt having put Russia into a new position of influence
in the Middle East; demands for higher prices from more and more OPEC members; Russian and Iranian
resistance to demands that they agree to limit production; Kuwait refusing to limit production;
Venezuela and Mexico nearing default; Ukraine melting down politically, financially, and militarily:
financial tremors at home and in Europe; and the rise of Trump and Bernie as an election nears,
- these factors have led Western leaders to stop suppressing the price of crude.
The commodities traders and their algos will now be allowed to manipulate up the prices. Fundamentals
of excess supply and weak demand do not matter, and have not mattered for a long time. Futures
contracts, refinery shutdowns for fires or scheduled maintenance, pipeline ruptures, and rumors
of international instability can all be used to increase crude prices.
Oil production in Russia will inevitably decline by 2035 according to an Energy Ministry
report seen by the Vedomosti business daily. The different scenarios predict an output drop from
1.2 percent up to 46 percent two decades from now.
The document, obtained by the newspaper and confirmed by a source in the ministry, says by
2035 existing oil fields will be able to provide Russia with less than half of today's production
of about 10.1 million barrels per day.
The shortfall should be met by increased production from proven reserves, according to projections
by the Energy Ministry.
In the best case for oil producers, short-term growth remains possible only until 2020, according
to the report. After that, production will contract. The figures vary from 1.2 percent to 46 percent,
depending on prices, taxation and whether or not anti-Russian sanctions will be in force.
A slight increase in production is possible only for smaller companies like Slavneft and Russneft,
while the market leaders are facing the depletion of existing deposits. Added to an unfavorable
tax environment, their production is set to fall by 39-61 percent.
To counter the decline in oil production, the Energy Ministry proposes giving private companies
access to the Arctic shelf, to soften the tax regime and support for small and medium-sized
independent companies.
The Ministry also suggests promoting the processing of high-sulfur and super viscous
heavy oil with the introduction of preferential rates of excise duties on fuel produced from
such oil.
This forecast published by "Vedomosti" is for crude only and excludes condensate (around 520 kb/d
in 2015). It was not yet officially released. Condensate production growth in 2014-15 was
higher than crude only. There are gas condensate fields in the far north of West Siberia that
should start production in the next few years.
The worse case assumes very low oil prices and sanctions remaining for the whole period. Is
$30-40 oil a realistic scenario to 2035?
Base case implies 2035 crude production only 2.1% below 2015 levels
"Reasonably favorable" scenario: crude production in 2020-2030 slightly above 2015 levels;
2035: 1.6% below 2015.
Russian crude (ex condensate) production scenarios.
Source: Vedomosti newspaper based on the Energy Ministry data
Meanwhile, the EIA in its Short-Term Energy Outlook has revised upwards estimates and projections
for Russian oil production in 2015-17.
From the report:
"Russia is one example of production exceeding EIA's expectations. Fourth quarter 2015 oil
production in Russia is 0.2 million b/d higher than in last month's STEO, with initial data indicating
it has remained at high levels in early 2016. This higher historical production creates a higher
baseline level that carries through the forecast period. Russia's production is expected to increase
by 0.2 million b/d in 2016 and then decline by 0.1 million b/d in 2017. Russia's exposure to low
oil prices has been mitigated by the depreciation of the ruble relative to the dollar, given ruble-denominated
production costs, and by Russia's taxation regime for the oil sector."
The EIA is the last of the key international energy forecasting agencies to revise the numbers
for Russia (others are IEA, JODI and OPEC)
Besides what Alex already said, I want to add another important point: the recovery of oil-in-place
in Russia is very low compared to international averages, around 20-25%. This is why there is
a lot of potential just by improving extraction from current fields.
P.S. Then, there is shale oil, really a lot of it, but it requires much higher prices for it
to be developed, and economically it makes more sense to first increase the % extracted of oil-in-place
Though Iran hasn't committed to a production freeze, since it wants to ramp up production to pre-sanction
levels, Russian Energy Minister
Aleksander
Novak has noted that "Iran has a special situation as the country is at its lowest levels
of production. So I think, it might be approached individually, with a separate solution."
With all the major Gulf nations agreeing, Iraq, which is without a credible political leadership,
will also likely follow suit if Russia assures them of stronger support against ISIS.
If the
above scenario plays out, Russia will emerge as the de facto leader of the major oil producing
nations of the world, accounting for almost 73 percent of the global oil supply.
Along with this, Russia has been in the forefront of plans to move away from Petrodollars,
and Moscow has formed pacts with various nations to trade oil in local currencies. With this new
cartel of ROPEC (Russia and OPEC nations), a move away from petrodollars will become a reality
sooner rather than later.
Russia is smart. Vladimir Putin is genius. Moscow senses the opportunity that is almost tangibly
floating about in the low crude price environment and appears to be ready to capitalize on it
in a way that would reshape the geopolitical landscape exponentially.
"... The meeting of oil-producing countries will be held on March 20th in Russia, the Minister of oil of Nigeria, Emmanuel Kachikwu, announced. According to him, it will be attended by representatives of countries who are OPEC members and countries that are not members in the organization. Mr. Kachikwu noted that producers seek to restore oil prices to $50 per barrel ..."
here is some good news. You have heard it first from me here on POB 2 weeks ago. We are moving
in direction of restoring the prices to acceptable level that major producers can live temporarily.
"The meeting of oil-producing countries will be held on March 20th in Russia, the Minister
of oil of Nigeria, Emmanuel Kachikwu, announced. According to him, it will be attended by representatives
of countries who are OPEC members and countries that are not members in the organization. Mr.
Kachikwu noted that producers seek to restore oil prices to $50 per barrel."
"... Instead, it reprieved the fading remnants of the military-industrial-congressional complex, the neocon interventionist camp and Washingtons legions of cold war apparatchiks. All of the foregoing would have been otherwise consigned to the dust bin of history. ..."
"... The Saudis geopolitical goal is to contain the economic and political power of the kingdoms principal rival, Iran, a Shiite state, and close ally of Bashar Assad. The Saudi monarchy viewed the U.S.-sponsored Shiite takeover in Iraq (and, more recently, the termination of the Iran trade embargo) as a demotion to its regional power status and was already engaged in a proxy war against Tehran in Yemen, highlighted by the Saudi genocide against the Iranian backed Houthi tribe. ..."
"... But the Sunni kingdoms with vast petrodollars at stake wanted a much deeper involvement from America. On September 4, 2013, Secretary of State John Kerry told a congressional hearing that the Sunni kingdoms had offered to foot the bill for a U.S. invasion of Syria to oust Bashar Assad. In fact, some of them have said that if the United States is prepared to go do the whole thing, the way weve done it previously in other places [Iraq], theyll carry the cost. Kerry reiterated the offer to Rep. Ileana Ros-Lehtinen (R-Fla.): With respect to Arab countries offering to bear the costs of [an American invasion] to topple Assad, the answer is profoundly yes, they have. The offer is on the table. ..."
"... Gazproms gas exports to Europe – including Turkey – had increased to 158.6 billion cubic meters in 2015 with a 8.2 percent increase compared to 2014 ..."
Stockman's Tales of western intervention into the ME Oil Puzzle.
"The Trumpster Sends The GOP/Neocon Establishment To The Dumpster"
"And most certainly, this lamentable turn to the War Party's disastrous reign had nothing to do
with oil security or economic prosperity in America. The cure for high oil is always and everywhere
high oil prices, not the Fifth Fleet"
It goes all the way back to the collapse of the old Soviet Union and the elder Bush's historically
foolish decision to invade the Persian Gulf in February 1991. The latter stopped dead in its
tracks the first genuine opportunity for peace the people of the world had been afforded since
August 1914.
Instead, it reprieved the fading remnants of the military-industrial-congressional complex,
the neocon interventionist camp and Washington's legions of cold war apparatchiks. All of the
foregoing would have been otherwise consigned to the dust bin of history.
Yet at that crucial inflection point there was absolutely nothing at stake with respect
to the safety and security of the American people in the petty quarrel between Saddam Hussein
and the Emir of Kuwait.
Having alienated Iraq and Syria, Kim Roosevelt fled the Mideast to work as an executive
for the oil industry that he had served so well during his public service career at the CIA.
Roosevelt's replacement as CIA station chief, James Critchfield, attempted a failed assassination
plot against the new Iraqi president using a toxic handkerchief, according to Weiner. Five
years later, the CIA finally succeeded in deposing the Iraqi president and installing the Ba'ath
Party in power in Iraq. A charismatic young murderer named Saddam Hussein was one of the distinguished
leaders of the CIA's Ba'athist team.
… … …
The EU, which gets 30 percent of its gas from Russia, was equally hungry for the pipeline,
which would have given its members cheap energy and relief from Vladimir Putin's stifling economic
and political leverage. Turkey, Russia's second largest gas customer, was particularly anxious
to end its reliance on its ancient rival and to position itself as the lucrative transect hub
for Asian fuels to EU markets. The Qatari pipeline would have benefited Saudi Arabia's conservative
Sunni monarchy by giving it a foothold in Shia-dominated Syria. The Saudis' geopolitical goal
is to contain the economic and political power of the kingdom's principal rival, Iran, a Shiite
state, and close ally of Bashar Assad. The Saudi monarchy viewed the U.S.-sponsored Shiite
takeover in Iraq (and, more recently, the termination of the Iran trade embargo) as a demotion
to its regional power status and was already engaged in a proxy war against Tehran in Yemen,
highlighted by the Saudi genocide against the Iranian backed Houthi tribe.
Of course, the Russians, who sell 70 percent of their gas exports to Europe, viewed the
Qatar/Turkey pipeline as an existential threat. In Putin's view, the Qatar pipeline is a NATO
plot to change the status quo, deprive Russia of its only foothold in the Middle East, strangle
the Russian economy and end Russian leverage in the European energy market. In 2009, Assad
announced that he would refuse to sign the agreement to allow the pipeline to run through Syria
"to protect the interests of our Russian ally."
… … …
But the Sunni kingdoms with vast petrodollars at stake wanted a much deeper involvement
from America. On September 4, 2013, Secretary of State John Kerry told a congressional hearing
that the Sunni kingdoms had offered to foot the bill for a U.S. invasion of Syria to oust Bashar
Assad. "In fact, some of them have said that if the United States is prepared to go do the
whole thing, the way we've done it previously in other places [Iraq], they'll carry the cost."
Kerry reiterated the offer to Rep. Ileana Ros-Lehtinen (R-Fla.): "With respect to Arab countries
offering to bear the costs of [an American invasion] to topple Assad, the answer is profoundly
yes, they have. The offer is on the table."
"The EU, which gets 30 percent of its gas from Russia, was equally hungry for the pipeline, which
would have given its members cheap energy and relief from Vladimir Putin's stifling economic and
political leverage."
That is nonsense. The issue is that Russia has quite limited leverage: They can not replace
the European customers on short notice – pipeline chain producer to certain customers – and they
urgently need the income.
The more interesting question for Russia is how to cope with a customers who may reduce the
demand for NG by 1% per year for the next few decades.
"The issue is that Russia has quite limited leverage: They can not replace the European customers
on short notice"
Leverage is always mutual in the gas trade that involves long term contracts and long gas supply
lines. It is like marriage :-)
"The more interesting question for Russia is how to cope with a customers who may reduce the
demand for NG by 1% per year for the next few decades."
I am not sure that this is the case.
"Gazprom's gas exports to Europe – including Turkey – had increased to 158.6 billion cubic
meters in 2015 with a 8.2 percent increase compared to 2014."
"... Pickens said Saudi cannot produce more than 10 million billion barrels per day. Well someone else agrees with me. I wish he had went farther and said that there is no OPEC spare capacity. I am sure he knows that. ..."
"... Pickens may not have the capability of writing Of Fossil Fuels and Human Destiny and The Grand Illusion , but when it comes to that oil barrel, man – he knows very well whats coming! ..."
Pickens said Saudi cannot produce more than 10 million billion barrels per day. Well someone else
agrees with me. I wish he had went farther and said that there is no OPEC spare capacity. I am
sure he knows that.
Joe Kernan is a complete moron. He was mocking T.Boone, who was predicting higher prices all the
way from $30 to $140 in 2004-2008. At current growth rates, Saudi's will consume an additional
1 million barrels per day of their own consumption in 5 years. Ditto for Russia. Gonna be very
interesting.
That's precisely why he reacted with the lexicon and facial expression he did when his "old
buddy" Joe "challenged" his point of view and tried to portray him as a "same ol', same ol' "
charlatan!
Pickens may not have the capability of writing "Of Fossil Fuels and Human Destiny" and "The
Grand Illusion", but when it comes to that oil barrel, man – he knows very well what's coming!
And the imbecile Joe got it (or was told) at the end that you do not mess with T.Boone…so we
have to end on football and the "come again when in NYC…" bullshit.
"Well someone else agrees with me"
I would argue with some accuracy that a few more than "someone" do indeed agree with you Ron,
but your ultimate proof of vindication and sign that what you narrate about is close…very close,
stands with the fact that idiots akin to Joe Kernan, Ron Insana, etc. feel confident and knowledgeable
enough on mocking Matt Simmons…
-As Mr. Joseph Kennedy said: "…when the shoe shine boy gives you stock tips, cash out and stuff
the mattress…".
So, max oil production when there has been falling demand causes
low prices which is good for consumers, what could go wrong?
If you're Syria you're the pipeline hub to enable either NATO or
Russian control of european gas supplies.
If you're Ukraine, well, everything has gone wrong, hasn't it?
Innocence of the masses VS effective propaganda...
If you're Yemen then your border is contiguous with that of a large
Saudi oil field, not to mention a competing brand of Islam.
If you're Iraq then, well, you've been totally f*d over since Bush
Sr., sorry about that.
If you're Libya and want to sell oil in gold Dinars, and your name
is Kadaffy (I know, but who cares how it's spelled?) then you should
have known better. Doesn't matter if you have a huge aquaifier and can
give away land and irrigate it, or provide free university education.
I guess I should be glad I'm just a simple consumer! Wait, I'm
paying for all this shiite!!!
Short term, the trade was to sell w/34.69 APR 16 as a stop. There
is still the trend, mojo to the downside, which has not yet broken.
The shot game is to hold feb high, and plunge to new lows, so March is
a thich red monthly bar that closes near the lows. I think the trigger
price is Feb highs, and it isn't too far away prev year sett, meaning
a break of feb = touching the prev yr sett, and going positive for the
year, which is an epic event, esp in this setting. Right now the
market is trapped inside of the 2/16/2016 shadow, w yday close
conspicuously settling (once again) inside that shadow @.75, with the
top of yday bar @.98, last trade 90.
the news is bad, but the news is bs. just a headline. the news is
only a story, the truth is somewhere else. so trading on old news
wears out and the paradigm shifts. pretty soon they talk about how the
world's population break 8 BB, so many ppl, so much demand, all that
stuff. then you stare at a chart that is in love with the upper right
hand corner of the chart, instead of the lower.
It's hard to see it, and believe me, impossible to feel it, esp
with all this short sniping and juking ower, threatening, etc, but,
and I get the velocity of money thing, I had not really taken that
fully into consideration, but nonetheless, the money supply flying
around out there is still 4x greater
today
that it was in
2009, where the prices were
higher
than they are now. On the
surface of it, that seems crazy to me.
So, theoretically, commods across the board are front running a
collapse in money supply (which has not happened yet) bcz, if I have
this right, the ponzi scheme of this money system requires fresh debt
to cover old % obligations, and those % obligations touch innumerable
amounts of debt instruments, govt, corp, down to mom and pop private.
As ZH hammers away on all the time, the question is, exactly
where
is the fresh money supply supposed to come from to cover?
If ZIRP failed for lack of takers, and one could argue that failure is
real because of the existence of NIRP, where the banks just go into
your acct and simply take
your
money to cover
their
obligations, and if NIRP is only a temporary bandaid (TM, haha)
solution, the argument goes that if there is not enough liquidity in
the system, these obligations
cannot
be covered, and as we
saw in 2008, when
that
happens, the par value of the bonds
pretty much hits zero, and when that happens,
then
the money
supply crashes, because as we know,
debt is money.
Assuming Putin is not (at least completely) right about the selling
politically motivated, with the hidden hand behind it the US Treasury,
trying to destroy Mother Russia (that has to at least be a factor),
what I would say that we are looking at, considering the extreme, mind
blowing divergence between oil prices and the stock market indices, is
at least the
possibility
the market has just
priced in
the coming money supply wipe out, the
worst case scenario.
So let's say the money supply crashes from today's levels to 2009,
that is a big drop, for sure, but oil
already played that
, to
the
extreme
of hitting $26 (!). That would definitely have an
impact on stock prices, but if oil
was
at $35 @2009 MS
levels, why would it be @10?
Of course, when the money supply crashes, moving away from the
current, seemingly impenatrable MS ceiling, this then leaves a lot of
room for fresh injections of money supply, to get the game started all
over again - but not after a lot of ppl get whatever they had in
equity totally wiped out.
But, under my analysis here, assuming that scenario, oil was way
out in front, so they wont be trading on that anymore because it
happened. That is old news, for real. And in that scenario, oil
production gets wiped out, but the demand (static as it generally is,
increasing only with a steady rise in population, in broad terms),
this would force oil prices much higher.
And what if the bet on money supply crash is wrong, and the central
banks pull a rabbit out of their hat? That is supportive of oil prices
as well.
Finally, setting aside all else, assuming our crazy world just
keeps on keeping on, and the fraud of headlines continues to mask the
truth that things are far better in the world than the headline
dictates, and that no new technology has come into play that makes oil
obsolete, the most basic and primitive analysis has one looking at
$26 v 0 and $26 v $150. You tell me, where is the risk?
Getting to new all time highs in a commod can take a very long
time, I grant you that. But no matter how I slice it, while sellers
might get some love down here for, what, $10, $15, they are starting
to play a game of market roulette, where instead of one bullet in the
chamber, there are like 3 or 4.
Thus, (150 - 25) / 2 = $62. (150 - 15) / 2 = $67. In other words,
the lower the prices go, the higher the mid point in the range between
old all time high, and last printed low. Some would argue the $150 oil
was an anomaly, but I say it has to be accounted for, and the
underlying factors that led to it are still in play, and not likely to
change for years to come. Even
if
there is an equity crash
back to 2009 lows, what does anybody thing the odds are that the fed
res system will be abolished and the hands that control the money
system will change?
If
that
happens, then the FRN becomes extinct, and then
perhaps we see a repricing across the board, where
everybody
gets a massive haircut. But that is a separate issue. Apples and
oranges, and a different risk discussion. Hence, in the present
context, I see oil back in the mid 60s, hard to say when, 2 years? Who
knows. But if the context doesn't change, I am far more focused on
that $150 than the $10, because if the context doesn't change, even
if
there is a MS crash, as oil is way out in front of it,
they can just rebuild the MS and put everybody right back where they
were in 2007, or even worse - meaning oil trades @ $200 p/bbl, back to
peak oil headlines, incessent demand, etc.
You cant see it now. 5 years? 7? Yeah, it wont look like this.
Leave it to the markets and the news and all the BS of the day
distract you from seeing a once in a lifetime opportunity. But, that
is what makes a market a market. Everybody has their own ideas, and
definitions of risk, and execute accordingly.
Russia's crude and condensate production in February was 10,840 kb/d (preliminary estimate), up
2.1% year-on-year, and down 25 kb/d (0.2%) from January level.
Looks like Russian bear after being hit in the head and robbed at gun point starts slow awakening
from hibernation. The honchos of Russian oil companies are now officially onboard for the freeze
and some of them want more drastic measures. They have a discussion of "stabilization of Russian
economy" (which means stabilization of oil prices) with President Putin, which means that Putin
got his marching orders from oil oligarchs, some of which wants "quid pro quo" from the
government (not to increase taxes on oil despite budget deficit). Details are scarce. But previously
hapless head of Rosneft Igor Sechin lamented about the situation he drove his company into, being
completely unprepared to the oil price crush. May be he got promises of additional loans to keep
the company afoot.
Generally Russian performance in this crises leaves to me the impression of complete incompetence
on high level. Especially unimpressive is Alexander Novak – the Russian Minister of Energy. He
speaks like a typical neoliberal. This is when more centralized economy should score points and
they instead were taken for the ride and continued to buy the US Treasuries. Why not to buy Russia
oil for the strategic reserve instead, like China did ? I think Russia still does not have any
state strategic oil reserves (the only major country in such a position).
President Vladimir Putin and the heads of major Russian oil companies discussed implementation
of decisive measures to stabilize the Russian economy in view of increased volatility of world
markets.
As a start Russia is ready to join the group of countries within and outside OPEC, which approved
the proposal to freeze the level of production of oil in 2016 at January level. Such production
limits can be implemented by a joint agreement of key countries, that is already was put on table
on Feb 16, 2016 by Saudis, Russia, Qatar and Venezuela and now is at the stage of multilateral
discussion with other oil exporting countries. The final decision is expected somewhere in March
on a new meeting of Ministers of oil producing countries.
This meeting at the Kremlin was chaired by Vladimir Putin and was attended by all key representatives
of the Russian oil industry - the Chairman of the Board of "LUKOIL" Vagit Alekperov, the General
Director "Surgutneftegaz" Vladimir Bogdanov, the head of Board "Gazprom oil" Alexander Dyukov,
the President of the company "Bashneft" Alexander Korsik, the General Director of Zarubezhneft
Sergey Kudryashov, the head of "Tatneft" Nail Maganov, President of "Rosneft" Igor Sechin, the
head of the Independent oil and gas company Eduard Khudainatov.
In addition, the Russian minister of energy Alexander Novak and the head of the presidential
administration Sergei Ivanov, as well as aide to President Putin Andrei Belousov also participated
in this meeting.
This year Alexander Novak held a series of meetings with Ministers of oil-producing countries.
In February, the negotiations in the Qatari capital and it was proposed to fix the production
at the level of January. In January, Russia produced 46,006 million metric tons of oil with gas
condensate. This is 1.5% more than in January 2015. Average daily production amounted to 10.9
million barrels.
Before the meeting, when everybody was sitting at the table, Vladimir Putin held a short private
consultation with Alexander Novak. After that Putin opened the meeting with the following statement:
"As the Minister reported to me, some of you have more radical suggestions (for the countries
- exporters of oil. - Izvestia) for the stabilization of oil markets, but about this particular
measure (fixation of production at the level of January. - "The news") as I understand something
close to a consensus already exists.
The purpose of our meeting today is to hear from each of the heads of the companies represented
here personally the opinion of each of you on the subject of the discussion. How do you really
feel about the current situation and measures that need to be taken ?"
CEOs of major Russian companies remained silent while journalists were present. Only the General
Director "Tatneft" Nail Maganov and Chairman of the Board "Gazprom oil" Alexander Dyukov start
grinning, because these companies in January of this year recorded a growth of production relative
to January of last year (by 4.2% and 5.6% respectively, according to the Central Department of
Control of Fuel and Energy Complex).
After those introductory remarks journalists were asked to leave the meeting.
The meeting did not last long. After the meeting ended, Minister Alexander Novak in a press
conference said to journalists that all heads the Russian companies who were present supported
this international initiative. He stated that:
The implementation of this freeze should give a positive impulse on oil markets. It increases
the predictability of behaviors of key market participants, which should lead to the reduction
of volatility…
Today, the total surplus of world oil production is estimated to be around 1.5 million barrels
per day. If you freeze the level of production on the level of January, 2016 and the demand
increases by 1.3 million to 1.5 million barrels a day, the oversupply in the market will be
eliminated at the end of the year. And we already saw some signs of stabilization of the market
after this measure was announced.
Alexander Novak also noted that this freeze may not only reduce price volatility but also shorten
the period of depressed oil prices to the end of 2016, when in his opinion oil prices can return
to the $50-60 per barrel range. He noted that as of today 15 oil producing countries have publicly
declared his readiness to sign the agreement.
According to the Minister, they represent around 73% of world oil production. The exact format
of the agreement, in which the key is the method of monitoring of compliance, is yet to be determined.
The sighing of the freeze agreement can happen at another meeting of oil ministers in March.
According to Alexander Novak, even if Iran does not join the agreement, the market will still
stabilize, as Iran still has a very low level of production and can't increase it fast. Due to
this countries-signers of the agreement can make an exception for Iran and increase its ceiling
over the January 2016 level.
Freezing production at least will stop flooding the market with new volumes of oil in the delusionary
pursuit of "market share", commented on the event the analyst of FC "Discovery Broker" Andrei
Kochetkov. It will more be influenced by the financial strength of companies and countries as
well as the real costs of production from the depleting fields. On average, traditional oil wells
lose 3-5% of production volume each year, he said. Accordingly, if the flow of new investments
in the field slow down to a halt, the global market might lose another 3-4 million barrels per
day of the production at the end of the year. This drop even if less drastic as stated will increase
the pressure on oil prices said the expert.
There should not be any major problem for Russian companies with freezing the production of
oil on January, 2016 level said the head of the analytical company of the Small Letters Vitaly
Kryukov. We should not fear that this measure damage our fields, given that in Western Siberia
production continues to fall, he said.
That, of course, might lead to less drilling in some places but will not affect the commissioning
of new projects that were under construction. For example, LUKOIL is expected to launch new projects
this year in the Caspian sea, but at the same time they are quickly losing the volume of production
in Western Siberia.
The second topic discussed at the meeting with the President was the taxation of Russian oil
companies. The heads of the companies have asked the head of state in the medium term, not to
raise taxes and to keep the current system of taxation while the current turmoil with oil prices
exist. In his after the meeting interview Alexander Novak stated that Vladimir Putin is now aware
about the position of the heads of Russian oil companies on this subject, but this issue still
needs to be discussed inside the government.
One interesting take from Art Berman presentation is that he ignore "Great condensate Con" (and
grossly overplays Cushing "storage glut" MSM meme). He also thinks that without OPEC cut $30 oil
price range will last for the whole 2016.
• Energy markets have been characterized by low oil prices and over-supply since
mid-2014.
• Supply deficit before Jan 2014, supply surplus after
• Prices fell from 2011-2013 average of $111 per barrel to average of $52 in 2015.
• Without an OPEC cut, 2016 prices will probably be in the $30 per barrel range.
… … …
U.S. crude oil produc4on has declined about 570,000 bopd since the peak in April 2014,
about 60,000 bopd per month.
• EIA forecast is for a total decline of 1.4 mmbpd by September 2016 ( ~100,000 bopd per
month) before increasing again based on $43 per barrel WTI by year-end 2016 and $58 by
year-end 2017.
• Price deck has WTI at $43 per barrel by December 2016 & $58 by December 2017.
• Forecast suggests that the oil market is sufficiently in balance now for prices to increase
but
that production will not respond to price signals until later in 2016-very optimistic.
… … …
Little chance that oil prices will increase beyond the head-fakes and sentiment-driven price
cycles of
2015 and early 2016 until U.S. crude oil storage begins to decrease.
• Oil stocks are currently 152 million barrels above the 5-year average and 128 million barrels
above the
5-year maximum.
… … …
• Cushing and Gulf Coast storage make up almost 70% of U.S. working storage.
• These areas are currently at 84% of capacity. Cushing at 89%.
• As long as storage volumes remain above 80% of capacity, oil prices will be crushed.
• Until U.S. oil production declines substantially, storage will remain near capacity.
As I highlighted
on CNBC yesterday, Saudi's actions speak louder than their words; they
may be willing to entertain a production freeze if everyone else plays ball,
but in the meantime, they are continuing to flood the market, involved in a
political battle with Iran.
This is illustrated in the chart below. So far
in February, we are seeing Saudi crude oil flows into China up 30% versus
February last year, and some 67% higher than volumes seen last month,
kicking around record levels. On the flip-side, while we are hearing
repeated claims of production ramping up from Iranian sources, we are yet to
see this manifesting itself in vastly higher Iranian export activity.
On the economic data front we have had a number of inflation readings out
across the globe. Japan kicked things off, with inflation data coming in as
flat as a pancake at 0.0% YoY in January, edging down from +0.2% in the
month prior. German inflation was also as flat as a beaver's tail, at 0.0%
YoY for February, down from +0.5% in the prior month. We have also had
consumer confidence and business climate assessments out of the Eurozone:
both readings were downbeat.
Looks like Russian oil minister decided to play the role of a regular supply and demand jerk, may
be intentionally. Generally Russians unlike Chinese's behaved like idiots in this situation. Inread
of building state petroleum reserves like Chinese did and later selling oil later at reasonable prices
they continued to dump the oil on market helping Saudis to crash the price. Russia is still buying US
treasures instead as if oil is not as reliable as currency. Russia is the only major country that does
not have strategic oil reserves.
Alexander Novak mostly sounded like a regular member of the neoliberal cosmopolitan elite not as
a Russian oil minister who is interested in well-being of Russian citizens. As Soros aptly mentioned
such people have more in common with Wall Street financial oligarchs that with interests
of their own country.
Whether this was intentional of this is a his assumed position for Die Welt I do no know.
Notable quotes:
"... Given the pricing environment we expect in 2016 further reductions of 15-40%. Thus, this year 30 largest companies in the world can cut $200 billion from capex budgets . At the same time, we see that rise in in the price of the credit for oil producers in the US hinders their access to financial markets. ..."
"... On a global scale in the short term, these effects will be minimal. However, in the medium and long term they will be dramatic, because many of the cancelled projects were important for stability of oil supply from the point of view of growing global demand, have been postponed or frozen. So we can assumed that after 2020 a stable supply of oil is under threat. In this regard, Russia seeks to remain a stable supplier of oil globally. ..."
24.02.2016 | Die Welt/InoSMI
Russia is suffering from extremely low oil prices. Energy Minister Alexander Novak warned us
against the dramatic consequences of falling oil prices for the entire world. After the oversupply
of oil, according to him, a severe deficit is coming.
Die Welt: You have agreed with the oil Minister of Saudi Arabia on the limitation of oil
production. At first the market reacted to the results of your negotiations negativity and oil prices
continued to fall. What, in general, gives us this arrangement?
Alexander Novak: I Think our meeting with the colleagues from Saudi Arabia, Qatar and Venezuela
were very productive. The main result was a preliminary agreement on limiting oil production in 2016
at the level of January of this year. The final decision will be made when this initiative will join
most other oil producers. In our view, this approach would gradually reduce the oversupply and stabilize
prices at a level that will ensure the stability of the industry in the long term.
- Let's assume that others will agree with this. However, experts believe that price stabilization
is necessary not just freeze, and a reduction in oil production.
- Such proposals are periodically received. But we think that this may soon lead to an abrupt
artificial increase in prices. Because such a rise in prices entails the inflow of speculative
money into capital-intensive projects, for example, in the production of shale oil that, in turn,
will lead to rapid increase of oil production and as a result another round of oil prices fall. Of
crucial importance is the level of prices at which US shale oil is unprofitable. If the oil price
moved higher higher, we will again be faced with the effect of plummeting oil prices. That is why
we need mutual consultation in order better to access the current supply and demand situation.
- But the decline in prices over the last 18 months ago is already having a serious negative
impact on producers with higher costs.
- Yes, albeit slower than expected. This is a change from previous oil price cycles, when only
the oil exporting countries influenced the market by voluntarily reducing the production. But after
the invention of the technology for shale gas extraction in 2009, the situation has changed.
- So you agree with the International energy Agency, believes that in 2016, contrary to expectations,
oil prices stabilize?
- In general yes. Because when in mid-2014 oil prices began to decline, many thought that soon
shale oil will fall prey of it. However, this did not happen. We can see that the price at around
$100 per barrel was too high, but shale oil companies for more then a year managed to withstood the
falling oil prices and continue oil extraction is volumes comparable with the volume at peak.
Demand and supply grow equally, and the gap between them did not became smaller. That's why in 2016
everyone is adjusting their predictions about the end of low oil prices regime.
Limited access to funding by high cost producers and delay in implementation of capital intensive
projects will play a role in the alignment of supply and demand in the market and the volume of oil
production outside OPEC, primarily in North America, will be reduced. For example, in the US, the
number of drilling rigs already has declined by two-thirds.
- Not only in the United States. All the world's leading oil companies reduced their investment
programs by 10-35%. What reductions we can expect in 2016?
- Given the pricing environment we expect in 2016 further reductions of 15-40%. Thus, this
year 30 largest companies in the world can cut $200 billion from capex budgets . At the same time,
we see that rise in in the price of the credit for oil producers in the US hinders their access to
financial markets.
- What can be the consequences of reducing investments in the foreseeable future?
- On a global scale in the short term, these effects will be minimal. However, in the medium
and long term they will be dramatic, because many of the cancelled projects were important
for stability of oil supply from the point of view of growing global demand, have been postponed
or frozen. So we can assumed that after 2020 a stable supply of oil is under threat. In this regard,
Russia seeks to remain a stable supplier of oil globally.
- Can Russia to help stabilize prices, "selling" to OPEC and other major producers the
idea to reduce production?
- We haven't made exact calculations. For Russia, this is a difficult question due to the technological
aspects of oil extraction, the current state of the projects under construction and climatic conditions.
You can understand our situation from a simple fact: Russia has more than 170 thousand wells, and
to reduce their number very difficult. And in the middle East much less wells: Saudi Arabia produces
the same amount of oil as we do, with only 3500 wells. In addition, our oil companies are independent
joint-stock companies which are independently planning the level of their own production.
- The head of the second largest Russian oil company LUKOIL Vagit Alekperov said recently that
the Russian oil sector is most afraid that the government will change tax rules for him.
- I share the opinion of the head of the Lukoil concern. We needs a stable tax system. Oil prices,
along with the ruble and so fell and to this created for oil companies the problems of financing
of the oil extraction. If in addition we change the rules of taxation, the future would
become impossible to predict and the companies would be unable to plan their activities for more
then one year. We in the last two years had introduced some tax breaks which should encourage the
production at new fields in Eastern Siberia and the far East. Their effect is already noticeable:
in 2015, we got from those fields additional 60 million tons.
- And in the Arctic region?
- This region now is off-limit due to the costs. But the investments in the extraction of Okhotsk
and Caspian seas have risen because they are attractive from the point of view of taxation. In the
long run we are - regardless of the dynamics of oil prices - will have to change the tax system.
Together with the Ministry of Finance we will develop in the course of this year proposals.
- Russia, as you know, is struggling with declining production in current fields. If the investment
will be reduced, won't this mean that in 2017 the volume of oil production will fail?
- Much will depend on the situation with oil prices and the ruble exchange rate. All our major
companies confirm that they will be able to maintain production at the current fields at the current
level. However, at the current oil prices, investment in new projects will be reduced - at least
by 20-30%.
- In the medium to long term additional load on unconventional and expensive projects will
fall and Western sanctions. How noticeable the effect of them now?
- Impact on overall production is extremely small. In the last two years we have extracted from
these "difficult" fields were we do need western technology just 18 million tons, or around
3% of our total production. The growth of their share is a matter of the future.
- However, without the Western technologies to achieve it will be difficult.
- I expect the opposite effect. Since our companies cannot cooperate with the West in this
area, they had to do this work independently and to develop new technologies in Russia.
- Let me get this straight: in the next few years Russia can't eliminate technological handicap
with the West. This will not work.
At least, we achieve our goals. In three years we seriously upgraded the level of our current
technology. Professionals, scientific and practical basis of all that we have. Many companies are
working on it.
- As for the gas sector, the European Commission seeks to obtain access to all of the gas contracts.
What is that in your shows?
- It's hard for me to comment on it. We believe that commercial contracts are a matter between
the two companies.
- Are you concerned about the behaviour of the EU?
- European authorities want the contract on deliveries was coordinated by the European Commission.
However, many countries disagree. Much will depend on them.
- Differences between the EU and Gazprom have a long tradition. For a long time Gazprom attitude
to the EU's was aggressive and disrespectful. Now his tone was softer. How do you evaluate the bilateral
relations at the moment?
- We believe that Russia is a reliable supplier and that the relationship is beneficial to both
parties. Thus the entire current infrastructure was created. Now, however, we have to expand
it taking into account the fact that production in Europe will decrease and demand will increase.
But differences remain. Can we call the position of Europe a constructive policy ?
- Political aspects now take precedence over the economic aspect of natural gas and oil supplies.
So, for political reasons the project "South stream" was blocked . For political reasons, there
are attempts to prevent the expansion of Nord stream. It is obvious that the construction of the
first two lines of the "Nord stream" conformed to European legal norms. However, the attitude
to the two new branches is different. In addition, we see that in the new energy strategy of the
EU does n mention relations with Russia. How can this be considering the fact that we are the main
supplier of energy to EU? We hope, however, that pragmatism will prevail. We need to develop relations
based on mutual interests, guarantees and long-term prospects.
- I can assume that you are counting on the support of Germany to expand the "Nord stream".
- We presume that we are talking, primarily, about economic project. Major energy companies of
Europe are interested in him. Because this is a long term project. And we will compete with other
suppliers of natural and liquefied gas, which is the rate now.
The world's most powerful oilman brought a harsh message to Houston for executives hoping for
a rescue from low prices: high-cost producers -- many of them sitting in the room -- need to
either "lower costs, borrow cash or liquidate."
For the thousands of executives attending the IHS CERAWeek conference, the message from Saudi
Arabia oil minister Ali al-Naimi means deeper spending cuts, laying off more roughnecks and
idling drilling rigs.
"It sounds harsh, and unfortunately it is, but it is the most efficient way to rebalance
markets," Naimi told the audience in Houston on Tuesday.
... ... ...
Naimi told the executives in Houston that Saudi Arabia believed that freezing oil production
-- as it just agreed with Russia -- would be enough to eventually balance the market. Over time,
high-cost producers will get out of the business, and rising demand will slowly eat up the
oversupply, he said. The International Energy Agency believes that means another two years of low
prices.
The freeze agreement isn't "cutting production. That is not going to happen," Naimi said.
Venezuela, Saudi Arabia, Russia and Qatar have discussed holding a meeting in mid-March for
OPEC and non-OPEC oil producers that support the production freeze, Venezuela Oil Minister
Eulogio Del Pino said on Twitter. All oil producers are being consulted to determine where and
when the meeting will be held, Del Pino said. Venezuela has been lobbying for producers to
support prices, with Del Pino circling the globe to drum support.
... ... ....
While Naimi insisted that Saudi Arabia wasn't at war with shale, or any other producer, he was
clear in his aim. "We are doing what every other industry representative in this room is doing,"
he told the audience. "Efficient markets will determine where on the cost curve the marginal
barrel resides."
"It's going to be really, really ugly to get through this valley," Papa said.
[Feb 20, 2016] Tech Talk - Oil Supply, Oil Prices and Saudi Arabi
Notable quotes:
"... Thus slight reductions in production from OPEC, and particularly the Kingdom of Saudi Arabia (KSA), can keep the world supply in balance with demand and more critically for them keep the price up at a level that they are comfortable with. Note that in relation to the overall volumes of oil being traded, they are not talking much adjustment in their overall volume (around 1% of the total 30 mbd) in order to sustain prices. The USA produces more, OPEC produces less – not much less because global demand is growing – and the price is sustained. ..."
"... This has virtually nothing to do with the speculators on Wall Street and the corrections they might impose, this is all about supplying a needed volume to meet a demand and controlling that supply to ensure that the price is sustained. ..."
"... As I have noted in the past, OPEC is sufficiently suspicious of the reported numbers from the countries themselves that they check from secondary sources, and provide both sets of numbers. ..."
"... One of the other caveats is that the internal demand in these countries is rising, and that lowers the amount that can be exported. This will in time require that OPEC produce more, just to sustain the amounts that they export. And the problem here is the biggest caveat of all. Because KSA cannot continue to produce ever-increasing amounts of oil. ..."
"... But these new fields, including Manifa and Safaniya produce a heavier crude that, for years, KSA struggled, usually in vain, to find a market for internationally. It is only now that it is building its own refineries to process the oil that it can find a global market for the product. ..."
"... Realistically, over a couple of years, I would suspect that the oil price line that I mentioned was rising at the beginning of the piece will continue to rise and we are just going to have to accommodate to it. ..."
From the time that The Oil Drum first began and through the years up to the Recession of 2008-9,
there was an increase in the price of oil, and that resumed following the initial period of the recession,
and in contrast to the price of natural gas, oil has recovered a lot of the price that it lost.
