/ world today news/ At the beginning of the year 2000, the largest oil exporters were the OPEC countries and above all Libya, Iraq, Saudi Arabia, Venezuela, Nigeria, as well as the non-cartel countries Russia and Brazil. In general, all these countries pursued an anti-American policy.
A peculiarity of this period was the uncontrolled global oil market. The largest producer of “black gold” then was Saudi Arabia, and the largest importer – the United States.
After large-scale armed conflicts (Afghanistan, Iraq), oil prices began to rise, as a result of which the producing countries became richer, their political regimes strengthened, which was perceived negatively by Washington. There should be no doubt that if the oil trade of the turn of the century had persisted, the US economy today, if not collapsing, would be in deep crisis. But the situation has changed in key geopolitical nodes of the global oil production system.
The Saudi Knot: ARAMCO and Deep US Ties
According to expert estimates, world oil reserves are 1.7 trillion barrels. Of these, 276 billion barrels are owned by the Saudis – they are in first place in terms of oil reserves in the world. About 90% of Saudi Arabia’s budget comes from the sale of “black gold”. The first oil companies on Saudi soil were established in 1933. In 1944, they received the name ARAMCO, i.e. an Arab-American corporation, 25% of which belongs to the Saudis. Since the 1980s, they have been under Arab control.
Today ARAMCO is the largest oil (and not only) company in the world. Its earnings per day, according to 2014 statistics, amount to 1 billion dollars. ARAMCO’s estimated market value is between $1.25 trillion and $10 trillion. For comparison – the value of the second company after ARAMCO – Apple – is 543 billion dollars.
With oil prices falling, Riyadh announced plans to wean the Saudi economy off its oil dependence. But the kingdom faced a serious problem. Profits from oil (officially about 750 billion dollars) are in the form of bonds and securities of the Federal Reserve System (FED) of the USA. And there are plans to freeze those assets. Not so long ago, some American senators came up with the initiative to pass a bill that would impose sanctions on Saudi Arabia for ties to international terrorism, including Al Qaeda. The authors of the initiative refer to the terrorist act of September 11, 2001, recalling that out of 19 terrorists, 11 were subjects of the Kingdom of Saudi Arabia. Equating the Saudi leadership with Arab terrorists threatens the return of Saudi petrodollars from the Fed. Obviously, in this way, the Americans intend to bring under their control both the Saudi Kingdom and its plans to modernize the economy.
The Russian Knot: the country they isolated from the world
The current Ukrainian leadership is pursuing an anti-Russian policy under the dictates of the Americans. This not only worsened Russian-Ukrainian relations, but also seriously affected Europe’s economic relations with the Russian Federation. As a result, the Russian economy cannot quickly adjust to the new world economic situation associated with the fall in oil prices.
The market value of “Gazprom” in 2000-2008 was about 360 billion dollars. According to Dmitry Medvedev’s forecast, with stable economic growth, Gazprom should have reached $1 trillion in 2017, and today it should already be the world’s second largest oil and natural gas company. However, due to the global crisis, the market value of “Gazprom” as of today has fallen to 51 billion dollars. As is known, 37% of the shares in Gazprom belong to the government, in the case of privatization, this part is intended to be purchased by American companies.
The US wants to become a serious competitor to Russia in the field of gas supplies. The first quantities of 175,000 cubic meters of liquefied US gas have already been delivered by tankers to Portugal. An alternative to Russian gas is being discovered for Europe as well.
The Venezuelan knot: a ruined economy as the price of the struggle for oil
In the early 2000s, Washington was buying 14% of the oil needed for the US economy from Venezuela. In 2005, President Hugo Chávez nationalized several US oil companies and strengthened state control of the oil sector. Western oil giants had to limit their activities and give the Venezuelan government 40% of the profits. In other words, Chávez announced his intentions to control the entire Venezuelan state oil flow. But soon after demonstrating these ambitions, Chávez died, riots began in the country, and then the national currency was devalued. It is obvious that the main struggle in Venezuela is now over the privatization of the state-owned oil and gas company PDVSA, and that after its privatization the unrest in the country will end.
