In reading the “news of the week” posting on WUWT, there was an article about future oil production.
http://thegwpf.org/international-news/6074-the-next-oil-revolution.html
Worth reading in its own right. The major thesis being that advances in oil production methods, and fielding those methods due to the oil price spike of just a couple of years back, means a price collapse from excess production in the next few years.
I think there is another angle to consider. What happens when politics meets with that reality? I suspect folks with power will not sit by and twiddle their thumbs.
In particular, this chart from the article speaks volumes:
Oil Production now to 2020
Look at it for a minute.
First thing I noticed was just how MUCH is produced in the USA. Then how much the USA is predicted to add (based on present plans and actions). We are projected to be challenging Saudi Arabia in total production, and ahead of Russia.
Then I noticed that a lot of countries that I tended to think of as larger oil producers are really rather small. Libya, Mexico, even Venezuela.
But the big item is Iraq. Knocked down to Norway size in production, it is expected to expand to #4 in global production.
Something has got to give…
I would predict that the “something” is Iran.
Saudi Arabia, the USA, and Russia all share one thing. LOTS of oil production. They will all be hurt by large price drops in that oil. Forget OPEC (what do Nigeria and Indonesia matter on that graph? Or even Lybia and Qatar? The Big Boys are all at the other end. So would it be all THAT hard for them to agree that a little “excess capacity” needed to come out of the system? And where better than in Iran… Almost, but not quite, enough just by itself.
So I’d expect sanctions to be applied that forbid their oil exports. And then an eventual war as those things blow up into conflict. A war that will “incidentally” happen to break their oil infrastructure for a decade or two… Rather like Iraq was knocked off line for a decade…
Right now oil is $80 / bbl and has dipped a couple of bucks lower. Bring that much more capacity on line, we’re looking at $50 oil as a real potential. None of those first half dozen countries can afford that. And who has the weapons?
So looks to me like it isn’t a very long stroll from this chart to “Capacity Reduction” and the quickest way to get there is take down a large supplier. Of those suppliers, I only see one that is a big time “Nobody really likes them”… The others are all “Friend Of Somebody”, one side or the other.
It might be interesting to find the exact growth projections for Iraq and see just when it is projected to spike most. Then figure a year prior for the “clean up time”…
Place your bets… ;-)
Musings from the Chiefio 
An interesting, cynical hypothesis. It would be worth researching who buys oil from Iran these days, in order to round your analysis out. My recollection is that China is a big customer and, possibly, Japan. This may influence the speed and direction of the events you expect. The other aspect is the security of oil transit through the Straits of Hormuz and its vulnerability to Iranian attack.
The big turnaround is, as you point out, the re-emergence of the USA as a major energy resource – likely to be come a net exporter of energy resources from being a major importer. This, it seems to me, offers the USA a great opportunity for restoring its economic fortunes in the decades ahead. The other is the re-emergence of Iraq as a major oil exporter. No doubt Iran would like to spike that outcome if it could.
Ah, maybe that’s the real reason for some of Iran’s policies: “Don’t shoot or the Israelis get it!”
Though it’s hard to see that anyone but the US would much care.
Oil is like gold and diamonds, once it out of the ground and in the ‘system’ where it came from is meaningless. EM makes a great point, what we down here in the trenches think is ‘telling’ or ‘important’, the big boys calling the shots don’t even bother to think about. All the Players in the Game know that Iran’s Islamic Revolution is toast and it’s just a matter of time, even though they use it to huff and puff at each other while setting up their next chess move. They also know that the current WIC’s (Whackos-In-Charge) in Iran are a minority and that time and tide will change the Bully into a nice compliant friend one day (for one or more of them;-). If the Bully needs a little push (or a big punch in the nose) they will probably do it sooner rather than later, or let one of their number do it for them while they throw a temper-tantrum for the benefit of their own fans at home and around the globe. This is like the World Wrestling Federation Saturday Night Tag-Team Matches, just one mind you, there are many more in the wings getting ready to hit the mat and put on a show. Something about that “World Champion Belt”, they all want it.
PS: And… don’t be surprised if during the upcoming match, when the US/EU take on the snot nosed Islamic Bullies of Iran/Pakistan, just as they have the bad boys pinned to the mat and the ref is counting “One!”, “Two!”, and the fans are going ape, someone like the China&Russia Team don’t jump into the ring and start pummeling the US/EU, stopping the count and making the Ref mad as hell, and driving the house frantic with rage and joy, and holding their blood red hands high in the air, they jump out of the ring with a tripple sumersault, land on their feet, flip a gross gesture at the fans on the right and give a more victorious gesture to their fans on the left, and slowly, proudly, arrogantly, head back to the locker rooms to get ready for the next title match “The US/EU v China/Russia”.
