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I am not beyond believing that the current gutting of oil prices was done at the US's behest to damage Russia. It wouldn't take too much in the way of guarantee

I am not beyond believing that the current gutting of oil prices was done at the US's behest to damage Russia. It wouldn't take too much in the way of guarantees to Saudi Arabia to have them swamp the markets. Far more effective than military intervention.

retube 11y ago
Sorry but that's nonsense. It's a well known and indeed publically admitted strategy by the Saudi's to drive US shale producers out of business. Google "saudia arabia united states oil price" for many authoritive hits on the subject. Russia was collateral damage.
- Scarbutt 11y ago
  Come on, are all those US shale producers really that dumb? they knew that if they started flooding the market they just wouldn't be able to compete, the U.S doesn't care much about all those small shale producers when it has bigger fish to fry.
  - ghshephard 11y ago
    "Small Shale Producers?" We're talking about 49% of total US crude oil production. http://www.eia.gov/tools/faqs/faq.cfm?id=847&t=6 http://www.eia.gov/tools/faqs/faq.cfm?id=847&t=6
    - Scarbutt 11y ago
      "Small Shale Producers" are the ones that go out of business, of course, the big ones can hold up.
      - stuaxo 11y ago
        The small ones aren't the ones with any political clout.
      - stuaxo 11y ago
        The small ones aren't the ones with any political clout.
- wehadfun 11y ago
  You can google "Russia united stated oil price" and find authoritative hits supporting the other argument.
  - api 11y ago
    Whether intentional or not, Russia's economy is something like 40% oil and gas so the effect was certainly severe.
- Lawtonfogle 11y ago
  Why not both? Gives a better reason for the Saudi's to go along with the plan. They help the US political side and get paid in political good will and getting to damage the US competitors.
  - rancur 11y ago
    because we don't care that much about Russia. This isn't the 80's. OPEC got greedy, that created room for shale, and Russia got hurt.
    - elektromekatron 11y ago
      Hello, there's a fairly warm little proxy war going down right now in Ukraine and an increase in Russian forces in Syria. The 80's were the nice hopeful bit.
      - rancur 11y ago
        yes, those were the days when Russia could at least hope they would win a war with us
- elektromekatron 11y ago
  From my understanding the dump was started from financial companies that had loads of oil sitting around in tankers and the Saudis then followed and met the price, but didn't set it.
- ckozlowski 11y ago
  A bit of both. I wouldn't characterize as being quite so malicious, but it's business for sure. The Saudi's need to maintain market share, even if they are selling it cheaper. They're banking on the price going back up, and if it does and the world has switched to US suppliers, then they're out even more. But there's another country they're looking to disrupt, one who's primary source of income is through oil sales due to sanctions. Their biggest enemy. Iran.
- Shivetya 11y ago
  Figure it this way, Obama killed two birds with one stone.
Synaesthesia 11y ago
It's certainly not beyond conception! As Assange mentioned in this interview, a wikileaks cable showed how the US departments all work together to achieve a Foreign Policy aim, for example when a a country needs to be isolated by the they work together to apply pressure in the economic, diplomatic, military and public relations realm. https://www.youtube.com/watch?v=W3HWiydFlJc https://www.youtube.com/watch?v=W3HWiydFlJc
- dogma1138 11y ago
  That's how a functional nation works. When the executive branch decides on a policy all of the departments muster to achieve it.
- deleted 11y ago
  [deleted]
- cylinder 11y ago
  And why shouldn't they cooperate together?
  - Synaesthesia 11y ago
    No, nothing wrong with that, but there is sometimes a perception that there is some competition between the branches of government, or a conflict of interest.
- icanhackit 11y ago
  > US departments all work together to achieve a Foreign Policy aim My interpretation wasn't that they're working together, i.e. coordinating, more like acting in unison where they are each given a different pressure-point to attack suited to their innate abilities or field. So a central goal would be established at the highest level and you give a task to each entity that can contribute in their own separate ways to that goal - e.g. a newspaper leaks something that will destabilize something. An NGO will support a particular group with food, AID, legal advice, protection. A diplomat will call in some favors. They're all doing different things with different effects that will hopefully contribute towards the greater goal, which would also explain how things can go pear-shaped if it doesn't all lock together into a cohesive outcome.