Figure 1. Comparable price of oil from 1946 (Inflation
data)
If one were to draw a straight line on that graph from the low point in 1999 though now, there
hasn't been a huge variation away from the slope of that line for long. That, of course, does not
stop folk from pointing to the very short, roughly flat bit at the end and saying that oil prices
are going to remain at that level, or are even
about to decline.
To address that final point first, I would suggest that those making such a foolish prediction
should go away and read the OPEC Monthly
Oil Market Reports. Remember that, for just a little while longer, oil is a fungible product.
OPEC make no secret of the fact that they continuously examine the global economy and make estimates
on how it is going to behave.
This month they note that the economies aren't doing quite as well as expected, and have revised
down global growth to 2.9%, though they expect next year to be better, and hold to their estimate
of a 3.5% growth rate.
But OPEC go beyond just making that prediction - they use it, and data that they have on consumption
and oil supplies around the world to estimate how much OPEC should produce each month to balance
supply against demand, so that the price will remain at a comfortable level for the OPEC economies.
And based on those numbers they tailor production.
This month, for example, they note that global oil demand is anticipated to grow by 0.8 mbd this
year (and by 1.04 mbd in 2014). They anticipate growth in production of around 1.0 mbd from the non-OPEC
nations, with projected increases from Canada, the United States, Brazil, the Sudans and Kazakhstan
contributing to an additional 1.1 mbd next year. From these numbers they can project that demand
for OPEC oil will be slightly down this year, at 29.9 mbd down 0.4 mbd on last year, with next year
seeing an additional fall of 0.3 mbd on average.
Figure 2. Projected oil demand for 2013 (OPEC
MOMR )
Thus slight reductions in production from OPEC, and particularly the Kingdom of Saudi Arabia (KSA),
can keep the world supply in balance with demand and more critically for them keep the price up at
a level that they are comfortable with. Note that in relation to the overall volumes of oil being
traded, they are not talking much adjustment in their overall volume (around 1% of the total 30 mbd)
in order to sustain prices. The USA produces more, OPEC produces less – not much less because global
demand is growing – and the price is sustained.
This has virtually nothing to do with the speculators on Wall Street and the corrections they
might impose, this is all about supplying a needed volume to meet a demand and controlling that supply
to ensure that the price is sustained.
There are a number of caveats to this simplified explanation, one being the short-term willingness
and ability of some producers to keep to their targets. One of the imponderables is the production
from Iraq. Although Iraq
has been given a waiver through 2014 on the need to limit their production, the increasing violence
has led to a drop in production,
back below 3 mbd.
Figure 3. OPEC production based on data from secondary sources (OPEC
MOMR)
As I have noted in the past, OPEC is sufficiently suspicious of the reported numbers from the
countries themselves that they check from secondary sources, and provide both sets of numbers.
Figure 4. OPEC production numbers from the originating countries. (OPEC
MOMR August 2013)
Note, for example, that Iran says that it is producing over 1 mbd more than other sources report,
and Venezuela is around 400 kbd light. The balancing act is largely the charge of KSA, since it produces
the largest amount and can adjust more readily to balance the need.
One of the other caveats is that the internal demand in these countries is rising, and that lowers
the amount that can be exported. This will in time require that OPEC produce more, just to sustain
the amounts that they export. And the problem here is the biggest caveat of all. Because KSA cannot
continue to produce ever-increasing amounts of oil.
Just exactly how much the country can produce is the subject of much debate, and has been at The
Oil Drum since its inception. But if I can now gently admonish those who think it can keep increasing
forever and that it has vast reserves that can flood the market at need. This fails to recognize
that the major fields on which the country has relied are no longer capable of their historic production
levels, and that over the time that TOD has been in existence, production has switched to the new
fields that KSA had promised it would, back in time.
But these new fields, including Manifa and Safaniya produce a heavier crude that, for years, KSA
struggled, usually in vain, to find a market for internationally. It is only now that it is building
its own refineries to process the oil that it can find a global market for the product. Yet those
refineries have only a limited capacity. If you can't ship, refine and market your product in the
form that the customer needs, it can't be sold, regardless of how much, instantaneously, you can
pump out of the ground. And so KSA is starting to look harder for other fields. They have increased
the number of rigs employed to 170 by the end of the year (in 2005 they had about
20 oil and 10 gas rigs operating), going beyond
the 160 estimated earlier, seeking both to raise production from existing fields, but also to find
new ones. This is almost double the number that Euan reported at the end of last year. That this
is being expedited is not good news! Because new fields will very likely be smaller, and more rapidly
exhausted, and may not have the quality of the oil produced from Ghawar and the other old faithfuls.
Realistically, over a couple of years, I would suspect that the oil price line that I mentioned
was rising at the beginning of the piece will continue to rise and we are just going to have to accommodate
to it.
I define the ECI (Export Capacity Index) ratio as the ratio of total petroleum liquids + other liquids
production to liquids consumption. So, production of 2.0 mbpd and consumption of 1.0 mbpd would result
in an ECI ratio of 2.0 (or they were consuming half of production). Mathematically of course, a declining
ECI ratio means that the net exporter is trending toward zero net oil exports (and an ECI ratio of
1.0).
Note that some countries with flat net exports, e.g., Russia, which had net exports of 7.2
mbpd in 2007 and in 2012 (EIA), showed declines in their ECI ratios. Russia's ECI Ratio fell from
3.7 in 2007 to 3.3 in 2012.
If we look at 2005 to 2012 data, as annual Brent prices increased from $55 to $112, only seven
countries showed increases in their ECI ratios--Canada, Colombia, Iraq, Libya, Kazakhstan, Azerbaijan
and Nigeria. If we look at the last three years of data, 2010 to 2012, as annual Brent prices were
respectively $80, $111 and $112, only four of these seven countries still showed increases in their
ECI ratios--Canada, Colombia, Iraq and Libya. The other three--Kazakhstan, Azerbaijan and Nigeria--showed
declining ECI ratios from 2010 to 2012. And of course, Libya comes with an asterisk, because of political
unrest.
So, only 4 of the (2005) Top 33 net oil exporters showed: (1) An increasing ECI Ratio from 2005
to 2012, and (2) Maintained an increasing ECI ratio from 2010 to 2012.
Incidentally, some other countries did show increases in their ECI ratios from 2010 to 2012, but
they remained below their 2005 levels, e.g., the UAE's ECI ratio increased from 4.6 in 2010 to 5.1
in 2012, but they remained well below their 2005 ECI ratio of 7.6, i.e., the UAE is (so far at least)
on an "Undulating Decline" in their ECI ratio. At the 2005 to 2012 rate of decline in the UAE's ECI
ratio, they were on track to approach zero net oil exports in less than 30 years.
The overall (2005) Top 33 net oil exporters' ECI ratio fell from 3.75 in 2005 to 3.26 in 2012
(EIA).
As I have noted before, the cyclical pattern of higher annual oil price highs and higher annual oil
price lows is very interesting, especially in regard to "Higher lows." Following are the last three
year over year declines in annual Brent crude oil prices (1998, 2001 and 2009), along with the rates
of change for 1998 to 2001 and for 2001 to 2009.
If Brent averages $108 in 2013, down from $112 in 2012, it would be a +14%/year rate of change
(since the 2009 price of $62), which would be between the +12%/year and the +20%/year rates of change.
Following is a chart of the GNE/CNI* ratio versus annual Brent crude oil prices for 2002 to 2011.
For 2012, Brent averaged $112, and EIA data show that the GNE/CNI ratio fell from 5.3 in 2011 to
5.0 in 2012.
*GNE = Combined net oil exports from (2005) Top 33 net oil exporters, BP + EIA data for graph,
total petroleum liquids CNI = Chindia's (China + India) Net Imports, BP data
Rupee woes: More trouble ahead as oil prices touch all time high
In a press release dated August 16, 2013, the Ministry of Petroleum and Natural Gas, talks
about the increasing under-recoveries on diesel. The under-recovery on diesel has gone up to Rs
10.22 per litre for the fifteen day period ending August 15, 2013. Before this, the under-recovery
was at Rs 9.29 per litre. This leads to a daily under-recovery of Rs 389 crore or Rs 11,670 crore
for the month. That's the under-recovery just on diesel. Other than this there are under-recoveries
on cooking gas as well as kerosene. The under-recoveries for the first quarter of 2013-2014 (i.e.
period between April 1, 2013 and June 30, 2013) stood at Rs 25,579 crore.
This is likely to go up during this quarter, given the depreciation of the rupee and the increasing
price of oil. Oil prices have been going up internationally because of the uncertainty that prevails
in Egypt. The "fear premium" is getting built into the price of oil.
....
Only very recently, the government started to increase the price of diesel, to reduce the under-recoveries.
But with the international price of oil going up and the rupee depreciating against the dollar,
even at higher prices, the under-recoveries on diesel haven't come down. The under-recovery on
diesel was at Rs 9.29 per litre in January. It is now at Rs 10.22, despite diesel prices going
up.
I have been running my own site for some time at
Bit Tooth Energy . It covers more than
just Peak Oil - there is a weekly column on the use of high pressure water (which I actually did
for a living once) and other OT matters - come on over, the water is fine!
A while back (it had seemed like years to me but it was actually March 23,
2012--is it just me or did this last presidential election cycle actually stretch
time?) Joules Burn posted
From Qurayyah
to Khurais: Turning Water Into Oil which contains links to part one (9:47)
and two (13:06) of From Qurayyah to Khurais
The following are direct YouTube links to the same
My end of the wire bottom of the line DSL connection made loading those clips
downright painful but it was worth it. It is a very well done animation
and really fleshes out the process your linked article describes.
"... At the centre are the two designated heirs to the 271-year-old House of Saud, which has ruled Saudi Arabia since its emergence as a modern state. Crown Prince Mohammed bin Nayef, the kings 56-year-old nephew, is first in line to the throne but Deputy Crown Prince Mohammed bin Salman, believed to be about 30, is Salmans son and a rising power. ..."
"... Mohammed bin Nayef is interior minister while Mohammed bin Salman runs the defence ministry, and their growing rivalry is making itself felt, experts say. ..."
"... He points to the irresponsible Saudi-led intervention in Yemen and says the key Western ally has taken a more hard line tilt away from reforms. . . . ..."
"... In addition to being defence minister, Mohammed bin Salman heads the kingdoms main economic co-ordinating council as well as a body overseeing Saudi Aramco, the state oil company in the worlds biggest petroleum exporter. ..."
I have read, and heard, that many analysts are increasingly concerned that a 30 year old, Mohammed
bin Salman, is calling a lot of the shots in Saudi Arabia. And there have been widespread reports
that members of the royal family are increasingly unhappy about the current regime.
Two princes in Saudi Arabia battle for one throne (October, 2015)
A POWER struggle is emerging between Saudi Arabia's two most powerful princes, analysts
and diplomats say, as the secretive kingdom confronts some of its biggest challenges in years.
The Saudi-led military intervention in Yemen, falling oil prices and rising jihadist violence
are putting the country's leadership to the test, nine months after King Salman assumed the
throne following the death of King Abdullah. The kingdom's rulers have also faced criticism
for last month's hajj tragedy which, according to foreign officials, killed more than 2200
people in a stampede at the annual Muslim pilgrimage.
With concerns over the long-term health of 79-year-old Salman, jockeying for influence has
intensified, experts say.
At the centre are the two designated heirs to the 271-year-old House of Saud, which
has ruled Saudi Arabia since its emergence as a modern state. Crown Prince Mohammed bin Nayef,
the king's 56-year-old nephew, is first in line to the throne but Deputy Crown Prince Mohammed
bin Salman, believed to be about 30, is Salman's son and a rising power.
Mohammed bin Nayef is interior minister while Mohammed bin Salman runs the defence ministry,
and their growing rivalry is making itself felt, experts say.
"It's resulting in some disturbing policies abroad and internally," says Frederic Wehrey
of the Middle East Programme at the Carnegie Endowment for International Peace in Washington.
He points to the "irresponsible" Saudi-led intervention in Yemen and says the key Western
ally has taken a more "hard line tilt" away from reforms. . . .
In addition to being defence minister, Mohammed bin Salman heads the kingdom's main
economic co-ordinating council as well as a body overseeing Saudi Aramco, the state oil company
in the world's biggest petroleum exporter.
"Mohammed bin Salman is clearly amassing extraordinary power and influence very quickly.
This is bound to unsettle his rivals," Wehrey says.
The deputy crown prince "has this need to structure his position to become, at the moment
his father dies, irreplaceable" because he has no assurances of how Mohammed bin Nayef, as
king, would treat him, another foreign diplomat says.
Mohammed bin Salman, who has a close relationship with his father, has been "acting as if
he was the heir apparent, so this obviously creates tensions," Lacroix says.
ND Bakken December 2015 data are out. Production fell back to levels not seen since August/September
2014. Exactly what the Season Effect Model predicted 25 months ago (within a 0.64% error margin).
Links to an excerpt from "On Saudi Arabia" and to a NYT article on the young prince, Prince Mohammed
bin Salman, who seems to be calling the shots in Saudi Arabia:
To me the Saudi strategy looks like that they want to push everything to extreme as this
will turn the table in politics and also in the oil market more likely than a 'soft approach'.
Brilliant article. Thanks! Feudal states and the Mafia family type business don't differ much.
Many great examples throughout history. It'll b very interesting to watch KSA unwind and train
wreck.
What's unfolding is what Karen Elliott House described in her book "On Saudi Arabia."
What scares many royals and most ordinary Saudis is that the succession, which historically
has passed from brother to brother, soon will have to jump to a new generation of princes.
That could mean that only one branch of this family of some seven thousand princes will have
power, a prescription for potential conflict as thirty-four of the thirty-five surviving lines
of the founder's family could find themselves disenfranchised.
"... Understood one way, the Saudi king is CEO of a family business that converts oil into payoffs that buy political loyalty. They take two forms: cash handouts or commercial concessions for the increasingly numerous scions of the royal clan, and a modicum of public goods and employment opportunities for commoners. The coercive "stick" is supplied by brutal internal security services lavishly equipped with American equipment. ..."
"... With its political and business elites interwoven in a monopolistic network, quantities of unaccountable cash leaving the country for private investments and lavish purchases abroad, and state functions bent to serve these objectives, Saudi Arabia might be compared to such kleptocracies as Viktor Yanukovich's Ukraine. ..."
In fact, Saudi Arabia is no state at all. There are two ways to describe it: as a political
enterprise with a clever but ultimately unsustainable business model, or so corrupt as to
resemble in its functioning a vertically and horizontally integrated criminal organization.
Either way, it can't last. It's past time U.S. decision-makers began planning for the collapse of
the Saudi kingdom.
In recent conversations with military and other government personnel, we were startled at how
startled they seemed at this prospect. Here's the analysis they should be working through.
Understood one way, the Saudi king is CEO of a family business that converts oil into payoffs
that buy political loyalty. They take two forms: cash handouts or commercial concessions for the
increasingly numerous scions of the royal clan, and a modicum of public goods and employment
opportunities for commoners. The coercive "stick" is supplied by brutal internal security
services lavishly equipped with American equipment.
... ... ...
If the loyalty price index keeps rising, the monarchy could face political insolvency.
Looked at another way, the Saudi ruling elite is operating something like a sophisticated
criminal enterprise, when populations everywhere are making insistent demands for government
accountability. With its political and business elites interwoven in a monopolistic network,
quantities of unaccountable cash leaving the country for private investments and lavish purchases
abroad, and state functions bent to serve these objectives, Saudi Arabia might be compared to
such kleptocracies as Viktor Yanukovich's Ukraine.
For the moment, it is largely Saudi Arabia's Shiite minority that is voicing political
demands. But the highly educated Sunni majority, with unprecedented exposure to the outside
world, is unlikely to stay satisfied forever with a few favors doled out by geriatric rulers
impervious to their input. And then there are the "guest workers." Saudi officials, like those in
other Gulf states, seem to think they can exploit an infinite supply of indigents grateful to
work at whatever conditions. But citizens are now heavily outnumbered in their own countries by
laborers who may soon begin claiming rights.
For decades, Riyadh has eased pressure by exporting its dissenters-like Osama bin Laden-fomenting
extremism across the Muslim world. But that strategy can backfire: bin Laden's critique of Saudi
corruption has been taken up by others and resonates among many Arabs. And King Salman (who is
80, by the way) does not display the dexterity of his half-brother Abdullah. He's reached for
some of the familiar items in the autocrats' toolbox: executing dissidents, embarking on foreign
wars, and whipping up sectarian rivalries to discredit Saudi Shiite demands and boost nationalist
fervor. Each of these has grave risks.
There are a few ways things could go, as Salman's brittle grip on power begins cracking.
One is a factional struggle within the royal family, with the price of allegiance bid up beyond
anyone's ability to pay in cash. Another is foreign war. With Saudi Arabia and Iran already
confronting each other by proxy in Yemen and Syria, escalation is too easy. U.S. decision-makers
should bear that danger in mind as they keep pressing for regional solutions to regional
problems. A third scenario is insurrection - either a non-violent uprising or a jihadi
insurgency-a result all too predictable given episodes throughout the region in recent years.
The U.S. keeps getting caught flat-footed when purportedly solid countries came apart. At the
very least, and immediately, rigorous planning exercises should be executed, in which different
scenarios and different potential U.S. actions to reduce the codependence and mitigate the risks
can be tested. Most likely, and most dangerous, outcomes should be identified, and an energetic
red team should shoot holes in the automatic-pilot thinking that has guided Washington policy to
date.
"Hope is not a policy" is a hackneyed phrase. But choosing not to consider alternatives amounts
to the same thing
The US is the dominant force in international banking. It is this position from which sanctions
are derived. Iran had to (and often did) find other ways to get paid for shipping oil than money
flow through international banking, which US and EU sanctions prohibited.
If you seek to oppose the US, you must not fight in a money arena. It's a disadvantageous battlefield.
The price of oil is determined by what? NYMEX traders? Or agreement between a refinery and
an oil exporter?
I would suggest it is the latter, which need not depend on NYMEX numbers at all.
If your goal is to destroy US shale, the last thing you would do is allow your weapon (price)
to be defined by your target (the US in general, which is where the NYMEX is). Nor would you allow
it to be defined by something as variable as free market forces. If you specify price to your
buyer, perhaps lower than his bid, you remove the marketplace from involvement in the battle.
The goal is victory. Not profit. How could you allow yourself to define victory in pieces of
paper printed by your enemy?
If your goal is to destroy US shale, the last thing you would do is allow your weapon (price)
to be defined by your target (the US in general, which is where the NYMEX is). Nor would you allow
it to be defined by something as variable as free market forces.
If your goal is to destroy US shale then the only way you can do that is to produce every barrel
of oil you possibly can. It would not be within your power to allow the price to be defined
by anyone or anything other than market forces. Of course every exporter negotiates a price with
his buyer. But that price must be within a reasonable amount of what the world oil price is at
the moment.
The price of oil is determined by supply and demand just like every commodity on the market.
Every day, there are thousands of oil buyers around the world. There are dozens of sellers,
many of them exporters. All the buyers are in competition with other buyers to get the lowest
possible price. All the sellers are in competition with other sellers to get the highest price
possible. And the price moves up and down with each trade, hourly or sometimes minute by minute.
To believe that even one of those dozens of exporters has the power to set the price oil, much
higher than everyone else is getting, is just silly. And likewise, to believe that a buyer can
get a much lower price than everyone else is getting, is just as silly.
They say that depletion never sleeps. Well, market forces never sleep either.
But that price must be within a reasonable amount of what the world oil price is at the moment.
Which is why it took the predator 18 mos to get it down to lethal levels. Just repeatedly be
willing to sell for a bit less than the bid and down it will go, because others will protect their
marketshare by matching your price (sound familiar?). Then you're no longer the only one offering
a low price.
All the sellers are in competition with other sellers to get the highest price possible.
Were this so there would exist no wiki for predatory pricing.
You aren't thinking about victory. If you seek victory, you don't fight in an arena where you
are disadvantaged. If you're the low cost producer of the lifeblood of civilization, you assert
that advantage and kill the enemy.
By your reasoning the price of oil should be close to zero, say $1/b.
Explain why that isn't the case, if "victory" is the sole objective.
Also predatory pricing is not an effective strategy especially in commodity markets where the
barriers to entry are low.
OPEC does not set the price of oil on World Markets, they simply influence it by their level
of output. In the case of the oil industry attempts at predatory pricing are not rational, it
is simply a strategy for losing money.
Which is why it took the predator 18 mos to get it down to lethal levels. Just repeatedly be
willing to sell for a bit less than the bid and down it will go, because others will protect their
market share by matching your price (sound familiar?). Then you're no longer the only one offering
a low price.
Oh good grief. I give up. You are a hopeless case.
I don't think Watcher expresses the situation very clearly, especially with words like 'predator'.
I don't see it as an apt analogy. I do however feel that the current price war/production war/phantom
production war is clearly an act of economic warfare by Saudi Arabia against their competitors.
It seems odd to me that a world oil production system that can't very accurately tell me how much
oil was produced today until months after the fact is going to start the day tomorrow by saying
'we are over supplied by 1.8 million barrels a day today' and then proceed to talk the price into
the gutter.
"... KSA has cut production in 6 out of the last seven months. Cut might not be the right word though as I suspect it was not a choice. It was thrust upon them by geology. ..."
"... I feel they are producing every single barrel that they possibly can. Theyve got the peddle to that floor. No holding back. ..."
KSA has 'cut' production in 6 out of the last seven months. Cut might not be the right word
though as I suspect it was not a choice. It was thrust upon them by geology.
KSA will IMO face month after month of decreasing production. They managed a production
surge for a short while but that's all they had in them. They've shot their bolt. Iran probably
has some good increases coming but that's about it, and not all of that Iranian increase will
be exported.
The increase in Saudi oil production in the summer season was due to peak demand from the domestic
power generation for air conditioning.
As demand moderated in the past several months, KSA slightly reduced output levels, while crude
exports have actually increased.
KSA oil production and exports in 2015 – Jan. 2016
sources: JODI, OPEC
Do you believe that the slightly reduced production level of the last 6 of 7 months was optional?
I tend not to. I feel they are producing every single barrel that they possibly can. They've
got the peddle to that floor. No holding back.
How you can expand exports when Iran is very aggressively trying to get back into the market
with a very similar product at a very similar price. And somehow signed contracts for at least
0.3 Mb/d in Europe alone.
Does this mean that there is a huge deficit in the world for good quality oil or they simply
undercut competitors, including Iranians ?
"... For decades, the royal family has used the kingdom's immense oil wealth to lavish benefits on its people, including free education and medical care, generous energy subsidies and well paid (and often undemanding) government jobs. No one paid taxes, and if political rights were not part of the equation, that was fine with most people. ..."
"... But the drop in oil prices to below $30 a barrel from more than $100 a barrel in June 2014 means that the old math no longer works. Low oil prices have knocked a chunk out of the government budget and now pose a threat to the unwritten social contract that has long underpinned life in the kingdom, the Arab world's largest economy and a key American ally. ..."
"... Like Norway, Saudi Arabia's oil money has created a generation of lazy bums who get paid a lot for doing little of importance. Lower oil prices is the only thing that'll force the Saudi population to work harder. ..."
"... Frugal. Having worked both in Norway and the middle east, I think it is unfair to put them in the same pot. There are more productive nations than Norway, but they do work much harder than the nationals of the oil-rich middle east countries. In addition, if one nation ever got the work-life balance right than it is them. ..."
"... I suppose they could try get jobs that displace the expats but it's not like they're gonna go be lumberjacks and farmers. Who the hell is hiring in KSA, Wendy's? ..."
"... As a kid I remember my dad once remarked 'never buy a house in a one resource town'. KSA is a one resource country! 30 million people with no detectable prospects whatsoever. The best any of then can do is get educated and flee. ..."
RIYADH, Saudi Arabia - In pressed white robes and clutching crisp
résumés, young Saudi men packed a massive hall at a university in the
capital city this month to wait in long lines to pitch themselves to
employers.
It was one of three jobs fairs in Riyadh in two weeks, and the high
attendance was fueled in part by fear among the younger generation of
what a future of cheap oil will mean in a country where oil is everything.
For decades, the royal family has used the kingdom's immense
oil wealth to lavish benefits on its people, including free education
and medical care, generous energy subsidies and well paid (and often
undemanding) government jobs. No one paid taxes, and if political rights
were not part of the equation, that was fine with most people.
But the drop in oil prices to below $30 a barrel from more than
$100 a barrel in June 2014 means that the old math no longer works.
Low oil prices have knocked a chunk out of the government budget and
now pose a threat to the unwritten social contract that has long underpinned
life in the kingdom, the Arab world's largest economy and a key American
ally.
Like Norway, Saudi Arabia's oil money has created a generation of lazy
bums who get paid a lot for doing little of importance. Lower oil prices
is the only thing that'll force the Saudi population to work harder.
Frugal. Having worked both in Norway and the middle east, I think it
is unfair to put them in the same pot. There are more productive nations
than Norway, but they do work much harder than the nationals of the oil-rich
middle east countries. In addition, if one nation ever got the work-life
balance right than it is them.
I suppose they could try get jobs that displace the expats but it's
not like they're gonna go be lumberjacks and farmers. Who the hell is hiring
in KSA, Wendy's?
As a kid I remember my dad once remarked 'never buy a house in a
one resource town'. KSA is a one resource country! 30 million people with
no detectable prospects whatsoever. The best any of then can do is get educated
and flee.
Don't forget that of every four barrels of extra oil that we need over the next 25 years, only one
will be used to meet demand growth. Three others will just compensate for the decline of existing fields.
The number of vehicles in the world tin 2012 was over a billion (700 M cars, 300 m trucks and buses).
Notable quotes:
"... The question what will happen now with the oil prices in a short run still remains open. Iran has offered Europe a good discount to compete with Saudi Arabia depressing prices. According to National Iranian oil company , the discount on Iranian oil grades Iran Heavy (part of the OPEC basket) is $6.55 dollar while Saudi Arabia discount is $4.85 dollars per barrel. ..."
"... In this situation, in my opinion, the statement about the freezing of the production is from Saudi Arabia was just a tactical move, which hints on possible production cuts by OPEC later. A bluff if you wish. ..."
"... However, from now on the most natural trend for oil prices is up. And not due to any agreements, but due to depletion when production in most countries naturally goes down because of low capex. This is a more fundamental factor, but the agreement allow to win some time before this fundamental factor fully comes into play. ..."
"... The fact is that the oil the world economy still consumes more and more oil each year and now this trend was accelerated by low prices. As the result problems with meeting demand might arise as early ad the end of 2016 and inventories will start being depleted. ..."
"... After that we will enter a new uptrend , a new phase of higher prices of energy. But once scared twice shy and it is unlikely that oil prices will go up quickly. But I expect 2016 average in the range of $40-45 per barrel. This price range, I believe, will suit most conventional oil companies in the world. And especially Russian, which due to the devaluation of the national currency is largely compensated for falling prices of the oil on world markets... ..."
"... The key value of the Doha statement is that it implies that the restriction of volumes of production is possible, changing market expectation. Thats it. ..."
"... No one still can predict how much more time will be needed for coming to agreement to reduce oil production, and whether agreement will be reached at all, but it does change market expectations immediately. ..."
From my point of view, it is a signal that Saudi game in the oil dumping is close to the end,
from now on Riyadh is interested in raising energy prices. Another thing, again, that the Saudis
are ready to freeze and to reduce production only if Iran and Russian freeze or proportionately
reduce their production too.
"SP": How will other members of OPEN react on Doha announcement?
Other members will most probably support this decision. Already, a number of members of
OPEC with higher production costs, were in favor of restricting their production.
This is first of all Venezuela, partially United Arab Emirates, Bahrain, and Oman. And we must
understand that if for Saudi Arabia and Russia low oil prices created problems with balancing the
budgets, for Venezuela this is a real question of survival.
This alignment of interests have led to the situation with this joint statement and subsequent
reaction of the market which is currently unfolding before our eyes. One way to move another
step forward might be an emergency OPEC meeting, which could take place in early March, and on which
the proposal to freeze production by cartel members can be officially adopted.
"SP": will oil price go up from now on?
The market is essentially ready for the return of higher oil prices, therefore, it might respond
positively to this news. However, the oil market is very speculative, and responding primarily to
the expectations - the real figures of production do not play a primary role in forming the spot
price for oil.
And yet, to seriously move oil prices up, it is probably necessary to reduce the world production
by around 1.5 million barrels a day. No matter by what measures.
We also think that oil speculators might use this situation to switch the trend and try to earn
money on uptrend instead of downtrend. This is the opinion of the head of the analytical Department
of the Russian energy Security Fund Alexander Pasechnik. Even minimal 'warming" of oil market is
beneficial to the producers of "black gold", including Russia which now waist their national
treasure.
He suggested that the agreement in Doha was possible because it was impossible to wait longer
for some measures to stop speculative attacks on oil price. The possibility of creating an
artificial shortage of supply in the oil market were actively discussed for the last few months on
different levels, but no decision were made.
The question what will happen now with the oil prices "in a short run" still remains open.
Iran has offered Europe a good discount to compete with Saudi Arabia depressing prices. According
to "National Iranian oil company", the discount on Iranian oil grades Iran Heavy (part of the OPEC
basket) is $6.55 dollar while Saudi Arabia discount is $4.85 dollars per barrel.
In this situation, in my opinion, the statement about the freezing of the production is from
Saudi Arabia was just a tactical move, which hints on possible production cuts by OPEC later. A bluff
if you wish.
"SP": What are the risks for Russia, due to freeze of production at the current level?
In my opinion, there is no any significant risks. In any case we will be forced to reduce production
due to the increase of the fiscal burden on the oil industry, and the consequent reduction of investments
in the sector. Let me remind you that in 2016, the oil companies will pay 200 billion rubles of additional
taxes, and government intends to stick to this tax regime in 2017 and possibly in 2018. This means
that the coming drop of production in the Russian Federation is baked into the cake. Agreement with
Saudis for freeze production on January 2016 level does not change this reality.
On the other hand, we should not expect much from the agreements in Doha. Even if the position
the Quartet will be supported by all other members of OPEC, it does not guarantee that such
a "gentleman's agreement" will be respected by all members of the cartel.
However, from now on the most natural trend for oil prices is up. And not due to any agreements,
but due to depletion when production in most countries "naturally" goes down because of low
capex. This is a more fundamental factor, but the agreement allow to win some time before this
fundamental factor fully comes into play.
The fact is that the oil the world economy still consumes more and more oil each year and
now this trend was accelerated by low prices. As the result problems with meeting demand might arise
as early ad the end of 2016 and inventories will start being depleted.
After that we will enter a new "uptrend", a new phase of higher prices of energy. But
once scared twice shy and it is unlikely that oil prices will go up quickly. But I expect 2016 average
in the range of $40-45 per barrel. This price range, I believe, will suit most conventional oil companies
in the world. And especially Russian, which due to the devaluation of the national currency is largely
compensated for falling prices of the oil on world markets...
"The key value of the Doha statement is that it implies that the restriction of volumes
of production is possible, changing market expectation. That's it." This is how Director
of the Energy Institute Sergey Pravosudov thinks about the announcement. The key purpose of such
statements is to spook speculators pushing the oil price down, and not to push oil prices up.
No one still can predict how much more time will be needed for coming to agreement to reduce
oil production, and whether agreement will be reached at all, but it does change market expectations
immediately.
A while back (it had seemed
like years to me but it was actually March 23, 2012--is it just me or did this last presidential
election cycle actually stretch time?) Joules Burn posted
From Qurayyah to Khurais: Turning
Water Into Oil which contains links to part one (9:47) and two (13:06) of From Qurayyah
to Khurais
the following are direct YouTube links to the same
My end of the wire bottom of the line DSL connection made loading those clips downright painful
but it was worth it. It is a very well done animation and really fleshes out the process your
linked article describes.
"... Qatar's energy minister, Mohammad bin Saleh al-Sada, said the agreement would help stabilize the market. Saudi oil minister Ali Al-Naimi said the freeze was adequate for the market, adding the meeting was successful. He added he hoped producers inside and outside OPEC would adopt the proposal. ..."
"... The producers will meet with Iran and Iraq on Wednesday and may find significant reticence on the part of Iran to hold output steady. After years of sanctions, Iran plans to ramp up production in a bid to regain market share. ..."
Crude futures pared gains Tuesday following news that Qatar, Saudi Arabia, Russia and
Venezuela would lead an effort to freeze output at January levels, dashing hopes of a cut in
production.
The large producers met in Doha, Qatar, to discuss measures to tackle a supply glut that's
sent prices to 13-year-lows.
Qatar's energy minister, Mohammad bin Saleh al-Sada, said the agreement would help stabilize
the market. Saudi oil minister Ali Al-Naimi said the freeze was "adequate" for the market, adding
the meeting was successful. He added he hoped producers inside and outside OPEC would adopt the
proposal.
The producers will meet with Iran and Iraq on Wednesday and may find significant reticence on
the part of Iran to hold output steady. After years of sanctions, Iran plans to ramp up
production in a bid to regain market share.
... ... ...
Qatar is the current holder of the rotating OPEC presidency.
Earlier, news of the meeting news sparked hopes of an eventual deal on supply cuts, after
Saudi Arabia-led oil cartel OPEC previously persistently refused to lower its 30 million
barrel-a-day production ceiling in a strategy to squeeze out higher cost energy producers,
including U.S. shale companies.
Iran is now directly competing with Saudi in Europe regarding oil sales. A Bloomberg report earlier
this week revealed some concrete data showing that Europe is a key battleground in the market share
struggle between Iran and Saudi. From that report: "The most competitive pricing compared with Saudi
Arabian supply in 21 months underscores its intention to win back market share." [emphasis my own]
Iran Heavy oil, one of the Islamic Republic's primary export grades, will cost $1.25 less than Saudi's
most similar crude in March, releases from Iran's NIOC and Saudi Aramco both show.
During sanctions, Iran supplied Turkey and continued publishing prices for Europe. Iran's most recent
discount will be the steepest against the Saudi grade since June 2014, Bloomberg reported. Iran is
also giving steeper discounts for Iran Heavy grade in Asia.
Iran is preparing to boost oil exports by 1 M/bpd this year, and is also getting ready to introduce
a new heavy grade as it adds production, Bloomberg reports.
Marketers with Iran's NIOC can go after more than 500,000 barrels of lost daily sales in Europe alone,
Bloomberg reports, now that sanctions, which limited Iran's oil sales to six buyers (China, India,
Japan, South Korea, Taiwan and Turkey), have ended.
How young, arrogant Saudi price took other OPEC members hostage...
Notable quotes:
"... I think Saudi Arabia pushed for a strategy that will go down as one of the greatest mistakes in OPEC's history. It was a decision, I might add, that 9 of the 13 OPEC members reportedly oppose. ..."
"... But I believe they failed to fully appreciate the risk in that strategy. If the higher cost producers slash costs in an attempt to survive (which they undoubtedly would), OPEC could suffer through a period of much lower prices. That is in fact what has happened. ..."
"... OPEC has claimed several times that their strategy is working because U.S. shale oil production is falling. But the only way the strategy actually works is for OPEC to get back to the cash flow levels they had prior to 2014. They are a very long way from achieving that. ..."
"... The one big thing they have going for them is that they still control 72% of the world's proved crude oil reserves - 1.2 trillion barrels. If they ultimately manage to sell those barrels and earn a few dollars more per barrel as a result of their current strategy, it could amount to trillions of dollars ..."
Some have argued that OPEC had no choice but to defend market share instead of cutting
production to balance the market, but I disagree. I think Saudi Arabia pushed for a strategy
that will go down as one of the greatest mistakes in OPEC's history. It was a decision, I might
add, that 9 of the 13 OPEC members reportedly oppose.
... ... ...
At the time of their decision, the global markets were probably oversupplied by 1-2 million
bpd. If OPEC had merely decided to remove 2 million bpd off the world markets - only 5.5% of the
group's combined 2014 production - the price drop could have easily been arrested and maintained
in the $75-$85/bbl range. That would have still given them 38.9% of the global crude oil market.
For that matter, a production quota cut of 13% could have removed from the market a volume
equivalent to all of the U.S. shale oil production added between 2008 and 2014. (Whether the
Saudis could have actually enforced those quotas is another matter).
Why didn't they opt for that course of action?
Don't get me wrong, I understand why they did what they did. I just don't think it was necessary.
They were obviously concerned that the shale oil boom would continue to expand, with production
not only continuing to grow in the U.S. but in other countries with shale oil resources. It was a
legitimate concern, but I think the shale oil boom in the U.S. would have peaked in a few years.
Further, I am not sure any other country will see the same level of success in shale drilling for
various reasons. Some will succeed, but I don't expect they will manage to add millions of
barrels per day of new oil production in just a few years.
It was going to be a gamble either way, but I think it would be more likely that a combination of
growing global demand and a shale boom that couldn't continue to expand at the rates seen from
2008 to 2014 would have ultimately shifted power back to them after perhaps a couple of rounds of
production cuts.
OPEC of course reasoned that it didn't make sense that they, the low cost producer, should cut
production which would prop up higher cost producers. After all, that does seem backwards.
But I believe they failed to fully appreciate the risk in that strategy. If the higher cost
producers slash costs in an attempt to survive (which they undoubtedly would), OPEC could suffer
through a period of much lower prices. That is in fact what has happened.
OPEC has claimed several times that their strategy is working because U.S. shale oil
production is falling. But the only way the strategy actually works is for OPEC to get back to
the cash flow levels they had prior to 2014. They are a very long way from achieving that.
Should OPEC go on to gain back market share, and should they manage to maintain higher margins as
a result, their strategy could pay off in the long run. The one big thing they have going for
them is that they still control 72% of the world's proved crude oil reserves - 1.2 trillion
barrels. If they ultimately manage to sell those barrels and earn a few dollars more per barrel
as a result of their current strategy, it could amount to trillions of dollars. (Note that
because proved reserves are a function of price and available technology, their reserves
estimates may plummet back to what can be produced economically at a price of $30/bbl. That will
nullify much of Venezuela's heavy oil reserves).
If OPEC's strategy does ultimately pay off, it will be many years before it does so. It will
require a huge recovery in the price of oil. It won't be easy for them to earn back the trillion
dollars in foregone revenue for 2015 and 2016. At this moment in time, it is hard to conclude
that it was anything other than a big, costly miscalculation on their part. I also expect that's
what the history books will eventually say.
When President Obama secretly authorized the Central Intelligence Agency to begin arming Syria's
embattled rebels in 2013, the spy agency knew it would have a willing partner to help pay for the
covert operation. It was the same partner the C.I.A. has relied on for decades for money and discretion
in far-off conflicts: the Kingdom of Saudi Arabia.
...
The support for the Syrian rebels is only the latest chapter in the decadeslong relationship between
the spy services of Saudi Arabia and the United States, an alliance that has endured through the
Iran-contra scandal, support for the mujahedeen against the Soviets in Afghanistan and proxy fights
in Africa. Sometimes, as in Syria, the two countries have worked in concert. In others, Saudi Arabia
has simply written checks underwriting American covert activities.
...
In addition to Saudi Arabia's vast oil reserves and role as the spiritual anchor of the Sunni Muslim
world, the long intelligence relationship helps explain why the United States has been reluctant
to openly criticize Saudi Arabia for its human rights abuses, its treatment of women and its support
for the extreme strain of Islam, Wahhabism, that has inspired many of the very terrorist groups the
United States is fighting. The Obama administration did not publicly condemn Saudi Arabia's public
beheading this month of a dissident Shiite cleric, Sheikh Nimr al-Nimr, who had challenged the royal
family.
...
American officials have not disclosed the amount of the Saudi contribution, which is by far the largest
from another nation to the program to arm the rebels against President Bashar al-Assad's military.
But estimates have put the total cost of the arming and training effort at several billion dollars.
...
When Mr. Obama signed off on arming the rebels in the spring of 2013, it was partly to try to gain
control of the apparent free-for-all in the region. The Qataris and the Saudis had been funneling
weapons into Syria for more than a year. The Qataris had even smuggled in shipments of Chinese-made
FN-6 shoulder-fired missiles over the border from Turkey.