@Pascvaks – it is just another round of ‘The Great Game’ – http://en.wikipedia.org/wiki/The_Great_Game
@IanW-
I subscribe to the greater all inclusive definition of “The Great Game”. To distinguish, maybe all caps would set off THE GREAT GAME from the little British-Russian Spat ‘The Great Game’. You know, it actually was once called “The Cave Game”? Really! Then the Celts came along and upped the anty. Really! And it hasn’t been the same sence. It’s like the Universe, it just keeps getting bigger, and Bigger, and BIGGER;-)
I disagree with that statement. Saudi Arabia and Russia are net exporters. Yes, they will suffer. The US is a net importer. A drop in energy costs will help our overall economy.
The graph shows a huge jump in oil for America, but that may never come to fruition. Obama and the EPA are working feverishly to halt the US growth in oil and gas, They have all but killed coal. With proper manipulation the price of oil will stay high and the globalists will be happy.
I am a believer in cold Fusion and believe that late this year or early next year it will be obvious that it is about to go commercial. To me, this is the major battlefront for maintaing the price of oil.
Saudi Arabia is trying to get close to this technology and has made (rumored) big money offers to hide the technology. Just think of the taxes lst if oil and gas go away. This will be what craters the price of oil and sends the Saudis back into the desert with their camels.
With the projected oil output from the western Hemisphere, it will be the new OPEC with all the problems to follow. The US has hundreds of years of gas and it can be converted to oil synthetically, but that to is being discouraged. Our government likes everyone’s gas but our own.
“I am a believer in cold Fusion and believe that late this year or early next year it will be obvious that it is about to go commercial. ”
I will keep that one bookmarked. Last I heard there was a new process but it required a considerably quantity of unicorn horn for the catalyst and there is currently a severe shortage of that commodity.
I’m looking in another direction. The WSJ just carried an article on the energy crisis slowing growth and change in India. Nations in Africa and a few other places need energy. Would it not be simpler and safer to fund energy expansion (use) in such places than to start blasting away in the middle east? I’m a believer in the power of communications in changing what millions (billions) of folks in under-energized countries are willing to tolerate. Further, the CAGW agenda seems to be waning as a call to influence massive changes. Australia is going to find out soon how seriously flawed this “carbon” tax thing is. So, I’m expecting the price of oil will not fall far and trigger the scenario proposed in the post because there are other compelling trajectories – mine here and others.
@Oldtimer:
China is the largest (something like 20% of Iranian oil) Nice map here:
With Europe now voting to cut of imports, looks like China, Japan, Korea, and India are the biggies.
I’m sure the USA would not want to do anything to slow down the growth of China and India…
/sarcoff>;
@Dearieme:
Shades of “Blazing Saddles”! ;-)
@Pascvaks:
Maybe we need a new name for International Politics… World Political Federation ?
@Ian W:
https://chiefio.wordpress.com/2011/11/27/old-ending-for-a-new-great-game/
@George:
Well, who contributes more to politicians; The Oil Companies or Joe Hotdog Stand and Jane Dressmaker? How much does oil production contribute to the GDP (see most all of the states along the southern Gulf border… not to mention Alaska and the Dakotas and…). The higher the oil price, the more exploration and production (read jobs and tax revenues).
Add to that the point that we are projected to be nearing break even on oil and related hydrocarbons by 2020 and the “Add” to domestic GDP from higher oil is less than any “loss” to overseas suppliers.
Basically, it isn’t the USA in total that matters. It’s the USA that has vested interests and political connections… So they don’t give a hoot about your $4 gasoline; just about their $1 profit on making it.
(Yes, this is a cynical mindset posting ;-)
@BobN:
IMHO, that is evidence for the push to discourage global oil production that ends with Iran getting a whack…
@John F. Hultquist:
In a sane capitalist world, yes… but we live in a Green Agenda World… No growth for Africa…
Who has credible / deliverable nukes has got to be a factor in any trigger pulling decision.
As I’ve pointed out to people for some time, Iran is not the only country capable of blockading [I mean blocking] the Straits of Hormuz [or the Caribbean for that matter]. An interesting question to ask is who would be hurt most by some major naval power [or ‘coalition’ of powers] playing gate keeper at the Straits of Hormuz? Who’s economy and political system would degenerate into chaos faster? Iran is much more dependent on their own petroleum exports than anyone else is dependent on imports from them. Iran has oil now but their production future is bleak. The Saudis and other Gulf states can get their oil out other ways if they need to and the correct political WILL is applied where necessary. The lonely Iranians have fewer options. A VERY cynical way of looking at things, but I think somehow Iran must understand the logic.