cloakandswagger 11y ago
Geopolitics are rarely so simple that they can be boiled down to a single cause-and-effect like this.
drzaiusapelord 11y ago
This is fairly conspiratorial. SA was looking at all this fracking and realizing fracking could easily invalidate its oil wealth. All it has is oil wealth. If the regime wants to survive it must compete with fracking. I'm not sure why this is suddenly a surprise as HN and other popular sites have had fracking articles for years and those articles specifically mention the threat fracking is to SA's oil wealth. That's on top of the upcoming electric car revolution, which is very much depress oil prices futher as demand plummets. And that's on top of China's oil demand going down as its slowing down its mega-building projects and entering an economic slowdown. It probably doesn't help that Putin is messing around the mideast and trying to get all sorts of oil/gas pipelines running through it. On top of Putin cozying up to Iran, which is SA's regional rival. I imagine there's a realpolitik angle here and probably a dozen other angles, but the idea that the US called up SA and made them drop prices solely to hurt Putin laughable. Putin is already hurting Putin by forcing sanctions on himself with his various annexations. Even without the oil drop, Russia's economy would still be in the shitter. They can't get the loans they need to beat the recession that's been brewing for years. They can't modernize their economy, can't diversify, etc. They scared off foreign investors with their annexations, civilian targeting, corruption, and nationalization of wealth. What country did the founder of VK flee to, for example? The oil price drop is just the icing on Putin's incompetence. The ruble is now 0.015 US Dollar, which is half its historic price. We didn't get here by oil price drops alone. Putin is digging his own grave here, and by proxy, the Russian people's.
irq-1 11y ago
I Googled this yesterday thinking the same thing, but the real increases in production came from Iraq (nearly doubling yearly output) and the extra US production. Saudi Arabia didn't seem to have any substantial change in production. Maybe I'm wrong, but that's what I found. Politically, if Saudi Arabia can't be counted on to fix prices when faced with a threat like Russia and Ukraine, then why does the US keep them as an ally, since they're clearly involved with terrorism?
- adventured 11y ago
  Saudi Arabia has only added about a million barrels per day during the supposed attempt to weaken US frackers. By contrast, the US added about three million barrels per day in three years ('12,'13,'14). Most of the oil price damage was caused by the dollar. Oil had been running at significant global oversupply for years before the dollar began to crash the price back in June/July 2014. That same dollar effect threw Canada into a recession, cut Australia's growth rate in half, and crushed emerging markets including Brazil. Long before Saudi Arabia boosted production, the dollar took off on its greatest run in decades. Oil immediately began to crash from there forward. The USSR also collapsed due to the strong dollar 30 years ago, which dropped the price of oil substantially. Oil went from $140 inflation adjusted, for three years, to plunging off a cliff to $35 or so, courtesy of Volcker's strong dollar move. And then again Russia nearly imploded during the cheap oil days of 1997-2000, also caused by an extremely strong dollar (gold hit around ~$250).
  - JTon 11y ago
    How exactly does a strong USD decrease the price of oil?
    - ci5er 11y ago
      Oil contracts and futures are priced in USD. This is what the phrase "Petro-dollar" refers to. And this is why everyone needs a big slug of dollars in their respective reserves - to buy oil. This scheme as been pretty good for the US, but other players are not quite so enamored with it. When the dollar is strong, it takes fewer of them to buy a barrel of oil. ITT there is a lot of talk about the production side of the equation, but the effect of the strong dollar and weaker Chinese demand have played a role too. China is talking with Russia, Saudi Arabia and Iran about RMB denominated contracts, so that'll be fun. Currency risk will have to factored into contract prices.
frandroid 11y ago
Saudi Arabia has its own interest in crippling the Iranian economy further. If we're looking at a geopolitical goal beyond Saudi's own need to keep oil cheap to undermine renewables and U.S. shale oil, that would come way before the American desires to undermine Russia. Saudi Arabia is strongly allied with the U.S. but doesn't feel particularly threatened by Russia.

retube 11y ago

Sorry but that's nonsense. It's a well known and indeed publically admitted strategy by the Saudi's to drive US shale producers out of business. Google "saudia arabia united states oil price" for many authoritive hits on the subject. Russia was collateral damage.

