The Moscow Times: Kremlin Playing Oil Game For Keeps

[La_Serpiente]

Kremlin Playing Oil Game For Keeps

News of the July arrest of Yukos co-founder Platon Lebedev was greeted with disbelief and excitement in Saudi Arabia, a kingdom increasingly nervous about losing its market-maker status in the global oil industry to long-time rival Russia.

According to a source close to OPEC in Riyadh at the time, the Saudi royal family moved within days of the arrest to capitalize on the apparent sea change in Kremlin policy, approving the first official visit to Moscow by a crown prince in 71 years.

"The arrest was seen as confirmation that the Russian government was building a policy independent from the United States," the source said. "Before then, they feared Moscow was boosting oil output at Washington's bidding. They saw a window of opportunity to engage Russia in longer-term co-operation. They saw a sign that Russian government was moving to slow down production growth," he said.

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Kremlin Playing Oil Game For Keeps

and here is a Letter to the Editor in response to the article.

Editor,

World affairs as they stand currently, particularly in respect of the sole superpower misbehaving so badly, deserve some urgent counter-balancing.

To get some common sense back into the behavior of some Western nations, I think it is vitally important to put economic pressure on the United States since no country can challenge their misdeeds militarily or in any other way. On the occasion of the most recent meeting between Vladimir Putin and Germany's Gerhard SchrÚder, a reporter asked whether oil contracts could be written in euros rather than dollars. This would be the most devastating move against the United States.

Even if Russia would not gain very much directly by such a change, there would be friendly and fair European investment into Russia which would help bring cultured people in eastern and western Europe closer together.

It is known that OPEC is sympathetic to pricing contracts in euros and, judging by the magnitude of opposition in the world to the behavior by the current junta in the White House, the great nation of Russia would be applauded indeed for embracing the euro.

Gary Ludwig
Melbourne, Australia

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I hope that the US does not see the day when Russia and OPEC price their oil in Euros. However, it could happen if the Bush foreign policy team keeps its scorning behaviour up.

[kalian]

1. Ths Russians could use their own oil as their trump card....

Remember that the Russians have vast reserves of the black gold
underneath their territories.
The US is playing a peripheral war with Russia in that they are trying
to get former Soviet republics to become the US's "allies". NOT
going to happen.
Chechnya is an interesting case. This is Russia's legit engagement
with terrorism, yet the US backs those "muslim fundamentalists".
For the Russians...these fighters are "terrorists" but for the US,
these people want "freedom and democracy". News sources fail to
mention that Chechnya not only has oil...but is located near other oil
fields and "people that yearn to be free"... :eyes:

OPEC WILL go to Euros...as will Russia. The question is: what will
China do. China, IMHO, is the key for the US currency's survival.
China holds vast reserves of US dollars and remember that the
Chinese are tied in directly to the US economy. They cannot allow
their goods to become expensive to American consumers....or
companies. Wal_Mart would cease to exist if they couldn't bring in
all that Chinese crap to their shelves. As Americans grow poorer,
the only place that they will be able to buy are such places as
Wal_Mart, but if their goods start to become equally "expensive"
then Americans will be in a world of hurt.

I remember all the talk about the so-called "new economy", yada, yada
yada... Now, why aren't we talking about the "new depression"...?
Unfortunately, the last time the world hit a major depression...
war followed...it was the only way to revitalize a very sick world
economy.

[bemildred]

2. The threat is stronger than the move.

Russia will go to Euros a little, or maybe just
threaten to. They don't want to demolish the World
economy, they just want to put the neocons in their
place. US provocations in Georgia will continue to
be ignored. I expect a coordinated effort with other
players.

The "New economy" babble IS interesting. I remember very
similar talk coming from Britain in the 50s and 60s when
they had issues similar to the US now in the wake of the
self-disassembly of the British Empire. It is one of the
things that made me start to think that the fall was imminent
when all the New Economy babble started showing up.

[RainDog]

3. mutually assured destruction is not longer an option

war cannot solve the problems of a failure of the US economy this time around.

the reason the war restored the economy, anyway, is because the govt invested in retooling factories, etc. to make goods to supply the war machine.

this is classic economic theory, isn't it...govt can be used to help get the economy back on track...

the war we need to fight now is for a new energy economy.

Bush, of course, is the worst possible person to do this because he is all about those special interests, and his own.

But the same sort of effort could be put into altering the way we gather energy. This is also the answer to the problem of terrorism, basically, because we, as a nation, would care less about Saudi Arabia, etc. if it were not for their oil reserves.

If we were not so energy dependent, Israel and Palestine might get solved too, because Sharon would not be able to get away with the things he does which have thwarted attempts at a separate peace and separate states for Israel and the Palestinian people...it would definitely put pressure on many to rethink their actions, as much as the fall of the Soviet Union did.