Very sad what has happened in Paris today - heart goes out to all that have been affected
I think you are on to it Eshmun.
If we think that the likes of Russia
et al are just going to lay down and accept what is coming their way threatening sovereign wealth as dictated by what is a cartel, well I think we had better think again.
It was all about oil supply when the GOP went into Iraq, now it's about the price of oil as the Russians set up camp on the door step of the Arab States under the guise of helping a friend.
While the US suffer from doctrinal and political paralysis, rule of law and rules of engagement (advantages / disadvantages); the Russians are being a bit more flexible with those concepts; and ISIS do not know what these things mean.
At the moment Putin is outflanking, outsmarting and outmuscling Obama. That's not to say the US are weak but they do not seem to have the political will to stomach full engagement. Easy to throw rocks from afar (airpower) much harder to look the enemy in the eye (boots on ground) in a political sense. That may not change with a change of government in the US next year either. I think the Russians have summed this up correctly and are taking full advantage.
Something will happen where we will see the POO normalise. What that is I'll leave to others to figure out. I'm not saying $100, $150 or $200 oil, but certainly somewhere north of $40. Oil is not like other commodities such as gold. The status quo is intolerable to the non OPEC nations and the only way things would become tolerable would be to reset all prices back to 1990 levels. That means the cost of living, food staples, and housing prices etc etc, all resetting and that ain't gonna happen any time soon. The oil industry (sovereign nations) are going to feel aggrieved by what the Saudis are perpetrating and will want to ensure that their profits (income) are restored. They will feel victimised here and will want rebalancing to take place ASAP. Why should they be the ones to shoulder the cost for what has essentially been engineered and watch others profit at their expense. I'm not ignoring other factors here, such as cheap borrowings in the US fuelling the current US oil boom in shale, but this has now given way to political and sovereign power reactions and possibly unintended consequences and I am sure there is more to it than what I can write in a few lines on a post. That is to say that there will be forces at work here that we cannot even begin to understand in a very fluid and dynamic environment.
I might be wrong with this analysis (possibly ignorant on some fronts) but believe that there is lot more to be played out with signs that relations between Russia and the USA being extremely frosty according to some commentary.
Cheers
BW
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There are known knowns. These are things we know that we know.
There are known unknowns. That is to say, there are things that we
know we don't know. But there are also unknown unknowns. There
are things we don't know we don't know.