Scarbutt 11y ago
Come on, are all those US shale producers really that dumb? they knew that if they started flooding the market they just wouldn't be able to compete, the U.S doesn't care much about all those small shale producers when it has bigger fish to fry.
- ghshephard 11y ago
  "Small Shale Producers?" We're talking about 49% of total US crude oil production. http://www.eia.gov/tools/faqs/faq.cfm?id=847&t=6 http://www.eia.gov/tools/faqs/faq.cfm?id=847&t=6
  - Scarbutt 11y ago
    "Small Shale Producers" are the ones that go out of business, of course, the big ones can hold up.
    - stuaxo 11y ago
      The small ones aren't the ones with any political clout.
    - stuaxo 11y ago
      The small ones aren't the ones with any political clout.
wehadfun 11y ago
You can google "Russia united stated oil price" and find authoritative hits supporting the other argument.
- api 11y ago
  Whether intentional or not, Russia's economy is something like 40% oil and gas so the effect was certainly severe.
Lawtonfogle 11y ago
Why not both? Gives a better reason for the Saudi's to go along with the plan. They help the US political side and get paid in political good will and getting to damage the US competitors.
- rancur 11y ago
  because we don't care that much about Russia. This isn't the 80's. OPEC got greedy, that created room for shale, and Russia got hurt.
  - elektromekatron 11y ago
    Hello, there's a fairly warm little proxy war going down right now in Ukraine and an increase in Russian forces in Syria. The 80's were the nice hopeful bit.
    - rancur 11y ago
      yes, those were the days when Russia could at least hope they would win a war with us
elektromekatron 11y ago
From my understanding the dump was started from financial companies that had loads of oil sitting around in tankers and the Saudis then followed and met the price, but didn't set it.
ckozlowski 11y ago
A bit of both. I wouldn't characterize as being quite so malicious, but it's business for sure. The Saudi's need to maintain market share, even if they are selling it cheaper. They're banking on the price going back up, and if it does and the world has switched to US suppliers, then they're out even more. But there's another country they're looking to disrupt, one who's primary source of income is through oil sales due to sanctions. Their biggest enemy. Iran.
Shivetya 11y ago
Figure it this way, Obama killed two birds with one stone.

Synaesthesia 11y ago

It's certainly not beyond conception! As Assange mentioned in this interview, a wikileaks cable showed how the US departments all work together to achieve a Foreign Policy aim, for example when a a country needs to be isolated by the they work together to apply pressure in the economic, diplomatic, military and public relations realm. https://www.youtube.com/watch?v=W3HWiydFlJc https://www.youtube.com/watch?v=W3HWiydFlJc

dogma1138 11y ago
That's how a functional nation works. When the executive branch decides on a policy all of the departments muster to achieve it.
deleted 11y ago
[deleted]
cylinder 11y ago
And why shouldn't they cooperate together?
- Synaesthesia 11y ago
  No, nothing wrong with that, but there is sometimes a perception that there is some competition between the branches of government, or a conflict of interest.
icanhackit 11y ago
> US departments all work together to achieve a Foreign Policy aim My interpretation wasn't that they're working together, i.e. coordinating, more like acting in unison where they are each given a different pressure-point to attack suited to their innate abilities or field. So a central goal would be established at the highest level and you give a task to each entity that can contribute in their own separate ways to that goal - e.g. a newspaper leaks something that will destabilize something. An NGO will support a particular group with food, AID, legal advice, protection. A diplomat will call in some favors. They're all doing different things with different effects that will hopefully contribute towards the greater goal, which would also explain how things can go pear-shaped if it doesn't all lock together into a cohesive outcome.