On Al Jazeera they had coverage of oil exports via alternate means. Looks like UAE can export about 2/3 of capacity that way:
http://gulfnews.com/news/gulf/uae/employment/a-pipeline-to-jobs-and-regional-stability-emirati-youth-say-1.1041979
Saudi can get out about 1/3 via a pipeline to the Red Sea and there are two shut unused pipelines that could be restarted with a refurbish (one via Lebanon). and I think there was another one with only modest usage that could be ramped up.
Leaves Kuwait, Bahrain, Qatar and Iraq (which is still ramping up production and way below capacity) up a creek ( or a gulf) without a paddle…
It would be a pain and oil would likely hit about $150 / bbl but as it presently is in oversupply and price collapse, might only make it to $120 or so. ( OPEC target is “over $100” per resent statements by Saudi and Iran). So from an OPEC point of view, it gets “to target” without all that messy negotiating…
I’d also expect a very rapid build of a second pipeline to the Red Sea and a feeder from the minor Gulf countries over to UAE and a second pipeline there. Figure a year or two worst case.
Saudi has a gas pipeline to their chemical factories on the Red Sea that in a real emergency could likely be converted to carry oil instead. ( Or the “chemicals” could become gasoline ;-)
Almost my first news link this morning: http://etfdailynews.com/2012/07/02/investing-in-israels-epic-oil-and-gas-boom. The report states that Israel imports 99% of its oil and 70% of its gas. With new drilling capabilities, an Israeli company discovered 1.4 bb offshore oil and 6.7 trill cu ft natural gas. This is the third largest discovery to date (800 mb oil last year) and there seems to be an abundance of on-shore resources. Don’t know about this claim, but Israel over the long term should come in right after Venezuela in proven reserves. “In terms of energy, over the next 10 years we’re going to see changes take place in the Middle East like we’ve never experienced before.” Do you think this makes war more or less likely?
Long ago when I was teaching American social, cultural, and economic history, I could not bring myself to deny Pres Bush his “necessary” war with Iraq (stupidly fought, however) because of my knowledge of then-proven reserves of oil. I followed pipelines being built, especially the directions they headed, and the then-knowledge (unless it was bogus and we/I were being conned — did technology really change that much?) that the US had “run out of oil”. The US. could not afford an implacable enemy who owned the second?, third?, largest reserve of oil positioning itself to joyously and generously fund Al Quaeda and any other terrorist who would end the existence of the U.S.
My better sense said listen to your elders: the U.S. should never get into a war in the Middle East. (Afghanistan, I thought, was a punishment mission, along with search and destroy “proven” enemy nests, and we would not stay foolishly like the Brits and the Ruskies.) My better sense said this was a mission in the best interests of the Saudiis, not ours, with the exception that owners of natural energy resources, if they are free to develop them, sit on top of the world.
I wonder about Russia. Islamists are their nightmare, too. And China’s. Is U.S. power more frightening than the purposes of these enemies-of-everyone-else? What else is the Saudi’s position of maintaining the “price of oil” than denying cheap energy development for those in the rest of the world. The U.S. used to think that the Saudiis were “our friends”. Their position, it seems to me, only funds dictators. Unfortunately for dictators, if we are in time, the world is awash with oil and gas. I wonder if the “big boys” will be able to control “it” as “they” have done in the past — the creative destruction of (free/abundant) markets.
[Reply: Found this stuck in the SPAM queue. No idea why. My apologies for the delay, but my internet was down so didn’t check quickly… -E.M.Smith. ]
1. The USA already is a net energy exporter
2. We already see a growing gap between the oil price and the price we pay for gasoline and diesel at the pump due to carbon taxes and a decline in refinery capacity. This gap will grow bigger and bigger in time.
3. 2020 is a long jump in time considering the short term events and their impact in social economic and geo political tems.
Both the US and Europe are toast from a financial perspective, their middle class is wiped out and costs for energy, water and food are soaring.
4. there is no sane prediction to make what the public respons will be if the current political establishment continues it’s quest to sabotage the very basis of our civilization
5. The same goes for the short term relationship between China, Russia and the West
A sunny retreat outside Europe and the US looks more attractive by the day.
R.de Haan: A sunny retreat outside Europe and the US looks more attractive by the day
But, as the same “script” is being applied everywhere, that supposes having savings and living out of them; but LOL, in what currency? Only gold would make it.
adolfogiurfa says:
3 July 2012 at 2:31 pm
“But, as the same “script” is being applied everywhere, that supposes having savings and living out of them; but LOL, in what currency? Only gold would make it.”
