Update October 2014: Falling oil prices hurt Russian ambitions of empire
Update: Global oil demand slump spells big trouble for Russia
One ominous sign that Russia’s corrupt oil/government axis of power is under strain
Oil prices have sunk as much as $50 bbl under the level that some oil dictators require to balance their budgets.
Russia’s mafia government is on a spending spree, attempting to convince the world that it is a formidable foe that cannot be opposed. But intelligent people can see that for all of Russia’s vast land mass, its economy is smaller than that of California, and its core population of ethnic Russians is shrinking — unable to hold onto its vast land area over the long term. What is holding Russia’s government together? Income from oil & gas. If oil & gas prices stay far below Russia’s fiscal breakeven for long — particularly at a time when the mafia government is overextending itself — the hold of Russia’s thug rule will be shaken.
Abundant global oil supplies have been a major factor in driving the price of Brent crude below $100 a barrel. The October contract for the global Brent crude benchmark is currently trading just under $100 a barrel for the first time in 15 months, at $99.95 –about $3 below the peak of future prices next April. _WSJ
Putin invaded Georgia in 2008 when oil prices had climbed close to $150 bbl. After a brief interlude of very low oil prices, it seemed as if oil prices would once again climb to $150 bbl or higher — at least to wishful thinking oil dictators and peak oil doomers.
And so Putin made plans to invade Crimea, Ukraine proper, and other parts of the former Soviet gulag-empire. These ambitious plans cost money, and there is a limit to how long Russia’s reserves can hold out under these adverse circumstances.
Russia is fighting back with one of its most time-proven weapons — propaganda:
In today’s Russia … the idea of truth is irrelevant. On Russian ‘news’ broadcasts, the borders between fact and fiction have become utterly blurred. Russian current-affairs programs feature apparent actors posing as refugees from eastern Ukraine, crying for the cameras about invented threats from imagined fascist gangs. During one Russian news broadcast, a woman related how Ukrainian nationalists had crucified a child in the eastern Ukrainian city of Sloviansk. When Alexei Volin, Russia’s deputy minister of communications, was confronted with the fact that the crucifixion story was a fabrication, he showed no embarrassment, instead suggesting that all that mattered were ratings. “The public likes how our main TV channels present material, the tone of our programs,” he said. “The share of viewers for news programs on Russian TV has doubled over the last two months.” The Kremlin tells its stories well, having mastered the mixture of authoritarianism and entertainment culture. The notion of ‘journalism,’ in the sense of reporting ‘facts’ or ‘truth,’ has been wiped out. In a lecture last year to journalism students at Moscow State University, Volin suggested that students forget about making the world a better place. “We should give students a clear understanding: They are going to work for The Man, and The Man will tell them what to write, what not to write, and how this or that thing should be written,” he said. “And The Man has the right to do it, because he pays them.” __ Russia’s Surreal Propaganda World
Russian-paid propagandists know what they are doing. But perhaps Russia’s western apologists are unaware of the role they are playing in Russia’s surreal propaganda putsch? Clueless to the end, these useful idiots sit like monkeys at their keyboards, repeating their unsupported and essentially meaningless mantras to the point of psychotic perseveration.
In the real world, the economic tightrope that Putin and the other Russian mafia thugs walk will eventually dictate terms. China may hold out a reassuring safety net — up until the time of the actual fall — but then expect China to pull the net away and murmur with the rest of the world over the “unexpected” carnage.
The concept of “a nation” is always a fiction. Nowhere is this more true than in modern day Russia. But as long as the propagandists are able to bring enough people to the belief that the fiction is real, “the nation” can slog onward toward is inevitable doom. The longer the march the deeper the burial pit, as more and more resolute enemies are created with every bloody goose step.
Russian economy stares into the abyss
Corruption in Russia 2014 (PDF) — You will probably never think of Russia the same way after reading this document.
Putin postures and promises large boosts in military spending
Europe is slow to awaken to the mafia leader’s promise of war in Europe
US defence spending continues to shrink by built-in budgetary mandates
Brent prices continue to slump through autumn 2014 and beyond
al fin next level 
I have to imagine real oil availability isn’t that much different than a year ago. The dollar should not be getting stronger relative to oil.
that leaves two possibilities.
Oil was priced too high last year.
Oil’s price is being played with by an intelligent government.
I can think of reasonable arguments that falsify both those options.
how do you see it?
Over the last few years, about 3.5 mm bpd have been taken off the global market by various means. At the same time, North American production has increased to approximately match the deficit, and continues to grow. This is a dynamic process that is guided by many factors, including prices, market manipulation, and state oil companies following political decisions of their governments.
In early to mid-2008, Al Fin analysts claimed that oil prices were far too high. At the same time, peak oil doomers claimed that prices were too low, and bound to go much higher in the short, middle, and long terms. It was time itself that falsified some arguments and supported others.
All of your arguments are true to some extent. But not completely true.
Some people want to be “right” about oil markets. Other people just want to make money.
There are different levels of truth. But as a wise man once said, truth is a rare commodity and we must economise it. 😉