...
By the summer of 2012, a freewheeling feel had taken hold along Turkey's border with Syria as the
gulf nations funneled cash and weapons to rebel groups - even some that American officials were concerned
had ties to radical groups like Al Qaeda.
...The C.I.A. was mostly on the sidelines during this period, authorized by the White House under
the Timber Sycamore training program to deliver nonlethal aid to the rebels but not weapons. In late
2012, according to two former senior American officials, David H. Petraeus, then the C.I.A. director,
delivered a stern lecture to intelligence officials of several gulf nations at a meeting near the
Dead Sea in Jordan. He chastised them for sending arms into Syria without coordinating with one another
or with C.I.A. officers in Jordan and Turkey.
...While the intelligence alliance is central to the Syria fight and has been important in the war
against Al Qaeda, a constant irritant in American-Saudi relations is just how much Saudi citizens
continue to support terrorist groups, analysts said.
"The more that the argument becomes, 'We need them as a counterterrorism partner,' the less persuasive
it is," said William McCants, a former State Department counterterrorism adviser and the author of
a book on the Islamic State. "If this is purely a conversation about counterterrorism cooperation,
and if the Saudis are a big part of the problem in creating terrorism in the first place, then how
persuasive of an argument is it?"
"... Submitted by Dalan McEndree via OilPrice.com, ..."
"... Or, alternatively, are they targeting specific global competitors and specific national markets? ..."
"... And, of course, what does the Saudi strategy beyond pumping crude portend for the Saudi approach to some OPEC members' calls for coordinated production cuts within OPEC and with Russia? ..."
"... Saudi Arabia's sustainable crude output capacity ..."
"... Rather than maintaining crude output at 2014's level in 2015, the Saudis steadily increased it after al-Naimi's announcement in Vienna as they brought idle capacity on line ..."
"... IEA monthly Oil Market Report ..."
"... exports peaked in 4Q 2015 at 7.01 million barrels per day ..."
"... The Saudis did not ship any of their incremental crude exports to the U.S.-in other words, they did not increase volumes exported to the U.S., did not directly seek to constrain U.S. output, and did not seek to increase U.S. market share. ..."
"... It is therefore not surprising that the Saudis moved aggressively in Europe in 4Q 2015-successfully courting traditional Russian customers in Northern Europe and Eastern Europe and drawing complaints from Rosneft. ..."
"... In this Saudi effort, the U.S. could be an ally. The U.S. became a net petroleum product exporter in 2012 (minus numbers in the table below indicate net exports), and net exports grew steadily through 2015. Growth continued in January, with net product exports averaging 1.802 million barrels per day, and, in the week ending February 5, 2.046 million. U.S. exports will lessen the financial attractiveness of investment in domestic refining capacity, both for governments and for foreign investors in their countries' oil industries (data from EIA). ..."
"... It may be that the Saudis will not change course until Russian output declines, Iraq's stagnates, Iran's output growth is stunted-and that receding output from weaker countries within and outside OPEC would not be enough. If this is case, the Saudis will see resilient U.S. production as increasing pressure on their competitors and bringing forward the day when they can contemplate moderating their output. ..."
"... NOTE: Nothing in the foregoing analysis should be understood as denying that the U.S. oil industry has suffered intensely or asserting that this strategy, if it is Saudi strategy, will succeed. ..."
"... NOTE: Nothing in the foregoing analysis should be understood as denying that …. IF IT IS Saudi strategy. ..."
Do the Saudis have an oil market strategy
beyond pumping crude to defend their market share? Are they indifferent to which countries' oil industries
survive? Or, alternatively, are they targeting specific global competitors and specific
national markets? Did they start with a particular strategy in November 2014 when Saudi
Petroleum and Mineral Resources Minister Ali al-Naimi announced the new market share policy at the
OPEC meeting in Vienna and are they sticking with it, or has their strategy evolved with the evolution
of the global markets since?
And, of course, what does the Saudi strategy beyond pumping crude portend for the Saudi approach
to some OPEC members' calls for coordinated production cuts within OPEC and with Russia?
Conventional Wisdom
Conventional wisdom has it that the Saudis are focused primarily on crushing the U.S.
shale industry. In this view, the Saudis blame the U.S. for the supply-demand imbalance
that began to make itself felt in 2014. U.S. production data seems to support this. Between 2009
and 2014, U.S. crude and NGLs output increased nearly 4 million barrels per day, while Saudi Arabia's
increased only 1.64 million barrels per day, Canada's 1.06 million, Iraq's 0.9 million, and Russia's
0.7 million (Saudi data doesn't include NGLs).
In addition, the Saudis, among many others, believed that U.S. shale would be the most vulnerable
to Saudi strategy, given relatively high production costs compared to Saudi production costs and
shale's rapid decline rates and the need therefore repeatedly to reinvest in new wells to maintain
output.
Yet, if the Saudis were focused on the U.S., their efforts have been unsuccessful, at least in
2015. As the table below shows, U.S. output growth in 2015 outstripped Saudi output growth and the
growth of output from other major producers in absolute terms. In addition, many observers also came
to believe that U.S. shale production will recover more quickly than production in traditional plays
once markets balance due to its unique accelerated production cycle and that this quick recovery
will limit price increases when markets balance.
Is the U.S. Really the Primary Target?
The above considerations imply the Saudis-if indeed they primarily were targeting U.S. shale-embarked
on a self-defeating campaign in November 2014 that could at best deliver a Pyrrhic victory and permanent
revenues losses in the US$ hundred billions.
Is the U.S. the primary target? U.S. import data (from the EIA) suggests the U.S. is not now the
Saudis' primary target, if it ever was. Like other producers, the Saudis operate within a set of
constraints. Domestic capacity is one. In its 2015 Medium Term Market Report (Oil), the IEA put
Saudi Arabia's sustainable crude output capacity at 12.34 million barrels per day in 2015
and at 12.42 million in 2016. Export capacity-output minus domestic demand-is another.
Rather than maintaining crude output at 2014's level in 2015, the Saudis steadily increased
it after al-Naimi's announcement in Vienna as they brought idle capacity on line (data from
the IEA monthly Oil Market Report):
This allowed them to increase average daily crude exports by 460,000 barrels in 2015 over 2014
average export levels-even as Saudi domestic demand increased-and exports peaked in 4Q 2015 at
7.01 million barrels per day (assuming the Saudis keep output at average 2H 2015 levels in 2016,
and domestic demand increased 400,000 barrels per day, as the IEA forecasts, the Saudis could export
nearly 7 million barrels per day on average in 2016):
The Saudis did not ship any of their incremental crude exports to the U.S.-in other words,
they did not increase volumes exported to the U.S., did not directly seek to constrain U.S. output,
and did not seek to increase U.S. market share. Based on EIA data, Saudi imports into the U.S.
declined from 1.191 million barrels per day in 2014 to 1.045 million in 2015-and have steadily declined
since peaking in 2012 at 1,396 million barrels per day. (OPEC's shipments also declined from 2014
to 2015, from 3.05 million barrels per day to 2.64 million, continuing the downward trend that started
in 2010). Canada, however, which has sent increasing volumes to the U.S. since 2009, increased exports
to the U.S. 306,000 barrels per day in 2015:
Also, the Saudi share of U.S. crude imports declined 1.9 percentage points in 2015 from 2014,
and has declined 2.6 percentage points since peaking at 16.9 percent in 2013; during the same two
periods, Canada's share increased 4.5 and 9.9 percentage points respectively (and has more than doubled
since 2009):
Other Markets
The Saudis presumably exported the incremental 606,000 barrels per day (460,000 from net increased
export capacity plus 146,000 diverted from the U.S.) to their focus markets. Since other countries'
import data generally is less current, complete, and available than U.S. data, where these barrels
ended up must be found indirectly, at least partially.
In its 2015 Medium Term Market Report (Oil), the IEA projected that the bulk of growth from 2015
to 2020 will come in China, Other Asia, the Middle East, and Africa, while demand will remain more
or less stagnant in OECD U.S. and OECD Europe:
The Saudis find themselves in a difficult battle for market share in China, the world's second
largest import market and the country in which the IEA expects absolute import volume will increase
the most through 2020-1.5 million barrels per day (it projects Other Asia demand to increase 2.0
million). The Saudis are China's leading crude supplier. However, their position is
under sustained attack from their major-and minor-global export competitors. For example,
through the first eleven months of 2015, imports from Saudi Arabia increased only 2.1 percent to
46.08 million metric tons, while imports from Russia increased 28 percent to 37.62 million, Oman
9.1 percent to 28.94 million, Iraq 10.3 percent to 28.82 million, Venezuela 20.7 percent to 14.77
million, Kuwait 42.6 percent to 12.68 million, and Brazil 102.1 percent to 12.07 million.
As a result of the competition, the Saudi share of China's imports has dropped from ~20 percent
since 2012 to ~15 percent in 2015, even as Chinese demand increased 16.7 percent, or 1.6 million
barrels per day, from 9.6 million in 2012 to 11.2 million in 2015. Moreover, the competition for
Chinese market share promises to intensify with the lifting of UN sanctions on Iran, which occupied
second place in Chinese imports pre-UN sanctions and has expressed determination to regain its prior
position (Iran's exports to China fell 2.1 percent to 24.36 million tons in the first eleven months
of 2015).
Moreover, several Saudi competitors enjoy substantial competitive advantages. Russia has
two. One is the East Siberia Pacific Ocean pipeline (ESPO) which directly connects Russia
to China-important because the Chinese are said to fear the U.S. Navy's ability to interdict ocean
supplies routes. Its capacity currently is 15 million metric tons per year (~300,000 barrels per
day) and capacity is expected to double by 2017, when a twin comes on stream. The second is the agreement
Rosneft, Russia's dominant producer, has with China National Petroleum Corporation to ship ~400 million
metric tons of crude over twenty-five years, and for which China has already made prepayments. Russia
shares a third with other suppliers. Saudis contracts contain destination restrictions and other
provisions that constrain their customers' ability to market the crude, whereas those of some other
suppliers do not.
Marketing flexibility will be particularly attractive to the
smaller Chinese refineries, which Chinese government has authorized to import 1 million-plus
barrels per day.
While they fight for market share in China, the Saudis also have to fight for market share in the
established, slow-growing or stagnant IEA-member markets (generally OECD member countries). Saudi
exports to these markets declined 310,000 barrels per day between 2012 and 2014, and 490,000 barrels
per day between 2012 and 2015's first three quarters. Only in Asia Oceania did Saudi export volumes
through 2015's first three quarters manage to equal 2012's export volumes. During the same period,
Iraq managed to increase its exports to Europe 340,000 barrels per day (data from IEA monthly Oil
Market Report).
It is therefore not surprising that the Saudis
moved aggressively in Europe in 4Q 2015-successfully courting traditional Russian customers in
Northern Europe and Eastern Europe and drawing complaints from Rosneft.
As with China, the competition will intensify with Iran's liberation from UN sanctions. For example,
Iran has promised to regain its pre-UN sanctions European market share-which implies an increase
in exports into the stagnant European market of 970,000 barrels per day (2011's 1.33 million barrels
per day minus 2015's 360,000 barrels per day).
Might the U.S. be an Ally?
Without unlimited crude export resources, the Saudis have had to choose in which global markets
to conduct their market share war, and therefore, implicitly, against which competitors to direct
their crude exports.
Why did the Saudis ignore the U.S. market?
First, U.S. crude does not represent a threat to the Saudis' other crude export markets.
Until late 2015, when the U.S. Congress passed, and President Obama signed, legislation lifting
the prohibition, U.S. producers, with limited exceptions, could not export crude. Even with the
prohibition lifted, it is unlikely the U.S. will become a significant competitor, given that the
U.S. is a net crude importer. Therefore, directing crude to the U.S. would not improve the Saudi
competitive position elsewhere.
Second, the U.S. oil industry is one of the least vulnerable (if not the least vulnerable)
to Saudi pressure-and therefore least likely and less quickly to crack. Low production
costs are a competitive advantage, but are not the only one and perhaps not the most important
one. Financing, technology, equipment, and skilled manpower availability is important, as are
political stability, physical security, a robust legal framework for extracting crude, attractive
economics, and access and ease of access to markets. The Saudis major export competitors-Russia,
Iran, and Iraq-are far weaker than the U.S. on all these areas, as are its minor export competitors,
including those within-Nigeria, Libya, Venezuela, and Angola-and outside OPEC-Brazil.
Third, in the U.S. market, the Saudis face tough, well-managed domestic competitors,
and a foreign competitor, Canada, that enjoys multiple advantages including proximity,
pipeline transport, and trade agreements, the Saudis do not enjoy.
Finally, the Saudis may be focused on gaining a sustainable long term advantage in
a different market than the global crude export market-the higher value added and therefore more
valuable petroleum product market. Saudi Aramco has set a target to double its global
(domestic and international) refining capacity to 10 million barrels per day by 2025. Depressed
revenues from crude will squeeze what governments have to spend on their oil industries and, presumably,
they will have to prioritize maintaining crude output over investments in refining.
In this Saudi effort, the U.S. could be an ally. The U.S. became a net petroleum product exporter
in 2012 (minus numbers in the table below indicate net exports), and net exports grew steadily through
2015. Growth continued in January, with net product exports averaging 1.802 million barrels per day,
and, in the week ending February 5, 2.046 million. U.S. exports will lessen the financial attractiveness
of investment in domestic refining capacity, both for governments and for foreign investors in their
countries' oil industries (data from EIA).
Saudi Intentions
The view that the Saudi market share strategy is focused on crushing the U.S. shale industry has
led market observers obsessively to await the EIA's weekly Wednesday petroleum status report and
Baker-Hughes weekly Friday U.S. rig count-and to react with dismay as U.S. rig count has dropped,
but production remained resilient.
In fact, they might be better served welcoming resilient U.S. production. It may be that the
Saudis will not change course until Russian output declines, Iraq's stagnates, Iran's output growth
is stunted-and that receding output from weaker countries within and outside OPEC would not be enough.
If this is case, the Saudis will see resilient U.S. production as increasing pressure on their competitors
and bringing forward the day when they can contemplate moderating their output.
NOTE: Nothing in the foregoing analysis should be understood as denying that the U.S. oil
industry has suffered intensely or asserting that this strategy, if it is Saudi strategy, will succeed.
Conventional wisdom has it that the Saudis are focused primarily on crushing the U.S.
shale industry.
Article LAST words: NOTE: Nothing in the foregoing analysis should be understood
as denying that …. IF IT IS Saudi strategy.
Does anyone with their head screwed on believe this Conventional Wisdom nonsense?
Let me give you three examples:
Isn't Saudi Arabia going into war? Where will the money come from? In a war, Saudi Arabia will
go broke before US shale.
Second: Saudi Arabia Per Capita Income:
Despite possessing the largest petroleum reserves in the world, per capita income dropped from
approximately $18,000 at the height of the oil boom (1981) to $7,000 in 2001, according to one
estimate.As of 2013, per capita income in Saudi was "a fraction of that of smaller
Persian Gulf neighbors", even less than petroleum-poor Bahrain.
The Saudi's remain committed to "helping" the US squeeze Russia at the expense of our own shale
industry, Canadian tar sands and bankrupting Venezuela and Brazil. When prices get low enough,
the Four Horseman of the Big Oil (Exxon, BP, Dutch Shell and ARAMCO) will swoop in and buy it
up, for a fraction of what it is worth.
It's just another power play to squeeze the smaller producers out of the market. When they are
finished, oil will go back up and they will make gazillions more. It's been used over and over
again for a hundred plus years.
Big fish eat small fish...same as it ever was.
Faeriedust
The Saudis are dealing with a domestic budget crisis created by the new king (and most especially
his Defense Minister son)'s attempts to impose regional hegemony in the Middle East. They are
attempting to move from the "soft power" of deep pockets to "hard power" of direct control over
formerly independent regions, in order to provide colonial positions and the opportunity for advancement
to their disaffected poor. It will not end well, and the complete collapse of the Kingdom is a
distinct possibility. But of course, they're not going to admit that anywhere it might see print.
"... Since his appointment, there has been a genuine effort in the field of PR. the goal is to create
for him an image of a politician of an international stature. He seeks to become the counterpart, if
not the equal of the great western powers. ..."
"... It is important to be opportunistic at this level and not to alienate the fringe wahhabi elements
of Saudi Arabia is of paramount importance. A little interaction with the West it OK, too much of interactions
with the West, this is detrimental to his image and his credibility. Therefore he tries to advance his
goal, while at the same time trying not to offend nobody. It is, after all, a dive of discovery in the
international political universe. ..."
"... Regardless of his background, he needs to prove that he matters, that he is a hardliner, that
he is a good minister of Defence, and that that he is anti-shiite, he is a man capable of confronting
Iran. At the same time, he needs to satisfy needs of Saudi population which is increasingly flocks to
jihadism. ..."
"... It is necessary to remove the ground under the feet of those who believe that the monarchy
has for too long been moderate, particularly during the reign of the former king Abdallah. It is this
desire to build his leadership, which leads to the direct confrontation with the shia, including such
political decisions as the execution of the leader of shiite Nimr al-Nimr, and the increased tension
with Iran. Finally, it also represents a reaction of the Saudi monarchy, which was disappointed by the
United States. He would like to stop normalization of Iranian-American relations, because in the event
of a confrontation with Iran, the Saudis would find themselves in a difficult position without 100%
US support. ..."
"... Prince Mohammed bin Salman tenure as the head of the armed forces can be characterized as a
failure. In Yemen, there has been a stalemate ..."
"... Moreover, where he was able to displaced the allies of Iran, the radicals from Al Qaeda and
DAESH took the control of those area. Iran became firmly positioned at the southern gateway to Saudi
Arabia. It is anything but a success. ..."
"... Nevertheless, he was applauded because he stood up and responded, tried to stop to Iran. He
responded to the Iran thereat, but has not managed to achieve his goals, which was expected of him.
However, in the eyes of the Saudis, a manly reaction that tha fact that has the the will to challenge
to the hegemony of Iran in the region was positive steps. ..."
"... In addition, Mohammed bin Salman has a revenge in mind: in 2009, the houthis crossed the Saudi
border, and despite the superiority of Saudis weaponry, the Saudi troops were able to repel that offence
only after 3 months of fighting which left 130 soldiers dead. ..."
"... It is perceived as dangerous because of the war, reckless and ineffective in Yemen as well
as its strategy of tension vis-à-vis Iran. Moreover, for the Germans, Iran is a huge market. They have
relied heavily on Iran in recent years, in the logical continuation of the long tradition of trade between
the two countries. Dont forget that it is a country that lives from exports, and that it is therefore
very important for the Germans to arrive at an agreement with Iran. Moreover, Germany is a country whose
strategy is intimately linked to that of the United States and totally dependent on NATO due to the
fact that it is forbidden to have an army of its own. Germany knows that if it was a direct confrontation
between Saudi Arabia and Iran, it would be required to be supportive of Saudi Arabia – regardless of
the efforts by Barack Obama to move closer to Iran. ..."
"... the strategy of the prince Mohammed Bin Salman is to push Iran to the fault in causing the
tensions that can go up to a risk of open warfare that would force the west to choose Saudi Arabia against
Iran ..."
"... The Prince Mohammed bin Salman is now the most powerful man in Saudi Arabia. It has exclusive
access to his father, King Salman, and effectivly he can rule the coutries inread of him. He is head
of his office, which means that nobody can contact or be received by the King without going through
the son ..."
"... Saudi Arabia is extremely disturbed by the detente with Iran on the international scene. We
are witnessing more or less a reversal of alliances, and of countries images in the eyes of the West.
A short time ago, Iran was demonized in the West. Today, it is accepted as a normal partner. Iran, therefore,
benefits from a relatively favorable treatment, while at the same time when the Arab monarchies, particularly
Saudi Arabia, are seen as retrograde, unable to provide for reforms and creating the flow of Islamic
radicals... The nature of Hezbollah, interference military and terrorists of Iran is currently forgotten.
..."
"... I think it will be very difficult to see any reapprochement with Iran in the coming months
as Saudi Arabia has two hardliners in the young rising generation of leaders. The heir and the vice-inherit
the Kingdom share the same radical line toward Iran. ..."
"... Moreover, Saudi Arabia pays very dear to his strategy of crushing oil prices, which makes it
less able to buy social peace than before. Therefore, there is an internal demand of radicalism, because
the discontent rumbles in the parts of the Saudi population fueled by the effects of the falling oil
prices. ..."
"... If one wanted to summaries, we could say that to buy a peace with Islamist Wahhabi radicals,
it is necessary to kill shia... besides, the Saudis have a genuine complex of encirclement by the Shiite
states. They try to counter it by creating an opposite ark of Sunni radicals. ..."
"... even if this does not lead to open warfare, the tension between Saudi Arabia and Iran is sustainable,
if only because this new generation of Saudis leaders is more combative. They differ from the former
kings who belonged to a generation that was distinguished rather by its search for a compromise and
some consensus. This is absolutely not the case for those two heirs of the throne. ..."
Atlantico : While today Saudi Arabia play the central role in the conflicts around the Middle
East which are worried the whole world. What do we know bout young chief of the armed forces of Saudi
Arabia ?
Antoine Basbous : His position is more precarious than the last year, and it looks like
he is trying to double cross his cousin crown prince.
He tries to use the advantage of the presence of his father on the throne to become a direct successor.
It is an assumption that is pretty crazy since theoretically, Mohammed bin Salman does
not belong to the chain of the succession because of his position in the family. In addition, it
is clearly lacking experience and legitimacy, compared to its brothers and cousins, but also to public
opinion.
He is someone of impulsive, short-tempered, as we already observed in the past. He behaves somewhat
like like his father when he was young. Previously, when he was less in the spotlight, he could afford
some mistakes. But since his appointment to the ministry of defense, he embodies the virile answer
of the kingdom to the set of challenges from Iran. Now, he certainly has placed contracts with firms
of communication that has allowed him to acquire the elements of language needed to smooth impression
about himself. They also help him to appear on major foreign media : recently, he appeared in the
journal The Economist. Since his appointment, there has been a genuine effort in the field of
PR. the goal is to create for him an image of a politician of an international stature. He seeks
to become the counterpart, if not the equal of the great western powers.
It is important to be opportunistic at this level and not to alienate the fringe wahhabi elements
of Saudi Arabia is of paramount importance. A little interaction with the West it OK, too much of
interactions with the West, this is detrimental to his image and his credibility. Therefore he tries
to advance his goal, while at the same time trying not to offend nobody. It is, after all, a dive
of discovery in the international political universe.
Inside, however, his authority comes from his status of the son to the King to whom his father
is listening a lot. In one year, it has greatly expanded its power. It controls not only the military,
budgets but also key sectors of the economy. It has separated the' ARAMCO (the biggest oil company
in the world) from the ministry of oil. This dramatically increases his economic power. In addition,
the minister of oil shall soon leave the position, and should be replaced by his half-brother. Mohammed
bin Salman leaves him a ministry deprived of any substance.
For his education, we know that he has studied the Law in Saudi Arabia, but has not, to my knowledge,
pursued follow-up studies in the West. Currently, he oversees the operations of the Coalition in
Yemen, together with his cousin prince Mohammed bin Nayef, the Interior minister and deputy crown
prince. So far, they are not in rivalry, on the contrary: as the minister of the Interior had no
sons, he might appoint Mohammed bin Salman to be a crown prince since their age gap is 21 years.
Moreover, the two men appear together on the front.
Alexander del Valle : Regardless of his background, he needs to prove that he matters,
that he is a hardliner, that he is a good minister of Defence, and that that he is anti-shiite, he
is a man capable of confronting Iran. At the same time, he needs to satisfy needs of Saudi population
which is increasingly flocks to jihadism. To consolidate its legitimacy, it is obliged to give
grain to grind to the islamists because a large part of the Saudi society is seduced by the dream
of Daech. It is also in a logic of competition with her uncle, who is the current heir of the thone,
as well as with the other princes. It is necessary to remove the ground under the feet of those
who believe that the monarchy has for too long been moderate, particularly during the reign of the
former king Abdallah. It is this desire to build his leadership, which leads to the direct confrontation
with the shia, including such political decisions as the execution of the leader of shiite Nimr al-Nimr,
and the increased tension with Iran. Finally, it also represents a reaction of the Saudi monarchy,
which was disappointed by the United States. He would like to stop normalization of Iranian-American
relations, because in the event of a confrontation with Iran, the Saudis would find themselves in
a difficult position without 100% US support.
Why his actions caused the concerns of the German intelligence services ? What assessment can
we make of year tenure at the head of the armed forces of Saudi Arabia ?
Antoine Basbous : It is important to understand the origins of this report. It is not excluded
that it comes from someone with an interest to harm the image of the Kingdom or of the Prince.
Prince Mohammed bin Salman tenure as the head of the armed forces can be characterized as a failure.
In Yemen, there has been a stalemate. The conflict began in April. We are in January. Nine months
later, despite the multiple bombardments, all of the money spent, the control of the Yemen government
from Ryad remains illusive... He has not managed to clean, to conquer and to install a protected
area. Moreover, where he was able to displaced the allies of Iran, the radicals from Al Qaeda
and DAESH took the control of those area. Iran became firmly positioned at the southern gateway to
Saudi Arabia. It is anything but a success.
Nevertheless, he was applauded because he stood up and responded, tried to stop to Iran. He
responded to the Iran thereat, but has not managed to achieve his goals, which was expected of him.
However, in the eyes of the Saudis, a "manly" reaction that tha fact that has the the will to challenge
to the hegemony of Iran in the region was positive steps. Iran has claimed control of four Arab
capitals. Hassan Rohani has announced the training of 200 000 militia in the five nations in their
neighborhood. A reaction of Saudi Arabia, in the light of these elements, is not unexpected or abnormal.
However, the latter has been slow to arrive and is not manifested in the most timely, the most intelligent
or the most effective.
However, this operation was his baptism of fire. Prior to the commencement thereof, the Prince
was suffering from a bad press. This conflict, it was his moment of truth so to speak. It should
be judged on its ability to generate a "surge" of military and diplomatic activities in the region,
so that Saudi Arabia free itself the control of the Us administration, and that the country acquires
a greater autonomy. The fact that Barack Obama has approved the nuclear deal with Iran has been perceived
as a lesson for the Turks and the Saudis. In addition, Mohammed bin Salman has a revenge in mind:
in 2009, the houthis crossed the Saudi border, and despite the superiority of Saudis weaponry, the
Saudi troops were able to repel that offence only after 3 months of fighting which left 130 soldiers
dead.
Alexander del Valle : It is perceived as dangerous because of the war, reckless and
ineffective in Yemen as well as its strategy of tension vis-à-vis Iran. Moreover, for the Germans,
Iran is a huge market. They have relied heavily on Iran in recent years, in the logical continuation
of the long tradition of trade between the two countries. Don't forget that it is a country that
lives from exports, and that it is therefore very important for the Germans to arrive at an agreement
with Iran. Moreover, Germany is a country whose strategy is intimately linked to that of the United
States and totally dependent on NATO due to the fact that it is forbidden to have an army of its
own. Germany knows that if it was a direct confrontation between Saudi Arabia and Iran, it would
be required to be supportive of Saudi Arabia – regardless of the efforts by Barack Obama to move
closer to Iran.
In fact, since the Covenant of Quincy, Saudi Arabia is bound by a close alliance with the United
States and through this with the western countries. Thus, the strategy of the prince Mohammed
Bin Salman is to push Iran to the fault in causing the tensions that can go up to a risk
of open warfare that would force the west to choose Saudi Arabia against Iran. This tactic is
based on the alliance of ultra-strategic-Pact of Quincy, which was renewed in 2006 by George W. Bush
and still valid today that fact that in any conflict, as soon as Saudi Arabia is struggling with
a rival in the region, the United States should support it. This looks like what Erdogan doing shoot
down a Russian plane. It was to prevent a warming of relations between the Russians and the Americans.
What are the limits of his influence in Saudi Arabia ? In what extent his role as the Minister
of Defence is decisive for his own future in the kingdom ?
Antoine Basbous :The Prince Mohammed bin Salman is now the most powerful man in Saudi
Arabia. It has exclusive access to his father, King Salman, and effectivly he can rule the coutries
inread of him. He is head of his office, which means that nobody can contact or be received by the
King without going through the son. He also can say to anyone inside as well as abroad, "This
is the will of the King". So he has phenomenal power, and does not suffer from the luch of desire
to exercise it. As to whether his role as Defence minister, is decisive for his own future, it is
obvious. If he succeeds in this position and it shows the virility of the military success, this
can strengthen its position. On the other hand, if this gets stuck into yeme war quadmire, if the
failures multiply, it is not excluded that this will ruin completely his chances of succeeding his
father. In a situation like this, He might well became a falling star. It is vital that he achive
a good results in the war on the ground, although in a majority of arab countries, the people is
not necessarily looking very attentively at the quality of governance.
What is the analysis of personality of this key figure and the balance sheet of his first year as
the Defense minister can say about the position of Saudi Arabia on the international scene in the
comong months ? What will be developments in the relations of Saudis and Iran ?
Antoine Basbous
:Saudi Arabia is extremely disturbed by the detente with Iran on the international scene.
We are witnessing more or less a reversal of alliances, and of countries images in the eyes of the
West. A short time ago, Iran was demonized in the West. Today, it is accepted as a normal partner.
Iran, therefore, benefits from a relatively favorable treatment, while at the same time when the
Arab monarchies, particularly Saudi Arabia, are seen as retrograde, unable to provide for reforms
and creating the flow of Islamic radicals... The nature of Hezbollah, interference military and terrorists
of Iran is currently forgotten.
Mohammed bin Salman is still an "emerging" politician, politician in the course of "on the job"
training. But despite of that he is exercising functions that are extremely strategic, and he must
demonstrate whether he can adapt to situations to which the country is facing.
Alexander del Valle : I think it will be very difficult to see any reapprochement with
Iran in the coming months as Saudi Arabia has two "hardliners" in the young rising generation of
leaders. The heir and the vice-inherit the Kingdom share the same radical line toward Iran.
Moreover, Saudi Arabia pays very dear to his strategy of crushing oil prices, which makes
it less able to buy social peace than before. Therefore, there is an internal demand of radicalism,
because the discontent rumbles in the parts of the Saudi population fueled by the effects of the
falling oil prices. An increase of sympathy for jihadism can be felt with those segments of
the population. So even if the prince Mohammed bin Salman and prince Mohammed ben Nayef – heir to
the throne and minister of the Interior - were moderate, they would be obliged to give pledges to
their people, who account for more of the "appeasers of Shiites". If one wanted to summaries,
we could say that to buy a peace with Islamist Wahhabi radicals, it is necessary to kill shia...
besides, the Saudis have a genuine complex of encirclement by the Shiite states. They try to counter
it by creating an opposite ark of Sunni radicals.
I thus do not see how there could be a rapprochement with Iran. Or it can be only via the pressure
of the United States, as was the case between Greece and Turkey in the past. Therefore, even
if this does not lead to open warfare, the tension between Saudi Arabia and Iran is sustainable,
if only because this new generation of Saudis leaders is more combative. They differ from the former
kings who belonged to a generation that was distinguished rather by its search for a compromise and
some consensus. This is absolutely not the case for those two heirs of the throne.
"... Venezuelas oil minister Eulogio Del Pino, who was on a tour of oil producers to lobby for action to prop up prices, said his meeting with Naimi was productive. ..."
NEW YORK (Reuters) - Oil prices were down 2 percent on Monday
as supply overhang concerns grew after a Saudi-Venezuela meeting at the weekend showed few signs
of coordination to boost prices.
No tangible signs emerged from a meeting on Sunday between
Saudi Arabia's oil minister Ali al-Naimi and his Venezuelan counterpart that OPEC and non-OPEC suppliers
were ready to meet to discuss the price slump.
After a flurry of diplomacy over the last two weeks about
a possible production cut roiled oil markets, Sunday's meeting between cash-strapped Venezuela and
the kingpin of the Organization of the Petroleum Exporting Countries was seen as "make or break"
for a possible deal to boost prices that have slumped 70 percent since mid-2014.
Venezuela's oil minister Eulogio Del Pino, who was on a tour
of oil producers to lobby for action to prop up prices, said his meeting with Naimi was "productive."
"But does 'productive' mean less production? The market thinks
not, at least right now," said Phil Flynn, an analyst at Price Futures Group in Chicago.
"... It could be that KSA production is about to fall off a cliff, so to speak. It's hard to know what to think but given KSA's strange, and perhaps desperate, geopolitical and geoeconomics maneuvers as of late it seems likely that something is afoot. They've been playing a lot of silly little games the last 18 months or so. It causes me great suspicion. ..."
I found this old article when I was reminiscing and google searching some old stories about wikileaks
and KSA's overstated oil reserves. I believe the wikileaks cable mentioned KSA overstated oil
reserves by 300 billion barrels. I believe KSA is now owning to having less less than 300 billion
barrels in proven oil reserves these days.
It could be that KSA production is about to fall off a cliff, so to speak. It's hard to know
what to think but given KSA's strange, and perhaps desperate, geopolitical and geoeconomics maneuvers
as of late it seems likely that something is afoot. They've been playing a lot of silly little
games the last 18 months or so. It causes me great suspicion.
1. We are not going to produce oil for which
we have no orders. That verbiage was from them at $110/b.
Think carefully about that today, because it has to still be true.
2. We are not going to lose market share.
To whom? They have said they don't compete with shale. They don't. They don't produce light
oil. They don't sell to the same refineries. So how would they lose market share? By having a
producer of their weight/type oil undercut their price. They have to match a competitor price.
If Urals gets priced at $30/b then so must theirs, regardless of who asked for how much.
(Giving rise again to that sticky question of who is placing orders for oil they can't sell
or burn)
"Asiri's announcement came shortly after Russia said it suspects Turkey of planning a military
invasion of Syria. Ministry spokesman Maj. Gen. Igor Konashenkov said Thursday in a statement
that the Russian military has registered "a growing number of signs of hidden preparation of the
Turkish armed forces for active actions on the territory of Syria.""
Who has ongoing military operations in Syria?
1. Syria
2. ISIS
3. IRAN
4. NATO (US, EU)
5. TURKEY (NATO, but for a non-NATO agenda)
5. KSA?
All we need is China to join in, to make it an official global war ( contained inside of one
small third world nation for the moment)
In general, Russia, Iran and Assad are winning. They are about to wipe out the rebels holding
Aleppo. That would effectively eliminate anyone for the US to support.
It also would pretty
solidly assure that no GAZPROM challenging pipeline of Qatar gas to Europe is going to happen.
How the heck is Saudi going to get troops into Syria? No shared border there. Through Iraq? Can't
see that happening because Iraq is aligned with Iran. Through Israel? Bwahahahaahahahahaha! Through
Jordan? Eh, well I guess that might work. Reasonably short supply lines too.
Well, let's get
this party really rockin' and rollin'! C'mon everybody! Let's do the twist!
Saudi Arabia won't let the plunge in oil prices derail a regional agenda that includes waging
war in Yemen and funding allies in Syria and Egypt, Foreign Minister Adel al-Jubeir said in an
interview.
"Our foreign policy is based on national security interests," al-Jubeir said on Thursday at the
Ministry of Foreign Affairs headquarters in the kingdom's capital, Riyadh. "We will not let our
foreign policy be determined by the price of oil."
The bankruptcy of the corrupt, medieval, bigot, terrorist exporting regime of Saudi Arabia would
be one of the few positive things of continuing low oil prices.
Saudi troops are going to get their ass kicked so hard. It's going to be pathetic. Saudis are
soft. Their leadership is incompetent. Their army has never seen battle on any reasonable scale.
I don't know whether to laugh at the very idea of Saudi troops fighting in Syria or cry for the
poor buggers that are gonna be turned into buzzard feed.
"... The question is whether 56 year old Crown Prince Mohammed bin Nayef (King Salman's nephew) or 30 year old Deputy Crown Prince Mohammed bin Salman (King Salman's son), or someone else, will succeed King Salman. ..."
"... King Salman, the deputy crown prince has shifted into high gear as the kingdom's minister of defense, economic czar and ultimate boss of Aramco, the national oil company that bankrolls the kingdom. Not since the 1960s has a prince his age held such power. . . . ..."
"... Some of Mohammed bin Salman's uncles and cousins insist that the senior members of the family are organizing to meet with the king in the "near future" to ask him to restrain or remove his son. ..."
"... "Is he a prince? A businessman? Or a politician?" asks one of the king's octogenarian half brothers. "I don't know when this play will end. Government is not theater. King Salman needs to open his heart and his mind to his brothers." ..."
Karen Elliott House, author of "On Saudi Arabia," has an Op-Ed in the WSJ in regard to the question
of succession in Saudi Arabia.
The question is whether 56 year old Crown Prince Mohammed bin Nayef (King Salman's nephew)
or 30 year old Deputy Crown Prince Mohammed bin Salman (King Salman's son), or someone else, will
succeed King Salman. An excerpt from the Op-Ed, "Some of Mohammed bin Salman's uncles and cousins
insist that the senior members of the family are organizing to meet with the king in the "near
future" to ask him to restrain or remove his son."
Inside the Turmoil of Change in the House of Saud
As oil prices drop and external threats mount, a 30-year-old crown prince is suddenly ascendant.
Can an audacious young prince make his tradition-bound family bow to his will and force
his somnolent society to wake up? With the sweeping powers recently bestowed on 30-year-old
Saudi Deputy Crown Prince Mohammed bin Salman, the Saudi royal family, its 30 million subjects
and the outside world may soon find out.
For the past two decades Saudi Arabia's geriatric rulers have steered the kingdom at a glacial
pace as if it were an antique car. Given the wheel last year by his father, King Salman, the
deputy crown prince has shifted into high gear as the kingdom's minister of defense, economic
czar and ultimate boss of Aramco, the national oil company that bankrolls the kingdom. Not
since the 1960s has a prince his age held such power. . . .
Prince Mohammed bin Salman, a risk-taker, has rallied much of the country behind him by
acting decisively-without deferring to the U.S.-to sever diplomatic ties with Tehran and confront
Iranian meddling in Yemen and Syria, to pursue a new 34-nation Islamic coalition against terrorism,
and to meet a parade of world leaders, including Russia's Vladimir Putin and China's Xi Jinping,
to show Washington that Riyadh has options.
As a result, there is a palpable air of anticipation in the kingdom. A growing number of
Saudis believe that the deputy crown prince will leapfrog his older cousin, 56-year-old Crown
Prince Mohammed bin Nayef, to succeed the 80-year-old King Salman. To these Saudis, especially
the younger generations, the youthful prince, with his energy and activism, is a leader whose
time has come. Some 70% of Saudis are the deputy crown prince's age or younger. To others,
including many in the royal family, he is a whirlwind about to wreak havoc in the kingdom and
create more chaos in the region. . . .
Yet some in the royal family believe this king and his son are bent on excluding the
bulk of the 7,000-member family in favor of only one line. Since 1953, the throne has passed
from brother to brother largely by seniority among the 36 sons of the founder Abdulaziz ibn
Saud. Some of Mohammed bin Salman's uncles and cousins insist that the senior members of the
family are organizing to meet with the king in the "near future" to ask him to restrain or
remove his son.
"Is he a prince? A businessman? Or a politician?" asks one of the king's octogenarian half
brothers. "I don't know when this play will end. Government is not theater. King Salman needs
to open his heart and his mind to his brothers."
"... The media puts forth a continuous stream of completely unadulterated crap to its readership. Saudi Arabia is not going to spend $175 billion per year to put out of business producers that produce an entirely different product, and which sells to an entirely different market. LTO is as much like Saudi crude as Shetland Ponies are to an Arabian race horses. The similarities stop at horse. ..."
"... LTO is a very light hydrocarbon that is used as a diluent, and feed stock. Its API is 45. It is used to thin heavier hydrocarbons like Canadian bitumen to allow it to be transported by pipe. It is used as a feedstock to make hundreds of different products from paint to plastic pipe. ..."
"... Saudis light sweet crude has an API 45, and the heavier ones, API 40, deliver entirely different products as show in the graph below: ..."
