A Pump War? (NY Times Thomas Friedman re: deliberate crashing of oil prices by US and Saudis)

[stevenleser]

http://www.nytimes.com/2014/10/15/opinion/thomas-friedman-a-pump-war.html?smid=fb-share&_r=0

Is it just my imagination or is there a global oil war underway pitting the United States and Saudi Arabia on one side against Russia and Iran on the other? One can’t say for sure whether the American-Saudi oil alliance is deliberate or a coincidence of interests, but, if it is explicit, then clearly we’re trying to do to President Vladimir Putin of Russia and Iran’s supreme leader, Ayatollah Ali Khamenei, exactly what the Americans and Saudis did to the last leaders of the Soviet Union: pump them to death — bankrupt them by bringing down the price of oil to levels below what both Moscow and Tehran need to finance their budgets.

Think about this: four oil producers — Libya, Iraq, Nigeria and Syria — are in turmoil today, and Iran is hobbled by sanctions. Ten years ago, such news would have sent oil prices soaring. But today, the opposite is happening. Global crude oil prices have been falling for weeks, now resting around $88 — after a long stretch at $105 to $110 a barrel.

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The Russians have noticed. How could they not? They’ve seen this play before. The Russian newspaper Pravda published an article on April 3 with the headline, “Obama Wants Saudi Arabia to Destroy Russian Economy.” It said: “There is a precedent [for] such joint action that caused the collapse of the U.S.S.R. In 1985, the Kingdom dramatically increased oil production from 2 million to 10 million barrels per day, dropping the price from $32 to $10 per barrel. [The] U.S.S.R. began selling some batches at an even lower price, about $6 per barrel. Saudi Arabia [did not lose] anything, because when prices fell by 3.5 times [Saudi] production increased fivefold. The planned economy of the Soviet Union was not able to cope with falling export revenues, and this was one of the reasons for the collapse of the U.S.S.R.”

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The price decline is no accident. In an Oct. 3 article in The Times, Stanley Reed noted that the sharp drop in oil prices “was seen as a response to Saudi Arabia’s signaling ... to the markets that it was more interested in maintaining market share than in defending prices. Saudi Aramco, the national oil company, stunned markets by announcing that it was cutting prices by about $1 a barrel to Asia, the crucial growth market for the Persian Gulf producers, as well as by 40 cents a barrel to the United States.” The Times also noted that with America now producing so much more oil and gas, “net oil imports to the United States have fallen since 2007 by 8.7 million barrels a day, ‘roughly equivalent to total Saudi and Nigerian exports,’ according to a recent Citigroup report.”

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If the Obama administration is deliberately doing this with the Saudis, I'm totally in favor of it and I think it is just punishment for Russian actions in Ukraine.

And it helps our economy and it is reversible if Putin cuts out the crap, which might be why we saw some reports of the Russian army pulling back from Ukraine. This probably has Putin worried. Seriously worried.

[Fred Sanders]

1. No. I blame Obama.

After all, if the price went up by 20%, the major media would be amplifying the GOP Crazy Voices who would screech just that....my logic is as impeccable as the major media is corrupt.

Friedman to the rescue to make sure there is an alternate explanation than for daring to give Obama credit, and the fact Obama has nothing to do with oil prices will be buried until the prices go up and then Obama has everything to do with oil prices.

That 5.9% unemployment rate is the big elephant in the room of the propagandists....

What a fucking game the American media play....

[stevenleser]

2. I happily do so too. This was a masterful stroke.

Well done President Obama!

Your move Vladimir Vladimirovich.

[Fred Sanders]

4. At least some of the gas buying voting type in America notice the price is down and make the

connection...not with Russia, but with crediting Obama....means to an end.

The media is as slow on the uptake when gas prices are down as they are swift when they are up.

[cilla4progress]

3. Wow - who knew?

If true, this is superb strategy. Mr. Obama is a patient man, and I could see him making a plan like this.

We've been noticing the drop in oil prices.

Any downside? Perhaps more Americans taking their own car, v. public transportation.

[upaloopa]

10. See my post #6 below. The down side is that

oil in this country is harder to get and involves methods that are highly toxic. The methods are fracking, acidification and cyclic steam extraction. We are polluting the environment more and more to export oil so price per barrel is lower.

[Skink]

5. It is republicans that crash economies

[upaloopa]

6. To get the oil we are exporting keeping prices down

involves fracking, acidification and cyclic steam extraction, all environmentally toxic ways to get the black gold.
We have a measure on the Nov ballot in Santa Barbara county to prevent the use of these methods in future oil production here but the oil industry is spending $3 to $4 million lying to voters compared to $250,000 to support the measure.
We should not jump for joy at the oil wars but rather find ways to move from fossil fuels. This shit is killing people by polluting their water and air.

[stevenleser]

7. Which is why in my other OP today, I said we should be pursuing a renewable energy program as if

it is a national security issue, because it is one.

I agree with you.

[Fumesucker]

8. How many Friedman Units until this policy bears fruit?

[stevenleser]

9. Well, the policy started Oct 3, and the Russians started pulling back from Ukraine 4 days ago...

I don't think this is coincidence...

http://www.bloomberg.com/news/2014-10-13/ukraine-says-russian-troops-pulling-back-from-border.html

Russian troops are pulling back from the border with Ukraine, the government in Kiev said, calling it a positive step toward ending a six-month insurgency.

President Vladimir Putin ordered Russian forces to withdraw from Ukraine’s borders on Oct. 11. About 17,600 soldiers, who were on drills since the summer in the Rostov region, are returning to their permanent bases, according to a statement on the Kremlin’s website.

“Military units that were arriving at the border with Ukraine and were deployed in camps are now seen moving back toward areas of permanent deployment,” Ukrainian military spokesman Andriy Lysenko told reporters in the capital today. “The withdrawal of military units, especially aviation and armed vehicles, from the Ukrainian border is a positive process and it helps decrease tensions in the area.”