The Oil Price Squeeze We can’t talk about the showdown with Russia without looking at the dramatic drop in oil prices that began in 2014. Obviously there are conflicting narratives on this topic, but according to Guardian and SALON (What really happened in Beijing: Putin, Obama, Xi — and the back story the media won’t tell you), in September of 2014 John Kerry instructed the Saudis to raise production and to cut its crude price. Now the Saudis have indicated that they have no intention of slowing down oil production anytime soon, but the elephant in the room here is U.S. oil production from fracking, which has been dramatically ratcheted up as well. This move might seem absurd since it is going to hurt U.S. oil producers as well, but it is clearly going to hurt Washington’s key opponents (namely Iran, Venezuela and Russia) far more since their economies are far less diversified. The drop in oil prices has already had a massive impact on the value of the Rubble and combined with the sanctions there is a good chance the Russian economic situation could degrade even more in the coming year. The drop in the Rubble has also interfered with Russia’s efforts to establish trade agreements which bypass the dollar. With the Rubble going through bouts of hyperinflation, even their closest allies are hesitant to accept payments in Rubbles. You’ll hear people (like CFR member Ian Bremmer) describe Russia as a dangerous, wounded beast that may do something unpredictable. That’s like a teenager poking a bear with a sharp stick and then warning that the bear might bite. Yes it might bite, so stop poking it. https://youtube/watch?v=TC3tINgWfQE
Posted on: Sat, 10 Jan 2015 09:51:16 +0000
Trending Topics
Recently Viewed Topics
© 2015