I think you’re right on the basics but there are also great opportunities in the retreat.
For example, land is relative cheap, staff is relative cheap and many business opportunities surface on the go.
Europe has turned into an mess which can’t’ be resolved over at least two decades.
http://www.zerohedge.com/news/farage-eu-summit-breakthrough-its-not-credible-nobody-believes-you
Same goes for the US.
From Debka:
US military strength beefed up at Hormuz as nuclear talks with Iran fade
DEBKAfile Exclusive Report July 3, 2012, 4:26 PM (GMT+02:00) Tags: US buildup Strait of Hormuz Iranian missiles nuclear negotiations oil embargo Saudi Arabia Israel
The USS Ponce
The Obama administration released details Tuesday, July 3, of a fresh buildup of its military forces in the Persian Gulf, stressing their task is to fend off any Iranian attempt to endanger international shipping by blocking or planting mines in the Strait of Hormuz.
Shortly after the announcement, senior US administration officials said the fourth round of nuclear negotiations between Iran and six world powers taking place in Istanbul Tuesday were most probably the last: Tehran has refused to give way on the key issues of the 20-percent grade enrichment of uranium and the closure of its underground nuclear facility at Fordo.
The new war drums sent oil past $100 for the first time in three weeks.
As for the Gulf buildup, US sources said counter-measures were in place in case the extra forces were targeted for Iranian aggression.
Tehran earlier threatened military reprisals for the oil embargo imposed by the European Union Sunday, July 1. The next day, the Prophet 7 missile exercise was launched by Iran’s Revolutionary Guards simulating attacks on “enemy air bases.”
The wording of the exercise’s mission was taken as strongly intimating that Tehran had US air bases in the Persian Gulf and Middle East, including facilities used the US Air Force in Israel and Turkey, well within the sights of its missiles. It was stressed that short-, medium- and long-range missiles were being put through their paces.
Tuesday, commanders of the Iranian exercise reported that dozens of missiles had been trained for several hours on mock “enemy bases” in several countries, stating that missiles capable of hitting Israel had been successfully tested.
The US has doubled the number of fast warships in Gulf waters that are capable of instantaneously responding to Iranian moves for closing the strategic Straits of Hormuz, through which a fifth of the world’s oil passes daily. More minesweepers are also on hand, as well as commando units for preventive action against the planting of mines in the sea lanes frequented by oil tankers on their way to and from Gulf export terminals.
DEBKAfile’s military sources report that US, Saudi and other Gulf armies have been on high military alert since Thursday, June 28, on two counts: the escalating Syrian crisis and the potential threat to the strategic strait in response to the EU embargo. Iranian leaders have often threatened to treat this penalty as an act of war. As part of their new stance, Saudi forces moved up to the Jordanian and Iraqi borders.
According to our sources, the information released in Washington on the US Gulf buildup represents only a fraction of the concentration of strength gradually building up around Iran for five months since March. It was then that two squadrons of the F-22 Raptor stealth planes were moved to the United Arab Emirates air base at Al Dhafra and troops were flown in to two strategic islands, Masirah on the Gulf of Oman and Socotra at the meeting-point between the Gulf of Aden and the Indian Ocean. Their numbers now are estimated at 40,000. See the attached map.
OT, but I think you’ll be interested.
http://taxdollars.ocregister.com/2012/04/19/cpuc-approves-sce-smart-meter-opt-out-option/153472/
@Jim2:
We have an “opt out” here in Kalifornia…. something like $125 up front AND $25 / month. Given that my last electric usage portion was something like $50, that’s a 50% surcharge…. So it’s easier and cheaper to just:
1) Stop using their product.
2) Substitute non-smart meeter Natural Gas.
3) Load Level with a battery box / charger / inverter set ( i.e. foil the spy).
4) Add my own generation (whatever is most fun).
Oh, I see! It’s one of those new-fangled tax-penalty thingies.
Wonder if the thing can tolerate microwave or other RF pulse? Just wondering. pg
Saudi’s are buying nuclear capable missiles from China…
http://www.debka.com/article/22155/Saudis-are-buying-nuclear-capable-missiles-from-China
European Madness to control anything at any price
http://www.eureferendum.com/blogview.aspx?blogno=82861
@R. de Haan:
Why I drive old cars and will never by a GM product with On-Star…
Golly… I need to get my Story written before reality gets out in front of it…
@P.G.Sharrow:
Once upon a time, a college friend worked for a D.O.D. related industry. They made radar sets. One of the features was a passive “see what the other guy is looking at” where you picked up the other guy’s radar pulse reflections. It also could then figure out where he was, and what direction his radar was pointing.