"... Goldman Sachs is an unscrupulous pack of thieves who have no qualms about lying to their clients, or the public if it serves their purposes. They, and others in the shale financing business will continue to push the Saudi/ US LTO myth for as long as they can find investors that are credulous enough to believe them. ..."
"... Some see only what they want to see. Others see the whole forest. Bloomberg and Goldman are both habitual liars and thieves. Goldman says it and Bloomberg backs it up, as if either have any credibility left. ..."
"... Short has it correct. All you see in the US MSM is bullshit in ever higher and smellier piles. As we approach the end, the cries will be louder, shriller and continuous. Wait and see. ..."
"A deal is not only "highly unlikely," in the estimation of Goldman Sachs, but "self-defeating"
for the Saudis. By cutting production now and boosting prices, Saudi Arabia would effectively
bail out U.S. shale producers just as the Saudi strategy of keeping prices low to squeeze them
out of the market is beginning to work, Goldman's Jeff Currie argues."
The media puts forth a continuous stream of completely unadulterated crap to its readership.
Saudi Arabia is not going to spend $175 billion per year to put out of business producers that
produce an entirely different product, and which sells to an entirely different market. LTO is
as much like Saudi crude as Shetland Ponies are to an Arabian race horses. The similarities stop
at horse.
LTO is a very light hydrocarbon that is used as a diluent, and feed stock. Its API is >
45. It is used to thin heavier hydrocarbons like Canadian bitumen to allow it to be transported
by pipe. It is used as a feedstock to make hundreds of different products from paint to plastic
pipe.
Saudi's light sweet crude has an API 45, and the heavier ones, API < 40, deliver entirely
different products as show in the graph below:
Saudi's light sweet crude, and LTO are entirely different products that sell to entirely different
markets. Saudi's crude is no competition to LTO and LTO is no competition for Saudi's crude.
Goldman Sachs is an unscrupulous pack of thieves who have no qualms about lying to their
clients, or the public if it serves their purposes. They, and others in the shale financing business
will continue to push the Saudi/ US LTO myth for as long as they can find investors that are credulous
enough to believe them.
makati1 on Thu, 4th Feb 2016 7:59 pm
Some see only what they want to see. Others see the whole forest. Bloomberg and Goldman
are both habitual liars and thieves. Goldman says it and Bloomberg backs it up, as if either have
any credibility left.
Short has it correct. All you see in the US MSM is bullshit in ever higher and smellier
piles. As we approach the end, the cries will be louder, shriller and continuous. Wait and see.
"... Saudi Arabia won't let the plunge in oil prices derail a regional agenda that includes waging war in Yemen and funding allies in Syria and Egypt, Foreign Minister Adel al-Jubeir said in an interview. ..."
Saudi Arabia won't let the plunge in oil prices derail a regional agenda that includes waging
war in Yemen and funding allies in Syria and Egypt, Foreign Minister Adel al-Jubeir said in an
interview.
"Our foreign policy is based on national security interests," al-Jubeir said on Thursday at the
Ministry of Foreign Affairs headquarters in the kingdom's capital, Riyadh. "We will not let our
foreign policy be determined by the price of oil."
The bankruptcy of the corrupt, medieval, bigot, terrorist exporting regime of Saudi Arabia would
be one of the few positive things of continuing low oil prices.
The Middle Eastern OPEC countries that aren't already up in smoke are tinderboxes, and Saudi
Arabia's King Salman has just reached for the matches. His government ushered in the new year by
beheading a top Shia dissident cleric. It was a calculated goading by the Sunni monarchy,
triggering protests and the trashing of the Saudi embassy in Iran.
Those of us who remember the "Tanker War" in the '80s, when Iranian and Iraqi jets chased each
other's oil tankers up and down the Gulf firing missiles at them, know how things can escalate.
Kuwait found this out the following decade when Iraq accused it of slant drilling under the fence
and helping itself to Iraqi oil. Kuwait was invaded and all its oil wells were deliberately
torched.
All Gulf OPEC members have tense border disputes with at least one neighbor, so offshore
islands and oil platforms in the region bristle with radar and missiles. Iran regularly threatens
to close the Strait of Hormuz to shipping, as Sunni and Shia conflicts smolder on Saudi borders
to the north, east and south.
On these governments – and on the accuracy of Saudi gunners in shooting down incoming missiles
fired at oil installations by Iranian-backed rebels in Yemen – depend the fortunes of Albertan
drillers. Aside from the short-term economic weapon of cheap oil, the Saudi kingdom also has a
medium-term weapon in its economic arsenal – the sun. During peak seasonal power demand, as much
as 700,000 bpd of crude burn in Saudi power stations. Of its planned 41 gigawatts of solar power
capacity, the kingdom's only built small plants so far. But it only takes two years to build a
solar farm, releasing more oil for export. Even launching the first phase of this project would
impact oil prices.
The kingdom has another powerful motive to do this: money. The World Bank estimates Saudi
Arabia spends 10 percent of its GDP on energy subsidies, or about $80 billion a year. These are
subsidies that it is now having to cut, risking social unrest. Wars cost money. The IMF says the
kingdom's estimated $640 billion in foreign reserves will run out in five years at this rate. But
Riyadh thinks it has greater stamina than Iran and its ally Russia, whose oil dollars buy weapons
for Saudi enemies. The country warily eyes Iran's unleashing of 500,000 bpd onto a post-sanctions
market.
The Saudi kingdom needs lower oil prices now, to squeeze Iran's depleted coffers tighter and
faster, which it hopes will also strangle North American producers.
Washington, Riyadh, Tehran … no one mentions Ottawa, despite Canada being a top oil exporter.
Accessing only one market and having no effective national strategy to get our crude to tideline,
Canada can do little to influence global energy politics. To find out when the sun will once
again rise over the oil sands, face east – and look all the way to the Arabian Gulf.
"... Thanks to a great post from John Kemp from Reuters we now know who is behind the magically higher imports starting in 2015 and that continues. This incremental 500,000 barrels per day of imports has been the primary reason for why the U.S. market remains imbalanced (although not nearly as much as what is portrayed in media). ..."
"... The motives for Saudi Arabia's oil market strategies today – whether for vengeance, ego, politics or irrationality – cannot be known for sure. But it surely was not economics, given the price drop in 2015. A 50 percent drop in price on 9 million barrels per day (mb/d) was not made up by a 500,000 bpd [exports] increase. ..."
"... I should also note that almost all of the Saudi production ramp up in 2015 went to fuel this surge. We should recall a U.S. State Department visit to Saudi Arabia in late summer 2014 when all of this started, as the dollar rose and Russia Ruble imploded. In light of the recent EPA methane crack down and tax levy on U.S. wells, one has to wonder how much of a coincidence all this is, as there is clearly a war on fossil energy as the global warming agenda ramps up. ..."
The so-called experts know this yet they continue to cloud the issue with ideologically based
biased spin.
Thanks to a great post from John Kemp from Reuters we now know who is behind the magically
higher imports starting in 2015 and that continues. This incremental 500,000 barrels per day of imports
has been the primary reason for why the U.S. market remains imbalanced (although not nearly as much
as what is portrayed in media).
The motives for
Saudi Arabia's oil market strategies today – whether for vengeance, ego, politics or irrationality
– cannot be known for sure. But it surely was not economics, given the price drop in 2015. A 50 percent
drop in price on 9 million barrels per day (mb/d) was not made up by a 500,000 bpd [exports] increase.
I should also note that almost all of the Saudi production ramp up in 2015 went to fuel this
surge. We should recall a U.S. State Department visit to Saudi Arabia in late summer 2014 when all
of this started, as the dollar rose and Russia Ruble imploded. In light of the recent EPA methane
crack down and tax levy on U.S. wells, one has to wonder how much of a coincidence all this is, as
there is clearly a war on fossil energy as the global warming agenda ramps up.
By reducing oil prices, Saudi Arabia is waging a secret war against Russia and Iran, according to
political analyst Bassam Tahhan.
In
an
interview with RT , political analyst Bassam Tahhan said that Saudi Arabia and the other countries
of the Gulf Cooperation Council are trying to force down oil prices in order to harm Iran and a number
of other oil-producing countries, including Russia.
"A secret war is being waged by
Saudi Arabia and Gulf Cooperation Council states which are slashing oil prices so as to strangle
Iran, Russia, Algeria and Venezuela, as well as the entire 'anti-American' axis created by these
countries," Tahhan said.
He explained that all those countries had refused to adhere to Washington's demands with regard
to
Ukraine , Syria and
Yemen .
According to Tahhan, the oil spat between Riyadh and Tehran is unlikely to lead to a war, given
Iran's military potential and the sheer territory of the country.
What's more, he said, Saudi Arabia will fail to prod the UN or the West to issue a resolution
to condemn Iran and authorize invasion of the country.
Rather, Saudi Arabia itself may be attacked by Iran's allies, such as Yemen, a scenario that Tahhan
said may see Saudi oil fields destroyed and oil prices rise.
At the same time, he noted that
the United States is unlikely to say "no" to the war between Saudi Arabia and Iran, because Washington
could supply arms to both parties to the conflict.
Earlier this month, international business analyst
Ralph Winnie told Sputnik that Saudi Arabia has dropped its oil prices to try and wreck the Iranian
economy and keep Tehran's oil exports out of major European markets.
"The Saudis are looking to gain a competitive advantage: this is a response to the lifting of
Western economic sanctions on Iran , which allow the Iranians to reenter the global energy marketplace,"
he said.
His remarks came after the Saudi oil giant Aramco announced that it would cut oil prices for Europe,
apparently in preparation for Iran's resumption of oil exports to the region later this year.
He was echoed by Executive Intelligence Review senior editor
Jeff Steinberg , who said in a separate interview with Sputnik that by slashing their oil prices,
the Saudis were targeting US and Russian oil producers as well as the Iranian ones.
"... I do find this "Saudi Arabia flooding the market" narrative highly annoying when, according to the graph SA production doesn't appear to have varied as much as plus or minus a million barrels per day, while the US has increased production almost 6 mbpd and spent a small fortune doing it to boot. ..."
"... It is clear that LTO was a game-changer for the global oil market, but Saudi Arabian production undoubtedly contributed to the oil glut in 2015. That said, the US and Saudi production have been on decline since May and July 2015, respectively ..."
I do find this "Saudi Arabia flooding the market" narrative highly annoying when, according to
the graph SA production doesn't appear to have varied as much as plus or minus a million barrels
per day, while the US has increased production almost 6 mbpd and spent a small fortune doing it
to boot.
The US has increased oil production by 4.7 mb/d from 2008 average to April 2015.
Saudi Arabia has increased production by 950 kb/d between November 2014 (when OPEC decided not
to cut production) and June 2015.
It is clear that LTO was a game-changer for the global oil market, but Saudi Arabian production
undoubtedly contributed to the oil glut in 2015.
That said, the US and Saudi production have been on decline since May and July 2015, respectively
"... At the moment KSA is demonstrating just how volatile things can be for everybody in the oil production business. Once everyone is on board with quotas then some price stability can be more easily predicted. ..."
With consumption increasing and production decreasing I feel safe forecasting a price stabilization
or rise. Although Iran production will increase I don't think it'll be entirely exported. Some
will be consumed domestically to power manufacturing and agricultural production and exports.
Iraq is a wildcard. Maybe Iraqi increases will simply offset unconventional and LTO declines and
production will stay flat.
The real wildcard is OPEC. The price will go up as soon as they have
a meeting and decide it does. I feel KSA is waiting for non OPEC producers (Russia) to get on
board with agreeing to production quotas.
At the moment KSA is demonstrating just how volatile
things can be for everybody in the oil production business. Once everyone is on board with quotas
then some price stability can be more easily predicted.
EIA estimates global consumption of petroleum and other liquid fuels grew by 1.4 million b/d
in 2015, averaging 93.8 million b/d for the year. EIA expects global consumption of petroleum
and other liquid fuels to grow by 1.4 million b/d in both 2016 and 2017. Forecast real gross domestic
product (GDP) for the world weighted by oil consumption, which increased by an estimated 2.4%
in 2015, rises by 2.7% in 2016 and by 3.2% in 2017.
Consumption of petroleum and other liquid fuels in countries outside the Organization for Economic
Cooperation and Development (OECD) increased by an estimated 0.8 million b/d in 2015, considerably
lower than the 1.4 million b/d increase in 2014 mainly because of the slowdown in Eurasia, which
saw a contraction in its consumption, and to a lesser degree because of China's slightly slower
demand growth. Non-OECD consumption growth is expected to be 1.1 million b/d in both 2016 and
2017, reflecting higher growth in the Middle East and Eurasia.
OECD petroleum and other liquid fuels consumption rose by 0.6 million b/d in 2015. OECD consumption
is expected to continue rising in both 2016 and 2017 by 0.3 and 0.4 million b/d, respectively,
driven by an increase in U.S. consumption. OECD Europe demand is also expected to increase through
the forecast period, albeit at a slower pace than the 0.3 million b/d increase in 2015. U.S. consumption
is forecast to increase by 0.2 and 0.3 million b/d in 2016 and 2017, respectively. Consumption
in Japan is forecast to decline by less than 0.1 million b/d in both 2016 and 2017.
From 2008 to 2014, the U.S. added nearly 5 million barrels per day (bpd) of oil production to the
market. This lessened the U.S. need for OPEC's oil, and by 2014 OPEC's share of global oil production
had fallen slightly to 41.2 percent in 2014.
Historically OPEC - and more specifically Saudi Arabia,
which is responsible for over 30 percent of the group's oil production - has functioned as the world's
swing producer for crude oil. If the world needed more oil production, OPEC could usually bring more
barrels online. If the world needed less, some could be idled. The group often stressed the need
for a stable oil price to ensure that global supply met global demand.
Because they were losing market share - but perhaps more importantly because they saw that trend
continuing - that strategy was abandoned at their November 2014 meeting. It was then that OPEC announced
they would defend market share that was being lost due to the rise of non-OPEC production, especially
from the United States. Some have argued that OPEC had no choice but to defend market share instead
of cutting production to balance the market, but I disagree. I think Saudi Arabia pushed for a strategy
that will go down as one of the greatest mistakes in OPEC's history. It was a decision, I might add,
that 9 of the 13 OPEC members reportedly oppose.
To review, crude oil had shown signs of being oversupplied in early 2014, and by summer prices
had started to soften. By the time of their November 2014 meeting, the price had dropped from about
$100/bbl in mid-summer to ~$75/bbl. In making their decision, I think OPEC believed that oil prices
could fall somewhat below $75/bbl for a short period of time, and that would be enough to bankrupt
a lot of the shale oil companies and allow OPEC to recapture market share. Instead, the shale oil
producers slashed costs, and while some producers have gone bankrupt - and other bankruptcies are
undoubtedly on the way - shale oil production has proven to be much more resilient than the Saudis
and OPEC expected. It is declining at a much slower rate than they anticipated.
After that November 2014 meeting the Saudis were committed, and they have reiterated their strategy
at 2 subsequent meetings. To change strategies now would be to admit they had been wrong. Following
that initial meeting and the 2 subsequent meetings, oil prices have dropped to lower and lower support
levels. As a result the annual difference in the price OPEC is getting today for their crude, and
the price they were getting prior to their November 2014 meeting is over $500 billion per year for
the group.
At the time of their decision, the global markets were probably oversupplied by 1-2 million
bpd. If OPEC had merely decided to remove 2 million bpd off the world markets - only 5.5 percent
of the group's combined 2014 production - the price drop could have easily been arrested and
maintained in the $75-$85/bbl range. That would have still given them 38.9 percent of the global
crude oil market. For that matter, a production quota cut of 13 percent could have removed from
the market a volume equivalent to all of the U.S. shale oil production added between 2008 and
2014. (Whether the Saudis could have actually enforced those quotas is another matter).
WASHINGTON - When President Obama secretly authorized the Central Intelligence Agency to begin
arming Syria's embattled rebels in 2013, the spy agency knew it would have a willing partner to
help pay for the covert operation. It was the same partner the C.I.A. has relied on for decades
for money and discretion in far-off conflicts: the Kingdom of Saudi Arabia.
Since then, the C.I.A. and its Saudi counterpart have maintained an unusual arrangement for
the rebel-training mission, which the Americans have code-named Timber Sycamore. Under the deal,
current and former administration officials said, the Saudis contribute both weapons and large
sums of money, and the C.I.A takes the lead in training the rebels on AK-47 assault rifles and
tank-destroying missiles.
The support for the Syrian rebels is only the latest chapter in the decades long relationship
between the spy services of Saudi Arabia and the United States, an alliance that has endured
through the Iran-contra scandal, support for the mujahedeen against the Soviets in Afghanistan
and proxy fights in Africa. Sometimes, as in Syria, the two countries have worked in concert. In
others, Saudi Arabia has simply written checks underwriting American covert activities.
RIYADH, Saudi Arabia - Until about four months ago, Prince Mohammed bin Salman, 29, was just
another Saudi royal who dabbled in stocks and real estate.
... ... ...
The sweeping changes have thrust the young prince into power at a time when Saudi Arabia is
locked in a series of escalating conflicts aimed at defending its vision of the regional order
and holding back its chief rival, Iran. The kingdom is financially sustaining the rulers of Egypt
and Jordan and propping up the Sunni monarchy in neighboring Bahrain against a revolt by its
Shiite majority. It is also arming rebels in Syria against the Iranian-backed president, fighting
in the United States-led air campaign over Iraq and leading its own air assault on an
Iranian-backed faction in Yemen. And it is ramping up its military spending even as plunging oil
prices and growing domestic expenditures have reduced its financial reserves by $50 billion over
the last six months, to less than $700 billion.
... ... ...
... some Western diplomats, speaking on the condition of anonymity for fear of alienating the
prince and the king, say they are worried about the growing influence of the prince, with one
even calling him "rash" and "impulsive." And in interviews, at least two other princes in the
main line of the royal family made it clear that some older members of the clan have doubts as
well. Both questioned the costs and benefits of the Yemen campaign that Prince Mohammed has
spearheaded.
... ... ...
... scholars say the accumulation of so much responsibility in the hands of one branch of the
family - to say nothing of one young prince - breaks with a system of intrafamily power sharing
put in place at the founding of the modern Saudi state by King Abdul Aziz al Saud eight decades
ago. It ended decades of sometimes violent infighting and has helped preserve family unity ever
since.
... .... ....
He removed the state oil company from the oil ministry and put it under Prince Mohammed, who
was also handed control of a newly created economic policy council and the Defense Ministry.
(King Salman had been defense minister.) Prince Mohammed is also expected to take over the
National Guard from his cousin Prince Mutaib bin Abdullah, according to an aide to Prince Mutaib
and Western diplomats. The change would consolidate both forces under the Defense Ministry
but fundamentally alter the balance of power in the family.
Prince Mohammed's three older half brothers - sons of their father's first wife, Sultana Bint
Turki Al Sudairi, who died in 2011 - all have distinguished résumés and were once considered
contenders for top government roles.
Prince Sultan bin Salman al Saud, 58, a former colonel in the Saudi Air Force, is a former
astronaut who flew on the Space Shuttle Discovery in 1985 and now heads a tourism and antiquities
commission. Prince Abdulaziz bin Salman, believed to be about 55, is a deputy minister of oil who
has championed efforts to modernize the industry. Prince Faisal bin Salman, 44, holds a Ph.D. in
political science from Oxford, was a research fellow at Georgetown, founded one of Saudi Arabia's
largest investment firms, Jadwa, and serves as the governor of Medina.
Prince Mohammed, in contrast, holds a bachelor's degree in law from King Saud University in
Riyadh and has never studied outside the kingdom.
Prince Mohammed, however, is the firstborn son of the King Salman's third and most recent
wife, Fahda bint Falah bin Sultan, who worked hard to promote him as his father's successor,
according to Western diplomats who know the family, several family members and associates who
have worked for the family.
... ... ...
An official biography says vaguely that he was "self-employed" and "earned commercial
experience founding several businesses and investments." Businessmen in Riyadh say he was known
for his active trading in stocks and real estate.
"... There are well shut-ins and there will be more, but these are mostly wells with very low daily output, especially stripper wells in the U.S. ..."
"... Also note that shutting current oil production may prove more costly than producing at a loss due to high decommissioning costs and potential damage to the reservoirs. ..."
"... Investments also will not drop to zero levels even at $25-30, as there are a lot of projects at final stages of development, which will be completed with relatively modest additional investments and will be generating cash. ..."
"... http://www.cnbc.com/2015/01/12/ The article above suggests about 1.5 Mb/d of output becomes unprofitable at $40/b or less. http://www.reuters.com/article/us-oil-prices-kemp-idUSKCN0QI29320150814 The article above suggests also that under $40/b will be problematic for sustaining output. ..."
"... World liquids output will be lower than the EIA forecast for World liquids output. ..."
"... Today about 5 Mb/d of World output is from very flexible LTO projects which are pretty near the breaking point at under $30/b. If there is turmoil in the LTO plays due to lack of funding we could see a 20% drop in LTO output (1 Mb/d). ..."
"... possibly a 2 Mb/d reduction in output. ..."
"... This might be offset by a 600 kb/d increase in Iranian output, but we would be left with a 1.4 Mb/d decrease in World output. Possibly increases in the Gulf of Mexico and North Sea offset these declines partially and we are left with only a 500 kb/d decline in World output. ..."
"... In many cases the decision is made to keep producing at a loss because shutting in causes even bigger losses. What we do is avoid work overs, pump changes, or any expenses we can cut. In shoddy operations maintenance goes to hell. Some contractors are called in and told to share the pain or else. And all of this is dictated by price forecasts. Evidently producing at a loss cant go on forever. ..."
"... Thus say you think prices will stay at $25 for a year, but will increase to $50 in 2017, then you produce even if this generates a $5 loss. You do need to have the $5 to stay alive. I look at it as an investment in the future. And I bet thats the way most operators are looking at this current debacle. ..."
Euan, when we use empirical evidence from previous crashes we do need to factor in the real increase
in the cost to produce the marginal barrels. Since 1998 those marginal barrels are much more expensive.
I've also learned that oil prices don't necessarily drive all producers, they seem to be driven
by oil price forecasts. Thus the key is to see producers think that oil prices next month will
be below production cost enough to make shut in worthwhile (operators have fixed costs which don't
disappear simply because the wells were shut in).
But prices have dropped enough that shutting in for a couple of months may be worthwhile. Plus
we have Venezuela's looming problem. As long as Iran doesn't start tossing barrels into the market
we may see enough supply reductions over the next four weeks for the oil price to bottom out.
Maybe.
WTI down 7% today to $26.76. Dennis tried to make the cost of marginal barrel to me which in the
circumstances I just don't get. Its relevant when prices are rising and companies are evaluating
prospects and investments. I just don't see the relevance on the way down. Companies will sell
all they can for whatever they can get because xbbls*$20 is better than 0bbls*$20.
Oil is caught in an over-supply broad market crash vortex.
Eventually companies realize that when you are in a hole, the first rule is to stop digging.
In other words, cost matters because at a higher cost of production (say $50/b) you are losing
$25/b on every barrel you sell at $25/b. If the cost of production is $30/b, you are only losing
$5/b on each barrel produced.
The more money you lose, the less likely you are to invest more, this eventually reduces supply
due to depletion.
So yes, the cost of the marginal barrel matters. If it did not, oil would have a price of zero.
The cost of the marginal barrel is relevant only to the cost of new production. Operating costs
are the only limitation to production from existing wells. As Euan notes, oil produced at prices
above operating costs produces revenue. Shut in wells do not. This means that existing wells can
produce oil at prices far lower than those needed to justify drilling new wells. When the world
needs new oil wells, the price will rise enough to allow them to be drilled at a profit. That
price may be very high indeed.
Yes you are correct that producing wells might not get shut in, although some older wells may
not be profitable to maintain at low prices and will be shut in and producing oil fields decline
in output at an average rate of 6.5% per year if no new wells are drilled .
My point is this, very few new wells will be completed at very low oil prices and oil supply
will decrease. That is why cost matters, it affects investment in new wells.
As I said before, if the cost to produce oil is zero, then the price will be zero, otherwise
it will be a positive number which will approach the marginal cost in the long run.
The higher the cost of producing the marginal barrel, the more money one loses producing it
at any given price below the cost of production. The bigger the monetary loss the less likely
it is that more wells will be drilled.
You have a rather simplistic view on the interaction of prices, costs, investments and production.
At $35-40/bbl, the vast majority of the current global oil production remains profitable.
At $25-30/bbl, there are indeed fields in various parts of the world, where operating costs are
above those levels. But companies do not take decisions based on daily or weekly fluctuations
in oil prices.
Only after several months of oil price staying below $30/bbl operators may decide
to shut in non-economic wells. Despite headlines in the MSM with projection of $25, $20, $15 and
even $10 per barrel, none of institutions such as IEA, EIA and OPEC, investment banks, energy
consultancies and individual experts is projecting annual oil price below $30. The lowest existing
forecast is from J.P. Morgan at $31.5/bbl. The majority is in the range between $37 and $50.
Goldman
Sachs which was mentioned as forecasting $20 oil, is actually projecting $40 by mid-year as the
base case scenario. They say that under certain conditions prices may drop to $20, but only for
a short term. Ed Morse from Citigroup and Daniel Yergin from IHS have also recently said that
current prices are unsustainable and that there will be an upward correction in the second half
of the year. Not to $75, as you are or were projecting, but to $40-50, which would support all
of the current production.
There are well shut-ins and there will be more, but these are mostly wells with very low daily
output, especially stripper wells in the U.S. And that will not have significant impact on global
oil production. Also note that shutting current oil production may prove more costly than producing
at a loss due to high decommissioning costs and potential damage to the reservoirs.
Investments also will not drop to zero levels even at $25-30, as there are a lot of projects
at final stages of development, which will be completed with relatively modest additional investments
and will be generating cash.
As I have said earlier, it is important to take into account a significant cost deflation,
which lowers breakeven prices for new projects.
We have already seen this in the 80-s. In 1980 it was estimated that the most costly new projects,
such as the North Sea and Alaska, had breakeven costs at $25-30 ($70-85 in today's money). But
as prices started to decline from 1981 and dropped to $10-12 lows in summer of 1986 ($23-27 in
today's dollars), all of the new projects in the North Sea, Alaska, Canada, Mexico (Cantarel)
continued to increase output for at least 2-3 year more. This was largely due to declining costs.
Non-OPEC production started to decline only by the end of the 80-s, after several years of low
oil prices.
Non-OPEC production (mb/d) vs. oil price ($/bbl), 1970-1990
I believe that you may think that my argument is that no new wells will be drilled. It is not,
my point is that if Euan Mearns forecast for oil price is correct, oil investment is likely to
be lower.
Mearns oil price forecast is that Brent remains under $37/b until Dec 2016 with a bottom of
around $15/b and oil prices remaining under $20/b at mid year, he does not give an estimate for
an average oil price for the year, but it would be somewhere between $20/b and $37/b [maybe $29/b
(2014$) for 2016.]
Under the scenario above I would expect some wells might be temporarily abandoned because the
oil price might not cover OPEX, I would also expect that investment in new wells would be lower
than at higher oil prices, rather than zero .
Thank you for pointing out how simple minded I am.
:-)
(Although in fact I knew all that, and I agree that it is quite unlikely to be the case that
all investment in new wells will be discontinued.)
I think it equally unlikely that there will be no change in oil investment if oil prices
remain under $40/b for the first 6 months of 2016 (average oil price over those 6 months), but
I would never accuse you of such simplistic thinking.
;-)
On falling costs. Do you think the cost of the marginal barrel has fallen from about $70/b
in 2012 to $40/b in 2016 (nominal dollars)?
At one point I was estimating $75/b by years end, but I have been convinced that may be too
high. I think $50/b for an average 2016 oil price with a December level of about $65/b or higher
is reasonable, I think at average prices matching the EIA's short term outlook. World liquids output
will be lower than the EIA forecast for World liquids output.
Your powerful mind brilliantly covers a broad range of issues, many of which are too complicated
for me given my limited intellectual capabilities. But in some cases we have to consider so many
industry-specific details that a broader top down approach doesn't work properly.
You are the brilliant one, and I appreciate what you have taught me about the oil industry
which you understand far better than I.
The top down approach I use is intended to be a rough approximation, I do not have access to
enough data or the time to put together a detailed bottom up analysis of the oil industry.
Not sure how well it would work, because the EIA, IEA, and OPEC already do this and somehow
they seem to create oil supply out of nowhere to fill the oil demand they expect to see. So I
rely on a combination of Hubbert linearization and USGS estimates along with guidance from people
in the know like Fernando, Doug, Ron, Shallow sand, and AlexS to create scenarios using Webhubbletelescope's
oil shock model.
I agree 100% with your analysis, except I am a little more pessimistic about oil supply at
$40-50 per barrel than you are and believe oil prices may be a little higher than you do.
In the end you will probably be correct, I have consistently underestimated how resilient the
LTO output would be and oil supply keeps surprising me on the upside.
Perhaps the EIA's AEO 2015 with C+C output of 99 Mb/d, will even be correct, but my guess is
that will be about 25 Mb/d higher than actual C+C output in 2040, the peak will be 85 Mb/d at
most between 2020 and 2030 (probably closer to 2021 if it is that high and closer to 2030 if the
peak is only 81 Mb/d.)
Do you have an estimate of URR for C+C, I assume you believe 3400 Gb(including 600 Gb of extra
heavy oil) is too low?
Another difference between today and in the 1985 to 1990 period is that the non-OPEC output
increases were primarily coming from various mega projects which were ramping up at the time.
Today about 5 Mb/d of World output is from very flexible LTO projects which are pretty near the
breaking point at under $30/b. If there is turmoil in the LTO plays due to lack of funding we
could see a 20% drop in LTO output (1 Mb/d).
Along with decreased output elsewhere in the World
as higher cost output is reduced (maybe 500 kb/d from US stripper wells and 500 kb/d from other
high cost areas throughout the World) for possibly a 2 Mb/d reduction in output.
This might be offset by a 600 kb/d increase in Iranian output, but we would be left with a 1.4
Mb/d decrease in World output. Possibly increases in the Gulf of Mexico and North Sea offset these
declines partially and we are left with only a 500 kb/d decline in World output.
My guess is that this could happen at $50/b for an average 2016 oil price, but at $40/b it
does not happen and decline is 1 Mb/d.
"Operating costs are the only limitation to production from existing wells."
This is true when the need for current cash income is overwhelming and most oil companies are
in that position these days.
But suppose you are making only five bucks on a barrel, in net cash, at say thirty five bucks
a barrel.
If the price goes to forty, you DOUBLE your net cash income.
Anybody who can AFFORD to shut in production ought to be doing so, unless I am a complete dunce.
No industry can run in the hole forever, not even the oil industry.
Oil will go up again.
So, the question is, who has money enough in the bank to cut back now, so as to make a substantially
larger profit, later on?
The Saudi's, and maybe a couple of their good tight buddies come to mind. Is there anybody
else big enough to matter?
The Russians have an authoritarian government that will remain in power if the Putin regime
were to decide to cut production.
Euan, I went through this in the 1985-86 crash. We had dozens of field operations, each of them
was studied carefully, and I learned a lot seeing what we did, as well as the results.
As I wrote, behavior is dictated by what we see and forecast. An operator who knows opex breakdown
can segregate it into "fixed" and variable. Even fixed isn't that fixed as we expand the time
horizon. So the analysis should look at options such as contract term changes, salary cuts, dividends
suspensions, and tax cuts (that's fairly common in some countries, where the government will cut
taxes to help people stayed employed).
Thus when we look at say, the $22 opex in a faja field in Venezuela, we have to factor in what's
the actual cost reduction from shutting in, how fast can further cuts be made by cancelling contracts,
laying off people, etc.
In many cases the decision is made to keep producing at a loss because shutting in causes even
bigger losses. What we do is avoid work overs, pump changes, or any expenses we can cut. In shoddy
operations maintenance goes to hell. Some contractors are called in and told to share the pain
or else. And all of this is dictated by price forecasts. Evidently producing at a loss can't go
on forever.
Thus say you think prices will stay at $25 for a year, but will increase to $50 in 2017, then
you produce even if this generates a $5 loss. You do need to have the $5 to stay alive. I look
at it as an investment in the future. And I bet that's the way most operators are looking at this
current debacle.
"Companies will sell all they can for whatever they can get because xbbls*$20 is better than 0bbls*$20."
When you are broke, this makes sense. You eat the seed corn, and burn the furniture, last thing
before you freeze and starve to death in a mid winter famine.
But my neighbors keep hay in the barn, and beans in the silo, and beef cows in the pasture,
for sale next year, to the extent they can, when prices crash this year.
The ones who make it long term are the ones with a barn full of hay, beans in the silo, and
a pasture full of cows when prices go back up.
I have never sold a single load of logs in a down market, except a couple of times the trees
were in the way, preventing me from using that particular spot of ground as a building site.
Unfortunately, apples don't store well, which is a primary reason I have recently been switching
to cows, although mostly retired.
"... I think KSA knew they were going to peak soon so they maxed out the infill drilling and dropped the price for a year or so. Its s psychological game. In the future they might threaten to raise production to psyche the market, and maybe they will briefly, but I think this is KSAs last kick at the can and they know it. Theyll decline fast IMHO as the infill drilling has resulted in a longer plateau with a little burst up at the end but the decline rates will be steep. ..."
"... FYI the ruling clan does not think in terms of national interest. They think of their own personal/clan interest. Once theyve squeezed the land dry theyll retire to southern France and leave the mess behind. ..."
"... Interesting seasonal patterns in Saudi Arabias oil consumption. Demand usually surges during the summer as large quantities of crude and petroleum products are burnt to meet the increases in electricity consumption for air conditioning. ..."
"... Lower seasonal demand in the later part of the year allowed Saudi Arabia to increase exports of crude and refined products. It reached record-high volume of 8.9 mb/d in November. ..."
Saudi is pumping as much as it can, trying to drive the rest of em out of business. So they can
have their one last hay day, before the wells start drying up. They want to make the most of next
decade. BUT they didn't expect prices to fall THIS much. So it's a big game of chicken now.
I tend to agree. I think KSA knew they were going to peak soon so they maxed out the infill
drilling and dropped the price for a year or so. It's s psychological game. In the future they
might threaten to raise production to psyche the market, and maybe they will briefly, but I think
this is KSA's last kick at the can and they know it. They'll decline fast IMHO as the infill drilling
has resulted in a longer plateau with a little burst up at the end but the decline rates will
be steep.
FYI the ruling clan does not think in terms of 'national interest'. They think of their
own personal/clan interest. Once they've squeezed the land dry they'll retire to southern France
and leave the mess behind.
There was a study published last year predicting the OPEC peak in 2028. I haven't read the paper
but perhaps some one with academic access to petroleum engineering journals could have a glance
at it and critique it.
Interesting seasonal patterns in Saudi Arabia's oil consumption. Demand usually surges during
the summer as large quantities of crude and petroleum products are burnt to meet the increases
in electricity consumption for air conditioning.
Lower seasonal demand in the later part of the year allowed Saudi Arabia to increase exports
of crude and refined products. It reached record-high volume of 8.9 mb/d in November.
from Bloomberg:
Saudi Oil Exports at Seven-Month High as Refineries Return
Saudi Arabia, the world's largest crude exporter, shipped the most oil in seven months in
November in a sign that overseas refineries were getting prepared to put plants back on line
after seasonal maintenance.
Saudi shipments rose to 7.72 million barrels a day, the highest since April, from 7.364
million in October, according to data on the website of the Joint Organisations Data Initiative
based in Riyadh.
"This is exactly what they've been doing for the last year and a bit, whenever there is
demand for their crude they will export," Amrita Sen, chief oil market analyst at Energy Aspects
Ltd. in London, said by phone.
Refineries are usually taken off line for repairs in September and October. Refined products
exports from Saudi Arabia rose in November, to 1.18 million barrels a day from 1.09 million,
according to JODI.
Saudi Arabia crude oil and refined product exports (mb/d)
source: JODI
I am not sure what they mean, but I suppose they include total Saudi C+C+NGL output, which
was 11.5 mb/d in 2014.
If they mean only crude oil, that's too much, in my view.
I agree the Saudis will not increase output by 2 Mb/d over the next 6 years, possibly 500
kb/d as you suggest seems more likely, which would bring crude output to about 10.6 Mb/d, if
your guess is correct.
"... However, at the start of the 2000s production from the North Sea began to decline and some of the fields in Saudi Arabia had also passed their production peaks. Oil production in the USA had begun to decline in the 1970s and continued to do so until the fracking boom. The supply of oil decreased and the price rose. The price passed $50 per barrel in 2004 and finally reached $147 per barrel in 2008. ..."
"... At the same time, the USA raised oil production dramatically by 4 Mb/d by 2014 through fracking. Fracking now played the same role that North Sea production had played during the 1990s ..."
"... Crude oil production that peaked at 70 Mb/d in 2007 was down at 66.6 Mb/d by 2014 and preliminary data suggests it was 65 Mb/d in 2015. This year it should decrease by 4%, i.e. 2.6 Mb/d. Production from fracking will decrease by up to 1 Mb/d. ..."
"... Production of natural gas liquids, currently in oversupply in the USA, is dependent on natural gas production and at the moment they believe that it will increase greatly. If that does not happen then that fraction of oil supply will also fall. ..."
"... To those who believe that we can forget Peak Oil I just want to repeat again that the bulk of the worlds oil production – conventional crude oil – has already passed its peak. Unconventional oil may also have reached its peak when fracking peaked in 2015. The next few years will reveal the truth. ..."
"... From 1999 it took 4 years to go from drowning in oil to the end of the Oil Age. ..."
But there is still another factor that caused the oil flood in 1999. That is the dramatic increase
in production from the North Sea. However, at the start of the 2000s production from the North
Sea began to decline and some of the fields in Saudi Arabia had also passed their production peaks.
Oil production in the USA had begun to decline in the 1970s and continued to do so until the fracking
boom. The supply of oil decreased and the price rose. The price passed $50 per barrel in 2004 and
finally reached $147 per barrel in 2008.
In the Autumn of 2014 global oil production was in a situation reminiscent of 1999. Saudi Arabia
had finished its massive investments to raise pressure in the Manifa oil field and some other fields,
and at the start of 2013 could now raise production by 1 Mb/d.
At the same time, the USA raised oil production dramatically by 4 Mb/d by 2014 through fracking.
Fracking now played the same role that North Sea production had played during the 1990s. In
its recently released report, the IEA now says that the world is once again drowning in oil. By lifting
the sanctions against Iran we will first see that they sell all the oil they have stored at sea on
old oil tankers. Then they will increase production. Thus Iran will increase the world's oil supply
further.
The question is, when will we see a decline in production like that we had at the beginning of
the 2000s? In the figure above you can see the scenario that the IEA presented in November 2015.
Crude oil production that peaked at 70 Mb/d in 2007 was down at 66.6 Mb/d by 2014 and preliminary
data suggests it was 65 Mb/d in 2015. This year it should decrease by 4%, i.e. 2.6 Mb/d. Production
from fracking will decrease by up to 1 Mb/d. What will compensate for this decline in production
from existing fields is that previously discovered fields will be put into production. However, we
know that the willingness to invest in oil production is currently decreasing along with the willingness
to fund exploration for new oil fields. The latter means that fewer fields will be put into production
in the longer term.
My conclusion is that the world will not be drowning in oil but that, like the oversupply in 1999,
it will take a few years before the market sees shortage. The question is what will happen to oil
demand. One consequence of the current oversupply can be that the shortage in the future will be
more severe since there is less investment in new supply. We have already seen that crude oil has
passed its production peak and the price of oil will be decisive for the moment in time when unconventional
oil peaks. Production of natural gas liquids, currently in oversupply in the USA, is dependent
on natural gas production and at the moment they believe that it will increase greatly. If that does
not happen then that fraction of oil supply will also fall.
To those who believe that we can forget Peak Oil I just want to repeat again that the bulk
of the worlds oil production – conventional crude oil – has already passed its peak. Unconventional
oil may also have reached its peak when fracking peaked in 2015. The next few years will reveal the
truth.
From 1999 it took 4 years to go from drowning in oil to the end of the Oil Age. The Norwegian
oil field Johan Sverdrup will be profitable if the price of oil is $40 per barrel. Oil that is planned
to come into full production in 2020 will presumably be very profitable if we see a similar development
to what we saw after 1999.
