13 April 2023
The recently minted Saudi-Russia-China oil alliance, which paves the way for international oil trades to be settled in a currency of the vendors choice effectively spells the end of the 'Petrodollar' system, an agreement concluded in the early 1970s between Saudi Arabia, as the world's largest oil exporter, and the USA, issuer since the Bretton Woods agreement of 1945, of the main global reserve currency for international trade.
This development has the potential to cause all kinds of
trouble for the US economy, which has been propped up for decades by the US$ status as reserve currency, because it enabled the USA to dictate to nations and organisations needing to buy dollars to settle their trades, what price the USA would pay for its imports and how much its trading partners would pay for US exports.. At the OPEC+ (Organisation of Petroleum Exporting Cpuntries,) meeting earlier this month the decision by member states to cut crude output,
for the second time since President Joe (Where am I, what's going on,) Biden flew to Saudi Arabia last summer to plead with Crown Prince Mohammed bin Salman to increase oil output may be just the start of the oil producers revenge, after they have watched advanced nations try and fail to find alternative ways to power their economies which would have destroyed the oil producers revenue streams.
The April 2 announcement caused oil prices to spike by about $5 a barrel. OPEC’s projections on future demand show
that the cuts will widen the supply shortfall later this year as futures contracts made before sanctions were applied to Russian oil exports expire. That
means oil prices will go up further, with the usual knock on effects on food and manufactured goods, inflation will rise even faster, and recession risks become greater because consumers spending more on energy and food
will have less to spend on consumer goods. Worse, in spite of sanctions Russia is still managing to sell its oil via middle men in China, Iran, India, Pakistan and the Gulf States so Russian President Vladimir
Putin, meanwhile, gets a bigger war-chest to fund his attack on Ukraine.
But what does the OPEC+ move tell us about the likely future for oil prices.
In
a world of shifting geopolitical alliances, Saudi Arabia is breaking
away from Washington’s orbit and cosying up to China and Russia which in addition to its detente with the traditional enemy and rival regional power Iran, is very bad news for businesses and citizens in the developed nations. The Saudis set oil production levels in
coordination with Russia. When they wanted to ease tensions with
regional rival Iran, they turned to China to broker a deal with the US
left out of the loop. Western influence over the oil cartel, in other
words, is no longer absolute and appears to be waning fast.
But while The White House expects OPEC+ members to dance to Washington's tune,
all have their own priorities, from Saudi Crown Prince Mohammed Bin
Salman’s ambitious plans to reinvent his economy, to Putin’s war. Any
extra revenue they get from charging more for oil will help and also serve China's long term aim of replacing the US$ as reserve currency with a trading system of its own creation.
Asked
about concerns that OPEC+ has twice cut production since Biden's visit to Saudi Arabia, a State Department spokesperson
said the administration is focused on controlling domestic energy
prices and ensuring US energy security, adding that the US views production cuts as
inadvisable given ongoing market volatility.
Meanwhile,
the threat of competition from US shale fields, a deterrent to price
hikes in the past, has receded. And while there’s a global effort to
reduce fossil-fuel use — and higher prices will accelerate that effort —
the dash to drill in the last year shows that the zero-carbon economy
remains in the realm of wishful thinking than an achievable target in the short term.
However for the global economy, lower oil supply and higher prices are doubly bad news. The major exporters are the big winners, of course. For
importers, like most European countries, more expensive energy is a
double blow — dragging on growth even as inflation rises. Bloomberg Economics’ SHOK model predicts that for
every $5 increase in oil prices, US inflation will rise by 0.2
percentage point, which at a time when the Federal
Reserve is struggling to bring prices under control is not welcome.There are three key reasons why more such shocks may be in
store: The geopolitical shift, the maturing of shale, and the Saudi
spending splurge.