cloakandswagger 11y ago

Geopolitics are rarely so simple that they can be boiled down to a single cause-and-effect like this.

drzaiusapelord 11y ago

This is fairly conspiratorial. SA was looking at all this fracking and realizing fracking could easily invalidate its oil wealth. All it has is oil wealth. If the regime wants to survive it must compete with fracking. I'm not sure why this is suddenly a surprise as HN and other popular sites have had fracking articles for years and those articles specifically mention the threat fracking is to SA's oil wealth. That's on top of the upcoming electric car revolution, which is very much depress oil prices futher as demand plummets. And that's on top of China's oil demand going down as its slowing down its mega-building projects and entering an economic slowdown. It probably doesn't help that Putin is messing around the mideast and trying to get all sorts of oil/gas pipelines running through it. On top of Putin cozying up to Iran, which is SA's regional rival. I imagine there's a realpolitik angle here and probably a dozen other angles, but the idea that the US called up SA and made them drop prices solely to hurt Putin laughable. Putin is already hurting Putin by forcing sanctions on himself with his various annexations. Even without the oil drop, Russia's economy would still be in the shitter. They can't get the loans they need to beat the recession that's been brewing for years. They can't modernize their economy, can't diversify, etc. They scared off foreign investors with their annexations, civilian targeting, corruption, and nationalization of wealth. What country did the founder of VK flee to, for example? The oil price drop is just the icing on Putin's incompetence. The ruble is now 0.015 US Dollar, which is half its historic price. We didn't get here by oil price drops alone. Putin is digging his own grave here, and by proxy, the Russian people's.

irq-1 11y ago

I Googled this yesterday thinking the same thing, but the real increases in production came from Iraq (nearly doubling yearly output) and the extra US production. Saudi Arabia didn't seem to have any substantial change in production. Maybe I'm wrong, but that's what I found. Politically, if Saudi Arabia can't be counted on to fix prices when faced with a threat like Russia and Ukraine, then why does the US keep them as an ally, since they're clearly involved with terrorism?

adventured 11y ago
Saudi Arabia has only added about a million barrels per day during the supposed attempt to weaken US frackers. By contrast, the US added about three million barrels per day in three years ('12,'13,'14). Most of the oil price damage was caused by the dollar. Oil had been running at significant global oversupply for years before the dollar began to crash the price back in June/July 2014. That same dollar effect threw Canada into a recession, cut Australia's growth rate in half, and crushed emerging markets including Brazil. Long before Saudi Arabia boosted production, the dollar took off on its greatest run in decades. Oil immediately began to crash from there forward. The USSR also collapsed due to the strong dollar 30 years ago, which dropped the price of oil substantially. Oil went from $140 inflation adjusted, for three years, to plunging off a cliff to $35 or so, courtesy of Volcker's strong dollar move. And then again Russia nearly imploded during the cheap oil days of 1997-2000, also caused by an extremely strong dollar (gold hit around ~$250).
- JTon 11y ago
  How exactly does a strong USD decrease the price of oil?
  - ci5er 11y ago
    Oil contracts and futures are priced in USD. This is what the phrase "Petro-dollar" refers to. And this is why everyone needs a big slug of dollars in their respective reserves - to buy oil. This scheme as been pretty good for the US, but other players are not quite so enamored with it. When the dollar is strong, it takes fewer of them to buy a barrel of oil. ITT there is a lot of talk about the production side of the equation, but the effect of the strong dollar and weaker Chinese demand have played a role too. China is talking with Russia, Saudi Arabia and Iran about RMB denominated contracts, so that'll be fun. Currency risk will have to factored into contract prices.

frandroid 11y ago

Saudi Arabia has its own interest in crippling the Iranian economy further. If we're looking at a geopolitical goal beyond Saudi's own need to keep oil cheap to undermine renewables and U.S. shale oil, that would come way before the American desires to undermine Russia. Saudi Arabia is strongly allied with the U.S. but doesn't feel particularly threatened by Russia.