"... Saudi Arabia says $30 oil is 'irrational'. Comments from Khalid al-Falih, chairman of state oil company Saudi Aramco: The market has overshot on the low side and it is inevitable that it will start turning up" ..."
"... Saudi is pumping as much as it can, trying to drive the rest of em out of business. So they can have their one last hay day, before the wells start drying up. They want to make the most of next decade. BUT they didn't expect prices to fall THIS much. So it's a big game of chicken now. ..."
"... I think KSA knew they were going to peak soon so they maxed out the infill drilling and dropped the price for a year or so. It's s psychological game. ..."
"... FYI the ruling clan does not think in terms of 'national interest'. They think of their own personal/clan interest. Once they've squeezed the land dry they'll retire to southern France and leave the mess behind. ..."
ICYMI – Saudi Arabia says $30 oil is 'irrational'. Comments from Khalid al-Falih, chairman of
state oil company Saudi Aramco: "The market has overshot on the low side and it is inevitable that
it will start turning up"
He predicts higher prices by the end of the year, Also reiterated
that Saudi Arabia would not cut supply unilaterally, nor would they make way for rival producers
Saudi Arabia has said it would consider production cuts if other Opec members participated and if
the cartel was joined by the largest producers outside the group, such as Russia.
Saudi is pumping as much as it can, trying to drive the rest of em out of business. So they can
have their one last hay day, before the wells start drying up. They want to make the most of next
decade. BUT they didn't expect prices to fall THIS much. So it's a big game of chicken now.
I tend to agree. I think KSA knew they were going to peak soon so they maxed out the infill drilling
and dropped the price for a year or so. It's s psychological game.
In the future they might threaten
to raise production to psyche the market, and maybe they will briefly, but I think this is KSA's
last kick at the can and they know it. They'll decline fast IMHO as the infill drilling has resulted
in a longer plateau with a little burst up at the end but the decline rates will be steep.
FYI
the ruling clan does not think in terms of 'national interest'. They think of their own personal/clan
interest. Once they've squeezed the land dry they'll retire to southern France and leave the mess
behind.
There's something I don't understand about SA protecting its market share at the expense of price.
According to an IEA item written a few days ago (https://www.iea.org/oilmarketreport/omrpublic/),
global supply will exceed production by 1 million barrels in 2016.
So, all SA needs to do is reduce production by 1 million bpd to send prices shooting back up and
stop the rapid depletion of their financial reserves. What do they care about protecting a mere
1 million bpd in market share?
As stated above, OPEC has gone well past its peak and it would
only be a matter of a 2 or 3 short years before SA would again regain that market share. Let's
not forget also that there has been massive underinvestment from the big exploration companies
for the last few years which is guaranteed to have a knock-on impact in the near future – again
guaranteeing that SA will regain its market share in the medium to short term.
Something is afoot, particularly when now they also want to get western interests investing in
their oil refining industry.
If this was a poker game I'd say there's a major bluff being played here.
Protection of the market share is just a smoke screen for dumping or "undercutting". They essentially
give a discount for their oil for each region from Brent price effectively putting price tag on
each barrel. This way they drive price down even without exporting any more barrels. You can get
much farther with a kind word and a gun than you can with a kind word alone.
Actually their
exports are close to flat y-o-y ( 2013 7.36; 2014 7.11; 2015 7.4).
The price plunge represents a huge fiscal headache for the Saudi royal family (they can balance
the budget only at $90 or higher) so why they are doing this is an open question. They are depleting
their foreign currency reserves really fast to the tune of $100 billions a year.
In light of the jobs report, Edward sat down to talk with Warren Mosler, president of Valance
Inc. Warren gives us his take on what's going on with wages in the US and if policymakers believe
a robust economic recovery is possible without real wage growth. Warren also weighs in on the important
subject of oil; he sees the Saudis acting as the swing producer of oil, using spread pricing to engineer
a market crash that hurts producers of crude with high costs and too much debt.
He also tells us why he thinks the Saudis have moved to spread pricing that effectively turns them
into price takers and whether geopolitics is a big factor in this. Warren weighs in on what is happening
with credit expansion and demand in the US economy.
"... Poor article, not too much logic. I recall whilst working in Saudi Arabia in the mid 1980's when oil dropped to around $25. We sacked about 15% of staff overnight and curtailed capital projects. At the time Saudi Aramco's zero based budget level was $15 and a reported cost of about $1 to get it out of the ground. We had been experimenting with solar panels from about 1983 so none of this new. ..."
"... What happened in two years to make an alternative energy source that was then not competitive with oil of gas powered plants - when the cots of both oil and gas was so much higher - so competitive now? ..."
"... The Saudis could use their enormous and uninhabitable deserts for the world's best, and possibly safest way, to store nuclear waste. ..."
"... @mattwookey - the internet is something of a smorgasbord of competing claims, almost none of which can be held to task by the viewer. All news now is chacun a son gout and I hope I spelled that correctly. ..."
Since 2000, energy demand among the Middle Eastern oil producers
has grown at 5% a year, outstripping China and India. Saudi Arabia, the world's biggest oil
exporter, is now the seventh largest consumer of fossil fuels, according to
a report from Irena published on Wednesday.
Mod Mark -> newschats4 20 Jan 2016 13:40
The Saudis could use their enormous and uninhabitable deserts for the world's best,
and possibly safest way, to store nuclear waste.
Lets skip that one. When Gen 4 nukes arrive, that "nuclear waste" can be sold as fuel.
In the US, storing the partial used fuel using the dry cask system is working quite well.
Rinkaiso 20 Jan 2016 13:00
Poor article, not too much logic. I recall whilst working in Saudi Arabia in the mid
1980's when oil dropped to around $25. We sacked about 15% of staff overnight and curtailed
capital projects. At the time Saudi Aramco's zero based budget level was $15 and a reported
cost of about $1 to get it out of the ground. We had been experimenting with solar panels from
about 1983 so none of this new.
newschats4 20 Jan 2016 12:56
Not two years ago I visited the site of about 15 wind turbines in Washington, NH that was
also holding a fundraising event for the station. I was not permitted to attend the event
because I wasn't invited. What happened in two years to make an alternative energy source
that was then not competitive with oil of gas powered plants - when the cots of both oil and
gas was so much higher - so competitive now?
BTW - The Saudis could use their enormous and uninhabitable deserts for the world's best,
and possibly safest way, to store nuclear waste. Those deserts were considered, and still
are, inhospitable to human life in Lawrence of Arabia's day and a quick look at Google earth
doesn't contradict that statement. But nuclear was a power source that, in it's infancy no one
considered had any problems. I recall Scientific American books my father had in the late
1950s that discussed it and all they saw was nuclear power's enormous advantage over the use
of coal. They loved figures like one pound of enriched uranium was the equivalent of a mile
long coal train (I'm can't quite recall the number of cars). They didn't once discuss the
problem of waste disposal.
@mattwookey - the internet is something of a smorgasbord of competing claims, almost none
of which can be held to task by the viewer. All news now is "chacun a son gout" and I hope I
spelled that correctly.
But perhaps you don't like living in a customized digital hallucination any more than I do?
What's the point of having a human memory anymore?
Saudi Oil Minister Ali al-Naimi said crude prices will rise and foresees that market forces
and cooperation among producing nations will lead in time to renewed stability.
... ... ...
OPEC forecast a steeper decline this year in supplies from outside the group as lower prices
affect producers in the U.S. and Canada. Non-OPEC output will drop by 660,000 barrels a day, the
group said Monday in its monthly market report...
OPEC is oversupplying markets by some 600,000 barrels a day, according to the report. This is
"the year when the re-balancing process starts," it said. The report made no reference to the
lifting of sanctions on Iran's oil exports.
"The missile precisely hit Aramco Oil Company on Monday night," Yemeni Army Spokesman
Brigadier General Sharaf Luqman said, reported Iran's semi-official Fars news agency citing
Arabic-language media outlets.
He added that the attack came in retaliation to the "Saudi-led aggressors' violation of
UN-sponsored ceasefire" but did not give any further details about damages that the plant
allegedly suffered.
Saudi Arabia confirmed the attack but said the missile had been intercepted by the kingdom's
air defense systems, state media report as cited by Reuters.
The Saudi Arabian Oil Company also denied a strike on its compound in Jazan Economic City
which is located 80 kilometers north of Jizan and about 150 kilometers from the border with
Yemen. All the facilities in the area managing "safe and normal operations", the company said.
The much-discussed increase from Saudi Arabia only puts the kingdom's oil production back to where
it had been in August 2013.
Monthly Saudi Arabian field production of crude oil, thousands of barrels per day, Jan 1973 to
Sept 2015. Data source:
EIA Monthly
Energy Review .
It's worth noting that also leaves Saudi exports of crude oil significantly below their recent
peak. One important factor in the increased Saudi crude production since last year was the need to
supply its
greatly expanded refinery capacity . As a result, Saudi Arabia is now exporting more refined
products in place of crude oil.
Saudi crude oil exports, thousand barrels per day, in 2015 (yellow), 2014 (red), and range over
2010-2014 (shaded). Source:
JODI
.
Saudi exports of refined petroleum products, thousand barrels per day, in 2015 (yellow), 2014
(red), and range over 2010-2014 (shaded). Source:
JODI
.
"... I said it before and I say it again: the Saudi's don't give a fricking damn about US fracking, it's Iran they're after. These "royals" are a nasty bunch, they won't stop at nothing and they couldn't care less about whatever consequences for whoever, them "royal" selves included. ..."
"... And don't forget that production in Ghawar Field is declining 13% a year, even with the most aggressive techniques in the world to bring oil to the surface (nitrogen/water combination). ..."
Its Aramco. They dont have to post any results, they are the blood in a
pool of sharks. Think about Syria, who is going to run that mess, theres
only one group capable, the house of Saud. Thats the deal with the Americans,
access to Aramco for most of Syria, the jihadi's will accept Saudi control
as long as Abu Bakr is gone, we or the yanks will see to that. Think about
it.
Saudis may be "playing a long game" - unfortunately they only have a short
time left! It remains to be seen how the new ISIS inheritors will move the
oil out.
I visited some Aramco facilities in the 1990s. The company retains much
of its American heritage - eg. pool tables in the staff lounges. I would
agree with the idea that it is well run. Its sheer size makes it something
of a state within a state. It has its own airline and does business all
over the world.
There is a phrase apparently along the lines of "God is great but not
as great as Aramco", indicating perhaps that when it comes to it, the geology/economy
trumps theology in the Kingdom.
Its revenues - which are massive, as it easily has the lowest cost of
production of any producer - largely shore up the Saudi state. But hence
the Saudi nervousness about attempts to tackle global warming by reducing
dependence on fossil fuels.
It will be interesting to see just how much of the stock is unloaded.
I am guessing no more than 25%. The prospectus will make interesting reading
and might put the Saudi's off. I mean is there enough money in the capital
markets to devote say $2.5tr to a company which is always, ALWAYS, going
to be controlled by a state. I'd say that's a figure based on today's oil
price. Put the price back to $100 and a 25% slice might be worth $10tr.
one to buy for the dividend though...
Saudi Aramco was previously named 'Aramco'. Aramco stands for Arabian American
Oil Company. U.S. interests (event the buts and bolts were U.S. standard
size), acceptance of decapitation, corrupt governance, and petrodollars.
What else do you need to know? How much the arms industry earns?
And how many refugees they have created through Western/Saudi greed?
arusenior
"a supply glut that Saudi Arabia and fellow Opec members have refused
to address in their determination to drive US fracking rivals out of business"
I said it before and I say it again: the Saudi's don't give a fricking
damn about US fracking, it's Iran they're after. These "royals" are a nasty
bunch, they won't stop at nothing and they couldn't care less about whatever
consequences for whoever, them "royal" selves included.
hashtagthat -> Markets_Observer
They might still be able to produce oil at a profit but that is not the
issue for the Saudis. They need circa $106 a bbl to balance the budget.
I can fill my tank up cheaply but if my wages don't cover my mortgage
I'm gonna burn through my savings ultimately.
Wow - when you put it like that, it's hard not to be persuaded by your well-informed
arguments and incisive analysis! And after all, what do I know - I just
read Wikipedia:
Volatile weather conditions in Europe's North Sea have made drilling
particularly hazardous, claiming many lives (see Oil platform). The
conditions also make extraction a costly process; by the 1980s, costs
for developing new methods and technologies to make the process both
efficient and safe, far exceeded NASA's budget to land a man on the
moon.
I mean, obviously you're right on one level, that if everyone was paid less,
then production costs would fall. But you don't have to buy an oil rig to
drill in Saudi; you don't have to haul it out into the middle of a very
rough sea; you don't have to fly every single ounce of kit out to the rig
by helicopter or on a supply boat, both vulnerable to the endless bad weather
out there; you don't have to use divers; and so on.
TettyBlaBla -> redwhine
Don't forget that Aramco was originally a Standard Oil (of California)
venture.
Look into the history of Standard Oil and how it was forced to break
into multiple separate corporations by the US government, one of these was
Standard Oil of California. It operated as Chevron in the US for a number
of years, acquired Union Oil of California (Union 76/Unocal) and is now
Exxon/Mobil, having acquired Mobil Oil (which used to use Pegasus as its
logo). It has learned well from its founder, Rockefeller and his minions.
Same can be said of AT&T and Verizon, spawn of the US government mandated
breakup of Ma Bell.
smed54235
and the rapid transformation of Saudi Arabia from desert kingdom
to modern nation state
Modern nation state. That's a laugh. They've barely left the Middle Ages.
semyorka
"My grandfather rode a camel, my father rode a camel, I drive
a Mercedes, my son drives a Land Rover, his son will drive a Land Rover,
but his son will ride a camel."
Custodian of the Two Holy Mosques is going to have to worry about some
more earthly blow back from all that Takfiri Jihadism when they cannot pay
the bills.
The price of oil will rebound, but in the medium term they are likely
to begin to see steadily lower production and the world will begin to decarbonise.
ARAMCO does not look like a safe bet.
Eugenios
The cost of fracked oil is too high for it to be the target of this Saudi-engineered
glut. Quite obviously the target is Russia, and the Saudis are in league
with Britain, the US, and so forth in the move.
It is also possible that some of the Finance Capitalist imbeciles think
that lowering the price of oil will lead to an economic recovery. As a matter
of fact the high price of oil was a decisive element in the crash of 2008.
Consider the following prices for Brent crude, so:
January 2002 $19 per barrel
August 2008 $147 per barrel
That does not mean, however, that as oil prices decline the economies
involved will pick up again.
The only sure bet to benefit from low oil prices is China.
Noiseformind
Saudi Aramco is actually only possible in KSA, since it has a wasteland
with no environmental control. Any international company (other than a Chinese
one) will have a lot of issues operating with Saudi Aramco and keep up with
keeping Jubail such a wasteland. Check Google Maps to see how that trillion
dollars valuation is produced.
And don't forget that production in Ghawar Field is declining 13%
a year, even with the most aggressive techniques in the world to bring oil
to the surface (nitrogen/water combination).
So any valuation is subjected to a 13% devaluation every year. And if
the Saud monarchs even show a little flinching in gripping that oil they
will see many other tribes (yes, KSA is just a mix of semi-nomadic tribes
with Bugatti Veyrons) coming to grasp the power.
There are over 1600 "princes" in KSA. That position means they have over
10 million dollars coming from the King directly, plus other rents from
foreign companies that lease their "wasta". If they loose that power in
Saudi Aramco they will rebel very easily.
d1st1ngu1shed -> objectinspace
So do I get this right? The Saudis don't like the Turks. The Turks don't
like the Iranians. The Iranians do like the Russians mainly because the
Russians don't get on with the Turks. The Germans do get on with the Turks.
The US interferes with everybody, (for their own good, and because the Brits
and the French aren't any good at anything any more, except holidays in
Dubai)
Everybody else takes care.
I haven't forgotten anything have I? Syria Ooooo! Them.
Usedhankerchief
The sale of Aramco doesn't mean that much. Rumours of over-stated reserves
are one thing, production problems at Gharwar another. The problem for the
buyers of the shares is that the Saudi state is becoming dysfunctional,
and the assets are in Shia areas, so there will be a huge write-down because
of those risks. Its the worst possible time to sell, so they must really
have problems.
PSmd -> SirWillis
Well, a lot of work done by foreign people there, unemployed youth, the
public sector employs 60% of the Saudi population, they're masking what
unemployment might really be. Indeed, running 22% deficit, trying to find
a way to get prices back up, quite a balancing trick.
MacCosham -> redwhine
1. Fracking companies weren't making a profit at $100 oil, let alone
$50.
2. Fracking technology has existed for the past 30 years.
Let's face it, the main innovation that created the fracking boom was
7 years of 0% interest rates.
"... Our mission now questions how much the Saudis can now substantively influence the crude markets over the long term. Clearly they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period. ..."
"... The following year, Mining Weekly ran a story which suggested the overestimation of The Kingdoms reserves might go as high as 70% . They meant all of OPEC, but Saudi reserves would have to be overstated by more than 40% to make that true. Business Insider suggests that it is elementary the Saudis are fibbing about their reserves – but it also says oil may have peaked in 2005 and production might start to fall in the next year or two . That was in 2011. ..."
"... For how long are they going to allow their OPEC allies to continue pumping at maximum capacity into a glutted market? It is an obvious radical departure from the former careful balance of supply and demand, which was supposed to be a clever plan to make Russia collapse. What if it makes America collapse instead? ..."
"... Hundreds of billions of dollars were invested in the oil fracking effort. alternative energy projects and other technologies that banked on high energy costs. The incurred debt would take many years or decades to pay off. However, a relatively short term drop in oil prices can drive the debt holders out of business. Massive loan defaults and hundreds of thousands of good-paying jobs will be lost. The ensuing drag on the economy can exceed the benefits of lower oil prices, at least in the short term. ..."
"... Up and down energy prices are likely more harmful than steady high prices on long term economic development. If oil prices were to remain low for, say, 5 years, then the net economic gain can become significant. Dont bank on that being the case. ..."
"... The American tight oil boom was almost entirely financed by junk bonds and only made financial sense at oil prices a lot higher than they are now. There is going to be a lot of pain as those bonds get defaulted on and the companies that issued them go bankrupt. However, the big question is what kinds and amounts of derivatives were leveraged on those bonds, and who is going to blow up when those bonds blow. ..."
"... Unless the USA withdraws its sponsorship of The Kingdom, and lets Saudi Arabia collapse from its internal problems. God knows America has learned a lot about the regime-change game considering all the practice its gotten. ..."
I can't promise anything like a simple explanation but the most thought provoking take I've seen
is from hedge-fund manager and father of MMT, Warren Mosler. It's summarized quite well here (though
FFS don't surmise from that that Agora is a fount of wisdom. It's not: a pump and dump stock kiting
scheme with kick ass copywriters.) Regardless, I have a lot of time for Mosler. He has very rewarding
unconventional views:
That is a very interesting explanation. But there is a great big hole in it, reasoning-wise,
and that is, why does the USA continue to put up with this? Two of its oil companies are among
the ten most profitable entities in the world, and they can't be happy with the Saudis' largess.
You could see the USA letting it go on for as long as it possibly can, considering it makes the
U.S. dollar stronger for consumers, if and only if the core of very rich and very powerful people
who run the United States were happy with a situation in which corporate profits were halved,
but the people were giddy because their dollar buys more pots and pans and vacations and gasoline
and picnic baskets. Are they happy with that situation, do you think? Are the two biggest energy
companies in the USA – Exxon-Mobil and Chevron – happy with an economy in which the big boys take
home a lot less, but the rubes are in clover? And not even that the rubes make more, because they
don't – it just buys more.
Call me a cynic, but I can't see them being happy with that. In fact, I can't see America's
corporate hurt, after they went to all the trouble of declaring that a corporation is legally
a person and can therefore contribute an unlimited amount to political campaigns, being happy
with a situation in which oil costs around what it did in the 1960's. Especially when that situation
could end at any time, and they do not have any control over when that time is. They were probably
okay with it while they thought it was going to destroy Russia, but it's not – not before the
United States is itself destroyed. And long before either of those countries cries "Uncle!!" there
is going to be a wave of poverty and bankruptcies such as the world has never seen.
We'll see. But back in 2011 there was fear – you'll love this – that Saudi Arabia was not going
to be able to keep a lid on prices at $100.00 a barrel,
according to Wikileaks . They based this on an alleged overestimation of Saudi reserves by
about 40%, that overstating having been introduced deliberately to spur foreign investment. Here's
my favourite quote, I love this one;
"Our mission now questions how much the Saudis can now substantively influence the crude
markets over the long term. Clearly they can drive prices up, but we question whether they
any longer have the power to drive prices down for a prolonged period."
Well, I guess that one was answered, wasn't it?
The following year, Mining Weekly ran a story which suggested the overestimation of The Kingdom's
reserves
might go as high as 70% . They meant all of OPEC, but Saudi reserves would have to be overstated
by more than 40% to make that true. Business Insider
suggests
that it is elementary the Saudis are fibbing about their reserves – but it also says oil may
have peaked in 2005 and 'production might start to fall in the next year or two". That was in
2011.
What's that going to mean to the American economy? Three of the
ten most profitable companies in the world are oil companies, and of them two – Exxon-Mobil
and Chevron – are American. Chevron's profits in 2014 were $33.6 Billion, and even that was a
drop of 40% over fiscal year 2012/13. For how long can the American economy sustain that kind
of hit?
For how long are they going to allow their OPEC allies to continue pumping at maximum
capacity into a glutted market? It is an obvious radical departure from the former careful balance
of supply and demand, which was supposed to be a clever plan to make Russia collapse. What if
it makes America collapse instead? Of the vaunted most profitable companies,
the remaining American star is Appple . Are people going to want an Apple watch or a new Smartphone
if the economy starts to falter?
I would say the low oil price benefits the American economy since it is a net oil importer. Their
economy eats a lot of oil. In fact the USA is still the biggest net importer of oil in the world
even with their "shale revolution".
Yes, that's true on the consumption side, so low prices are a boon to homeowners and consumers
in general. But what is it doing to corporate profits? Exxon and Chevron are used to turning a
profit on oil sales in America, too.
Gasoline is finally starting to fall at the pump, down more than 12 cents over the past couple
of weeks here.
Karl, its not that simple. Hundreds of billions of dollars were invested in the oil fracking effort.
alternative energy projects and other technologies that banked on high energy costs. The incurred
debt would take many years or decades to pay off. However, a relatively short term drop in oil
prices can drive the debt holders out of business. Massive loan defaults and hundreds of thousands
of good-paying jobs will be lost. The ensuing drag on the economy can exceed the benefits of lower
oil prices, at least in the short term.
Up and down energy prices are likely more harmful than
steady high prices on long term economic development. If oil prices were to remain low for, say, 5 years, then the net economic gain can become significant.
Don't bank on that being the case.
The American tight oil boom was almost entirely financed by junk bonds and only made financial
sense at oil prices a lot higher than they are now. There is going to be a lot of pain as those
bonds get defaulted on and the companies that issued them go bankrupt. However, the big question
is what kinds and amounts of derivatives were leveraged on those bonds, and who is going to blow
up when those bonds blow.
My personal take is this is going to be a very, very bad year. There are no bright spots that
I can see anywhere in the world. It is going to get very ugly out there, and the US is no exception.
Unless the USA withdraws its sponsorship of The Kingdom, and lets Saudi Arabia collapse from its
internal problems. God knows America has learned a lot about the regime-change game considering
all the practice it's gotten.
"... Oilprice.com looked beyond the headlines for the reason behind the oil price drop, and found that the explanation, while difficult to prove, may revolve around control of oil and gas in the Middle East and the weakening of Russia, Iran and Syria by flooding the market with cheap oil. ..."
"... in 1990, when the Saudis sent prices plummeting as a way of taking out Russia, which was seen as a threat to their oil supremacy. In 1998, they succeeded. When the oil price was halved from $25 to $12, Russia defaulted on its debt. ..."
"... Adding credence to this theory, Iranian President Hassan Rouhani told a Cabinet meeting earlier this month that the fall in oil prices was "politically motivated" and a "conspiracy against the interests of the region, the Muslim people and the Muslim world." ..."
The oil price drop that has dominated the headlines in recent weeks has been framed almost exclusively
in terms of oil market economics, with most media outlets blaming Saudi Arabia, through its OPEC
Trojan horse, for driving down the price, thus causing serious damage to the world's major oil exporters
– most notably Russia.
While the market explanation is partially true, it is simplistic, and fails
to address key geopolitical pressure points in the Middle East.
Oilprice.com
looked beyond the headlines for
the reason behind the oil price drop, and found that the explanation, while difficult to prove, may
revolve around control of oil and gas in the Middle East and the weakening of Russia, Iran and Syria
by flooding the market with cheap oil.
The oil weapon
We don't have to look too far back in history to see Saudi Arabia, the world's largest oil exporter
and producer, using the oil price to achieve its foreign policy objectives. In 1973, Egyptian President
Anwar Sadat convinced Saudi King Faisal to cut production and raise prices, then to go as far as
embargoing oil exports, all with the goal of punishing the United States for supporting Israel against
the Arab states. It worked. The "oil price shock" quadrupled prices.
It happened again in 1986, when Saudi Arabia-led OPEC allowed prices to drop precipitously, and
then
in 1990, when the Saudis sent prices plummeting as a way of taking out Russia, which was seen
as a threat to their oil supremacy. In 1998, they succeeded. When the oil price was halved from $25
to $12, Russia defaulted on its debt.
The Saudis and other OPEC members have, of course, used the oil price for the obverse effect,
that is, suppressing production to keep prices artificially high and member states swimming in "petrodollars".
In 2008, oil peaked at $147 a barrel.
Turning to the current price drop, the Saudis and OPEC have a vested interest in taking out higher-cost
competitors, such as US shale oil producers, who will certainly be hurt by the lower price. Even
before the price drop, the Saudis were selling their oil to China at a discount. OPEC's refusal on
Nov. 27 to cut production seemed like the baldest evidence yet that the oil price drop was really
an oil price war between Saudi Arabia and the US.
However, analysis shows the reasoning is complex, and may go beyond simply taking down the price
to gain back lost marketshare.
"What is the reason for the United States and some U.S. allies wanting to drive down the price
of oil?" Venezuelan President Nicolas Maduro asked rhetorically in October. "To harm Russia."
Many believe the oil price plunge is the result of deliberate and well-planned collusion on the
part of the United States and Saudi Arabia to punish Russia and Iran for supporting the murderous
Assad regime in Syria.
Punishing Assad and friends
Proponents of this theory point to a Sept. 11 meeting between US Secretary of State John Kerry
and Saudi King Abdullah at his palace on the Red Sea. According to
an article
in the Wall Street Journal, it was during that meeting that a deal was hammered out
between Kerry and Abdullah. In it, the Saudis would support Syrian airstrikes against Islamic State
(ISIS), in exchange for Washington backing the Saudis in toppling Assad.
If in fact a deal was struck, it would make sense, considering the long-simmering rivalry between
Saudi Arabia and its chief rival in the region: Iran. By opposing Syria, Abdullah grabs the opportunity
to strike a blow against Iran, which he sees as a powerful regional rival due to its nuclear ambitions,
its support for militant groups Hamas and Hezbollah, and its alliance with Syria, which it provides
with weapons and funding. The two nations are also divided by religion, with the majority of Saudis
following the Sunni version of Islam, and most Iranians considering themselves Shi'ites.
"The conflict is now a full-blown proxy war between Iran and Saudi Arabia, which is playing out
across the region," Reuters
reported
on Dec. 15. "Both sides increasingly see their rivalry as a winner-take-all conflict:
if the Shi'ite Hezbollah gains an upper hand in Lebanon, then the Sunnis of Lebanon-and by extension,
their Saudi patrons-lose a round to Iran. If a Shi'ite-led government solidifies its control of Iraq,
then Iran will have won another round."
The Saudis know the Iranians are vulnerable on the oil price. Experts say the country needs $140
a barrel oil to balance its budget; at sub-$60 prices, the Saudis succeed in pressuring Iran's supreme
leader, Ayatollah Ali Khamanei, possibly containing its nuclear ambitions and making the country
more pliable to the West, which has the power to reduce or lift sanctions if Iran cooperates.
Adding credence to this theory, Iranian President Hassan Rouhani told a Cabinet meeting earlier
this month that the fall in oil prices was "politically motivated" and a "conspiracy against the
interests of the region, the Muslim people and the Muslim world."
"... The United States' longtime ally is losing its iron-fisted grip over both its people and the region. This fact, coupled with Saudi Arabia's staggering arsenal and unprincipled ruling ideology, makes the kingdom incredibly dangerous–arguably more so than infamous Axis of Evil member Iran. . . . ..."
"... However, Mohammed bin Salman is widely regarded as impulsive and woefully inexperienced. The failure of Saudi policy against the Iranian-supported Houthi rebellion in Yemen lies at his feet. It is hardly a coincidence that on the same day Riyadh executed Sheik Al-Nimr, it unilaterally withdrew from a fragile ceasefire in Yemen. Western allies and regional acolytes alike nervously consider whether Saudi Arabia will be vulnerable to more campaigns of folly or even a palace coup, depending on who next ascends the leadership hierarchy. ..."
Saudi Arabia's decision to execute Shia cleric Sheikh Nimr Al-Nimr was designed to provoke
Iran into an expansion of military engagement. That's an unsettling strategy–but true nonetheless.
The initial reaction to the kingdom's decision was relatively minor-a few Molotov cocktails
were lobbed at its embassy in Tehran. But a chain reaction of diplomatic fallout has unfolded
over the past few days. Saudi Arabia severed all diplomatic relations with Iran; oil allies
Bahrain, Sudan and Djibouti quickly followed suit. Perhaps more surprisingly, other Gulf Cooperation
Council (GCC) allies like Kuwait, Qatar and the United Arab Emirates opted for the less drastic
measure of recalling their ambassadors.
Each act of incitement, however, including Saudi Arabia's allegedly deliberate targeting
of the Iranian embassy in Sana'a, Yemen, is further indication of Riyadh's desperation to demonize
Tehran in the court of world opinion. It is an exercise in futility, and one that casts doubt
over the kingdom's own stability and sensibility.
The United States' longtime ally is losing
its iron-fisted grip over both its people and the region. This fact, coupled with Saudi Arabia's
staggering arsenal and unprincipled ruling ideology, makes the kingdom incredibly dangerous–arguably
more so than infamous Axis of Evil member Iran. . . .
A paradigm shift of leadership beckons as King Salman, the son of the kingdom's founder,
Abdulaziz Al-Saud, looks to incorporate a next generation of Saudi royalty. The king's nephew,
Mohammed bin Nayef, is the crown prince and presumptive heir to the throne. But it is Salman's
own son, Mohammed, deputy crown prince and the world's youngest defense minister at age 30,
who is seen as the country's eminence grise and successor to his father's title.
However, Mohammed bin Salman is widely regarded as impulsive and woefully inexperienced.
The failure of Saudi policy against the Iranian-supported Houthi rebellion in Yemen lies at
his feet. It is hardly a coincidence that on the same day Riyadh executed Sheik Al-Nimr, it
unilaterally withdrew from a fragile ceasefire in Yemen. Western allies and regional acolytes
alike nervously consider whether Saudi Arabia will be vulnerable to more campaigns of folly
or even a palace coup, depending on who next ascends the leadership hierarchy.
GOP presidential front-runner Donald Trump said late Monday that the Iran nuclear deal made Tehran
a global power that now threatens Saudi Arabia's existence.
"We made a power out of Iran," the
outspoken billionaire told host Bill O'Reilly on Fox News's "The O'Reilly Factor."
"They are looking to go into Saudi Arabia," Trump continued. "They want the oil, they want the money,
[and] they want a lot of other things.
"That's phase one - to go into Saudi Arabia and, frankly,
the Saudis don't survive without us. And the question is, at what point do we get involved and how
much will Saudi Arabia pay us to save them? That's ultimately what's going to happen."
Trump argued that his presidency would back Saudi Arabia in any regional conflict that emerges
in the Middle East.
"Well, I would want to help Saudi Arabia," he said. "I would want to protect Saudi Arabia. But
Saudi Arabia is going to have to help us economically. They were making, before the oil went down
... they were making $1 billion a day."
Trump additionally charged that aiding Saudi interests is essential, given the possibility Iran
eventually acquires nuclear weapons.
"You know that Iran is going to have a nuclear weapon very soon," he told O'Reilly. "The ink isn't
even dry, and they have already violated the deal and a lot of people are calling for sanctions."
"... From October 2010 through 2015, the U.S. has approved sales of $111.3 billion of arms to Saudi Arabia, including $29 billion for 84 F-15 warplanes-more than three times the arms sales approved to the U.S.'s second-biggest customer, South Korea. ..."
"... Iran can balance its budget with crude at $70 a barrel, while the Saudis need $95. Ominously, the IMF predicts that if the Saudis don't lower spending, and if oil stays at $50 a barrel, they'll burn through their foreign currency reserves by 2020. ..."
For all the talk of abandonment, Saudi Arabia remains by far the U.S.'s top weapons customer.
Sales have ramped up significantly under Obama, says William Hartung, director of the Arms &
Security Project at the Center for International Policy.
From October 2010 through 2015, the
U.S. has approved sales of $111.3 billion of arms to Saudi Arabia, including $29 billion for 84
F-15 warplanes-more than three times the arms sales approved to the U.S.'s second-biggest
customer, South Korea.
A lot of that firepower is being used in Yemen. The 10-month bombing campaign against the
Iran-backed Shia rebels, the Houthis, has been sloppy. The UN estimates that 2,600 Yemen
civilians were killed from March to October, including 1,600 in Saudi-led airstrikes. To pay for
the war, the Saudis have been dipping into shrinking foreign currency reserves. "The only thing
it accomplished is to create a major humanitarian crisis," Hartung says. The air campaign has
been led by the king's 30-year-old son, Mohammad bin Salman, the youngest defense minister in the
world. "They should be worried about ISIS, but instead they're spending all their blood and
treasure in Yemen as some kind of anti-Iranian measure," Hartung says. "And it's a disaster."
... ... ...
According to International Monetary Fund estimates,
Iran can balance its budget with crude
at $70 a barrel, while the Saudis need $95. Ominously, the IMF predicts that if the Saudis don't
lower spending, and if oil stays at $50 a barrel, they'll burn through their foreign currency
reserves by 2020.
Being a wartime king is expensive.
"... It knows that low oil prices also squeeze Iran's ally Russia, and yes, they whack North American high-cost producers too. That's three birds with one barrel. ..."
...The world looked to OPEC (read Saudi
Arabia, as OPEC stopped functioning as an effective cartel long ago) to prop
them up. But the kingdom's busy. The Sunni monarchy is busy fighting proxy wars
with its rival, the Shia theocracy of Iran, to be the regional power. To the
south, it's shooting down incoming missiles aimed at its oil plants fired by
Iranian-backed militants in Yemen, whom the Saudi air force is also bombing. To
the north, Sunni insurgents are battling Iranian-supported governments in Syria
and Iraq. To the east, Saudi tanks have crushed a still-simmering Shia uprising
Bahrain. And wars require oil money – lots of it.
The kingdom believes it can
dive deeper and for longer into the turbulent seas of oil markets than rival
producers.
It knows that low oil prices also squeeze Iran's ally Russia, and
yes, they whack North American high-cost producers too. That's three birds with
one barrel.
...But it's also hurting. Riyadh is slashing spending,
cutting price subsidies on fuel, water and power, and hiking taxes – and
risking social unrest. Saudi Arabia's estimated $640-billion foreign reserves
look like a comfortable cushion, until compared against the kingdom's social
spending hand-outs of more than a whopping $100 billion, pledged dramatically
in 2011 when the Arab Spring revolutions spread across the region.
...But Iran is hurting more. Tehran's foreign reserves dropped long
ago, triggering rationing, riots and price hikes on food and fuel.
Saudi security forces keep a nervous eye on their own dissident Shias who
are the majority in the kingdom's main oil-producing province, which lies on
the shore of the Persian Gulf.
... ... ...
The execution triggered outrage in the seething "Shia crescent" that runs
round the Gulf coast from Iran to Bahrain, taking in major oil fields and
export infrastructure.
... ... ...
... "Former cartel" would be
a better description. The definition of a cartel is not an organization of
competing producers that control prices by a few reducing production together
while others secretly increase it, and that rarely agree on anything. Today,
survival and ending the flow of oil dollars to your enemies' armories are at
the top of Middle Eastern agendas.
The Iranians fell into the Saudi trap. Geopolitically this is classic "divide and conquer"
strategy in action. Somehow remins me shooting Russian jet, after which Russi self-impose on
itself additional sactions by braking economic cooperation with Turkey. Of couse Endogan
played duplicipus game and betrayed Russins, but still this is another episode of 'devide and
conquer" starategy.
Notable quotes:
"... The rentier kingdom relies heavily on the government's welfare policies, besides its religious appeal, to drum up public support. The late King Abdullah's response to Arab Spring protests is an example of this. When people elsewhere rose up against dictatorships, he announced a special economic package of $70 billion (much of this money was allocated to build 5,00,000 houses to address housing shortage) to quell discontent at home. Additionally, the state injected $4 billion into healthcare. King Salman does not enjoy the luxury of using oil revenues to save his crown due to the economic crisis. Another option the royals have to buttress their position is to resort to extreme majoritarianism. ..."
"... Even when pre-revolutionary Iran and Saudi Arabia were the two pillars of the U.S.'s West Asia policy, Riyadh and Tehran were regional rivals. The latest phase of this cold war begins with the U.S.-led Iraq invasion. When Saddam Hussein was toppled and a Shia-dominated government emerged in Baghdad, Iran was the happiest regional power. Hussein had been a staunch enemy of Tehran. Saudi Arabia was alarmed by the changing political equations in Iraq, and had supported Sunni militancy to prevent the Shias consolidating power in the post-Saddam set-up. This was one reason that Iraq broke apart later. But the Americans had assured full support to the Gulf monarchies and kept pressure on Iran over the nuclear sanctions. When the Barack Obama administration changed its approach towards Iran, engaging with the Islamic Republic through serious negotiations, the Saudis were upset. Though Riyadh publicly accepted the nuclear deal, it was expectedly concerned about Iran's reintegration with the global economy. That would not only flood the market with cheap oil from Iran, sending oil prices down further, but also help Tehran rise as a legitimate regional power. ..."
"... This Saudi frustration was evident in its Yemen war. Riyadh started bombing Yemen in March, when the nuclear talks were in the final stages. ..."
"... Iran should have exercised restraint in the wake of Sheikh Nimr's execution. It could have used the global anger against mass beheadings in Saudi Arabia to its benefit, particularly at a time it's rebuilding its position in the region. But lack of a cohesive vision, and maybe the high-handedness of the hardliners, led Iran to overreact to the executions. ..."
"... Iran has gained nothing but international condemnation from attacking foreign missions in its land. ..."
"... US/Obama/Republican/Democrat (any name we call them) are no fool. They just would like to maintain a balance of power between the two major sects for their own benefits - control over oil trade. It is not about the numbers here. Whenever one side dominates, they intervene to create a balance. ..."
"... One natural victim of these rising tensions will be the Syria peace plan ..."
"... Unless Saudi-Iran tensions are contained , there won't be an effective strategy to fight the Islamic State, which is a Sunni-Wahhabi extremist group; the war in Yemen will go on, endangering many more lives; and Iraq's efforts to stabilise itself could be challenged. The Saudis look determined to play a long-term game of sectarian geopolitics to maximise its interests. If the Iranians continue to respond in the same token, West Asia would remain turbulent for many more ..."
"... The rise of ISIL and the back-door support to ISIL from the GCC because they are anti-Shia, is clear to everyone. In short, the Saudis have lost favor with the west and their petrodollars are shrinking due to low oil price. ..."
"... Equally the Saudis cannot behave like they are some kind of 'Demi-Gods' with a license to flout normal rules and regulations. Their Human Rights record is terrible, they allow no other religions except Islam in their country, have harsh Sharia laws, Women's rights are non-existent, they support many terror networks around the World. Unfortunately the West turns a blind eye to all these misdemeanors from Saudi Arabia as the Saudis buy billions of dollars worth of military equipment from them. ..."