For decades, the
US-Saudi “oil for security” pact has been the foundation of of the energy market. Symbolized by the 1945 meeting between President
Franklin D. Roosevelt and King Abdul Aziz Ibn Saud, aboard a US cruiser
in the Suez Canal, the deal to make US$ the reserve currency later gave the US access to Saudi oil in exchange
for guaranteeing the kingdom’s security.
But the pact is no longer what it once was:
In 2018, Washington Post columnist and Saudi dissident Jamal Khashoggi was assassinated at the Saudi consulate in Istanbul.
In 2019, Joe Biden — then a presidential candidate — threatened to turn Saudi Arabia into a pariah state and halt arms sales.
In
2021, early in the Biden presidency, the US government published an intelligence report
assessing that Crown Prince Mohammed, the kingdom’s de facto ruler, was
responsible for the Khashoggi assassination.
In October
2022, OPEC+ lowered oil production by 2 million barrels a day — less
than three months after Biden flew to Riyadh seeking an increase. The
White House blasted the move as “short-sighted.”
Last month, Saudi Arabia and Iran agreed to restore diplomatic ties in a deal brokered by China and signed in Beijing. The
Saudi government has also agreed to join the Shanghai Cooperation
Organization – a group with China and Russia at the helm, and seen as a
rival to Western institutions, as a “dialogue member”.
"The
Saudis are looking for an aggressive hedge," said Jon Alterman,
director of the Middle East Program at the Center for Strategic and
International Studies, a Washington-based think tank. "Given what the
Saudis see as a radically unpredictable US policy, they think it's
irresponsible not to look for a hedge. And by radically unpredictable,
you're looking at a US policy that changed sharply between Obama and
Trump and Biden."
In the aftermath of the April 2 move, Saudi
officials said it was motivated by national priorities rather than any
diplomatic agenda.
“OPEC+ has succeeded now and in the past in
stabilizing oil markets, and contrary to claims by Western and
industrial states this has nothing to do with politics,” former Saudi
oil ministry adviser Mohammad Al Sabban said, according to Asharq
Al-Awsat newspaper
The Truth About Coal And The Lies Of The Elite
So much for all the COP 26 banter late last year. Let me remind you. The elites all flew in on their private jets and promptly told us we’re all (royal we) getting off fossil fuels and killing coal.So how’s that turning out?
The usage of coal is now at record highs:
If You Look At How Fast Global Trade Is Unravelling, You'll Get Dizzy
Governments constantly make positive noises about the health of their economies although most people who are in work have felt no improvement on the position they were in after the crash of 2008. Wagest are stangnant, employment has reduced somewhat (see below) and while the banks are printing money and the super rich are widening the gap between themselves and ordinary people faster than ever, the real situation is frightening.
Obama's Posturing As Leader Of The Battle Against Climate Change Exposed
At home in the USA, where his word does still carry some weight, if only by virtue of the fact that he is still their elected leader, after seven years of waffling (and somewhat under the radar but that is coincidence), Obama at long last rejected the proposed Keystone XL pipeline which would have transported over 800,000 barrels a day of low grade (dirty) oil ...
Another Oil Exporting State Surrenders: Last Nail In Petrodollar's Coffin
While record mainland deficits covered by the petroleum sector is nothing new in Norwegian budget history, the 2016 budget did raise some eyebrows. The net inflow to the Norwegian Treasury from North Sea oil will be lower than the required amount to cover the deficit. This has never happened before and is testimony of the sea change occurring in the world of petrodollar recycling.
Fracking Truth: Mainstream media reports only corporate lies and government propaganda.
The government, energy companies and their poodles in the science academy have been trying to sell us fracking as the cheapish, cleanish but ultimately more reliable than wind and mirrors way of meeting future energy needs. Nobody believed them of course, only a complete idiot would believe that nonsense. Unfortunately the idiots believed themselves.
Is Russia Selling Its Oil To The World Through An Obscure Egyptian Port?