Then it would wait, quietly, until their antenna was pointed directly at its antenna…
Then it would emit a very very large fast radar pulse.
Supposedly you could see the smoke emitted by the Soviet “Trawlers” radio shack from a good distance away ;-)
If it has an antenna, it is subject to overload destruction. The only question is “How much power?”.
(They used a device in the input that was highly resistant to overload pulses, so could look strait down the other guy’s beam with no problems. I’m not sure if the tech is declassified yet, so no details… but it was “asymmetric warfare” ;-) Such a device is not in common radios…)
Of course, if you have too many things “burn out” in the same place, folks come to ask why…
Just confirming my point that Russia (and China for that matter) deserve the classification of being a “wild card”.
Moscow may hand Iran S-300, breach arms embargo if Assad ousted
DEBKAfile Special Report July 5, 2012, 1:21 PM (GMT+02:00) Tags: Russian S-300 Iran Bashar Assad US Israel Vladimir Putin
The Russian S-300 aid defense system
Moscow has removed the gloves in its defense of Syrian ruler Bashar Assad. Wednesday, July 4, senior official Ruslan Pukhov warned: “If the Syrian regime is changed by force or if Russia doesn’t like the outcome, it most likely will respond by selling S-300s to Iran.”
Pukhov, who sits on the Russian Defense Ministry’s advisory board and heads a defense affairs think tank in Moscow, added: “The fall of the Syrian government would significantly increase the chances of a strike on Iran. Resuming S-300 shipments to Iran may be a very timely decision.”
Moscow has since 2010 withheld the S-300 air defense system from Iran at the request of the US and Israel. The Pukhov statement indicated that, just as that was the correct decision for the time, the strategic situation in the Middle East with regard to Syria and Iran has since changed, and so providing Iran with these weapons would be the timely decision now.
Kremlin strategic thinking on the region shifted radically in August 2011.
On August 8, two weeks before NATO and Arab forces drove the Libyan rebel invasion of Tripoli to oust Muammar Qaddafi, Russia’s ambassador to NATO, Dmitry Rogozin, warned in an interview to the Russian Izvestia, “NATO is planning a military campaign against Syria to help overthrow the regime of President Bashar Assad with a long-reaching goal of preparing a beachhead for an attack on Iran.”
To this day, Moscow is certain that the same Western-Arab coalition will sooner or later intervene militarily in Syria and then move against Iran.
Sources in Washington and Jerusalem found evidence of that suspicion in comments made by Russian President Vladimir Putin during his visit to Israel on June 25. He is reported to have scattered vague threats indicating that Syrian President Bashar Assad’s overthrow would be treated by Moscow as violating Security Council resolutions and elicit Russia’s exit from the international arms embargo on the Syrian regime. Putin was not specific.
Russian S-300 missiles batteries would make the targeting of Iranian nuclear sites by US and Israeli warplanes difficult because that weapon is reputed to have a near-zero miss ratio for intercepting ballistic and cruise missiles – even when they come in at very low altitudes.
In late 2009, Moscow began sending Iran some of the technical accessories for the S-300 batteries while withholding the actual missiles and their control and radar systems, DEBKAfile’s military and intelligence sources report. During 2010 and the first half of 2011, Iranian teams were trained in their use at bases in Russia. Moscow continually assured Tehran that with patience, US-Israeli pressure would abate and the missiles could be released.
In any case, Israeli air crews are at bases in Greece training in counter-measures since developed to outwit the S-300, DEBKAfile’s military sources disclose.
Tehran has tried to manufacture homemade equivalents to the S-300 on its own – drawing on the knowhow of Iranian military personnel trained in their use in Russia to form designer and construction teams working from blueprints provided during their training.
China, which has received these systems from Russia and is replicating them, was quietly approached by Iran for assistance. Beijing is reported to have handed over some of the technical materials but not the key blueprints for enabling their manufacture.
That is why Iranian generals often report progress in producing an air defense system similar to the Russian model and declare it will be operational by mid-2013, but have never displayed a homemade prototype.
@All:
Found a comment from Pyromancer76 stuck in the SPAM queue
https://chiefio.wordpress.com/2012/07/02/why-iran-oil-sanctions-and-the-war-after/#comment-37569
No idea why, but check up thread and ‘catch up’ on it.
@Pyromancer76:
Israel is known to have a load of “shale oil” and similar non-oil oil. That the new techniques let them now “discover” it is very nice for Israel. They also started bothering to look in places not inspected before, so yes, Israel is at long last in a good position on fuels.