"... Until Oil price was high US supported Saudi now they are indirectly supporting Iran ? US always benefit by creating instability. ..."
"... US can be rightly accused of creating instability but Western Asian countries are equally gullible to fall into this trap and sensitize everything with respect to Islam. ..."
"... Iranian hardliners held their breath for a long time during nuke-talks. It might not be possible to micro-manage this influential group every time. Besides this step might save the Al Saud dynasty another day, but how it serves KSA's strategic interests is yet to be seen. No countries except those directly controlled by KSA supported the execution, although they criticised Iran. KSA have no exit from this tip of events. ..."
"... the hints that the Riyadh-plan to ratchet up tensions in the region go beyond vintage tiff or screwing up economics of faraway shale. It is by extension, to my mind, a classic scheme-of-the-art of the eternal Empire over the MENA region, that feeds itself with petrodollars and the military industrial complex. ..."
"... Saudis fought the ottomans by terror and guerilla war, which they preached world over, be it against Soviet occupation of Afganistan, post Saddam Hussaien Iraq government, Wahhabi doctrine education in Madrassas world wide. Their Wahhabi doctrine is the bible for Talibans, ISIL, destruction of Sufi Islam. They are the fountain head for hardline ISLAM ..."
"... there is a strong clannish bonding among the various tribes, a delicate balance that has been assiduously built over two centuries which no ruler would like to disturb. ..."
"... The Saudi government executed the Shia cleric calling him a 'takfir', a usual Islamist practice to justify elimination. There could be several reasons for the execution, but, there are four prominent ones that have not got enough attention. Firstly, the Sunni wahhabi ruling family of al Saud is able to cling on to power only through coercion, bribery and loyalty of clerics going back to the treaty between ibn Wahhab and the Diriyah King bin Saud in the 18th century. ..."
"... The AQ terrorists executed now were caught then, a decade back. The executions, after ten long years, is strange in a country where they are always swift. With its strong backing of the IS, KSA is sending as much a message to the US Iran as it is to its own citizens and the IS. ..."
"... The Iranians fell into the Saudi trap. Sectarianism will remain the bench mark of Mid East politics as desired by the Saudis but this time thanks to hardline Iranian reaction. ..."
Why did Riyadh do this if they knew the consequences would be deadly? A logical
explanation is that it's part of a well-thought-out strategy to whip up
tensions so that the Al-Saud ruling family could tighten its grip on power at
home and embolden its position in the region by amassing the support of the
Sunni regimes. Whether the royals agree or not, Saudi Arabia is facing a major
crisis.
Oil prices are plummeting, endangering the kingdom's economy
. In 2015, it
ran a deficit of $97.9 billion, and has announced plans to shrink its budget
for the current year by $86 billion. This is likely to impact the government's
public spending, and could trigger resentment.
The rentier kingdom relies
heavily on the government's welfare policies, besides its religious appeal, to
drum up public support. The late King Abdullah's response to Arab Spring
protests is an example of this. When people elsewhere rose up against
dictatorships, he announced a special economic package of $70 billion (much of
this money was allocated to build 5,00,000 houses to address housing shortage)
to quell discontent at home. Additionally, the state injected $4 billion into
healthcare. King Salman does not enjoy the luxury of using oil revenues to save
his crown due to the economic crisis. Another option the royals have to
buttress their position is to resort to extreme majoritarianism.
At least four, including Sheikh Nimr, among the 47 executed on
January 2 were political prisoners. By putting them to death, the royal family
has sent a clear message to political dissidents at home. At the same time, the
execution of the country's most prominent Shia cleric would bolster the
regime's Wahhabi credentials among the hardliners. This is a tactic dictators
have often used in history. They go back to extremism or sectarianism to
bolster their hard-line constituency to tide over the economic and social
difficulties. The real aim of the monarchy is to close down every window of
dissidence; if that can't be done through economic development and welfarism,
do it by other means.
Tensions between Iran and Saudi Arabia go back decades
.
Even when
pre-revolutionary Iran and Saudi Arabia were the two pillars of the U.S.'s West
Asia policy, Riyadh and Tehran were regional rivals. The latest phase of this
cold war begins with the U.S.-led Iraq invasion. When Saddam Hussein was
toppled and a Shia-dominated government emerged in Baghdad, Iran was the
happiest regional power. Hussein had been a staunch enemy of Tehran. Saudi
Arabia was alarmed by the changing political equations in Iraq, and had
supported Sunni militancy to prevent the Shias consolidating power in the
post-Saddam set-up. This was one reason that Iraq broke apart later. But the
Americans had assured full support to the Gulf monarchies and kept pressure on
Iran over the nuclear sanctions. When the Barack Obama administration changed
its approach towards Iran, engaging with the Islamic Republic through serious
negotiations, the Saudis were upset. Though Riyadh publicly accepted the
nuclear deal, it was expectedly concerned about Iran's reintegration with the
global economy. That would not only flood the market with cheap oil from Iran,
sending oil prices down further, but also help Tehran rise as a legitimate
regional power.
This Saudi frustration was evident in its Yemen war. Riyadh
started bombing Yemen in March, when the nuclear talks were in the final
stages.
But after nine months, the Saudis are far from meeting their goals -
defeating the Shia Houthi rebels Riyadh calls lackeys of Tehran. On the other
side, despite rhetoric from both sides, the U.S. and Iran have expanded
cooperation from the nuclear deal to Iraq and Iran. In Iraq, American warplanes
provided air cover when the Iraq army and Iran-trained Shia militias fought
Islamic State fighters. As regards Syria, the U.S. agreed to let Iran join the
peace talks, ending years of opposition. Against this background, the Saudis
wanted to escalate tensions with Iran, and further complicate Iran's
re-accommodation in West Asian geopolitical and economic mainstream.
The royals know that the best way is to whip up sectarian tensions.
Iran should have exercised restraint in the wake of Sheikh
Nimr's execution. It could have used the global anger against mass beheadings
in Saudi Arabia to its benefit, particularly at a time it's rebuilding its
position in the region. But lack of a cohesive vision, and maybe the
high-handedness of the hardliners, led Iran to overreact to the executions.
The
attacks on the Saudi embassy in Tehran and the consulate in Mashhad shifted the
world's attention from the executions to Iran's hooliganism, providing Riyadh
an opportunity to extend the bilateral tensions into a diplomatic crisis. This
is exactly what the Saudis wanted. After Saudi Arabia, Bahrain, a Shia-majority
nation ruled by a Sunni monarchy, and Sudan, a Sunni-majority country ruled by
an alleged war criminal who's moving increasingly closer to the Gulf monarchs,
have cut diplomatic ties with Iran. The United Arab Emirates, another Saudi
ally, has withdrawn its envoy from Tehran.
Iran has gained nothing but international condemnation from
attacking foreign missions in its land.
It's yet to recover completely from the
siege of the U.S. embassy in 1979 by hard-line students. In 2011, students
attacked the British embassy in Tehran, forcing London to withdraw its mission.
Full diplomatic ties between the two nations were restored only recently, after
the nuclear agreement. The latest attack may have far-reaching consequences.
It's also possible that hard-line sections within the Iranian establishment,
who are already upset with the moderates over the nuclear deal, might have used
the opportunity to embarrass President Hassan Rouhani. It's also worth noting
that the President has condemned the attack, but not the Supreme Leader Ali
Khamenei, who warned the Saudis of "divine revenge". Whatever led to the attack
has compromised Iran's position in the region.
boopathy
Not really in almost all these points.
US/Obama/Republican/Democrat (any name we call
them) are no fool. They just would like to maintain a balance of power between the two major
sects for their own benefits - control over oil trade. It is not about the numbers here. Whenever
one side dominates, they intervene to create a balance.
We have seen that in sanctions on
Iran (when Iran tried to rise above religious divide), Iraq invasion (suppress sunni domination),
lifting sanctions on Iran (to keep Saudi in check, when Saudi didn't agree to US demand to limit
oil supply to create demand and sustain newly started/quickly depleting US oil production
facilities) and so on to continue in future. We might think that Saudi dominates the region but
ultimate control is with US. They 'll try to maintain this as long as there is oil. Once the oil
is done (may be in another 40 years) they'll leave everything to rot.
What next
One natural victim of these rising tensions will be the Syria peace plan
.
President Bashar al-Assad's regime and a coalition of rebels are supposed to
begin peace talks this month, according to a road map agreed in the UN Security
Council a few weeks ago. Iranian and Saudi cooperation is a must for peace in
Syria, where the ongoing civil war has killed more than 2,50,000 people. The
Saudis back anti-regime rebels and extremists in Syria, while the Iranians
support the Assad government.
Worse, it's not just Syria.
Unless Saudi-Iran tensions are contained
, there won't be an effective
strategy to fight the Islamic State, which is a Sunni-Wahhabi extremist group;
the war in Yemen will go on, endangering many more lives; and Iraq's efforts to
stabilise itself could be challenged. The Saudis look determined to play a
long-term game of sectarian geopolitics to maximise its interests. If the
Iranians continue to respond in the same token, West Asia would remain
turbulent for many more
Sridhar
This brinkmanship from the Saudis cannot be explained easily. In my view, this is a
culmination of several months of anger and desperation because nothing has gone their way!
Loud and clear voices in the US and around the world are blaming extremist Sunni Wahabism for
what ails the Muslim world and this has been funded entirely by the Saudis.
The rise of ISIL and the back-door support to ISIL from the GCC because they are anti-Shia,
is clear to everyone. In short, the Saudis have lost favor with the west and their
petrodollars are shrinking due to low oil price.
Add to this, the fact that the flavor of the month is Rouhani and Iran. The Saudis expected
the attack on Yemen to mobilize support and this did not happen even from friendly Sunni
regimes. Now, Syria is likely to deal from a position of strength because of Russian support
and again the Saudis will be marginalized. Hence, like all bad losers, the Saudis want to make
maximum noise by dumb acts
Vipul
Equally the Saudis cannot behave like they are some kind of
'Demi-Gods' with a license to flout normal rules and regulations. Their
Human Rights record is terrible, they allow no other religions except Islam
in their country, have harsh Sharia laws, Women's rights are non-existent,
they support many terror networks around the World. Unfortunately the West
turns a blind eye to all these misdemeanors from Saudi Arabia as the Saudis
buy billions of dollars worth of military equipment from them.
Ziavudeen
Noting strange about the author. He just showed his
incapability by vomiting the western media statements. Who is benefiting by
causing instability in Middle east region , Middle east or western world?
Until Oil price was high US supported Saudi now they are indirectly
supporting Iran ? US always benefit by creating instability.
Now on top of it they are having fear of fast spreading Islam...
... ... ...
RaviKiran
You cant shift the blame squarely on western media. Saudi
Arabia and Iran have done nothing to improve the image of Islam worldwide.
US can be rightly accused of creating instability but Western Asian
countries are equally gullible to fall into this trap and sensitize
everything with respect to Islam.
Secondly you have no idea about hinduism or
the Varna class. So please refrain from commenting on other religions. Get
your own house in order first.
Subhranil Roy
Iranian hardliners held their breath for a long time during
nuke-talks. It might not be possible to micro-manage this influential group
every time. Besides this step might save the Al Saud dynasty another day,
but how it serves KSA's strategic interests is yet to be seen. No countries
except those directly controlled by KSA supported the execution, although
they criticised Iran. KSA have no exit from this tip of events.
Rajan Mahadevan
Under the last caption of "What next" of above article, lie
the hints that the Riyadh-plan to ratchet up tensions in the region go beyond
vintage tiff or screwing up economics of faraway shale. It is by extension,
to my mind, a classic scheme-of-the-art of the eternal "Empire" over the
MENA region, that feeds itself with petrodollars and the military industrial
complex.
Little wonder then, if the victim remains the Syrian peace plan as
war machines drag on, and worse, if the make-believe 'Islamic State'
continues its nasty business as usual. To be sure, the 'IS' might even gain
grounds for its much-publicised and feared caliphate in Af-Pak territories (
horrors ) and even abroad in Africa or Europe. Meanwhile, a determined Iran
is still playing upon its logical strategies of realpolitik for economic
survival, keeping fingers crossed on the Western sanctions. These are
expected to clear sometime soon, hopefully by month's end. Desperate waiting
games .......
Balasubramanian
Saudis fought the ottomans by terror and guerilla war, which
they preached world over, be it against Soviet occupation of Afganistan,
post Saddam Hussaien Iraq government, Wahhabi doctrine education in
Madrassas world wide. Their Wahhabi doctrine is the bible for Talibans, ISIL,
destruction of Sufi Islam. They are the fountain head for hardline ISLAM
K SHESHU
Iran might have fluttered the advantage of mobilising world
public opinion against Saudi royal family and the repression unleashed by
that country by reacting too much too soon. Still, if Iran does not take
hasty steps, there is a chance of anti-Saudi camp developing as a formidable
force with Russian support.
Subramanyam
(Part 2 of 2) Secondly,
there is a strong clannish bonding
among the various tribes, a delicate balance that has been assiduously built
over two centuries which no ruler would like to disturb.
That was the reason
why the dead were probably carefully chosen from among a large group of AQ
terrorists languishing in jail, to represent the 12 regions of the Kingdom.
In order to further soften the blow, they also decided to execute some Shi'a
so that a semblance of impartiality can be restored. Thirdly, of course, the
salafi Kingdom has always tried to find ways and means to treat its Shi'a
minority as third class citizens and the decision to execute the AQ
terrorists offered an opportunity to eliminate an influential cleric who has
been calling for 'wilayat-al-fiqh' in the Kingdom, the Iranian model of rule
by clerics. Fourthly, the Interior minister Crown Prince bin Nayef may be
trying to assert himself against the impetuous Defence Minister and King
Salman's son Prince Muhammad.
Subramanyam
(Part 1 of 2)
The Saudi government executed the Shia cleric
calling him a 'takfir', a usual Islamist practice to justify elimination.
There could be several reasons for the execution, but, there are four
prominent ones that have not got enough attention. Firstly, the Sunni
wahhabi ruling family of al Saud is able to cling on to power only through
coercion, bribery and loyalty of clerics going back to the treaty between
ibn Wahhab and the Diriyah King bin Saud in the 18th century.
This was
shaken up by Osama bin Laden after Iraq occupied Kuwait and Al Qaeda became
stronger. There was a period between 2002 and 2005 when the Kingdom was
wracked by AQ terror as it became the sworn enemy of the Royalty.
The AQ
terrorists executed now were caught then, a decade back. The executions,
after ten long years, is strange in a country where they are always swift.
With its strong backing of the IS, KSA is sending as much a message to the
US & Iran as it is to its own citizens and the IS.
SHOUKATH ALI
As usual Stanly has hit the nail!
The Iranians fell into the Saudi trap.
Sectarianism will remain the bench mark of Mid East politics as desired by the
Saudis but this time thanks to hardline Iranian reaction.
"... ...On Tuesday, Aramco said it was deepening the discount for its light crude by $0.60 a barrel to Northwest Europe and by $0.20 a barrel in the Mediterranean for February delivery. ..."
"The Saudis are preparing for Iran's return," said Mohamed Sadegh Memarian, who recently retired
as the head of petroleum market analysis at Iran's oil ministry, as they sharply cut the prices they
charge for crude oil in Europe (to the biggest discount since Feb 2009). The move that will likely
undercut Iran happens as sectarian tensions escalate between the rival Middle Eastern nations. As
WSJ reports, the Saudi move appears to pave the way for a competition over European oil markets later
this year when Iran is expected to increase its exports after the expected end of western sanctions
over its nuclear program.
... ... ...
...On Tuesday, Aramco said it was deepening the discount for its light crude by $0.60 a barrel
to Northwest Europe and by $0.20 a barrel in the Mediterranean for February delivery.
...The European Union is set to lift an embargo on Tehran as soon as next month.
"... The shia cleric was calling for a rebellion to attain equality for all citizens, freedom for all citizens, and democracy for all citizens. Iran has that but we all agree that the religious Mullahs have been harsh but have steered greatly to the side of the secular movement since the 80s. ..."
"... The state of women in Iran is way better than the moving cloths of Saudi Arabia. ..."
"... This is obviously a provocation. What we arent sure about is if this was a deliberate provocation or if the Saudis just didnt give a damn. ..."
"... Rubbish! The Saudis only manage to control the country through a combination of brutal suppression, free spending and making sure that only those tribes loyal to the Saud family are recruited for the National Guard which is more powerful than the army. ..."
"... Typical Grauniads false equivalence aimed at watering down Saudi Arabias barbarism and, in the process, justifying our allegiance to this aberration. ..."
"... Its interesting that, together with that other sacred cow in ME of a different religion persuasion, there are hardly any threads where one can comment on the subject - except for vapid, disingenuous articles like this one; the massacres in Bahrain are as if they never existed; Raif Badawis plight has been swept under the rug. Iran , on the other hand, is forever portrayed as the villain even though has been the object of Western-sponsored coup, sabotages and invasions for the last 60+ years. ..."
"... The strange thing here is that Saudi is the driving force behind the current low oil prices. Most of OPEC wants to reduce production, whereas Saudi insists on trying to squeeze out higher cost producers (most notably in the US and Canada). ..."
"... I say strange but this is more than likely a function of why western governments consider Saudi Arabia to be an ally. ..."
"... This is like a Daily Mirror article except with slightly more developed language. ..."
"... Hopefully 2016 will see the thousands of drug addicted princes that make up the house of frauds (saud) hanging from lampposts. At the very least therell be a lot less money being spent on British bombs. Makes me cringe to think that this country is the UKs most important ally in the Middle East. ..."
"... Its 2016 and Saudi Arabia executes people for witchcraft! ..."
"... The real Guardian view... support the Saudis, lick the arses of the US warmongers, blame the Russians for everything, ignore the Islamist terrorists. No wonder 80% of British people believe that all UK journalists are liars and no surprise that their lying media is in terminal decline. WE now have the web to make our own minds up. ..."
"... As far as I am aware Iran has not been gifting the world with madrassahs, hate-preachers and Wahabbism/Salafism. The only people who seem to suffer from their religious delusions and extremism are the Iranian people themselves. ..."
"... But the KSA has spread misery and hatred worldwide. And far too many Muslims have stood by and watched it happen. ..."
"... Careful with condemnations, after all Saudi is a friendly murderous regime unlike other murderous regimes and besides they are happy to fill the american arms manufacturers coffers. ..."
"... So was there any evidence presented that Sheikh Nimr al-Nimr was anot active terrorist or not? At the end of the day if there was conclusive evidence that he was involved in planning acts if violence, then although I disagree with capital punishment, by the laws of the land, he was treated the same way as other insurgents. ..."
"... Weasel words from the Graun. Fuck those barbaric Saudi autocrats and their elitist supporters over here. As for Iran they are part of the coalition actually FIGHTING the Islamic terrorists in Syria. Wake up Graun with your NATO lies. ..."
"... Watching the Guardian, always so loyal in its support of Saudi objectives, squirming as it is forced into some kind of comment on this execution has been a delightful pleasure. Indeed, how careful you have been. Could you have found a less critical word than unjust to describe this? ..."
"... The comparison between Iran and KSA here is rather superficial and dwells on some similarities but does not highlight the vast differences. Whereas there are elections for a parliament and a president and some form of democracy in Iran there is only very tyrannical autocratic monarchy in KSA, Whereas Iran has been the subject of demonisation by the west, the KSA has had lavish support in all ways by the west. ..."
"... Why crippling sanctions were imposed on Iran, not Saudi Arabia? Stop the slaughter in Yemen. ..."
Did the author of this piece of selective unbalanced diatribe deliberately avoid regularly
mentioning the Sunni arm of the religion which dominates life politically and socially and demographically
in Saudi Arabia ?
Only mentioning the Sunnis twice and on both occasions in relation to the Iranian state whilst
at the the same time peppering the article with references to the Shia faction is hardly balanced
or objective and appears to deliberately skew the article in such a way as to leave the reader
with the impression that Shia Islam is the main protagonist here.
I suppose I used to expect better from the Guardian, sadly no more.
DrKropotkin
, 3 Jan 2016 18:06
An article filled with many statements like this:
"Both Iran and Saudi Arabia are wasting their resources on aggressive foreign policies
which have little chance of ultimate success"
I don't know how anyone can compare what Iran is doing in Syria (at the invitation of the government
and fighting ISIS) with the barbaric assault currently being waged on Yemen (not to mention the
Saudi role in funding Jihadi's everywhere). On a day when Saudi Arabia kills 47 people the Guardian
reminds us not to forget about Iran.
Why are they coming in the cross-hairs here, because they condemned the execution? Iran has
only spoken of retaliation, they haven't actually done anything yet (it's going to come from God
apparently). The embassy attack in Tehran was done by an outraged people and condemned by the
Prime Minister.
Saif Eje
, 3 Jan 2016 18:01
That's one funny article! Is this an attempt to whitewash what's black on the outside and the
inside? Comparing Iran and Saudi and come out with a conclusion of how closely similar they are?
I guess pocketing some Riyals is much more worthy than integrity for some.
The shi'a cleric was calling for a rebellion to attain equality for all citizens, freedom
for all citizens, and democracy for all citizens. Iran has that but we all agree that the religious
Mullahs have been harsh but have steered greatly to the side of the secular movement since the
80s.
The state of women in Iran is way better than the moving cloths of Saudi Arabia.
I'm
greatly disappointed, or so I'd like to pretend in the hope that our frustrations do something
to your online paper. We all know the drill though I'm afraid... ignore and move on as money has
longer lasting echos.
Shankman Samir Afz.
, 3 Jan 2016 18:01
They know public support for the KSA is in freefall, so they're trying to stay on the sidelines
as much as possible (other than the requisite calls for both sides to keep calm).
Support for the KSA is becoming politically 'toxic'. Politicians perceived as too cozy with
or supportive of the KSA are increasingly being perceived a sellouts or hypocrites at best.
CanadaChuck
, 3 Jan 2016 18:00
This is obviously a provocation. What we aren't sure about is if this was a deliberate
provocation or if the Saudis just didn't give a damn.
Perhaps they tire of the proxy war in Syria and would prefer to go head to head with Iran.
Perhaps they think the US and UK will help them out. Where this 'Guardian view' falls down is
using words like 'unjust' towards sovereign countries that have different values.
The Guardian has their view of justice which would be the view of progressive 'Western' nations
and various UN bodies. It may be surprising to some that other countries have different values
and will not be thinking like Europeans anytime soon.
For instance, countries with over 1/2 of the global population do not accept the authority
of the UN Human Rights group in Geneva. There are no human rights investigations in these countries
even though 'Western' standards are not lived up to. Three of these countries can and regularly
do veto any action by this group. There is much talk in Geneva about Syria, N. Korea and Israel.
Any action is automatically vetoed.
Similarly with the misnamed ICC in The Hague. Countries with over 1/2 of the global population
do not accept the jurisdiction of this court and didn't ratify it. Much the same with European
projects like the Landmines Treaty or the proposal for a Right to Protect Protocol.
Possibly there are many in Europe who do not know that their concepts of justice and values
are not universally accepted, as of yet.
PhilPharLap
, 3 Jan 2016 17:59
I'm having a bit of trouble with this sentence too:
"The parallels between the Saudi kingdom and the Islamic republic are in some ways very
close. Both are influenced by a sense of Islamic mission,"
It is the all too common use of the word "mission" to mean imperialist aggression, terrorism,
and religious violence - a connotation it acquired during the invasions that accompanied the building
of empires. The concept of mission was originally to "send" people offering a new faith - not
inquisitors to torture and kill
It is the ugliness of imperialist intent that distorted the meaning of what was originally
seen as a peaceful action, and that hid its violence behind peaceful missions
London2012 -> BabylonianSheDevil03
, 3 Jan 2016 17:58
Rubbish! The Saudis only manage to control the country through a combination of brutal
suppression, free spending and making sure that only those tribes loyal to the Saud family are
recruited for the National Guard which is more powerful than the army.
DrKropotkin -> thrmaruf
, 3 Jan 2016 17:57
"ISIS is a Natural Results of these two Islamists barbaric systems." not a very informed comment.
Iran is fighting ISIS, while the Saudis give them money and weapons.
There is a lot to criticise Iran for, but please try to get it right.
Hanwell123 -> duqu_2
, 3 Jan 2016 17:51
It's the story they're all running because they - WE - are Allies and Members of the Coalition
dedicated to the War against Assad. We HAVE to back them! It's v much like that in all wars apparently
- the First Casualty?
It is cringing seeing them go overboard though, like implying Iran is some sort of equal combatant
in the Yemen when even the casual reader knows that's 100% bullshit (a WW2 expression I think?).
PhilPharLap -> trueblueozzy
, 3 Jan 2016 17:41
question for "inthelightoffacts"
isn't forcing women into a ridiculous dress code a form of violence?
isn't forcing children into marriage - violence?
isn't the implementation of honour codes that include murder as a punishment - violence?
isn't it terrorism to murder a person who as a matter of religious conscience chooses to leave
a faith imposed on them by their family and their culture?
isn't it violence to deny girls and adult women the right to education - the right to move around
without a male companion - the right to drive a car?
Start there and work your way on from there
truly - just asking
majamer
, 3 Jan 2016 17:36
Have you ever wondered why we've never heard of Sunni Iranian clerics doing the same thing
as Sheikh Al-Nimr? Because they are already melting in acid tubs in the Iranian intelligence agencies'
basements. If you don't believe that, try to criticize Khamenei in Tehran's streets and see what
happens to you. The really biased is parotting for the larger Western agenda: hiring Iran as the
regional stick holder. Khamenei reminds the Saudis of the divine vengeance while he's been killing
Syrian and Iraqi Sunnis from kids to elderly for years.
curiouswes -> Foracivilizedworld
, 3 Jan 2016 17:33
Saudi Arabia is not a country... it is a Family controlled business... and the business
is oil...
So the people there, have no say. They don't hold phony elections and try to fool people into
believing that they actually have a choice when a de facto government actually runs things from
behind the scenes. Is that what you mean?
Oboy1963
, 3 Jan 2016 17:26
I think this article missed out or glossed over some important differences between Iran and
Saudi Arabia.
Iran is actually a country, in the sense that we understand it. A government elected by
the people. Saudi Arabia, is NOT a country it is a big chunk of desert with a big load of oil,
and therefor e money and influence, ruled by a murderous clan that claim to be "Kings"
Iran has had a large dose of US interference in its internal affairs going back to the
Shah. this along with the threats, sanctions and vilification by " the west" has demonized
Iran via the "free press"
Saudi Arabia has had nothing but ass kissing , arms and technical sales along with the necessary
served up as "Our ally" by "the west "
No matter what Iran does "the west" criticizes, second guesses and condemns it, based mainly
on an ingrown deep hate from the US for not being allowed to subjugate them, and the loss of
face they suffered in the Embassy affair. No matter what Saudi Arabia does "the west" does
nothing, says nothing or fully supports it.
Iran, after decades of "the west" and its "free press" demonizing it just can not win a
trick, no matter what it does due to this long term bias build up.
Saudi Arabia on the other hand is according to our leaders the Kingdom of light and INCOME.
"the west" = The US and its vassal states.
"free press" = What we laughingly refer to as our open, honest source of factual information.
Metreemewall
, 3 Jan 2016 17:22
"The parallels between the Saudi kingdom and the Islamic republic are in some ways very
close. Both are influenced by a sense of Islamic mission, a sense which has encouraged them
in ambitions well beyond their means. Both are quick to violence, abroad and at home, where
there is little to choose between them, for instance, in the high rate of public executions."
Typical Grauniad's false equivalence aimed at watering down Saudi Arabia's barbarism and,
in the process, justifying our "allegiance" to this aberration.
It's interesting that, together with that other "sacred cow" in ME of a different religion
persuasion, there are hardly any threads where one can comment on the subject - except for vapid,
disingenuous articles like this one; the massacres in Bahrain are as if they never existed; Raif
Badawi's plight has been swept under the rug. Iran , on the other hand, is forever portrayed as
the villain even though has been the object of Western-sponsored coup, sabotages and invasions
for the last 60+ years.
So, my suggestion is simple, before wanting us to "Become a supporter for just £5 per month",
how about ensuring that we REALLY get quality, independent journalism?
spybaz -> Dicko23
, 3 Jan 2016 17:22
Yeah, but there's no insta-cash with your proposal. Oil and arms money is obtainable way more
quickly. The world now exists under a Corporatocracy. This requires that a profit to be shown
every 3 months. If you (a company or a govt) cannot do that, the shareholders are sad and you
are deemed to be failing. Killing people for oil, with arms sourced from the UK, USA (& Russia
too), is the most lucrative business to be in.
The UK, USA (& Russia) are guilty of this murderous money making scheme to the extreme. Yet,
the citizens of these countries keep on voting for them (well, I'm not sure about govts are truly
elected in Russia).
Fuego999
, 3 Jan 2016 17:15
The only good thing to come out of Trump's candidacy may be to scare the living day lights
out of the House of Saud. Once the mood turns against them in the West, which it hasn't so far
(ignorance and lack of interest being two reasons), there's no telling what will happen on the
Peninsula.
MrHumbug
, 3 Jan 2016 17:07
Realpolitik analysis of the situation.
Nations who are not US are making money. US isn't. Therefore "Iran must go." We can't have
exceptional nation loose control of who gets to eat and who doesn't.
I read this article before the news broke on KSA severing diplomatic ties with Iran. However,
my first reaction was "Surely, US will find some reason to "bomb the country back to the stone
age." How prescient of me. Just as with Syria, someone in the world must be the "or else" example
or US's global racket will loose its teeth. If only they stuck to the "bad guy" and "hellhole"
role alloted to them by the New World Order...
NotFobbedOff -> tickleme
, 3 Jan 2016 17:03
The strange thing here is that Saudi is the driving force behind the current low oil prices.
Most of OPEC wants to reduce production, whereas Saudi insists on trying to squeeze out higher
cost producers (most notably in the US and Canada).
I say strange but this is more than likely a function of why western governments consider
Saudi Arabia to be an ally.
PubGeezer
, 3 Jan 2016 16:38
"The execution of Sheikh Nimr al-Nimr could deepen the confrontation between Iran and Saudi
Arabia "
No shit. Thanks for the advice, Guardian.
This is like a Daily Mirror article except with slightly more developed language.
tickleme
, 3 Jan 2016 16:32
The Saudis are having to increase taxes to deal with the $100billion deficit the collapse in
the oil price has caused.
Let's see how much the citizens of Saudi Arabia like being squeezed before they revolt. The
oil price is going nowhere for the foreseeable future and those Saudi reserves will be spent within
a couple of years. The country is totally dependent on oil with zero economic diversification.
Hopefully 2016 will see the thousands of drug addicted princes that make up the house of
frauds (saud) hanging from lampposts. At the very least there'll be a lot less money being spent
on British bombs. Makes me cringe to think that this country is the UK's most important ally in
the Middle East.
It's 2016 and Saudi Arabia executes people for witchcraft!
danubemonster -> Spillage93
, 3 Jan 2016 16:25
There is a major differences between Iran and Saudi Arabia. Iran is a sophisticated country,
where the hold of religion is slowly cracking. Once the theocracy goes, Iran will be an embryo
Poland or Czech Republic. Saudi Arabia, by contrast, is going nowhere fast, and once the oil goes,
it'll probably revert to a primitive, Medieval state - unless it can have a secular revolution,
which strikes me as being unlikely.
ProfJonathanRawlings
, 3 Jan 2016 16:21
The real Guardian view... support the Saudis, lick the arses of the US warmongers, blame
the Russians for everything, ignore the Islamist terrorists. No wonder 80% of British people believe
that all UK journalists are liars and no surprise that their lying media is in terminal decline.
WE now have the web to make our own minds up.
Hairan Road -> Pareshan Gali
, 3 Jan 2016 16:20
Its the hypocrisy of western media who is siding with Iran because Sunni Muslim are more enemy
to west than shia. Irani muslim are considered most non practicing. It was in 1980 that 67 irani
siege the grand mosque of Makkah. It was an act of aggression from Iran no one condemn that. Now,
ita saudi right to execute anyone going against its govt.
Like U. S wants custody of Edward snowden. Europe or Iran has no right to interfere in other
countries internal matters. They are trying to perpetuate as this execution was linked to shia
sunni difference. The cleric was inciting violent comments against the govt. he cursed openly
the ex crown prince who died that he may be eaten by worms.
So if he was non violent cleric who gave voice to shia then why did he passed these comments.
He was receiving aid from Iran to fuel protest against saudi govt. There is o barbarism I think
pog boy David Cameron needs to be dispatched to cameroon in africa
moretsu
, 3 Jan 2016 16:17
The parallels between the Saudi kingdom and the Islamic republic are in some ways very
close. Both are influenced by a sense of Islamic mission,
As far as I am aware Iran has not been gifting the world with madrassahs, hate-preachers
and Wahabbism/Salafism. The only people who seem to suffer from their religious delusions and
extremism are the Iranian people themselves.
But the KSA has spread misery and hatred worldwide. And far too many Muslims have stood
by and watched it happen.
TRIALNERROR
, 3 Jan 2016 16:16
Khamenei added: "This oppressed cleric did not encourage people to join an armed movement,
nor did he engage in secret plotting, and he only voiced public criticism ... based on religious
fervour." !!!
So it was OK for Sheikh Namr to criticize government but it wasn't OK for someone like Mir
Hossein to do so! Practically nauseating in its hypocrisy
Ted Pawlowski
, 3 Jan 2016 16:08
Careful with condemnations, after all Saudi is a friendly murderous regime unlike other
murderous regimes and besides they are happy to fill the american arms manufacturers coffers.
John Smith 3 Jan 2016 16:06
So was there any evidence presented that Sheikh Nimr al-Nimr was anot active terrorist
or not? At the end of the day if there was conclusive evidence that he was involved in planning
acts if violence, then although I disagree with capital punishment, by the laws of the land, he
was treated the same way as other insurgents.
However if he was just expressing exasperation, or disagreement with the regime, and saying
that things needed to change for the greater good of Saudi Arabia, then sod diplomacy, there needs
to be a case drawn up in the International Criminal Court, and just for once the message sent
out that just because someone disagrees with a point of view, doesn't give you the excuse to kill
them, it's unacceptable in the 21st century and not the behaviour expected of a modern state where
the leaders have benefited from the best in Western education, and have seen first hand how opposed
political parties can work together to create advanced, generally prosperous nation states.
ProfJonathanRawlings
, 3 Jan 2016 16:04
Weasel words from the Graun. Fuck those barbaric Saudi autocrats and their elitist supporters
over here. As for Iran they are part of the coalition actually FIGHTING the Islamic terrorists
in Syria. Wake up Graun with your NATO lies.
Prometheon
, 3 Jan 2016 16:03
Watching the Guardian, always so loyal in its support of Saudi objectives, squirming as
it is forced into some kind of comment on this execution has been a delightful pleasure. Indeed,
how careful you have been. Could you have found a less critical word than "unjust" to describe
this?
Nobody reading this editorial would get the slightest hint that we are talking about Saudi
Arabia, a brutal medieval theocracy and the world's main sponsor of terrorism worldwide.
SHA2014
, 3 Jan 2016 15:09
The comparison between Iran and KSA here is rather superficial and dwells on some similarities
but does not highlight the vast differences. Whereas there are elections for a parliament and
a president and some form of democracy in Iran there is only very tyrannical autocratic monarchy
in KSA, Whereas Iran has been the subject of demonisation by the west, the KSA has had lavish
support in all ways by the west.
Whereas Iran is more liberal with regards to women and minorities, KSA isn't. Iran is also
more diverse economically than the desert kingdom which depends mainly on oil. It is therefore
strange that this assessment does not address this or even mention any democratic aspirations
for KSA. It is in these situations that objective critical journalism, holding our politicians
to account on their lack of concern about the behaviour of a close ally that one yearns for in
the so-called free press in the West.
Foracivilizedworld
, 3 Jan 2016 14:59
Why crippling sanctions were imposed on Iran, not Saudi Arabia? Stop the slaughter in Yemen.
"... Nevertheless, Saturdays execution has only resulted in the further deterioration of relations
which were already less than cordial. In several of the regions ongoing conflicts, Tehran and Riyadh
are on opposite sides of the barricades. ..."
"... In Syria, Iran has offered the secular government of Bashar al-Assad, embattled by over five
years of war, political, economic and military assistance against a coalition of Saudi, Turkish and
Qatari-funded jihadist groups, including the Muslim Brotherhood, the al-Nusra Front and Daesh (ISIL/ISIS).
..."
"... in Yemen, Saudi Arabia has formed a military coalition to try to crush the Shia tribesmen known
as the Houthis, who overthrew the government of Saudi-backed president Abd Rabbuh Mansur Hadi last year.
..."
"... the Saudi dynasty has also grown fearful of Shiites living in Saudi Arabia itself. ..."
"... Vladimir Ahmedov, a senior researcher at the Institute of Asian Studies of the Russian Academy
of Sciences, called the emerging situation somewhat frightening. According to the academic, the conflict
in the Middle East threatens to gain a new, religious dimension, openly becoming a war between Sunnis
and Shiites. ..."
"... Living in the 21st century, we have been thrown back into the Middle Ages, when the main factor
of wars was religion, rather than geopolitical considerations and the capture of territory. This, Ahmedov
warned, reduces the possibility of coming to an agreement in the most acute conflicts in the region.
..."
"... the clerics killing portends positive negative consequences, with the regional sectarian conflict
threatening to to Russias borders, to the neighboring states of Russias underbelly in Central Asia.
..."
On Sunday, Iranian Supreme Leader Ayatollah Ali Khamenei warned that "divine vengeance will befall
Saudi politicians" for "the unjustly spilled blood" of prominent Shia cleric Nimr al-Nimr, executed
by the Saudis on Saturday.
Considered a terrorist by Saudi authorities for his criticism of the government, calls for free
elections and demands that authorities respect Saudi Shias' rights, al-Nimr's execution sparked outrage
and an escalation of diplomatic tensions across the Middle East, but
only a cautious criticism from Riyadh's allies in Washington and Brussels.
The cleric was killed along with 46 others in the country's largest mass execution in decades,
sparking anger and violent protests in Shia areas of Saudi Arabia, as well as Bahrain, Indian-controlled
Kashmir, Pakistan, and Iran, where protesters
stormed the Saudi Embassy in the Iranian capital and
attempted to set the building on fire.
Trying to prevent the explosive situation from escalating out of control, Iranian President Hassan
Rouhani vowed to bring to justice those responsible for Saturday's attack. "The Iranian people should
not allow [al-Nimr's death] to become an excuse for rogue individuals and groups to commit illegal
acts and damage Iran's image," Rouhani said.
Speaking to his EU counterpart on Sunday, Iranian Foreign Minister Javad Zarif said that Iranian
authorities had
taken steps "to defuse the tensions and protect the Saudi diplomats."
Nevertheless, Saturday's execution has only resulted in the further deterioration of relations
which were already less than cordial. In several of the region's ongoing conflicts, Tehran and Riyadh
are on opposite sides of the barricades.
In Syria, Iran has offered the secular government of Bashar al-Assad, embattled by over five
years of war, political, economic and military assistance against a coalition of Saudi, Turkish and
Qatari-funded jihadist groups, including the Muslim Brotherhood, the al-Nusra Front and Daesh (ISIL/ISIS).
Furthermore, in Yemen, Saudi Arabia has formed a military coalition to try to crush the Shia
tribesmen known as the Houthis, who overthrew the government of Saudi-backed president Abd Rabbuh
Mansur Hadi last year. Accusing the coreligionists of being a proxy for Iran (claims which both
the Houthis and Tehran have denied), Riyadh launched a military campaign, including a naval blockade,
prompting criticism that the intervention has caused a '
humanitarian
catastrophe '.
At the same time that it has struggled with real and imaginary Iranian threats abroad, the
Saudi dynasty has also grown fearful of Shiites living in Saudi Arabia itself.
Commenting on the escalating conflict for Russia's
Gazeta.ru
, Vladimir Ahmedov, a senior researcher at the Institute of Asian Studies of the Russian Academy
of Sciences, called the emerging situation "somewhat frightening." According to the academic, the
conflict in the Middle East threatens to gain a new, religious dimension, openly becoming a war between
Sunnis and Shiites.