The Iraqi Junction: Increasing Production Regardless of Terrorism
The long-term Iraqi crisis, related to the destruction of the regime of Saddam Hussein, the civil war and the activities of terrorist organizations, practically did not touch the Shiite Basra – a key oil-producing region of the country. Despite war raging in other regions, international companies BP, ExxonMobil and Royal Dutch Shell are increasing oil production in Iraq. Experts from Morgan Stanley forecast that Iraq’s daily oil production in 2016 will be 3.88 million barrels, and in 2017 – 4.17 million barrels. Such confidence makes it possible to talk about the fact that Central Iraq is now successfully controlled by the West.
Indeed, the situation remains complicated in another oil-producing region – Iraqi Kurdistan in the northern parts of the country. But even there, the main support of local authorities and field commanders is provided by Americans, which in the future makes Washington a strategic partner of the Iraqi Kurds in oil ventures.
The Libyan knot: nostalgia for the past without chances for the future
Not long ago, Libya was the richest oil-producing country in Africa. But its leader Muammar Gaddafi signed his death sentence after refusing the privatization of national oil companies and very actively lobbied for the idea of a gold dinar. There are now two governments in Libya, as well as numerous terrorist groups that control the country’s territory. There is no doubt that the terrorist group “Islamic State” (IS) will strengthen its influence in Libya in the near future.
In parallel, the activities of American oil companies are intensifying in Libya. Therefore, it can be said with confidence that Libya will not be able to restore the national oil market and, accordingly, will not be able, as before, to claim leading positions in the world market.
The Nigerian Junction: An Unstable Country Under the Threat of Boko Haram
Today, a part of the territory of Nigeria the size of Belgium is under the control of the extremists of the terrorist organization “Boko Haram”, which is considered an offshoot of IS. Nigeria is torn apart by corruption and inter-religious conflicts, so in the next 10 years there are no positive prospects for this country. At the same time, mainly American oil companies continue to show interest in Nigerian deposits of “black gold”. This interest is complemented by the initiative of British politicians who offer the Nigerian government assistance in the military sphere, and also provide groups of troops with a special purpose to solve tasks in the security sphere. Experts have no doubt that in the near future transatlantic oil and gas companies will increase their production in Nigeria and that Boko Haram militants will continue to pose a threat to Chinese oil companies operating in Nigeria and neighboring countries.
The Iran Knot: An American Trick for Tehran
The American trick for Tehran is that, when oil was worth 130 dollars a barrel, a ban on its sale was introduced through the mechanism of international sanctions. When oil fell to $40-45, the ban and sanctions were lifted.
Today, Iran increased oil production to 1.750 million barrels per day. However, if the American leadership wants, it can again impose an embargo on the sale of Iranian oil, which would be the strongest blow to the economic and socio-political system of the Islamic Republic. Therefore, today Iran is particularly dependent on these US capabilities. It should be noted that with one shot (the lifting of the embargo last year) Washington killed two birds with one stone (restored relations with Tehran while demonstrating to the Ayatollahs’ regime their vulnerability in the future, and also punished Saudi Arabia for becoming too independent in the region and planned modernization of the national economy).
The Chinese Knot: America’s Strategic Game
The annual growth rate of China’s economy is about 6%, and for this reason the United States cannot compete with it. However, the Americans can create serious obstacles to the development of the Chinese through the difficulty of access to the development of oil or gas fields and the increase of oil prices. It is likely that transatlantic corporations will try to control such companies as ARAMCO, Rosneft, Gazprom and PDVSA. Taking them under their control is convenient right now, when the market value of the companies has decreased to the maximum. And after these Arab, Russian and Venezuelan corporations come under the control of the Americans and their allies, an increase in oil prices to 80-85 dollars per barrel can be expected.
Running the big US oil and gas game is to achieve an understandable goal – to eventually end OPEC’s dominance and to control and set the prices of the oil market themselves, thereby ending China’s rapid rise. It is obvious that various conflicts and political alliances will arise around this game in the coming years.
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Engin Ozer, in Nezavisimaya Gazeta.
Moscow / Russia
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