As I think the probability of war in the M.E. is 100%, no, it doesn’t increase the probability of war in my opinion ;-) But it likely does increase the intensity and decrease the lag to start time… Nothing like billions of bbls of “threat” to OPEC income to give a little more motivation and nothing like being able to claim more dominance of energy assets to stimulate some Palestinian property rights claims….
FWIW IMHO the ‘deal’ was made to end the Arab Oil Embargo. The USA guaranteed the House of Saud that it would run the M.E. energy show. We would keep them in power, and they could buy any western assets they wanted; BUT: In exchange, the oil flows uninterrupted. We’d help manage the price to keep them rich, but get a ‘cut’ in the refining / distribution end. They would keep the rest of OPEC happy enough and in line; we would assure nobody deposed them. Oh, and we wouldn’t actually “discover” an alternative…
It fits all the loose ends that other theories do not. Our constantly promoting “exactly wrong” alternatives to oil. Our dashing in to save the House of Saud when Iraq became a threat. Our giving Iran a hard time when they start causing problems for “our friends”… All part of “The Deal”.
We had known workable alternatives in the pipeline, that got scrubbed. We had no love lost with the Embargo Promoters, yet suddenly are defending them. We threatened (and in fact acted to promote) inflating away their price hikes. “Go ahead and raise prices, we’ll inflate them away”… then Reagan stopped it. And more….
But one answer explains it all. Europe agreed to stay out (fears of ‘colonialism’ in the area) and the USA agreed to be the Police. The USA also agreed to not get off the needle / oil fix and the Saudis agreed to discipline OPEC ( as swing producer they can do that) and keep consistent oil flowing at modestly stable prices. They (and Egypt and others) agreed not to attack Israel again and we (USA) agreed to maintain weapons shipments to both sides AND the status quo. Oh, and a few $Billion/year to places like Egypt…
(Sidebar to Adolfo and NWO Paranoia fodder: About that same time the Masonic order added the Koran to The Bible and Torah as holy books on the table and you just had to pledge to believe in SOME God, not the Jewish / Christian pledge of prior years…)
I think all that has worked relatively well.
So what changes now? How long does The Saudi Deal stand? I think it stands as long as the House of Saud is in charge.
So expect us to take down Iran WHEN they threaten the Saudi control / power.
Expect us to promote things that can not replace oil in any reasonable time frame ( like e-cars that must pass through 25 years of fleet change…)
Expect Saudi to NOT participate in any attack on Israel ( but Syria / Lebanon as a client / Iran by proxy; and Egypt will).
Expect that since Egypt has “left the fold”, we’ll send some folks to remind them of “The Deal” and then either there is a new Egypt / Israel war; or their government become reluctantly agreeable…
Expect the House of Saud to continue to fund various “soft jihad” things like Mosques everywhere in the world to try and buy peace with their population.
Expect the folks like Muslim Brotherhood and Al Quada and Taliban to continue to cause mayhem (largely funded by Iran, who left The Deal with their revolution, and perhaps some under the table from Saudis as individuals).
Expect us to respond (as contracted Rent A Cop to Europe and The House Of Saud) whenever it threatens The Deal or The House Of Saud.
So what does Israeli oil do to this?
It takes away the energy threat from Israel, but increases the desire to kick them out by their neighbors. (If an infinite desire can be increased ;-)
It adds another destabilizer to The Deal in that they are outside OPEC and not subject to Saudi influence (and have incentive to undermine the power or OPEC financially).
I’d expect Israel to “get a bigger cut of The Deal” in exchange for a slower development rate on their oil and gas. Enough energy for themselves and a modest balance of trade surplus, but not enough to destabilize The Deal.
Expect that some “excess capacity” has to be taken out to keep The Deal viable.
Who is not part of The Deal and has excess capacity? Hmmmm…..
Per Russia: One of the developments post Arab Oil Embargo was the growth of Russian Oil production. I think that was a wild card. I suspect Putin was mostly playing from outside The Deal (thus alliances with folks like Syria and Iran) but is angling for more insider connections.
The EU has taken a hard turn back to Holy Roman Empire and has made Russia a bit nervous. At the same time, 40 years on, the USA is being seen as less of “Honest Broker Rent A Cop -not those nasty colonizers” and more of “Bully and Great Satan”.