"Living in the 21st century, we have been thrown back into the Middle Ages, when the main
factor of wars was religion," rather than geopolitical considerations and the capture of territory.
"This," Ahmedov warned, "reduces the possibility of coming to an agreement in the most acute conflicts
in the region."
"In Yemen, Saudi Arabia has announced that it has decided to resume hostilities. It will be just
as difficult to come to an agreement on Syria, where that Saudis will begin coordinating with Turkey,
in my view."
As far as Russia is concerned, the analyst warned that the cleric's killing portends positive
negative consequences, with the regional sectarian conflict threatening to to Russia's borders, "to
the neighboring states of Russia's underbelly in Central Asia." Ultimately, the analyst suggests,
"I have no optimistic forecasts on this situation being resolved in the near future. Still, we can
only place our hopes in the true authorities of the Muslim world."
As they moved in to arrest Sheikh Nimr, the Saudis were well aware that this was a case that would
cause ructions.
Here was a prominent, outspoken cleric who articulated the feelings of those in the country's
Shia minority who feel marginalised and discriminated against. This was a figure active on the sensitive
Sunni-Shia sectarian fault line that creates tension in the Kingdom and far beyond.
As the Shia power in the region, Iran takes huge interest in the affairs of Shia minorities in
the Middle East. And it was inevitable that Tehran and Riyadh would clash over the treatment of Sheikh
Nimr.
The Iranians had warned that the death sentence handed to him should not be carried out. But one
of the principal concerns of the Saudis is what they see as the growing influence of Iran in places
like Syria, Iraq and elsewhere. So perhaps it is not so surprising that they were not going to be
swayed by Iranian pressure in this most sensitive case in their own backyard.
The international rights group Reprieve called the executions "appalling", saying at least four
of those killed, including Sheikh Nimr, were put to death for offences related to political protest.
Protests broke out in early 2011 in the oil-rich Eastern Province in the wake of the Arab Spring.
Sheikh Nimr's arrest in the following year, during which he was shot, triggered days of protests
in which three people were killed.
... ... ...
Prominent Iraqi Shia cleric Moqtada al-Sadr called for "angry demonstrations in front of Saudi
sites and interests", but said protests should be peaceful.
Lebanon's Shia council called the execution a "grave mistake" while the Hezbollah militant group
said it was an "assassination".
Police in Bahrain, which has seen tensions between the majority Shia population and its Sunni
rulers, fired tear gas on protesters angry at the execution.
Saudi authorities deny discriminating against Shia Muslims and blame Iran for stirring up discontent.
Saudi Arabia carried out more than 150 executions last year, the highest figure recorded by human
rights groups for 20 years.
"... The Saudis have been making use of tertiary recovery methods for decades. Lately they have been driving infill wells with laterals along the top of the Ghawar formation to capture the dregs that water flooding leaves behind (they treat seawater). ..."
"... Capitalism requires surplus value to extract from. Peak oil along with peak everything else has made it so there is no longer any surplus value anymore at least in the real economy where imo any real value resides. Capitalisms extraction now comes at the expense of someone else or as I call it Cannibalistic Capitalism. ..."
"... Its Hood Robin Economics. Rob from the Poor to Give to the Rich. ..."
Yeah. Busy man. In the winter Apollo also rode on the back of a swan to the land of the Hyperboreans
where he engaged in HFT and front running to shore up his account.
BTW: to read articles in WSJ or Financial Times, simply copy and paste the article headline
onto the search window and the complete article will come up.
"prolonged period of low prices is "also unsustainable, as it will induce large investment
cuts and reduce the resilience of the oil industry, undermining the future security of supply
and setting the scene for another sharp price rise," the prince said in the remarks"
Then pulls out the paint sprayer: "The size of the world's middle class will expand from 1.8
billion to 3.2 billion in 2020, and to 4.9 billion in 2030, with the bulk of this expansion occurring
in Asia, he said".
That's nice precision. Not 4.8 or 5.0 but 4.9. The very same middle class that is now disappearing.
And that 2020 target is just 5 (soon to be 4) years away. I guess setting the target of 2016 was
just a little too much to be trustworthy.
Keepin it hummin. The last car I'll ever need. And it's never been better. Long weekend rides
for the price of 3 beers. And of course it's morally wrong to drive to see my friends. But someone's
gotta keep the oil prices up, right?
At least this time they recognize that there are several factors that need to be overcome:
" The success of the drilling, the ability to find the water needed in the desert to make it
work, Saudi co-operation with the global energy companies who have the expertise, the Saudi cost
per barrel to produce shale energy and the global price of oil."
The Saudis have been making use of tertiary recovery methods for decades. Lately they
have been driving infill wells with laterals along the top of the Ghawar formation to capture
the dregs that water flooding leaves behind (they treat seawater).
PP – I have come to the conclusion that the fed can only follow on with what is happening at
the time. If things are not looking so cheery they grudgingly lower rates to encourage borrowing
and ramp things up. As soon as things are ramped up they happily crank up rates and rake in the
profits of exuberance. Both of these are lagging actions. Their claim that they make these rate
changes to balance out the economy is pure BS.
Capitalism requires "surplus value" to extract from. Peak oil along with peak everything
else has made it so there is no longer any surplus value anymore at least in the real economy
where imo any real value resides. Capitalisms extraction now comes at the expense of someone else
or as I call it Cannibalistic Capitalism.
The real burden on the Saudi budget comes from the fact, that there is 13 million ex-pat workers
working in Saudi Arabia, which makes the subsidies number so huge, the government subsidies fuel,
electricity, water, medicine, food & gas for the total population (30 million). according to the
numbers issued by the ministry of labour last week, Saudi Arabia issued last year 1.5 million
work visa to the private sector & 800 thousand for domestic workers (maids & drivers) which represents
around 4.5% of total population Saudi Arabia, from 2010 to 2014 this the average rate of work
visa issuance in the country. This huge influx of labour to the kingdom means an increasing government
spending to expand and maintain the country's infra structure to accommodate the ever exploding
population, and it puts an inflationary pressure on the general prices because of the growing
demand on food and clothing and housing...etc, and it creates other social problems.
Factcheck4567
I think the reverse is true. The migrant labor force is exploited and do not have good living
conditions. The citizens gets a free ride by exploiting the labor class. It is the labor class
that is subsidising the Govt finances (they don't have pensions or even good healthcare) and the
citizens that is exploding it (they go to Germany for medical treatment with family in business
class when they have a chest pain- all paid by Govt). Please be humane and fact based.
MJDubuque
The potential of various neoliberal austerity measures, whose burden disproportionately falls
on the poor, to create social unrest in Saudi Arabia is hyperbolically discounted.
Douglas Jones
What is the price of bottled water in Saudi?
A 50-65% increase in gasoline prices just might invent Saudis not to leave their car engines
running to power the air conditioning while at shopping malls with outside temperatures over 110
Fahrenheit. Need more comparative gasoline and diesel prices in the Gulf region.
"... One theory afloat is that the US and Saudi Arabia are allies in an economic and political war
against their enemies. According to this narrative, the intent of Saudi Arabia dramatically increasing
oil production during a world oil glut, and sending oil prices into a tailspin, is to shipwreck the
economies (and the polities) of US and/or Saudi enemies - e.g., Venezuela, Iran, and Russia. ..."
"... Saudi Arabia hasnt dramatically increased oil production. Their most recent peak in June of
2015 was only a couple hundred thousand barrels per day more than the previous peak back in mid-2013.
Thats about 2-3% increase over two years. I wouldnt call that, dramatic. ..."
"... Ron is basically correct. The people who think that oil production is a function of the price
are assuming that the oil is there to produce. Now, unless there are a few supergiant fields out there,
already discovered and waiting for some State Oil Company or some multi-national oil company to make
a Final Investment Decision, that assumption is incorrect. There is a handful of locations which could
potentially have supergiant oil fields that are so far undiscovered, Im not that confident that they
are there to find, since discovery in the last couple of decades has been a long way short of consumption,
even after the price went sky high and everybody and their dog was spending big on exploration. ..."
"... Tight oil has been developed in the US on the basis of unrealistic projections of ongoing production,
due to depletion rates being vastly higher than admitted when spruiking to investors. Sooner or later,
it was bound to run into problems. These problems have arrived sooner, as opposed to later, due to OPECs
price war, which is aimed at sending the tight oil industry broke. Producers have cut back on drilling
and concentrated with increased intensity on sweet spots , where production is likely to be highest.
They have also introduced technological progress that has cut the price of drilling substantially and
thus cut the break-even price for a well of a given production level, but the industry is still losing
money. A loss-making industry is unsustainable and, therefore, will not be sustained. Something has
to give. ..."
"... At this point, what will be relevant is just how extensive the sweet spots in the tight oil
formations are. Having been burnt once, investors will be working on much more careful examination of
likely decline rates and wont support drilling wells just to keep production up, if those wells wont
recover their costs within the time frame of the investment horizon. ..."
"... The $64 thousand dollar question, therefore, is how long the US tight oil industry is going
to be able to keep finding sweet spots where they can extract sufficient tight oil to pay back the cost
of drilling. ..."
"... I am NOT saying the Obama administration is colluding with the Saudis, secretly, to keep the
price of oil down. I AM saying Uncle Sam is no doubt perfectly happy about oil selling for peanuts,
because peanut oil prices are a damned good economic tonic. There must be fifty people happy about cheap
gasoline for every one person hurting because he lost his ass or his job in the oil business. Fifty
to one. No politician in his right mind can afford to overlook that sort of thing. ..."
"... Im ready to bet the farm that no documentation ever comes to light proving Uncle Sam is trying
to force oil prices up at this time. OTOH, Uncle Sam and the Saudis share some very heavy duty common
interests when it comes to Iran and Russia. ..."
If they just cut 1 Mb/d and that allows to preserve 2014 average price of oil (not even 2013
average price) they would get 125 billions (and preserve 12 Mb from their depleting wells for
moment of higher prices which will eventually come.)
In any case they managed to achieve almost 3 times drop of revenue from 2012. Three times --
Now they have almost $100 billion budget deficit in 2015 (and almost the same, 86 billions
estimate of deficit for 2016) and only around 600 billions in reserves.
Questions:
1. Why they rocked the boat?
2. Where is the logic in their actions, unless we assume that they want to destroy Iran (and
hurt Russia) ?
3. Why MSM spread all this BS about Saudis defending their market share ? Does it look like
they are defending something else ?
One theory afloat is that the US and Saudi Arabia are allies in an economic and political
war against their enemies. According to this narrative, the intent of Saudi Arabia dramatically
increasing oil production during a world oil glut, and sending oil prices into a tailspin, is
to shipwreck the economies (and the polities) of US and/or Saudi enemies - e.g., Venezuela, Iran,
and Russia.
The war, however, is not being conducted without inflicting significant damages on US allies
- e.g., Mexico, Canada, Saudi Arabia, Colombia - and domestic US production as well.
Ambrose Evans-Pritchard, for instance, published an article a couple of days ago about the
immense economic damage being inflicted on Saudi Arabia's economy and polity:
"According to this theory, the intent of Saudi Arabia dramatically increasing oil production
during a world oil glut…"
Saudi Arabia hasn't dramatically increased oil production. Their most recent peak in June
of 2015 was only a couple hundred thousand barrels per day more than the previous peak back in
mid-2013. That's about 2-3% increase over two years. I wouldn't call that, dramatic.
Ron is basically correct. The people who think that oil production is a function of the
price are assuming that the oil is there to produce. Now, unless there are a few supergiant fields
out there, already discovered and waiting for some State Oil Company or some multi-national oil
company to make a Final Investment Decision, that assumption is incorrect. There is a handful
of locations which could potentially have supergiant oil fields that are so far undiscovered,
I'm not that confident that they are there to find, since discovery in the last couple of decades
has been a long way short of consumption, even after the price went sky high and everybody and
their dog was spending big on exploration.
What interests me is the bit from the previous post, where OPEC projected prices based on their
estimate of what it cost to produce the marginal barrel. I think that is a good line to take,
until it reaches the point where governments of OPEC countries decide that, with Peak Oil passed
and production in irreversable decline, they are going to start hoarding production and make the
rest of the world go short.
The thing to realise with projecting prices based on the cost of production of the marginal
barrel is that it should be taken as a tendency working on a 5 year or even decadal scale. In
time periods short of that, you can get price wars sending prices down below the marginal cost
and price spikes producing windfall profits even for the highest cost producers. The price wars
lead to national and multi-national oil companies cutting back on capital expenditure, which eventually
leads to stagnating or declining production and a recovery in prices. Price spikes lead to huge
resources being spent on exploration and development as everybody wants to cash in.
OPEC's production assumptions are a lot less sensible than their price projections. They assume
two things:
(a) That the oil is there to increase global production; and
(b) Most of that oil, from 2020 to 2040, will come from OPEC countries.
Conventional crude oil production is flat out right now and, as I said above, unless someone
is hiding a few undeveloped supergiant fields somewhere, it's got nowhere to go but down. Let's
look at unconventional sources, then.
1. Polar and deepwater oil. A huge amount has been spent exploring for this and the
results have been underwhelming. Sure, they've found oil, but not in anywhere near the quantities
needed. Shell recently pulled out of the Arctic because of the combination of environmental protests
and poor exploration results. If they were discovering heaps, they'd just tough out the protests
– as anybody who knows the first thing about corporate capitalism could tell you.
2. Canadian tar sands. Production of these has been expanding, but it hasn't been to
the rate that one might imagine from the published resource data. This is because the rate of
production is subject to certain limits, due to inputs. The relevant inputs in this situation
are water and natural gas – and it is water which is the harder limit. Basically, they can't produce
more oil from the tar sands than the rivers of the region can support. These limits will sooner
or later, and I believe sooner, put a ceiling on Canadian production. Absent a huge shift in consumption
caused by climate change mitigation action, it will keep at that limit for many decades to come,
but it won't exceed it.
3. Venezuelan extra heavy. This is the factor about which I know least, but there doesn't
appear to be a lot of it on the market yet. There seem to be a lot of obstacles in the road of
high production.
4. Tight oil. One thing that everybody who is knowledgeable admits is that there is
a lot of "oil in place" in this category. The question is how much of this is recoverable in a
practical sense. This industry has developed in the US, primarily because it brings a number of
environmental hazards with it and, outside the US, landholders are blocking exploitation because
of environmental concerns. In the US, landholders have a financial interest in ignoring these
concerns, because mineral royalties are vested in the landowner.
Tight oil has been developed in the US on the basis of unrealistic projections of ongoing production,
due to depletion rates being vastly higher than admitted when spruiking to investors. Sooner or
later, it was bound to run into problems. These problems have arrived sooner, as opposed to later,
due to OPEC's price war, which is aimed at sending the tight oil industry broke. Producers have
cut back on drilling and concentrated with increased intensity on "sweet spots", where production
is likely to be highest. They have also introduced technological progress that has cut the price
of drilling substantially and thus cut the break-even price for a well of a given production level,
but the industry is still losing money. A loss-making industry is unsustainable and, therefore,
will not be sustained. Something has to give.
Eventually, the price of oil will recover to be equal to or greater than the marginal cost
of production. At this point, what will be relevant is just how extensive the sweet spots
in the tight oil formations are. Having been burnt once, investors will be working on much more
careful examination of likely decline rates and won't support drilling wells just to keep production
up, if those wells won't recover their costs within the time frame of the investment horizon.
The $64 thousand dollar question, therefore, is how long the US tight oil industry is going
to be able to keep finding sweet spots where they can extract sufficient tight oil to pay back
the cost of drilling.
What's going to happen in other countries? Not a great deal, I predict. Opposition from the
local population, led by local landholders, will delay and minimise production from tight oil
reservoirs. It won't completely prevent a tight oil industry developing in many other countries,
but it will ensure that it never develops the dimensions of the current oil industry. Tight oil
production will be a buffer for production on the way down, but it won't counteract the declines
caused by the depletion of conventional oil fields.
In summary, the price of production of the marginal barrel of oil is going to go higher – a
lot higher, but the marginal barrels won't be additional ones. Rather, rising prices will cause
demand destruction. It is already doing so in OECD countries, and it will start doing it in Third
World countries too, as existing fields deplete and have to be replaced by new and extraordinarily
expensive oil.
Door number two looks damned good from where I sit in the audience, lol.
In addition to putting a hurting on Russia and Iran, the Saudis are also no doubt getting the
message across to other exporters, in and out of OPEC, that they will not carry the load alone,
if and when they eventually decide to cut.
There is little doubt in my mind that secret negotiations about cuts are going on every day,
day after day, between diplomats from other oil exporters and the Saudis. When the Saudi government
gets what it wants, iron clad promises of cooperation, THEN they might be more inclined to cut.Maybe.
Sometimes something that walks like a duck, and quacks like a duck , and looks like a duck,
is never the less not a duck .. Sometimes the resemblance is merely coincidental. Sometimes
coincidences are highly advantageous to two or more parties involved.
Consider for instance that many or most well informed people consider that the House of Saud
has managed to accumulate and hang onto the biggest fortune in the world only because the
country is a client state of the American empire.
Otherwise all those princes and princesses would be dead, or in dungeons, or refugees.
I am NOT saying the Obama administration is colluding with the Saudis, secretly, to keep
the price of oil down. I AM saying Uncle Sam is no doubt perfectly happy about oil selling for
peanuts, because peanut oil prices are a damned good economic tonic. There must be fifty people
happy about cheap gasoline for every one person hurting because he lost his ass or his job in
the oil business. Fifty to one. No politician in his right mind can afford to overlook that sort
of thing.
I'm ready to bet the farm that no documentation ever comes to light proving Uncle Sam is
trying to force oil prices up at this time. OTOH, Uncle Sam and the Saudis share some very heavy
duty common interests when it comes to Iran and Russia.
Hey guys, it ain't nothing but zero's in computers, in the last critical analysis, to the House
of Saud. They have more than they can spend (on themselves ) anyway.
Suppose any one of you happened to have a personal fortune of say ten million bucks, and you
discover you are at high risk of having a fatal heart attack. I doubt any of you would hesitate
to spend a third or even half of that fortune to avoid that heart attack. You will never have
eat beans and rice unless LIKE beans and rice, so long as you still have five million bucks. (
Unless maybe your physician insists!)
In the minds of the Saudis, the Russians and the Iranians may well represent a literal existential
threat .
"... The International Monetary Fund has suggested Saudi Arabia could be running a deficit of around
$140bn (£94bn). ..."
"... Dr Alsweilem said the country does not have deep enough pockets to wage a long war of attrition
in the global crude markets, whatever the superficial appearances. ..."
Saudi Arabia is burning through foreign reserves at an unsustainable rate and may be forced to
give up its prized dollar exchange peg as the oil slump drags on, the country's former reserve chief
has warned.
"If anything happens to the riyal exchange peg, the consequences will be dramatic. There will
be a serious loss of confidence," said Khalid Alsweilem, the former head of asset management at the
Saudi central bank (SAMA).
"But if the reserves keep going down as they are now, they will not be able to keep the peg,"
he told The Telegraph.
Remittances by foreign workers in Saudi Arabia are draining a further $36bn a year, and capital
outflows were picking up even before the oil price crash. Bank of America estimates that the deficit
could rise to nearer $180bn if oil prices settle near $30 a barrel, testing the riyal peg to breaking
point.
Dr Alsweilem said the country does not have deep enough pockets to wage a long war of attrition
in the global crude markets, whatever the superficial appearances.
Concern has become acute after 12-month forward contracts on the Saudi Riyal reached 730 basis
points over recent days, the highest since the worst days of last oil crisis in February 1999.
The contracts are watched closely by traders for signs of currency stress. The latest spike suggests
that the riyal is under concerted attack by hedge funds and speculators in the region, risking a
surge of capital flight.
A string of oil states have had to abandon their currency pegs over recent weeks. The Azerbaijani
manat crashed by a third last Monday after the authorities finally admitted defeat.
The dollar peg has been the anchor of Saudi economic policy and credibility for over three decades.
A forced devaluation would heighten fears that the crisis is spinning out of political control, further
enflaming disputes within the royal family.
Foreign reserves and assets have fallen to $647bn from a peak of $746bn in August 2014, but headline
figures often mean little in the complex world of central bank finances and derivative contracts.
""He is drawing on a McKinsey study – 'Beyond Oil' -
that sketches how the country can break its unhealthy dependence on
crude, and double GDP by 2030 with a $4 trillion investment blitz across
eight industries, from petrochemicals to metals, steel, aluminium
smelting, cars, electrical manufacturing, tourism, and healthcare""
McKinsey's advice to the Saudi suckers proves that global financial companies are crooks. Pray
tell from where will Saudi Arabia get people to run the industries recommended by Mckinsey ? There
is already global excess in the industries.
The ministry reported total revenue for fiscal year 2015 at $162 billion, an estimated 15
percent decline from budgeted revenues. Oil revenues are expected to reach $118 billion, a
decline of 23 percent from the previous year.
... ... ...
The Saudi government said that, because of "excessive" volatility in crude oil prices, a
budget support provision of $48.7 billion was established to help finance projects designated as
national priorities.
Non-oil revenue for Saudi Arabia increased 29 percent from last year to $43.5 billion.
The sooner those oil sheiks sell their oil at rock bottom price, the sooner the end of their kingdoms
arrive. In this sense this is not a bad development after all.
Yesterday, when Saudi Arabia
revealed its "draconian" 2016 budget, boosting gasoline prices by 40%, while trimming welfare
programs after forecasting a collapse in oil revenue (even while allocating the biggest part of government
spending in next year's budget to defense and security)
Bloomberg
reported that "the kingdom's 2016 budget is probably based on crude prices of about $29 a barrel,
according Riyadh-based Jadwa Investment Co."
With regard to peak oil, I have always [perhaps incorrectly] put most of the weight on the charts/graphs
of "new discovery quantities" by year, for the past 80 years.
Put those graphs against consumption graphs for those same 80 years. Looking at those two in
conjunction should give pause to most people.
Unless they believe that there dozens of elephant fields out there somewhere that have
not been discovered and which will be economic at some price below $75.
The fact that Saudi can produce oil at $5 per barrel is meaningless, since they have created
a country with a growing population that needs over $75 per barrel to survive as a country.
"... This year Saudi Arabia has ramped up production by 1.5 million barrels per day, which in fact destabilized the situation on the market, ..."
"... What is now emerging, especially clear since the Turkish deliberate ambush of the Russian SU-24 jet inside Syrian airspace, is that Russia is not fighting a war against merely ISIS terrorists, nor against the ISIS backers in Turkey. Russia is taking on, perhaps unknowingly, a vastly more dangerous plot. Behind that plot is the hidden role of Saudi Arabia and its new monarch, King Salman bin Abdulaziz Al Saud, together with his son, the Defense Minister, Prince Salman. ..."
Saudi Arabia has destabilized the crude market while increasing its
oil output by 1.5 million barrels a day, said Russia's Energy Minister
Aleksandr Novak.
"This year Saudi Arabia has ramped up production by 1.5 million
barrels per day, which in fact destabilized the situation on the
market," Novak told Rossiya 24 TV channel.
According to him,
the balance of oil supply and demand could be achieved in 2016. Iran's
return to the global energy market could also affect oil prices, Novak
added.
The world saw this behavior from the Saudi's in 1975 and 1978
when they created oil shortages to gain market share just as they
are doing today, sacrificing fellow members of OPEC for their own
greed.....we have seen this dumb show before and yet the world
allows it to continue.
Tom Brite > Greg G1
Greg G
Saudi Arabia responsible for oil market destabilization. Russia
seems to be doing so as well. Just wait till Iranian oil hits the
market!
vann tedd > nikko sharkenstein
nikko sharkenstein
Kathryn Roston
What is now emerging, especially
clear since the Turkish deliberate ambush of the Russian SU-24
jet inside Syrian
airspace, is that Russia is not fighting a war against merely
ISIS terrorists, nor against the ISIS backers in Turkey. Russia
is taking on, perhaps unknowingly, a vastly more dangerous plot.
Behind that plot is the hidden role of Saudi Arabia and its new
monarch, King Salman bin Abdulaziz Al Saud, together with his
son, the Defense Minister, Prince Salman.
The Saudi monarchy is determined to control the oil fields of
Iraq and of Syria using ISIS to do it. They clearly want to
control the entire world oil market, first bankrupting the
recent challenge from US shale oil producers, then by
controlling through Turkey the oil flows of Iraq and Syria.
If we strip away the phony religious cover, what emerges is a
Saudi move to grab some of the world's largest oil reserves,
those of the Sunni parts of Iraq, and of Syria, using the
criminal Turkish regime in the role of thug to do the rough
work, like a bouncer in a brothel.
It's the monarchy of King Salman and his hot-headed son, Prince
Salman. For decades they have financed terrorism under a fake
religious disguise, to advance their private plutocratic agenda.
It has nothing to do with religion and everything to do with
money and oil. A look at the ISIS map from Iraq to Syria shows
that they precisely targeted the oil riches of those two
sovereign states. Saudi control of that oil wealth via their
ISIS agents, along with her clear plan to take out the US shale
oil competition, or so Riyadh reckons, would make the Saudi
monarchy a vastly richer state, one, perhaps because of that
money, finally respected by white western rich men and their
society.
What Russia is facing is an indirect soft war from United
States. in at least 3 fronts, in Ukraine, in Syria and on its
Economy. but also it could be said in IRAQ too, since just
like Syria and IRAN, IRAQ is the other of the few countries in
middle east that Americans do not fully control, and that
cooperates with Russia and buys a lot of military hardware from
them. Saudi king, Turkey, US and ISrael are the lifeline of ISIS
and Alqaeda. This is why is impossible to completely defeat the
organization as long those countries continues recruiting
terrorist, and aiding terrorism with money and weapons.
And
logistics and training. It could be said that well organized
terrorism, but also ultra radical right wing nazis like in Ukraine
and baltic states are groups that Americans Government as a policy,
helps to organize and to become more powerful, simply because they
can be used to fight Russia. The major world conflict in the world
today, the major wars, are all caused by Americans with the aim to
weaken and isolate Russia. We are effectively in a "Cold war 2.0",
that Americans began against Russia, and forcing them to defend
itself before the problem grows too much (what Americans wants) and
affect directly the security of Russia directly and its long term
economic interest.
"... The government announced its budget on Monday, projecting spending of $224 billion (840 billion riyals) in 2016 versus $137 billion (513 billion riyals) in revenue. ..."
The government announced its budget on Monday, projecting spending of $224 billion (840
billion riyals) in 2016 versus $137 billion (513 billion riyals) in revenue.
Trav
Don't underestimate the Saudi's. They've gutted the oil market to the point that it's
hurting U.S. oil companies and more importantly the U.S. economy. Once that's accomplished
they can cut off the flow of oil and hurt us even more. They're not losing money without a
purpose and their purpose is likely to eventually hurt us.
backahead
Pikers. Obama banging the drums cause we just had our best year ever with him as
President...only $450Billion more debt this year. Hey, least it's no longer $1Trillion/yr.
Record revenues collected too.
JET
I would gladly pay more for my fuel if it meant putting the thousands of oil workers back
to work. It costs US taxpayers millions if not billions to unemployment, food stamps, renal
assist and the other social support programs for our unemployed people.
"... The literature on perceptions suggests that, however they come to be formed, the beliefs of
national leaders (including their beliefs about the relative power of states in the international system)
are slow to change. ..."
"... This blip period where oil prices are very low are just consequences of geopolitical war that
you describe where everybody produce maximum regardless of profit in order to undercut the competition.
..."
You continue to ignore the role of geopolitics in setting the tone for the global
oil market, and especially the current oil market.
KSA have not been pumping oil at a record pace in order to cover their budget (which is simply
impossible at current prices without a massive devaluation of their currency which will annihilate
their trade position, since KSA cannot feed or clothe itself) KSA have been doing what they are
doing because they are in a shooting war with Russia. The Syrian Arab Army, the Iraqi Shia militias,
the Shia-dominated Iraqi government, Iran itself, as well as Hezbollah are Russia's allies in
a grand regional struggle against NATO-GCC across the Middle East. The battlefield includes Syria,
Iraq and Yemen. East Ukraine is a derivative or diversionary front in what some people describe
as the First Global Hybrid War.
Russia, Iraq and Iran have massive oil (and gas) reserves that can be brought into production
in the future. Something similar applies to Venezuela (but I reckon that Venezuela's reserves
will be more expensive in relative terms) This potentiality threatens the global balance of power,
as western oil & gas output is destined to decline (as well as output by countries under western
domination) and the potential oil production of Russia, Iran & Iraq becomes a necessity for the
global economy.
This is one of the two main reasons (the other being the potential routes of gas pipelines)
why we now have an extremely dangerous (media and political leaders vastly understate the true
extent of brinkmanship currently ongoing) process of escalation in the Middle East.
What you fail to acknowledge in your articles, is that NATO-GCC have as a strategic imperative
to strangle Russia, Iran & Iraq in any which way they can. This includes the imposition of sanctions,
military pressure and all other kinds of sabotage one can think of. What we are now witnessing
in the global oil (and gas) markets is that excess investment has been ongoing in places such
as the US, Canada, the North Sea (as well as several offshore locations, performed by western
majors) etc while there is an under-investment in places such as Russia, Iran and Iraq (also Libya
& Venezuela) The latter group of countries is much less capital rich than the NATO-GCC countries
(and their proxies) and less proficient technologically, hence my firm belief that their production
is well below potential.
NATO-GCC's calculation once they embarked on their oil-price war more than a year ago, was
that the combination of sanctions, a crushed oil price and loss of trade with Ukraine would have
pummeled Russia into submission, hence ending that country's support for the Syrian Arab Army,
Iran and Iraq. Simply put, if Russia falls, then the Middle East will be at the mercy of the NATO-GCC-Israel
alliance (the world's dominant group of countries) One can also imagine what that would entail
for China's position on the world stage.
As for Russia's oil output in 2016, I cannot say very much. There are so many factors at play
(price, sanctions, unknown Russian technological capabilities) but even if there is a considerable
fall, then it will have nothing to do with Peak Oil (in the traditional sense) finally hitting
Russia, but with NATO-GCC pressure bearing some fruit.
In conclusion, my point is that several countries with vast oil & gas reserves, have been intentionally
starved of investment due to geopolitical factors, NOT economic ones. As for Russia in particular,
I am guessing you have been in the business of monitoring the global oil industry for many years
now, how many times have you heard/read western "experts" claim that any minute now, Russian oil
production will be entering terminal decline? I can attest that I have been coming across such
claims since the day I started following such things, more than a decade ago.
Iran & Iraq also have mythical reserves of oil still untapped. Libya, once stabilized (probably
under a NATO-puppet government) can also boost its oil production significantly.
NATO didn't do so shit-hot in Afghanistan. The days of anybody being at the mercy of NATO are
long over. If NATO learnt anything in Afghanistan it's to stay out of land wars in Asia. This
has been the case since Alexander the Great but great powers seem to need a reminder every century
or so.
I suggest USA is no longer a dominant power. Preeminent yes but not dominant. 25 years ago
anybody who defied the USA was in trouble. They'd fly half way around the world and kick your
ass. On a Tuesday if they wanted. For 5 billion dollars.
Today we see that Russia, Iran and China have joined together to defy USA/NATO policy in Syria
and they're doing rather well. It'll be along time until USA fights any winning battles anywhere
in Asia.
The literature on perceptions suggests that, however they come to be formed, the beliefs of
national leaders (including their beliefs about the relative power of states in the international
system) are slow to change.
Kenneth Boulding argues that such adjustments occur rarely, if at all, while John Stoessinger
asserts that change is possible only as a consequence of some monumental disaster.
The precise point at which the scales of power turn…is imperceptible to common observation…some
progress must be made in the new direction, before the change is perceived. They who are in
the sinking scale…do not easily come off from the habitual prejudices of superior wealth, or
power, or skill, or courage, nor from the confidence that these prejudices inspire. They who
are in the rising scale do not immediately feel their strength, nor assume that confidence
in it which successful experience gives them afterwards. They who are the most concerned to
watch the variations of this balance, midjudge often in the same manner, and from the same
prejudices. They continue to dread a power no longer able to hurt them, or they continue to
have no apprehension of a power that grows daily more formidable.
–EDWARD VOSE GULICK, Europe's Classical Balance of Power
Saudi Arabia appears to have other motives besides maximizing its income from oil sales. Its
motives are not stricly economic, and waging war is never without cost.
Again, I don't claim to know what Saudi Arabia's motives are, but your explanation seems as
plausible as any.
One thing we can be sure of, however, is that the balance of power which attained after 1989
is now very much in flux, and is very much being challenged.
The big picture that you describe is somewhat on the money but the devil is in the details.
And when you look at these details from different frame of mind you will get different picture.
1) If you use terms like NATO, GCC, EU, IMF you have to be aware that these are just labels
that are representing cartels. In North America they like to talk about OPEC cartel but not
so much about other cartels. If you don't talk about them than we pretend they do not exist. Main
purpose of NATO is not to fight the war with "enemies" but to collect a money racket from the
"allies". Country A is in the NATO, regardless if it likes it or not, has to have 3% of budget
spent on military. That 3% is your racket. And that racket has to be collected every year. And
you can only spend it on hardware from NATO catalogue. No free market there even if there are
cheaper and better options. The more countries join the cartel the more money is in the pot. Small
countries – no problem, they can join. Poor countries – no problem, they can join too. You can
always extract something. In military sense these countries are useful as much as your Facebook
friends (practically not friends at all) but what it does it keeps money trickling to the core.
2) Second note is about the fine print of the notion how much some country can produce oil.
There is misconception in the discussion that certain country has huge X amount reserves and it
will produce huge X amount of oil in the future. Country A with supposedly huge reserves, if assume
it has sovereign elite, will produce just enough that suits their economic development and no
more. It is as simple as that. The notion that Russia or Iran or whoever will produce so much
that European elite can entertain themselves with Formula 1 races every weekend is pretty much
nonsense that is result of 50 year of propagandazition. If American elite wants to piss their
remaining shale oil on NASCAR races or 20 miles drive to the nearest Wal-Mart for jug of milk,
or to keep military bases around the world, well, that is their choice. But eventually it will
come to the point where this way of life is not possible and you have to adapt to a new circumstance.
This blip period where oil prices are very low are just consequences of geopolitical war that
you describe where everybody produce maximum regardless of profit in order to undercut the competition.
If you don't have domestic source of oil then you can't play empire games anymore. You have to
be "normal" country again. And that is not that tragic because if you ask 99% that question if
they would like to be a "normal" country again they would take that in a heartbeat.
This potentiality threatens the global balance of power, as western oil & gas output is
destined to decline (as well as output by countries under western domination) and the potential
oil production of Russia, Iran & Iraq becomes a necessity for the global economy.
It's certainly time to put the era of the "great prize" of oil behind us, and transition to
new forms of transportation and energy.
If that were to reduce the chances for this kind of senseless conflict, that would be enormously
valuable.
"... Just because Saudi Arabia has increased production in order to meet their budget does not mean
the world will increase production because of cheap oil. (Iraq would have increased production regardless.)
..."
"... No, upstream investment will, or has, dropped dramatically. This will cause production decline
down the road. ..."
"... If the world is 2 Mbbl/day oversupplied right now, and decline rates are 6%, and there is only
minimal new oil wells. (so, overall decline rate is 2% ?). We should see the oversupply disappear in
a year or so. ..."
"... I don't think the oversupply is 2 mm. My guess it's less than 1.2 mm in December. ..."
So as the price of oil continues lower, oil production will continue to increase.
Oh
don't be silly. Just because Saudi Arabia has increased production in order to meet their
budget does not mean the world will increase production because of cheap oil. (Iraq would have
increased production regardless.)
No, upstream investment will, or has, dropped dramatically. This will cause production
decline down the road.
And what is "short term"?
12 months, or maybe 3-4 years.
If the world is 2 Mbbl/day oversupplied right now, and decline
rates are 6%, and there is only minimal new oil wells. (so, overall decline rate is 2% ?). We
should see the oversupply disappear in a year or so.
Ecopetrol, the largest Colombian producer announced that it will produce 755,000 barrels a
day in 2016 vs 760,000/day in third quarter of 2015.
That does not sound like much a of drop, until you realize that Ecopetrol will be taking over
the Rubiales field from a joint venture by not extending their partners contract.That will add
70,000 barrels a day to their production.Or about 35,000 barrels day annualized since it happens
mid-year. So adjusted for this their production will decline from 795,000 barrels to 755,000 barrels
per day, or a drop of 5%. And that is after spending 4.8 Billion USD. So I am guessing their base
decline rate is closer to 10%
JEDDAH: Custodian of the Two Holy Mosques King Salman has ordered that Saudi Arabia's aid and investment
package to Egypt should be increased to SR30 billion (US$ 8 bn) in the next five years.
The announcement was made by Deputy Crown Prince Mohammed bin Salman at a meeting with Egyptian
Prime Minister Sherif Ismail in Cairo on Tuesday, said SPA (Saudi Press Agency)
Prince Mohammed said at the start of the meeting that King Salman ordered the increase in the
package - to contribute to Egypt's oil needs for five years and for an increase in traffic for Saudi
ships in the Suez Canal.
According to a
report in Bloomberg quoting Egyptian Investment Minister Ashraf Salman on Wednesday, the investment
of SR30 billion would be through Saudi Arabia's public and sovereign funds, with inflows beginning
immediately. Egypt is also set to renew a deal to import Saudi oil products for five years on favorable
terms, Ismail said."
This follows
pledges of US$ 12.5 bn aid by Saudi Arabia, Kuwait, the UAE and Oman in March 2015, at an economic
conference (EEDC) in Sharm el-Sheikh.
Will that be enough to rescue Egypt?
Let's have a look at Egypt's budget. In the previous post we found that Egypt's oil production
peaked in 1993. Declining and now stagnating oil production against an ever-growing oil demand of
a ballooning population meant that Egypt is a net-oil importer since 2010. How did that impact on
the budget? We use IMF data available from this website:
http://www.imf.org/external/country/egy/index.htm
...the kingdom may raise domestic energy prices, privatize and tax mines and consider taxing
cigarettes. Like other Gulf Cooperation Council members, it's also plans to implement a
value-added-tax.
In November 2013, the Arab world's biggest economy took action against illegal workers as it
pushed to create more private-sector jobs for its citizens. At that time, unemployment was about
12 percent. The official data show joblessness at 11.6 percent for the first half of this year.
Youth unemployment is almost 30 percent, according to World Bank data.
Saudi shipments rose to 7.364 million barrels a day in the month from 7.111 million in
September, according to the latest figures from the Joint Organisations Data Initiative. The
monthly exports were the most since June and 7 percent higher than in October 2014, the data
released on Sunday showed. JODI is an industry group supervised by the Riyadh-based International
Energy Forum.
Saudi Arabia produced 10.28 million barrels a day in October, up from 10.23 million in September,
the JODI figures showed.
Great question: Why would a country drive down the price to maintain market share when they
know they will lose market share due to declining production.
Notable quotes:
"... According to you Saudi Arabia were doing everything possible in Jan 2013 just to stop decline. ..."
"... Yet here we are 3 years on and they are producing 1mmbld more and flooding the market. Please explain. Why would a country drive down the price to maintain market share when they know they will lose market share due to declining production. ..."
"... Peter, the only reason I can figure out is that the Saudis bought into the hype being peddled by Team Carbon (see graph below from https://www.eia.gov/conference/2015/pdf/presentations/hamm.pdf ), and wanted to stop "the Great American Shale Revolution" in its tracks. ..."
"... Could the Saudis be that stupid, to believe the hype? I doubt it. ..."
Yet here we are 3 years on and they are producing 1mmbld more and flooding the market.
Please explain. Why would a country drive down the price to maintain market share when
they know they will lose market share due to declining production.
According to you Saudi Arabia were doing everything possible in Jan 2013 just to
stop decline.
And they did. In addition to dramatically increasing infill drilling
in their old fields, they brought Khurais on line, then increased water injection
in Khurais and in 2013 they brought Manifa on line ahead of schedule.
