Is There an Oil Freeze in the Near Future?
An agreement, or an actual limit which is complied with? Because there is zero chance of the latter. The 900 lb. gorilla in the room is the fact that Iran, and the Sunni/Wahhabi states lead by Saudi Arabia are in an existential proxy war. This is happening more in Africa right now, but it is also happening in places on the Arabian peninsula, and other places in the Middle East. None of the players can afford to cut production and allow the others to bank oil dollars. Also Saudi has no economy outside of oil, and Iran knows this, and so wants to make as much from oil as possible. Saudi will be hurt more by low oil prices than Iran.
Expect if an agreement is reached, that none of the parties will follow it.
If they were to follow it, the US shale oil, and Canadian oil producers are well situated to capitalize on any price increase. I expect an oil production limit would be at best a cash wash for the producers so limiting.
Iran’s Kurds Now Growing Restless
This should have happened back in the early 1990s but fate and poor US leadership has kept it at bay till now. This is a tragedy for the families, and people involved, but the only way that the greater tragedy, radical Islam, will be vanquished is by an Islamic Religious Reformation.
More after the break.
Abbas Goes Off Deep End, And Even the NYT Can’t Overlook It
Hate always will out, it is too powerful to contain.
Bahraini court suspends the main political opposition party - FT.com
Bahrain like all of the Sunni gulf states needs a revolution. Could I point to the most important document in modern political history? The Declaration of Independence. Simply follow the form, and then steel yourselves for the fight. The US Constitution with Amendments from prior to 1900 is also brilliant, but it will need a few alterations. Be very careful with post 1900 Amendments.
Please advise if you would like input. Enjoy your republic!
Saudi Shift Brings Uncertainty on Oil
. . . they will lose their shirts on these trades, there is no support for the price of oil, demand is weak, supply strong, and no evidence anything will change that for a long time.
"'In the Southern Persian Gulf, oil is becoming a political commodity, more than an economic commodity,” he said, though he lamented that shift. “OPEC is in a difficult situation.”
In his first remarks as minister, Mr. Falih on Sunday said in a news release that the country would “remain committed to maintaining our role in international energy markets and strengthening our position as the world’s most reliable supplier of energy.'"
Right, like we have been saying, oil is a political tool being used by both Iran, and the House of Saud in the existential war between the Shia, and the Sunni. Saudi cannot stop or slow production to support price unless it can verify Iran and the Shia oil producers will as well. This is desperation selling to keep the price low, and limit Iran's income, while making desperate changes to the Saudi economy in an attempt to create gold from straw.
Good luck on that.
The oil traders are as yet unwilling to believe that the House of Saud is actually willing to let the price tank. And so they continue to bid up the price on any minor problem, or supply bauble. But the metrics do not support pricing in this range without the House of Saud restricting the supply. Something the House of Saud has specifically said it will not do.
Someone is going to get burned. Heh!
This Saudi millennial just cemented his position as one of the most powerful people in the world
. . . camel?
The rule is simple, anything which cannot go on forever will stop. And the most egregious Human Rights violator in the world cannot go on for ever. The House of Saud will fall, it is only a matter of time. The existential struggle between the Sunni and the Shia for control of Islam is coming to a head. Oil prices have tanked, and there is no evidence that demand will recover over the long term sufficiently to exceed current supply. There is excellent evidence that current supply will increase either through new finds, fracking old wells to renew output, or natural gas to liquids programs. The price of the end products of refined oil is likely to fall, and remain low. There is no evidence crude oil prices can seriously rebound in such a market.
The House of Saud will try to ride this down by selling part of ARAMCO, and cutting the subsidies it pays to those living in Saudi Arabia, but this will be ephemeral. The oil in Saudi Arabia is in the East, the Shia parts of the country. One can already see the outcome. The dilettante Arabs mincing about as the House weakens, only to watch as the much more serious Shia Persians, and Arabs of the East take the oil fields.
Couldn't happen to a more horrible bunch of Human Rights violators!
One of the great failures of the Bush administration was forcing Iraq to maintain the illogical colonial borders . . .
Kurdistan deserves an amicable divorce from Baghdad
. . . Kurdistan should have created the second stable republican, free market, reformed religions state in the Middle East. Perhaps Obama will stumble upon this acorn!? Hahahahahaha. But who knows, incompetence results in unpredictable outcomes.
Most galling is that the Bush failure was to keep Turkey in check, but Erdogan has completely run amok now. We should have sacrificed Turkey, if necessary, for the better option of Kurdistan. We should do so now.
“OPEC is Dead”
. . . the House of Saud must pump oil, or it will die. Of course, OPEC is dead.
"Times have changed, though, and the country’s new man-behind-the-throne—the 31 year old deputy crown prince Mohammed bin Salman—has little interest in ceding Saudi market share in pursuit of higher prices while the rest of OPEC gets a free ride."
Exactly. The House of Saud cannot afford to build Iran's coffers by cutting revenue. With Iran sans sanctions, The House of Saud is in dire straits for Iran already has an integrated economy, while Saud has an economy limited to oil alone. If allowed, Iran will use its oil revenue to build its integrated economy. This is the reason we are only now seeing the House of Saud pay attention to its non-oil economy, intent on selling off a portion of ARAMCO to fund a $2 trillion attempt to see if it can get the Arabs to actually go to work. Good luck with that. The reason they did not do it before? They do not think it is possible; they are desperate!
The Islamic Reformation is coming, Iran will anchor the Shia, The House of Saud will Anchor the Sunni, the outcome should be the sublimation of Salafism/Wahhabism into a reformed Islam more in tune with the Enlightened West. And optimistically, this will trigger an Islamic Enlightenment.
To do this the House of Saud, and its alliance with Wahhabism must fall. It's Game of Thrones with consequences!