IMHO that is the genesis of The New Great Game. EU/ UK vs Russia vs USA/Saudi-Deal with China sitting back, sipping tea, occasionally smiling inscrutably (and then something unexpected blows up on the board…) and India looking nervously over the northern and western borders…
No idea who is going to win this match. (Nukes help, but all sides have nukes… even Israel)
So far we’ve managed to keep The Deal stabilized and restabilized when displaced. But the destabilizing forces are growing and the folks who founded The Deal are leaving the stage. Especially one Arab Spring Country at a time. Making Israel an Oil Exporting Country and having Egypt leave The Deal while Russia has decided it’s time to reclaim Center Stage power is, er, “not stabilizing…”
Add Iranian invective and volatility, light match…
@R. de Haan:
See “light match” comment ;-)
I suspect the Saudis are just realizing that The Deal for a USA nuclear umbrella is not all that stable in the next couple of decades and that being sandwiched in between a Nuclear Israel and a Nuclear Iran and with a Nuclear Pakistan and a Nuclear India and a Nuclear Europe and… well, maybe it just isn’t all that important to be non-nuclear any more … ( As China sips some tea and smiles politely…)
Per Russia:
Lets see… what huge oil seller not in the Middle East would benefit from a sharp reduction in supply from the middle east (and would not mind the USA / EU getting a load of expensive military gear destroyed and a bloody nose in the process) while testing and improving their military equipment / sales “in the field”?
So Russia by proxy on one side. China by stealth on the other. USA stuck in the middle with The Deal forcing them to be present. The EU doing The Usual and “holding our coat”…
I’m sure it could never be that convoluted …. /sarcoff>;
@E.M.: That usually happens when printing currencies does not work anymore, at least legally, then they turn to “war economics” to fix things up, their way, of course.
Chances are that this time Nature will surprise all parties changing their games unexpectedly. We all bloggers know that: The Landscheidt Minimum, and some volcanoes and earthquakes as cherries on the celebration pie.
Iran goes around embargo and still sells it’s oil.
http://www.jpost.com/IranianThreat/News/Article.aspx?id=276579
@R
Little boys who always cry “Wolf!”, and Presidents who always draw “Lines in the Sand”, tend to get what they deserve; the problem for us is that we get it too.
@Pascvaks: “In the times to come those who can buy a farm, do it”(Edgard Cayce, american psyche)
@Adolfo-
The ‘farm’ I have now (a little piece of virgin turf you might say) reminds me of the one Alvin York and his family had before he went to France in WWI. I always thought Edgar Cayce was a little ahead of his time, didn’t you?
@Pasvacks: Hope the EPA issues a new regulation about VIRGINAL TURF…. :-)
I meant DOES NOT
Russian Answer to the 4th of July:
http://freebeacon.com/putins-july-4th-message/
Not the best of times to put our defense capability on sale and dismantle our production capacity.
http://www.eureferendum.com/blogview.aspx?blogno=82870
@R.de Haan: From that article: Moscow dispatched nuclear-capable bombers into the 200-mile zone surrounding U.S. territory…
BUT, the international law, The UN´s Convention of the Seas does not recognizes those 200 hundred miles anymore, but only 12 miles. This is a LAW already, as it is has been signed by the majority of countries:
Click to access unclos_e.pdf
@R.de Haan: And……:
Excerpt from President Obama’s National Security Strategy – 2010:
“We must work together to ensure the constant flow of commerce, facilitate safe and secure air travel, and prevent disruptions to critical communications. We must also safeguard the sea, air, and space domains from those who would deny access or use them for hostile purposes. This includes keeping strategic straits and vital sea lanes open, improving the early detection of emerging maritime threats, denying adversaries hostile use of the air domain, and ensuring the responsible use of space. As one key effort in the sea domain, for example, we will pursue ratification of the United Nations Convention on the Law of the Sea.”
http://www.jag.navy.mil/organization/code_10_law_of_the_sea.htm
@Adolfogiurfa.
I know about the UN’s “Law of the Sea” and I know the Russians being a model member of the UN.
I admire them for that.
NATO, Russian naval-air buildup in E. Mediterranean, French units to Gulf
DEBKAfile Exclusive Report July 11, 2012, 11:44 AM (GMT+02:00) Tags: Russian Navy NATO France Syria Iran nuclear
French aircraft carrier Charles de Gaulle
NATO, which proclaims non-involvement in the Syrian conflict, and Russia, which vows to block foreign military action against the Assad regime, are both moving large naval forces into the eastern Mediterranean opposite Syrian shores.
A flotilla of at least 11 Russian warships has been detached from Caspian Sea, Black Sea and North Sea fleet bases and is on its way to the Syrian coast for a maneuver; NATO has consigned its rapid response Maritime Group 2 to the same stretch of sea – where also five Israeli warships are deployed. The Western alliance has also increased surveillance flights over the Mediterranean from the Geilenkirchen air base in Germany.