April 15, 2013
Saudi Arabian Oil Co. started producing crude from Manifa, the world's fifth-largest
oil field, on April 10, three months ahead schedule.
Saudi Aramco, as the state-owned producer is known, said today the field will produce
500,000 barrels a day of Arabian heavy crude by July and it will reach 900,000 barrels
a day by end of next year.
And they are still working desperately to stem the decline in their old giant fields.
"This will bring it up to a million barrels (per day). We're in the process
of awarding the contract in the next few days," he said, adding that an ongoing project
at Shaybah will also add 250,000 bpd of natural gas liquids output in end-2014.
The Khurais expansion project was at the front-end engineering stage and the
expansion to increase the field's output by 300,000 bpd to 1.5 million bpd should
be completed by 2017, he said.
Khurais, Shaybah and Manifa are all very old fields that, for various reasons,
were mothballed years ago. But now they are called into service to to stem the decline
in their other old giants.
Saudi intends to hold production at current levels for several more years. How
successful they will be remains to be seen. But they have not and will not dramatically
increase production.
Why would a country drive down the price to maintain market share when they
know they will lose market share due to declining production.
Peter, the only reason I can figure out is that the Saudis bought into the hype
being peddled by Team Carbon (see graph below from
https://www.eia.gov/conference/2015/pdf/presentations/hamm.pdf ), and wanted to
stop "the Great American Shale Revolution" in its tracks.
Could the Saudis be that stupid, to believe the hype? I doubt it.
I suspect that the Saudis and Russians have other reasons for wanting the price
of oil low, reasons which folks like Rockman cannot even conceive of.
We are wandering about in a wilderness of unknowns, but that doesn't stop the speculation.
Iran's Ministry of Petroleum reported that its oil sanctions might be removed by the first
week of January 2015. The easing of sanctions would mean Iran could scale up crude oil production
by 0.5 MMbpd (million barrels per day) to 1 MMbpd in the next six months to one year.
...Iran has the lowest production cost at just $10–$15 per barrel. It also has the lowest
break-even cost in OPEC and in the world. Iran's strategic location allows it to transport vast
amounts of crude oil.
Non-OPEC production is forecast to fall by the end of 2016 and then set to rebound into
2017.
Notable quotes:
"... For 2016, non-OPEC oil supply is now expected to contract by 380,000 barrels a day to average ..."
"... OPEC raised its forecast for world oil demand growth in 2015, predicting it will rise by 1.53 million barrels ..."
"... The organization predicted oil demand would increase by around 1.25 mb/d to average 94.14 million barrels a day next year ..."
"... U.S. tight oil production – the main driver of non-OPEC supply growth – has been declining since April 2015. This downward trend should accelerate in coming months, given various factors, mainly low oil prices and lower drilling activities. ..."
"For 2016, non-OPEC oil supply is now expected to contract by 380,000 barrels a day to
average 57.14 mb/d, following a downward revision of 0.25 mb/d," from last month's report.
Just as the supply from non-members was forecast to dwindle, OPEC raised its forecast for
world oil demand growth in 2015, predicting it will rise by 1.53 million barrels per day (mb/d)
to average around 92.88 mb/d – up 30,000 barrels from the previous month's forecast – and for
2016.
The organization predicted oil demand would increase by around 1.25 mb/d to average 94.14
million barrels a day next year, upping its forecast mainly as a result of
"better-than-expected consumption in Europe and Other Asia," an area including India, Indonesia
and Thailand among other Asian economies but not China.
"Persistently low oil price levels in 2015 have caused the U.S. shale oil sector to shrink,"
OPEC noted. "Shale drillers in the U.S. have slashed spending and cut the number of workers this
year as prices have fallen. U.S. tight oil production – the main driver of non-OPEC supply
growth – has been declining since April 2015. This downward trend should accelerate in coming
months, given various factors, mainly low oil prices and lower drilling activities."
"... So about 7% of the ND Bakken wells were refracked since 2008, and that had a very significant impact on the plays' total output. ..."
"... Refracks are very efficient in terms of maintaining production, although, as shallow sand pointed out, the economics are an issue ..."
"... Without refracks, Bakken wells declines rates are much higher ..."
"... Posted oil prices are about $25. Gas about $1.60. Each needs to at least triple for activity to be economic (i.e. my view- chance of payout in five years or less). ..."
I belief I found a way to determine which wells have been refracked, using some simple rules (related
to the size and duration of the production increase). I found about 750 Bakken wells since 2008 that
have been refracked, which is of a similar magnitude as I have read from several sources. It may
not be completely accurate, but I belief it to be roughly so.
Below you can see the performance of all Bakken wells (about 9850) since 2008 (graph 1), and of the
same wells but then excluding those refracked wells (about 9100, graph 2).
Graph 2. The effect is much more severe than I expected: Take out the wells that appear to
have been refracked, and the performance of the remaining wells after 7 years drops by about
40%.
I wrote an original comment that is not getting posted … The significance of what you show in those two charts cannot be overstate. HUGE! I suspect the halo effect, rather than actual reentering/refrac'ing plays a role as the
750 figure seems high. Data from the ND subscription service should provide clarity.
On another site, an industry professional indicated that his company is very secretive
about this stuff as they are still trying to understand what is actually happening.
Enno. Again, thank you for this the information. To me it confirms the expensive nature
of the Williston Basin. Rune indicates refracks are generally not economic.
Further, it would seem to me that more recent mega frack practices would limit the viability
of going back in again on newer wells?
Wow! What a difference. When you revealed the first graph on a thread a few posts back,
I was singing and dancing, "We're in the money!" But now it looks like those flat decline curves only come as a result of a lot of very
expensive workovers.
So about 7% of the ND Bakken wells were refracked since 2008, and that had a very significant
impact on the plays' total output.
My conclusions:
1) Refracks are very efficient in terms of maintaining production, although, as shallow
sand pointed out, the economics are an issue
2) Without refracks, Bakken wells declines rates are much higher
coffee. It appears there is no "fat tail" unless wells are worked over after a few years.
One good thing about this is that companies do not have to do these work overs when prices
are low. As long as they keep producing some amounts of oil from the wells, they can
hold off on work over until prices are better.
Seems like this is not any different than what we do. We do not refrack many wells,
but we do sand pump and acidize them, which brings up production. A lot less expensive
and less regulatory work to do these kinds of jobs, as opposed to drilling a new well.
Wonder if these costs are figured into the PV10 calculations? How many refracks to
we need to expect to get to EUR 800K?
The Williston Basin has always been an expensive place to operate. Posted oil prices
are about $25. Gas about $1.60. Each needs to at least triple for activity to be economic
(i.e. my view- chance of payout in five years or less).
"... Saudi Arabia could, through a combination of debt issuance and reserve drawdown, weather a period of low oil prices (in the USD50-55/bbl range) for at least two years before even half of the kingdom's foreign reserves are depleted. ..."
"... By September 2015, the funds in the central government's deposit accounts at SAMA had fallen by -28.0 percent y/y, or USD112 billion. ..."
KUWAIT, Dec 12 (KUNA) -- The National Bank of Kuwait (NBK) said in a report on Saturday that
the Saudi economy is resilient and able to stand challenges caused by falling oil prices.
The Kingdom seems to have ample fiscal space with central government gross domestic debt a
very low 1.6 percent of GDP (USD11.6 billion) in 2014, the report added. Saudi Arabia could, through a combination of debt issuance and reserve drawdown, weather a
period of low oil prices (in the USD50-55/bbl range) for at least two years before even half of
the kingdom's foreign reserves are depleted.
According to the NBK report, the Saudi economy has begun to feel the effects of the decline in
oil prices: non-oil activity has moderated, the fiscal account has fallen into deficit and the
flow of deposits into the banking system, especially government-sourced, has slowed.
Faced with a sizeable fiscal deficit, a consequence of lower oil revenues and record high
spending, and the prospect of increased drawdowns of the kingdom's foreign reserves, the
authorities in 2015 started issuing sovereign bonds for the first time since 2007.
While banks' interest margins should improve through participation in the bond issuance
program, banking sector liquidity will need to be monitored Issuing debt of up to USD 45 billion
over the course of a year or two, or even several years, would nevertheless have implications for
the domestic banking system.
On the positive side, banks' net interest margins and revenues should improve as banks shift from
lower-yielding, short-term liquid assets to higher-yielding, longer term government securities.
The NBK report noted that a spate of negative outlook; assessments and a one notch downgrade
(AA- to A+) by the ratings agency Standard and Poor's (S&P), compounded the market'ss anxieties,
weighing heavily on the index.
Government deposits at Saudi Arabian Monetary Agency (SAMA) drawn down; falling foreign
reserves spurred the issuance of Saudi Arabia's first sovereign bonds since 2007. By
September 2015, the funds in the central government's deposit accounts at SAMA had fallen by
-28.0 percent y/y, or USD112 billion.
Thus, the kingdom has ample resources to help it negotiate the economic downturn, at least
over the medium term. Clearly, however, prudent fiscal policies will need to be the way forward
for Saudi Arabia.
The non-oil activity is likely to remain relatively buoyant, supported by government spending,
the NBK said. However, there are signs that the economy is cooling: GDP growth in 2Q15 slowed for
the third successive quarter and key metrics of consumer and business activity such as point of
sale (POS) and ATM transactions, business confidence and private sector credit growth, have all
been slipping.
Also, the annual non-oil growth is projected to slow, from 5.0 percent in 2014 to an average
of 3.7 percent during 2015-2017. Headline GDP growth is, therefore, forecast to expand by 3.5
percent in 2015 before slowing to 2.5 percent and 2.3 percent in 2016 and 2017, respectively.
(end) osj.amj.msa
...Saudi reserves were approximately $736 billion coming into the year.
...The kingdom supported roughly 4 million people in 1960, and since then, its population has
grown rapidly, to the 30 million population level it's at today. Although far-off population boom
highs hit in the 1980s, Saudi Arabia's population growth rate is still positive, with the overall
population increasing at around 2 percent per annum.
...According to the IMF, Saudi Arabia's fiscal breakeven - the price per barrel of oil that it
needs to balance its budget - was about $106 in 2014, and it is estimated to remain at about that
level for this year as well.
..."Saudi Arabia hasn't said they won't cut, but that doesn't mean they are going to increase
production either," SEB analyst Bjarne Schieldrop recently told CNBC.
"... Crude demand is expected to rise by 1 million barrels a day every year in this decade, and
the world requires more investments in oil to compensate for declining recovery rates, he said. The
recovery rate for all the worlds oil fields [annually] is decreasing by about 4 million barrels a day,
he said. ..."
"... The oil market will start to re-balance next year and prices will improve, Matar al-Neyadi,
energy undersecretary for the United Arab Emirates, said at the conference. ..."
"... Current U.S. shale output is slightly less than 5 million barrels a day and will drop by 900,000
barrels daily in 2016, ..."
"... Total U.S. oil production wont recover to its recent peak until at least 2018, he said. ..."
...And just today the Saudi Finance Minister stated
"Crude demand is expected to rise by 1 million barrels a day every year in this decade,
and the world requires more investments in oil to compensate for declining recovery rates, he
said. The recovery rate for all the world's oil fields [annually] is decreasing by about 4 million
barrels a day, he said."
... The oil market will start to re-balance next year and prices will improve, Matar al-Neyadi,
energy undersecretary for the United Arab Emirates, said at the conference.
... Current U.S. shale output is slightly less than 5 million barrels a day and will drop
by 900,000 barrels daily in 2016, Paul Horsnell, head of commodities research at Standard Chartered
Plc, said at the Bahrain conference. Total U.S. oil production won't recover to its recent peak
until at least 2018, he said.
"... Saudi Arabia feels betrayed by the US in providing a final solution to the Iranian problem.
Russias aggressive entry in the Mid-Eastern affair is also turning out to be a huge set-back for them.
..."
"... For instance, Saudias decision not to cut production of oil has now backfired. As oil prices
continue to fall, Saudi Arabia has been forced to offer Russia full membership in OPEC to stabilize
the oil market. ..."
"... The irony is that one of the main purposes behind Saudi knocking oil prices down was to hurt,
on the Wests behalf, Russian economy as much as possible. ..."
While Saudi Arabia has certainly failed to strangulate Iran's economy, it has also failed to contain
Iran's influence in the region that the former wanted to achieve through systematically engaging
Iran in one conflict (Syria) after the other (Yemen).
Saudi Arabia feels "betrayed" by the US in providing a "final solution" to the Iranian 'problem.'
Russia's aggressive entry in the Mid-Eastern affair is also turning out to be a huge set-back for
them.
I am not sure if the Saudis had contemplated such a scenario. If they had, they would not have
been trying to make use of "all available options" as they are doing now.
Instead, they would have had a certain policy direction. For instance, Saudia's decision not
to cut production of oil has now backfired. As oil prices continue to fall, Saudi Arabia has been
forced to offer Russia full membership in OPEC to stabilize the oil market.
The irony is that one of the main purposes behind Saudi knocking oil prices down was to hurt,
on the West's behalf, Russian economy as much as possible.
While offering Russia full membership is just one instance of how Saudi Arabia's foreign policy
is playing against itself, the Saudis are having to face a lot of trouble with regard to the goals
it set to achieve in Yemen.
... ... ...
Salman Rafi Sheikh is a freelance journalist and research analyst of international relations
and Pakistan affairs. His area of interest is South and West Asian politics, the foreign policies
of major powers, and Pakistani politics.
(Copyright 2015 Asia Times Holdings Limited, a duly registered Hong Kong company. All rights
reserved. Please contact us about sales, syndication and republishing.)
For how much longer will Saudi Arabia be in a position to defend its Riyal as
pegged to the Dollar at 3.75? Urgently needing oil to be at $106 per barrel in order
to balance its budget, it is nowhere near seeing such prices again in the presence
of a fracking industry as dynamic as it is innovative and which has managed to slightly
alleviate its predatory behaviour. This is a warning of a wholesale sandstorm to
come for the Wahhabi kingdom."
Notable quotes:
"... Basically, Saudi Arabia is going to have great trouble in about two years and will be confronted by an existential crisis in around five! The collapse of oil prices by nearly 55% in one year is effectively melting away this country's cash reserves, a country which is suffering the torment and humiliation of budgetary deficits, and which has been reduced to issuing a public loan (of more than $5 million) in order to subsidise its needs. ..."
The debacle of oil prices has greatly exceeded that of the global financial
crisis of 2008 and the Asian crisis of 1998. And it is much more severe. At
the end of this summer of 2015, OPEC is just a shadow of its former self: simply
put, it has been de facto dissolved and this cartel would be better off closing
its offices in Vienna in order to save some cash… Similarly, it is easy to see
that the Saudi tactic of flooding the market with petrol has backfired. Already
in decline and very fragile due to the fact that the only income from exportation
comes from the sale of just one product (oil), Saudi Arabia's war using ancient
weapons is dwindling.
The oil markets have indeed fundamentally changed since the time when investments
became lucrative only after ten years. The Saudis were of course the undisputed
masters when vast sums of money had to be handed over to make extractions from
oil wells that would only come good many years later. This is why they got up
to their dirty tricks in November 2014 when they decided to lower prices in
order to stifle American oil shale producers, whom they had been banking on
wiping off the map. As for the lost revenue due to the fall in oil prices, they
would inevitably gain it back after the renewed rise in prices thanks to the
disappearance of US producers. However, this venture, which consisted of making
prices drop in order to harm competitors before putting them back up again in
order to monopolise and maximise profits, is now an invalid practice. Also,
this insane gamble taken by Saudi Arabia last winter to increase its own production
to 10.6 million barrels per day at the climax of the fall in prices was already
lost because it reveals a deep misconception of fracking, which is by no means
a classical resource extraction method, and one which doesn't require substantial
investment nor elevated oil prices in order to be viable.
Far from being a traditional production model, fracking allows the operation
of wells with as little as $1 million while ensuring immediate gains. What's
more is that extraction techniques are improving basically every day and allow
the use of up to ten sites per day, while sophisticated computer programs detect
cracks over a large area. To sum it up, the explosion in the development of
fracking techniques – which will lead to the reduction of costs associated with
extraction by nearly 45% in 2015 alone – is revolutionising the oil industry,
previously the exclusive domain and prerogative of certain States, and which
once demanded massive prior investment. Extremely responsive and flexible, the
operators of shale oil would remain the beneficiaries even in the case of a
rise in prices: this would in turn allow for the opening of many more extraction
sites…acting on their part to squeeze prices due to increased supply.
Saudi Arabia is therefore no longer the go-to producer, since it is no longer
capable of influencing oil prices. Having opened the floodgates in order to
massacre the fracking industry, it is realizing that its extraction rates are
ridiculous and any attempt on its part to manipulate prices in order to let
prices rise again will be seized upon by the frackers who will immediately open
even more sites to profit from this goldmine. Basically, Saudi Arabia is
going to have great trouble in about two years and will be confronted by an
existential crisis in around five! The collapse of oil prices by nearly 55%
in one year is effectively melting away this country's cash reserves, a country
which is suffering the torment and humiliation of budgetary deficits, and which
has been reduced to issuing a public loan (of more than $5 million) in order
to subsidise its needs.
For how much longer will Saudi Arabia be in a position to defend its Riyal
as pegged to the Dollar at 3.75? Urgently needing oil to be at $106 per barrel
in order to balance its budget, it is nowhere near seeing such prices again
in the presence of a fracking industry as dynamic as it is innovative and which
has managed to slightly alleviate its predatory behaviour. This is a warning
of a wholesale sandstorm to come for the Wahhabi kingdom.
Michel Santi is a French-Swiss economist, financier, writer, advisor to
central banks and sovereign funds. For several years, he was a Professor of
Finance in Geneva, Switzerland, a member of the World Economic Forum, the IFRI
and a qualified member of the NGO "Finance Watch".
Born in Beirut, Lebanon, he is the son of a French diplomat. He lived in
Saudi Arabia, Bahrain, Lebanon, Egypt and Turkey.
I always was low opinion about Farid Zakaria. He is just a tool.
Notable quotes:
"... A primary reason for the accelerated price decline is that Saudi Arabia, the world's "swing supplier" - the one that can most easily increase or decrease production - has decided to keep pumping. ..."
"... Major oil-producing countries everywhere are facing a fiscal reckoning like nothing they have seen in decades, perhaps ever ..."
Nick Butler, former head of strategy for BP, told me, "We are in for a longer
and more sustained period of low oil prices than in the late 1980s." Why? He
points to a perfect storm. Supply is up substantially because a decade of high
oil prices encouraged producers throughout the world to invest vast amounts
of money in finding new sources. Those investments are made and will keep supply
flowing for years. Leonardo Maugeri, former head of strategy for the Italian
energy giant Eni, says, "There is no way to stop this phenomenon." He predicts
that prices could actually drop to $35 per barrel next year, down from more
than $105 last summer.
A primary reason for the accelerated price decline is that Saudi Arabia,
the world's "swing supplier" - the one that can most easily increase or decrease
production - has decided to keep pumping. The Saudis "know it hurts them
but they hope it will hurt everyone else more," says Maugeri, now at Harvard.
One of Saudi Arabia's main aims is to put U.S. producers of shale and tight
oil out of business. So far, it has not worked. Though battered by plunging
prices, U.S. firms have used technology and smart business practices to stay
afloat. The imminent return of Iran's oil - which markets are assuming will
happen, but slowly - is another factor driving down prices. So is the increasing
energy efficiency of cars and trucks.
Major oil-producing countries everywhere are facing a fiscal reckoning
like nothing they have seen in decades, perhaps ever . Let's take a brief
tour of the new world.
... ... ...
Many American experts and commentators have hoped for low oil prices as a
way to deprive unsavory regimes around the globe of easy money. Now it's happening,
but at a speed that might produce enormous turmoil and uncertainty in an already
anxious world.
"...The oil kingdom is facing a big hole in its budget,"
"...The biggest losers from the current price war between Opec and the shale producers seem
set to be producers outside the Middle East and North America caught in the crossfire. Expensive production
from the North Sea, Canada's oil sands, offshore mega projects, weaker African and Latin American members
of the Organisation of the Petroleum Exporting Countries, and frontier exploration areas around the
world are all being squeezed by the price slump."
The oil kingdom is facing a big hole in its budget, caused by the slump in oil prices and a
sharp rise in military spending. That's forcing the government to raid its reserves, and it may
even borrow from foreign investors, analysts say. Saudi Arabia has already burned through almost
$62 billion of its foreign currency reserves this year, and borrowed $4 billion from local banks
in July - its first bond issue since 2007. Its budget deficit is expected to reach 20% of GDP
in 2015. That's extraordinarily high for a country used to running surpluses. Capital Economics
estimates that government revenues will fall by $82 billion in 2015, equivalent to 8% of GDP.
The IMF is forecasting budget deficits through 2020. Oil's slump from $107 a barrel last June
to $44 right now is largely responsible for the squeeze. Half of the country's economic output
and 80% of government revenue is generated by the oil industry.
The biggest losers from the current price war between Opec and the shale producers seem
set to be producers outside the Middle East and North America caught in the crossfire. Expensive
production from the North Sea, Canada's oil sands, offshore mega projects, weaker African and
Latin American members of the Organisation of the Petroleum Exporting Countries, and frontier
exploration areas around the world are all being squeezed by the price slump. According to
oilfield services company Baker Hughes, the number of rigs drilling for oil outside North America
has fallen by over 200, or about 19 per cent, since July last year. Rig counts have fallen in
every region, with 28 fewer in Europe, 47 in the Middle East, 33 in Africa, 66 in Latin America
and 34 in Asia Pacific. Proportionately, the hardest hit regions have been Europe and Africa,
where more than 30 per cent of rigs operating in the middle of last year have since been idled.
But the slowdown is broad-based, with big downturns in countries as far apart as Mexico, India,
Turkey, Brazil, Iraq, Colombia and Ecuador.
BP has said it will invest £670m to extend the life of North Sea oil fields for more than 15
years, even as major cost savings in response to the oil price slump have forced it to cut projects
elsewhere. The investment in the Eastern Trough Area Project (Etap) comes despite the firm announcing
it would cut $3bn (£1.9bn) from capital spending in this current financial year as continuing
low prices eat into profits. Trevor Garlick, BP's regional president for the North Sea, told The
Times that in spite of "challenging times" that are forcing it to make "hard choices", BP remains
"committed to improving the competitiveness of the North Sea and to maximising economic recovery
from our fields". The Motley Fool says BP is one of the companies that is "well placed to ride
out low oil prices", as its 'downstream' operations such as refining and marketing have seen profits
rise five-fold due to falling oil prices, to offset some of the declines in its 'upstream' exploration
activities.
Oilfield services company Baker Hughes Inc. says the number of rigs exploring for oil and natural
gas in the U.S. increased by 10 this week to 884. Houston-based Baker Hughes said Friday 670 rigs
were seeking oil and 213 explored for natural gas. One was listed as miscellaneous. A year ago,
1,908 rigs were active. Among major oil- and gas-producing states, Texas gained eight rigs, Louisiana
gained four, Kansas increased by three, West Virginia gained two and California, and North Dakota
each increased by one. Alaska, Arkansas, New Mexico, Oklahoma, Utah and Wyoming were unchanged.
"..."The $300–$400 billion overall annual economic gain from the oil & gas boom has been greater
than the average annual GDP growth of $200–$300 billion in recent years-in other words, the economy
would have continued in recession if it were not for the unplanned expansion of the oil & gas sector.
"Hydrocarbon jobs have provided a greater single boost to the U.S. economy than any other sector,
without requiring any special taxpayer subsidies-instead generating tax receipts from individual incomes
and business growth". "
"...Peak exports was at least 7 years ago, and since then some net importers have seen their share
of oil reduced as much as 25%, while others have increased theirs (China and India mainly). Diminishing
oil is not going to be divided proportionally, some will get a lot and some will get almost none. This
effect inevitably leads to the killing of globalisation and a huge debt crisis that has the potential
to topple the monetary system."
"...Saudi Arabia is still growing its oil per capita consumption. Exporters will keep as much
as they wish, increasing the chances of geopolitical conflict."
"...This can be demonstrated by constructing a spreadsheet showing the next 50 years or so of
Energy Invested and Energy Returned of the world energy mix as it evolves over time. It is not until
people have convinced themselves that the complete transformation cannot be achieved that we can start
to look sensibly at what is best to do under the circumstances. Nobody is doing this at the moment because
everyone is still stuck in pre-Peak Fossils thinking, where anything is possible if you have enough
money."
O&G jobs grown 40% since 2008 (400,000 people direct , 2MM indirect)
These are high wage jobs – in Texas wages in Shale counties are 50% larger than non-shale
"The $300–$400 billion overall annual economic gain from the oil & gas boom has been greater
than the average annual GDP growth of $200–$300 billion in recent years-in other words, the economy
would have continued in recession if it were not for the unplanned expansion of the oil & gas
sector.
"Hydrocarbon jobs have provided a greater single boost to the U.S. economy than any other sector,
without requiring any special taxpayer subsidies-instead generating tax receipts from individual
incomes and business growth".
All of this is now at risk – how much will survive and at what shape??
С новом годом, с новом счастыем (happy new year in Russian)
Javier, December 22, 2014 at 2:10 pm
There are several problems not addressed with any downside scenario.
Peak exports was at least 7 years ago, and since then some net importers have seen
their share of oil reduced as much as 25%, while others have increased theirs (China and India
mainly). Diminishing oil is not going to be divided proportionally, some will get a lot and
some will get almost none. This effect inevitably leads to the killing of globalisation and
a huge debt crisis that has the potential to topple the monetary system.
The downside is also made steeper by the export land model. Saudi Arabia is still growing
its oil per capita consumption. Exporters will keep as much as they wish, increasing the chances
of geopolitical conflict.
The downside is also made steeper by the energy trap model. More and more of the oil will
have to be directed to ensure our energy production, making the decline on our economy much
worse.
Giving all the above, collapse appears as a real possibility.
davekimble3, December 23, 2014 at 9:49 pm
All this talk about the financial cost of fossil/nuclear/wind misses an important point – what
matters is the ENERGY that has to be spent up front on new generating infrastructure and the machinery
to use it, and the time gap till that energy is repaid and net energy profit starts.
This energy gap has to be filled by our current energy mix (mostly fossil), over and above
that needed to keep the global economy running and growing. There is still some slack in the system,
so we can certainly use fossil fuels to make a start on the transformation away from fossil fuels,
but there will come a time when Peak Fossils will impose a choice as to whether we keep building
more nuclear/wind/solar or keep industrial civilisation running. The complete transition away
from fossils can no longer be achieved – we should have started 3 decades ago.
This can be demonstrated by constructing a spreadsheet showing the next 50 years or so
of Energy Invested and Energy Returned of the world energy mix as it evolves over time. It is
not until people have convinced themselves that the complete transformation cannot be achieved
that we can start to look sensibly at what is best to do under the circumstances. Nobody is doing
this at the moment because everyone is still stuck in pre-Peak Fossils thinking, where anything
is possible if you have enough money.
Aramco looks for cut costs, asking oil-services providers for deals; pushing for a phone-bill
discount
Saudi Arabia's refusal late last year to rein in oil production helped trigger the price crash
that has hurt oil-producing countries and publicly listed energy companies alike. And now even the
kingdom's own oil company is feeling the pain.
Quotes:
.
"...OPEC is "all in at 31 million barrels a day. That's about all they can do,"
.
"...They talk a lot about it, what they can do, and the Saudis say 12 and half.
Well show me. I'm ready to see 12 and a half. They're making 10.3, and they struggle
at 10, I think. I think 10 is about all the Saudis can do."
Notable quotes:
"... "They talk a lot about it, what they can do, and the Saudis say 12 and half. Well show me. I'm ready to see 12 and a half. They're making 10.3, and they struggle at 10, I think. I think 10 is about all the Saudis can do." ..."
"... The cartel is now pumping about 2 million bpd more than needed, analyst say, feeding a glut that has left millions of barrels stored on tankers without a buyer and kept prices at close to half their peak levels last year. ..."
"... "If you're trying to grow production, you've first got to maintain production." ..."
"... Oil wells-whether conventional or unconventional-reach peak production soon after they yield the first drop of crude. The U.S. industry is dominated by unconventional wells. ..."
"... Conventional wells go through a long period of steady, flat production between peak and decline. In contrast, production falls rapidly in the first three years of unconventional wells-those in shale, sandstone and carbonates. They then enter a long phase of very low production. ..."
"... "Just as soon as you get an oil well, put it on production, it starts to decline," Pickens said. "Now how fast is it going to decline is very important." ..."
OPEC is "all in at 31 million barrels a day. That's about all they can do,"
Pickens said on CNBC's "
Squawk Box ."
"They talk a lot about it, what they can do, and the Saudis say 12
and half. Well show me. I'm ready to see 12 and a half. They're making 10.3,
and they struggle at 10, I think. I think 10 is about all the Saudis can
do."
Oil Minister Ali al-Naimi said Saudi Arabia produced some 10.3 million bpd
of crude in March, eclipsing a previous high of 10.2 million in August 2013.
The Organization of the Petroleum Exporting Countries is expected at a meeting
on Friday to keep a group output target of 30 million bpd, a ceiling it has
been exceeding for most of the last two years, weakening prices.
The cartel is now pumping about 2 million bpd more than needed, analyst
say, feeding a glut that has left millions of barrels stored on tankers without
a buyer and kept prices at close to half their peak levels last year.
Production declines in the United States will also support prices, Pickens
said, noting that output has dropped off in North Dakota's Bakken formation
and Texas's Eagle Ford play as drillers have taken about 1,000 rigs out of oilfields
since December.
"Now, you shut down 1,000 rigs, we're dealing with decline curve," said
Pickens, chairman of BP Capital Management. "If you're trying to grow
production, you've first got to maintain production."
Oil wells-whether conventional or unconventional-reach peak production
soon after they yield the first drop of crude. The U.S. industry is dominated
by unconventional wells.
Conventional wells go through a long period of steady, flat production
between peak and decline. In contrast, production falls rapidly in the first
three years of unconventional wells-those in shale, sandstone and carbonates.
They then enter a long phase of very low production.
"Just as soon as you get an oil well, put it on production, it starts
to decline," Pickens said. "Now how fast is it going to decline is very
important."
So why does the U.S. put up with Saudi Arabia? The simplest explanation, of course, is oil. The
kingdom is the largest and most important producer in the Organization of Petroleum Exporting Countries
(OPEC), the bloc that controls around 40 percent of the world's oil. Because the United States was
until recently the world's top oil importer, an alliance with Saudi Arabia made geopolitical sense.
The recent shale oil boom in the U.S. has led Washington to hope that before long, its alliance
with Riyadh won't be necessary. The U.S. now pumps more than 9 million barrels of oil per day,
which almost matches the amount in Saudi Arabia. Observers project that in five years, the U.S. will
get 80 percent of its oil from North and South America and will be mostly self-sufficient by 2035.
The OPEC decision to not cut supply in response to falling oil prices signaled that the North American
boom had fundamentally changed the commodity's global logic.
Saudi Arabia is well-positioned to survive a sustained drop in the price of oil, currently at
$48.71 a barrel. Riyadh generally needs oil to trade at $80 a barrel in order to balance its budget.
But with $750 billion stashed away in reserve, the kingdom faces little pressure to reduce supply
and raise the price. In addition, Saudi Arabia and fellow OPEC members Kuwait and the United Arab
Emirates have proved reserves of 460 billion barrels. The United States, by contrast, has proved
reserves of just 10 billion-and the U.S. Energy Information Agency forecasts that American shale
oil production will plateau in 2020.
Given the precarious health of King Salman, who is 79 and alleged to be suffering from dementia,
the United States government may well find itself offering condolences to Saudi Arabia on the death
of its ruler before much longer. When the time comes, don't expect the reaction to be any less effusive.
Saudi Oil Minister Ali al-Naimi met U.S. Deputy Energy Secretary Elizabeth Sherwood-Randall
on Tuesday in Riyadh where they discussed oil markets, the official Saudi Press Agency (SPA) reported.
SPA gave no specific details about the meeting in a brief statement but said the officials looked
into cooperation on energy and environmental issues, climate change, solar energy use and mutual
investments.
U.S. crude hit a near six-year low of $44.20 on Tuesday.
Venezuela's President Nicolas Maduro is in Algeria on a diplomatic push to persuade reluctant
fellow members of OPEC to prop up a sinking market by cutting output.
Saudi Arabia, OPEC's dominant member state and the world's biggest oil exporter, has repeatedly
said the group will not cut production.
On Tuesday, United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui stood by OPEC's
decision to keep production unchanged.
Mazroui showed no sign of backing down from OPEC's insistence that other producers, particularly
the U.S. shale oil drillers which it blames for oversupplying the market, reduce their output. (Reporting
by Reem Shamseddine; Editing by Ruth Pitchford).
In our view, there is a kind of cold war going on between the US and Russia. The US worked
to destabilize Ukraine from what we can tell and now along with Saudi Arabia has caused the price
of oil to plummet.
Low prices for oil put pressure on Russia's economy and currency. Moody's has just downgraded
Russia and the ruble. This is a kind of war by proxy, one the US seems confident of winning.
But this article makes the case that in the long run, market forces could prove stronger than
manipulation.
Here's more:
Representatives of the leading members of the Organization of Petroleum Exporting countries
have been saying for weeks they would not pump less oil no matter how low its price goes.
Saudi Arabian Oil Minister Ali Al-Naimi has said even $20 per barrel wouldn't trigger a change
of heart. Initial reactions in the U.S. were confident: U.S. oil producers were resilient enough;
they would keep producing even at very low sale prices because the marginal cost of pumping from
existing wells was even lower;
OPEC would
lose because its members' social safety nets depends on the oil price; and anyway, OPEC was dead.
That optimism was reminiscent of the cavalier Russian reaction at the beginning of the price
slide: In October, Russian President Vladimir Putin said "none of the serious players" was
interested in an oil price below $80. This complacency has taken Russia to the brink: On
Friday, Fitch
downgraded its credit rating to a notch above junk, and it'll probably go lower as the ruble continues
to devalue in line with the oil slump.
It's generally a bad idea to act cocky in a price war. By definition, everybody is going to
get hurt, and any victory can only be relative. The winner is he who can take the most pain.
My tentative bet so far is on the Saudis -- and, though it might seem counterintuitive, the Russians.
For now, the only sign that U.S. crude oil production may shrink is the falling number of operational
oil rigs in the U.S. It was down to 1750 last week, 61 less than the week before and four less
than a year ago. Oil output, however, is still at a record level. In the week that ended on Jan.
2, when the number of rigs also dropped, it reached 9.13 million barrels a day, more than ever
before.
Oil companies are only stopping production at their worst wells, which only produce a few barrels
a day – at current prices, those wells aren't worth the lease payments on the equipment. Since
nobody is cutting production, the price keeps going down; today, Brent was at $48.27 per barrel
and trends are still heading downward.
The article goes on to point out that "All this will eventually have an impact." The basic
impact would be felt by producers "shutting-in production at a level where there is a significant
reduction in global oil supply. At $40 Brent, 1.5 million barrels per day is cash negative with
the largest contribution coming from several oil sands projects in Canada, followed by the U.S.A.
and then Colombia."
The weak link here is US fracking. Frackers, according to the article, will keep pumping
at a loss because they have debts: "about $200 billion in total debt, comparable to the financing
needs of Russia's state energy companies."
Eventually this newfound US industry will begin to face bankruptcy. First, will go the highly
leveraged producers. But the industry will not contract in an orderly fashion because healthier
companies won't be in a position to purchase the unhealthy ones. A crisis of investor confidence
will affect all concerned.
This could be a bloody, prolonged battle with an uncertain outcome. The oil price is rather
inelastic to short-term changes in demand and supply. Its course this year will, therefore, be
largely dictated by the news and the market's reaction to it. A wave of bankruptcies in the U.S.
shale industry will probably drive it up because it will be perceived as a negative factor for
supply.
How high it will go, however, is unpredictable. It may actually rise enough to enable consolidation
in the U.S. shale industry, giving it second wind and driving OPEC countries, Russia, Mexico and
Norway into greater difficulties – or it might just even out at a level that would make the U.S.
forget about its shale boom. That would have dire consequences for the U.S. economic recovery.
Surprisingly, the article makes the suggestion that the US government might want to start preparing
for the day when fracking begins to melt down from a financial standpoint. If the price of oil hovers
in the US$40 area, the US may find it is in its strategic interest to "bail out or temporarily subsidize
shale producers."
Third, there is Saudi Arabia. The kingdom is the driving force behind the drop in prices because
it has grown weary of cutting its own oil output in order to prop up prices enjoyed by other countries,
both in OPEC and especially outside of OPEC.
How determined is Saudi Arabia? Very. It is now waiting
for low prices to discourage investments in new projects such as Russia's Arctic, Canada's oil sands,
U.S. shale drilling, and Brazil's costly sub-salt projects in deep offshore waters. Yes, these are
long-term projects that rely on long-term oil prices, but companies still tend to pay a lot of attention
to what's happening now.
And Saudi Arabia can afford to wait. Even though prices have tumbled, Saudi Arabia – unlike Venezuela
– has a large treasure chest of savings from past years and can weather a long period of low prices.
The government is assuming a 32 percent drop in oil-related revenues. In addition, Saudi
Arabia has some of the world's lowest production costs, rivaled only by Iraq and some parts of Russia.
Production costs in Saudi Arabia are about $4 to $5 a barrel, Naimi said recently.
The Saudi oil minister al-Naimi's interview in Argus Global Markets should send chills down the
spines of oil producers. He noted that "sooner or later, however much they hold out" high cost oil
projects such as wells in Brazil's sub-salt offshore region, off the coast of west African, and in
the forbidding Arctic would have to scale back in response to low prices. "Will this be in six months,
in one year, two years, three years? God knows," said Naimi.
"I say Gulf countries, and particularly the kingdom, have the ability to hold out."
Naimi also brushed aside the plight of Russia and Iran, saying that they were not only suffering
from low oil prices but also "from their political behavior" that had led to sanctions. "Their problem
is more basic" than oil prices, he said.
How long will Naimi have to wait? The surplus oil production is a small percentage of global consumption,
so it's possible that a disruption in supplies in, say, Libya and an uptick in consumption in the
United States, Europe and China could bring things into balance. But consumption isn't just a matter
of crude oil prices. Gasoline subsidies have been slashed in Indonesia and India, fuel efficiency
standards are pushing U.S. carmakers, and Europe's economy remains in the doldrums.
Meanwhile, new production keeps coming online. Take MEG Energy, for example, a producer in Canada's
costly oil or tar sands. MEG has slashed its capital spending budget by 75 percent this year, but
its production will still go up about 20 percent.
The boom in U.S. shale oil is perhaps the most important factor. Estimated global liquids
production grew by 1.8 million barrels a day to a total of 92.0 million barrels a day in 2014.
U.S. domestic crude oil production alone increased 1.2 million barrels per day in 2014, up 16
percent from 2013. U.S. shale oil production has jumped to about 4 million barrels a day in just
six years, more than the output of any OPEC country other than Saudi Arabia. At 8.6 million barrels
a day, U.S. production is at the highest level in nearly 30 years.
How fast will that shale oil activity drop off? So far, not much. The Baker Hughes rig count for
onshore U.S. drilling fell to 1,684 down 60 from the week before but still seven higher than a year
earlier. Because shale oil wells produce about half their output in 18 to 24 months, this activity
should be highly sensitive to prices.
But lower drilling costs, steady improvements in fracking techniques and a focus on lowest cost
areas help offset the effect of lower prices.
The EIA said in
December that
"projected oil prices remain high enough to support development drilling activity in the Bakken,
Eagle Ford, Niobrara, and Permian Basin, which contribute the majority of U.S. oil production
growth."
The EIA said it expects U.S. crude oil production to average 9.3 million barrels per day in 2015.
That's 200,000 barrels a day less than EIA's earlier projections, but it still means an increase
of 700,000 barrels a day from 2014.
Sooner or later, though, the cycle will turn. Naimi in the interview with Argus sounded confident,
and patient. "The bet is about the timing of the price rise," he said, "not about if it will occur."
The Last but not LeastTechnology is dominated by
two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt.
Ph.D
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Saudi Update October 2018
http://crudeoilpeak.info/saudi-update-october-2018