As this blog predicted when NATO and EU member states shot themselves in the foot by reacting to Russia's invasion of Ukraine with sanctions that prevented Russia from selling oil, gas and vital raw materials to the countries that needed them most, the NATO and EU member states, the Russians have had no problems finding alternative customers for their gas and oil and no problem getting oil into the world's commodity markets through the back door.
British Lawmakers Demand Inquiry Into Saudi / US War Crime In Yemen
Members of the British Parliament from both sides of the house have called on the government to demand an international inquiry into alledged Saudi Arabian war crimes committed in iuts ongoing war with neighbouring Yemen.
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The Source Of Islamic Radicalism Is biggest US Ally In The Middle East
From the fall of The Ottoman Empire after World War 1, throughout the rest of the 20th century into 21st, the evolution of Islamic culture has not been rational. Rather than moving forwards with Europe and North America, the main Islamic nations seem to have slid backwards toward medievalism. If we accept that social selection (or social conditioning) plays the same role in the evolution of societies as natural selection plays in the biological sciences:
Over 4000 Civilians Have Died In Forgotten War.
As attention has focused on Syria ans then on the efforts of the Obama administration, in its dying months, to avenge the defeat of the anointed successor Hillary Clinton and discredit the election victor and President - elect Donald Trump, and simultaneously demonize Russia and President Putin
Black Belgians Refute ‘Poverty, Discrimination’ As Causes Of Arab Terror - It's A Cultural Thing
“You know, we hear a lot about how the Arabs are a fragile community that suffers, but we, ‘les blackies,’ are discriminated against, too, and we hurt nobody”, Nico Atoba, an African Christian living in Brussels told the National Post for a feature the Canadian newspaper was assembling.
USA Extends Drone war To Africa
So why we wonder is the USA taking its drone war against the third world into deepest, sub Sahran Africa? There cannot be any reason for it, the cited aim of neutralising Boko Haram is not valid because boko Haram are not a standing army but a guerilla force that strikes and then melts away into the civilian population.
Turkey and Sadui Arabia Already Have Troops Fighting In Syria
Even mainstream media has been forced to concede that Turkey and Saudi Arabia are apparently ready to send ground forces to the Syrian battlefield as Assad's forces, backed by Russian air power and Iranian elite troops but continue to grind down ISIS forces equipped with US made arms and ammunition via Saudi Arabia and funded by Turkey's illegal oil trade with the terrorist group.
Humanitarian Crisis Unfolds in Yemen, As US-EU-NATO backed Saudi war destoys another nation.
With the attention of the word fixed on the totally misrepresented humanitarian crisis surrounding the evacuation of Aleppo in Syria (it is Obama’s beloved moderate rebels who are attacking convoys of refugees, why would Assad’s troops attack their own convoys FFS), another humanitarian crisis has been building in Yemen. In a small nation crippled by …
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The Truth Of What Is Going On In Syria
The public in those nations involved directly or peripherally in the Syrian war are not being told the truth of what is going on in that country, and have not been told the truth since hostilities began in 1011. We have tried to report this many times on our main news site The Daily Stirrer
The Truth About Coal And The Lies Of The Elite
So much for all the COP 26 banter late last year. Let me remind you. The elites all flew in on their private jets and promptly told us we’re all (royal we) getting off fossil fuels and killing coal.So how’s that turning out?
The usage of coal is now at record highs:
If You Look At How Fast Global Trade Is Unravelling, You'll Get Dizzy
Governments constantly make positive noises about the health of their economies although most people who are in work have felt no improvement on the position they were in after the crash of 2008. Wagest are stangnant, employment has reduced somewhat (see below) and while the banks are printing money and the super rich are widening the gap between themselves and ordinary people faster than ever, the real situation is frightening.
Obama's Posturing As Leader Of The Battle Against Climate Change Exposed
At home in the USA, where his word does still carry some weight, if only by virtue of the fact that he is still their elected leader, after seven years of waffling (and somewhat under the radar but that is coincidence), Obama at long last rejected the proposed Keystone XL pipeline which would have transported over 800,000 barrels a day of low grade (dirty) oil ...
