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OPEC, Russia and the New World Order Emerging
By F. William ENGDAHL
By the day it’s becoming clearer that what I have recently been saying in my writings is coming to be. The OPEC oil-producing states of the Middle East, including Iran, through the skillful mediation of Russia, are carefully laying the foundations for a truly new world order. The first step in testing this will be if they collectively succeed in eliminating the threat to Syria of the Islamic State, and prepare the basis for serious, non-manipulated elections there. (…)
In the political, more accurately geo-political sphere, we are now witnessing huge tectonic motion, and destructive it is not. It involves a new attractive force drawing the Middle East OPEC countries, including Saudi Arabia and Iran and other Arab OPEC countries, into what will soon become obvious as a strategic partner-ship with the Russian Federation. It transcends the huge religious divides today between Sunni Wahhabism, Sufi, Shi’ism, Orthodox Christianity.
That tectonic motion will soon cause a political earthquake that well might save the planet from extinction by the endless wars the Pentagon and their string pullers on Wall Street and the military industrial complex and the loveless oligarchs who own them seem to have as their only strategy today.
Russia in OPEC?
In an interview with the London Financial Times, Russia’s most important oilman, Igor Sechin, CEO of the state-owned Rosneft, confirmed rumors that Saudi Arabia’s monarchy is seeking a formal market-share agreement with Russia, even going so far as offering Russia membership in OPEC, to stabilize world oil markets. In the interview, Sechin, considered one of President Vladimir Putin’s closest allies, con-firmed the Saudi offer. The Financial Times (FT) is an influential media owned until this past July by the Pearson Group an asset tied to the Rothschild family who his-torically also dominate Royal Dutch Shell.
The London paper chose to emphasize Sechin’s rejection of the Saudi offer. How-ever, most instructive is to read between the lines of what he said. He told a Singa-pore commodities conference organized by the FT, “It needs to be recognised that Opec’s ‘golden age’ in the oil market has been lost. They fail to observe their own quotas [for Opec oil output]. If quotas had been observed, global oil markets would have been rebalanced by now.”
Sechin well knows the background to the Saudi oil price war and the fact it was triggered by a meeting between US State Department’s John Kerry and the late Sau-di King Abdullah in the desert Kingdom in September 2014, where Kerry reportedly urged the Saudis to crash oil prices. For Kerry the aim was to put unbearable pres-sure on Russia, then hit by US and EU financial sanctions. For the Saudis, it was a golden opportunity to eliminate the biggest disturbing factor in the OPEC domination of world oil markets–the booming production of US unconventional shale oil that had made the USA the world’s largest oil producer in 2014.
Ironically, as Sechin told the FT, the US-Saudi deal and the US financial sanc-tions have backfired on the US strategists. The Russian ruble lost more than 50% of its dollar value by January 2015. Oil prices similarly fell from $103 a barrel in Sep-tember 2014 to less than $50 today. But Russian oil production costs are calculated in rubles, not dollars. So, as Sechin states, the dollar cost of Rosneft oil produc-tion has dropped dramatically today from $5 a barrel before the sanctions to only $3 a barrel, a level similar to that of Arab OPEC producers like Saudi Arabia. Rosneft is not hurting despite sanctions. USA shale oil by contrast is unconventional and vastly more costly. Industry estimates depending on the shale field and the company, put costs of shale in a range of $60-80 a barrel just to break even. The current ongoing shakeout in the US shale industry and prospects of rising US interest rates dictate the demise of shale oil from the US for years if not decades to come as Wall Street lenders and shale company junk bond investors suffer huge losses.
Unknotting the ‘not’ knot (…) — emphasis m.z. —