Posted by Curt on 6 October, 2022 at 11:59 am. 2 comments already!


The Z Man

The golden rule states that the man with the gold makes the rules. In this age, gold is energy in its various forms. The world as we understand it runs on electricity, which comes from fossil fuels like oil, gas and coal. If you happen to sit upon a lot of these things, you get to be important and have a lot of money. If you do not have these things, then you are dependent upon others for your welfare. There simply is no way to have a modern society without cheap energy.
In case the West forgot this reality, OPEC+ sent a gentle reminder this week by committing to a large cut in production. Over the next two months they will reduce supplies of crude to the market by two million barrels per day. The stated reason is to bring market prices back in line with the target of $100 per barrel. The unstated reason was to remind Washington that they are not the only voice in the room. The Saudis were sending a message to Washington.
Since Biden took office, there has been a sharp decline in relations with Saudi Arabia, due, in part, to Biden’s reckless language regarding the Khashoggi affair. He was the CIA operative pretending to be a Washington Post reporter. The Saudis decided to have him chopped up at the Saudi consulate in Istanbul. This became a major scandal, as the events were leaked to the press, most likely by Washington. Biden has called Saudi Arabia’s Crown Prince Mohammed bin Salman a murderer.
There are also the recent efforts by the Biden administration to manipulate the energy markets through various means. It is clear that the administration has been faking gasoline demand numbers to suppress the futures market. Then there was the promise to buy 200 million barrels of oil from Saudi Arabia at $80 a barrel in exchange for OPEC not cutting production. The Biden admin has reneged on that deal. The Saudis have good reason to not want to play ball with Team Biden.
The larger issue for the Saudis and every other country outside the collective West is the issue of regime change, which has become a fetish for Washington. MBS looks at Biden’s reckless words regarding the Khashoggi affair and sees it as a potential first step on the regime change escalator. Whenever Washington decides they want to blow up a country, they anathematize the leader, by claiming he is in violation of the moral consensus and thus fair game.
The Saudis have become closer with the Russian over the last year and the main driver is the regime change issue. The OPEC countries, Russia, China and even India are coming to understand that Washington sees them as lackeys. As long as they do what they are told they can keep some of their stuff but get out of line and Washington will install someone new. The willingness of Washington to try regime change on a nuclear power says that no one is safe from this policy.
Of course, the Russians are a member of OPEC+ and they have their reasons for supporting a production cut. The EU is still plotting an oil price cap on Russian oil, which is mostly a face saving measure. They will set the cap at a price well above what Russia will find acceptable, so they can act tough while importing as much Russian oil as they can handle. This announcement by OPEC will make sure that the Europeans do not get creative with their math.
There is something else here. It is the first sign in the Middle East that the major players are thinking about a post-America world. The Saudi – Russia relationship has grown stronger over the last year to the point where the Saudis have been circulating a Ukraine peace plan in Europe. They have agreed to join BRIC’s, which is the political alliance formed around Brazil, Russia, India and China. Interestingly, Iran has also said they wish to join, despite their relationship with the Saudis.
Some observers suggest that Russia is playing peacemaker between Iran and the Saudis, with China and India supporting the effort. Getting these two regional rivals on the same team would be a sea change in regional politics. It is the sort of thinking that imagines a world where America is not a major force. It is also the sort of thinking that comes when all involved fear the same enemy. The sign outside their clubhouse will read, “No Regime Change Allowed.”
All of this is a reminder that while ideology plays a huge role in the current crisis, it is energy that has been the driving force. America’s presence in the Middle East has always been premised on the claim they are guarding the oil supply.

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