Another Oil Exporting State Surrenders: Last Nail In Petrodollar's Coffin
While record mainland deficits covered by the petroleum sector is nothing new in Norwegian budget history, the 2016 budget did raise some eyebrows. The net inflow to the Norwegian Treasury from North Sea oil will be lower than the required amount to cover the deficit. This has never happened before and is testimony of the sea change occurring in the world of petrodollar recycling.
Fracking Truth: Mainstream media reports only corporate lies and government propaganda.
The government, energy companies and their poodles in the science academy have been trying to sell us fracking as the cheapish, cleanish but ultimately more reliable than wind and mirrors way of meeting future energy needs. Nobody believed them of course, only a complete idiot would believe that nonsense. Unfortunately the idiots believed themselves.
[ Currency wars ] ... [ Petrodollar collapse ] ... [ oil, saudi arabia,qatar ] ... [ new world order ] ... [ Net Zero ]
For a committed COVID sceptic like myself this is hard to swallow. While it'sfeasible that the majority *were* pro-lockdown when the world was in the midst of the worst and most intensive scamdemic / PsyOp in living memory, but to carry on clinging to the fear generated by negative propaganda is stretching things even by the standards of Labour voting, Guardian reading herd creatures. In 2021 their brains would have been successfully washed with the elaborate fear porn and propaganda, their thinking too addled by the incessant lies they were bombarded with from all angles, MSM, politicians and other authority figures including doctors and academics. However, with the benefit of hindsight and all the data we’ve accrued and knowledge we’ve gathered through lived experiences, I call absolute BS that it is still the case that the majority of the public support lockdowns. So I do think it’s important to make the distinction between past and present tense here. Are people still as terrified of a virus now as they were in November 2020? Highly unlikely. Michael Senger has done an excellent article relating to this topic;
”Across the western world, governments used propaganda on their own citizens for the specific purpose of ratcheting up fear of the coronavirus and increasing compliance with lockdown measures. State scientists in the United Kingdom later admitted they’d used fear to change minds in a series of interviews with author Laura Dodsworth: “Using fear as a means of control is not ethical. Using fear smacks of totalitarianism.”
“The use of fear has definitely been ethically questionable. It’s been like a weird experiment.”
“Psychologists didn’t seem to notice when it stopped being altruistic.”
As one Member of Parliament put it:
Likewise, a report later published by the Canadian Armed Forces revealed that military leaders saw COVID as a unique opportunity to test propaganda techniques on the public, “shaping” and “exploiting” information to bolster government messages about the virus.
As a result of these domestic propaganda campaigns, across the western world, we were all treated to such delightful slogans as “just stay home,” “two weeks to slow the spread,” “follow the science,” and “we’re all in this together”—each of course, in truly Orwellian fashion, being a boldfaced lie.”
https://michaelpsenger.substack.com/p/devils-advocate-responding-to-lockdown
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Vaccines Do Not Stop COVID-19 Spread As Governments Claim: Legal Advocacy Group
Vaccines are less effective effective in stopping the spread of COVID-19 that governments have claimed, an analysis of government narratives carried out by a constitutional rights group shows. The report was published Tuesday by the Justice Centre for Constitutional Freedoms, found that claims made by governments promising vaccination will reduce or stop the spread of COVID-19 are not supported by either medical science or empirical evidence
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The Betrayal Of Humanity By The Corrupt Medical Professions
From day one, back in March 2020 when the pandemic was declared, this blog has been questioning the fake statistics, highlighting the distortion of statistics to serve the scaremongering narratives of the elites and exposing the lies and dishonesty of politicians, sciencetitis (sic) and, surprisingly perhaps if you are of a credulous nature, doctors and the medical professions. ... Continue reading >>>