Oil Prices in the Age of Political Peak Oil

Global oil prices are set to rise to $200 a barrel, if Russia’s oil stays toxic to buyers and if the US takes its exports off the market. No other country can make up the difference. Not Iran. Not Venezuela. Saudi Arabia doesn’t want to. Europe will suffer. China will suffer more since it is at the end of the chain. What will stock markets and oil prices do when Putin escalates his brutality to the use of WMDs?

China Isn’t Going to Like This

A “dirty bomb” fits Russian media narratives that a US-controlled “neo-Nazi” regime would practice genocidal “nuclear terrorism”. The function of this narrative could be to provide a retroactive justification for invasion – prevention of nuclear terrorism – and to place the blame for any nuclear radiation leakage on Kyiv. Such leakages would massively impact on refugee flows westwards. For Putin such flows would be understood in terms of an asymmetric responses by Russia to western pressure.

Russia Military Reform

Putin Casually Poised to Use Chemical and Nuclear Weapons

For Putin, the use of tactical nukes in Europe is a casual consideration. He is certain that NATO is too frightened of a global nuclear war to respond in kind. But the little tyrant may want to use chemical weapons against Ukraine’s cities first, since a NATO response to the use of nerve agents and other lethal poisons is less well worked out. By ramping up the rhetoric over Ukraine’s leftover Soviet era bio/chem weapons facilities, Putin is hoping to provide a confused cover for his own use of WMDs. First chemical (or dirty bomb), then strategic nuclear if necessary. It’s not a big deal to Putin, either way.

China In Danger of Becoming Collateral Damage

China will pay much more for its middle eastern oil, being on the tail end of supply chains.

While the crippling economic blows against Russia are applauded in the West, Chinese leaders watch them with great alarm. Their country is far more economically tied to the West than Russia is. Although the same type of economic sanctions leveled at Russia would unavoidably hurt Western economies, they could be catastrophic for China in the event of a war across the Taiwan Strait.

China Growing Worried

Russia Doesn’t Make Bearings, CNC, Advanced Machines or Modern Microprocessors

This shows how deeply Russia is integrated into the Western technological chains. What Russia produces is produced on Western industrial machines, with Western technologies, Western software and with Western details. That ofc includes military industry which uses this all, too 

Consider Diana Kaledina, CEO of Baltic Industrial Company which makes industrial machines for military plants. She says Russia doesn’t produce bearings, ball screws, drives, CNC systems, spindles. So she has to import it all, although as a military supplier she isn’t supposed to

Russia Doesn’t Do Advanced Machines or Routine Maintenance

Russia’s Bad Start in Ukraine Means that Putin Has to Do Something Desperate, Fast

Nobody had the guts to tell Putin that his big army was rotten

Putin’s confidence based on ignorance

Now, there is the puzzle of his dream of a new Imperial Russia. For all that he seems convinced that the current Russian Army is the old Red Army, Vladimir is NOT a Soviet Communist. Exercise for the reader/student: look up who he does subscribe to. Short version, he — along with quite a number of influential and/or hardliners — believe that communism was an import to the Rodina that poisoned her. That because it came from outside it didn’t, wouldn’t, and couldn’t work there. Again, a bit of a simplification but the asinine idea that he wants to restore the Soviet Union seems to be everywhere. And, again, this puzzle is a major part of why he is frantic to have a new cordon sanitaire in place to keep Western (and other) ideals and practices away from the Rodina lest they poison her and lead to the system changing.

Then there is the puzzle of Putin and the military. Really, the military and intelligence functions, but lets go with the shorthand for now. As always, there are multiple puzzles here. First up, it seems fairly clear that he was not getting accurate reports on the state of the military, nor was he getting good intel on enemy preparations, operations, and general attitudes. I include the U.S. in that part, though the majority of this puzzle should concentrate on the Ukraine. Outside of that, it is clear that the response of most of the world caught Vladimir by surprise.

Tied into these puzzles are the quality and quantity of the briefings he has been given. As noted previously, the Red Army was noted for gundecking reports and it would appear the current Russian Army has continued the tradition. Keep in mind that the Russian Army is a conscript army, as that has huge implications. There is some word that while the KGB may be gone, zampolits and special troops/police to make the troops obey still exist. That said, they can’t be everywhere and the number of troops who have been captured or just surrendered is a sign of that as well.

A key puzzle in this mix is tactical and doctrine training. While the grunts have only a limited exposure to this, and keep in mind they do not have the strong NCO base that we do in our troops, their officers do. How realistic is that training? That may prove to be a major point, especially when it comes to nuclear doctrine. The Russians have continued with the Soviet thought that tactical weapons can be used, multiple times and locations, without retaliation. They view such use as justified, while any similar response is an escalation of the conflict.

Escalation to WMD is What Putin Has Left

Putin jumped down this slippery slope seemingly without any deep consideration of the chain of consequences. That is exactly how a mafia don behaves.

To Understand Modern Russia, Read This

The structure of power in Russia is exactly how things work in large drug cartels and other forms of organized crime that are based upon physical threat and intimidation. A violent unpredictability is critical to coercing and dominating opposition. If your opponent never knows what you will do next, you have more time to improvise your violence to maximise intimidation.

You need to be able to consider multiple simultaneous complex dynamic processes, if you want to understand this crisis. And you absolutely must have a realistic understanding of Russia and China.

If all you understand is the corruption of the west, then you will be entirely unprepared for what is coming.

Prepare for the worst. If you are still making excuses for Putin, you may not have much longer to pat yourself on the back.

More:

SpaceX works with US military to provide “1 hour to anywhere on Earth” logistics to move cargo

The U.S. Air Force wants to test whether it’s possible to move hundreds of tons of military equipment to forward operating locations and bases around the world using reusable rockets instead of mobility aircraft.

Logistics of a Higher Order

The SpaceX Starship is a qualitatively different kind of transportation vehicle. If it can be perfected, it will provide entirely new doorways to outer space and to Earth.

This entry was posted in Putin, Russia. Bookmark the permalink.

2 Responses to Oil Prices in the Age of Political Peak Oil

  1. Someone says:

    Saudi Arabia does not have any spare swing oil capacity. Matt Simmons made a good argument against some years ago with his book ‘Twilight in the Desert.’ You have to wonder what kind of dopes are advising the pedo-Joe phony president here. No one publicly really knows what the reserve estimates are and have not for a long time. SA was already pumping sea water into those oil formations and most of what is pumped out these days is oil and water anyway.

    • alfin2101 says:

      It’s difficult to say, given all the secrecy. Here is an excerpt from the wikipedia article on “Twilight in the Desert”:

      Simmons’ prediction of rising oil prices made in Twilight in the Desert led to a bet with New York Times columnist John Tierney in August 2005. The two men bet US$10,000 on whether the daily price-per-barrel of crude oil averaged over the 2010 calendar year would exceed $200 when adjusted for inflation, with Simmons to win the bet if it did, or Tierney if it did not. The average price for a barrel of oil in 2010 turned out to be $80 ($71 in 2005 dollars, only slightly higher than the $65 barrel price when the bet was made). Simmons died on August 8, 2010, and the bet was paid out by his colleagues in Tierney’s favor.[4]

      Saudi Arabia’s “peak” was supposedly reached around 2005 according to Simmons. Production data since that time suggests that Simmons’ prediction may have been somewhat premature. How premature? I don’t have access to that data.

Comments are closed.