This rush of military movements is explained officially by the big air-and-sea exercise launched by Syria Sunday, July 8, to simulate outside aggression. It follows Iran’s practice of continuous military drills for repelling mock Western or Israel attacks.
The exercise began with a barrage of dozens of surface-to-sea missiles simulating naval and shore defense against approaching enemy craft and landing forces.
At about the same time, Iran embarked on a big air-cum-missile defense exercise in the south to fight off potential aggression from the direction of the Gulf of Oman and the Gulf of Aden, where US air force units are clustered.
DEBKAfile’s military sources report that this is the first simultaneous, coordinated Syrian-Iranian military maneuver for drilling action against an advancing enemy. It is synchronized from a joint headquarters established for the purpose in Damascus.
While these coordinated maneuvers are being presented as designed to fend off foreign intervention in the Syrian conflict, our sources report that they are in fact preparing for a potential US attack on Iran’s nuclear program, which is now expected in Gulf and European military quarters to take place in October, three months hence.
High-ranking Saudi princes associated with their national military and intelligence agencies frankly confided to Arab and Western officials on recent visits to Riyadh that the US and, possibly Israel too, are on the verge of war on Iran. “It is already decided,” they say. The only question still open is the date, which could be before or after the US presidential election on November 6.
In line with this prediction, France is reported in Paris to be massing a large naval force in the United Arab Emirates. The French nuclear aircraft carrier Charles de Gaulle-R91 is expected to dock soon at the French naval base in Port Zayid on Abu Dhabi’s northeastern coast opposite the strategic Strait of Hormuz. The French are also boosting their air units at Al Dhafra Air Base, stationing them alongside a large American air force presence.
Two hours for Syrian chemical weapons to reach Lebanon. Four armies prepared
DEBKAfile Exclusive Report July 22, 2012, 10:47 PM (GMT+02:00) Tags: Israel Syria Hizballah chemical weapons missiles Binyamin Netanyahu
Syrian WMD-capable missiles
The IDF, the Turkish and Jordanian armies and US Middle East forces have switched to preparedness mode in the last few hours in case the Syrian chemical weapons arsenal starts moving west toward Lebanon, DEBKAfile’s military sources report. Acting in unison, those armies are on the ready for instantaneous action because it would take no more than two hours to cover the distance from Syria to the Hizballah-controlled Bakaa Valley of east Lebanon. Their arrival there, unless thwarted, would mean a war on Hizballah.
Therefore Israeli and US military chiefs prefer to stop the arsenal in its tracks before it moves across the border. This would call for surgically precise, rapid action against a target going to extreme lengths to stay concealed.
In the view of a senior US military source quoted by DEBKAfile, the risk is solid but it comes from a different direction. He stressed that “President Assad has not decided to hand over his chemical weapons to Hizballah, nor has Hizballah leader Hassan Nasrallah decided to accept them.”
The chemical stockpile is kept at the al-Safira base northwest of Damascus in the care of the president’s personal guard unit which takes orders from Bashar Assad and no one else. If the heads of that guard saw the regime suddenly collapse – as it was expected to do last Wednesday when assassins murdered the men closest to the president – the American official says, “It is impossible to predict how they will act or what use they will make of the weapons systems under their guard.”
“They may decide to sneak out of Syria to Lebanon and take with them the entire arsenal as insurance for their safety and future,” he suggested.
According to our military sources, the arsenal which could be spirited across to Lebanon contains a lot more than chemical weapons. It also includes Scud C and Scud D surface missles capable of delivering chemical warheads and also the Russian-made advanced Pantsyr-S1 (NATO codenamed SA-22 Greyhound) anti-air missiles, which have been guarding the chemical stocks.
This background accounts for the words used by Israeli Prime Minister Binyamin Netanyahu and Defense Minister Ehud Barak Sunday, July 22, to make their intentions clear:
“Israel would have to act if the Syrian regime collapsed without changing and if there’s a risk Syria’s chemical weapons and missiles could fall into the hands of military groups,” such as Hizballah or al Qaeda, Netanyahu said.
Asked if Israel would act alone, he said that Syria’s stockpile was a “common concern” – hinting at the coordination in place between the Israeli, Turkish and Jordanian armies and US regional forces.
Barak was more specific: “I’ve ordered the Israeli military to prepare for a situation where we would have to weigh the possibility of carrying out an attack against Syrian weapons arsenals.” He told reporters.
”The state of Israel cannot accept a situation where advanced weapons systems are transferred form Syria to Lebanon.”