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Energy Insights: Energy News: ‘Global War I: geopolitical battle where oil is key’

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‘Global War I: geopolitical battle where oil is key’



Adrian Salbuchi is a political analyst, author, speaker and radio/TV commentator in Argentina.

Published time: January 15, 2015 13:12
A general view shows the166th ordinary meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria on November 27, 2014. (AFP Photo/Samuel Kubani)

A general view shows the166th ordinary meeting of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria on November 27, 2014. (AFP Photo/Samuel Kubani)

The oil price crash is the first battle of Global War I between the geopolitical interests of the West versus Russia and its allies, says international consultant Adrian Salbuchi. In the future we might see the same happening over water or food, he adds.

RT: Do you think Saudi Arabia is part of the oil price drop?

Adrian Salbuchi: Definitely yes. I think that Saudi Arabia is spearheading the drop in oil prices because Saudi Arabia has other interests when compared to some of the other OPEC countries, like for example Venezuela or even Nigeria. So what we have here is - we are seeing a global war. I won't call it WWIII; I will call it a global war, Global War I where the first battle is an oil battle. And that is what we are seeing right now.

It is not a question of how much the barrel of oil will cost, it is a question of seeing if the Western powers can put Russia to its knees, Iran to its knees, and whilst they are at it, and also Venezuela where President Maduro has been touring and visiting various countries to see if oil production can be reduced or the prices can go up again. But basically this is not a question of prices. This is a geopolitical battle where oil is the prime actor and it has a lot to do with whether the US dollar will continue being the international currency for the oil market or whether there may be some changes, the petrodollar so to speak.

Venezuelan President Nicolas Maduro. (AFP Photo/Presidencia)

Venezuelan President Nicolas Maduro. (AFP Photo/Presidencia)

We have to look at it from a geopolitical point of view of the Western powers versus Russia, China and Iran for mostly, and not as just a problem of the OPEC countries. The OPEC countries can split at any time because this is way above their level.

RT: Is the split inside OPEC possible? If yes, what are the reasons for that happening?

AS: Yes, I think we already have a split. OPEC was never a very coherent or consistent organization, basically because there're large asymmetries amongst the countries. But definitely the lion’s share is controlled by Saudi Arabia. If Saudi Arabia decides not to reduce production, oil production will just continue flowing and there is not much that the other countries can do about it, besides, for example Kuwait who is also following the Saudi lead. And because Saudi Arabia and Kuwait are aligned to this Western strategy of trying to challenge Russia and China, but mainly Russia, through oil prices, so there is very little that they can do.

This has already created a split inside OPEC and it will probably get worse as this crisis gets worse with the weeks and months to come. Naturally some countries suffer much more. Russia suffered in its foreign trade, because Russia has a lot of oil and it gets a lot of its revenues. Fifty percent of Russian foreign revenue comes from oil production. And Venezuela has suffered horrendously, because something like 95 percent of Venezuela’s revenues comes from the export of oil.

RT: So you said there are currently existing strong disagreements among the OPEC counties. Then is there a possibility of collapse of the organization?

AS: Yes, it is possible and that will probably spell the demise of OPEC, at least formally as a set of countries to set the price of oil. Let’s not forget that OPEC was born for different reasons. It was after the Yom Kippur war in 1973, it was because of other geopolitical factors of the 70s in the 20th century. But now we do have something very different and it is already tearing OPEC apart.

Reuters/Issei Kato

Reuters/Issei Kato

But it is very important to understand that this is not about market supply and demand. This is much more about geopolitics. It is not the invisible hand of the market that has lowered the price of oil by 55 percent in 7-8 months. This is the invisible hand of the market which is always attached to a muscular arm and to a devilish brain. So I think more than watching the price of oil which is what the invisible hand decides, it is much more important that we understand what the muscular arm is doing with the invisible hand and much more important, what the devilish brain in the Western think-tanks are designing as part of this ongoing veritable war against Russia, against China, and its allies.

RT: So is the reason for the ongoing tug of war between the Western powers and Russia’s allies a geopolitical factor? What kind of interests does the West gets from it in the first place?

AS: Yes, it is possible that this ongoing tug of war between the Western powers and Russia, China, and the BRICS geopolitical alliance, that this ongoing tug of war might break OPEC apart because the geopolitical factors today are so much more strong than the mere common interests that the OPEC countries had when the OPEC was formed in the late 20th century. And the reason for OPEC has practically disappeared.

So Saudi Arabia and Kuwait do their play allying to the US, Britain, and the Western powers whilst other countries will do their own things. And also it has lots to do with the fact that ever since America discovered and started to produce through shale oil fracking they know that they potentially have the ability to be completely self-sufficient.

That means waiting for a couple of years and really harming Russia, Iran, Venezuela, and they can do that by just keeping the oil price down for the next two or three years. America is willing to pay the price because when you are at war, you don’t look at the price, you just try to fight and win the war itself.

Brazil's President Dilma Rousseff (R) walks with Russian President Vladimir Putin. (Reuters/Nacho Doce)

Brazil's President Dilma Rousseff (R) walks with Russian President Vladimir Putin. (Reuters/Nacho Doce)

RT: How do you see the difference in targets of the oil producing countries? What are their interests in fact?

AS: We should not think in terms of the oil countries, the oil producing countries, because the countries that produce oil have very vastly conflicting interests, take for example, Saudi Arabia, an ally of Israel, the US, and NATO. Look at Russia - the largest oil producer in the world. It has its own very different interest. Look at the US with shale oil they will be able to be self-sufficient and become exporting again. And they have a very different sort of interest.

So we have to see oil as part of the war. That is why I call it the oil battle. It is probably the first battle of this ongoing Global War I and this has nothing to do with the oil countries on the one side and the rest of the world on the other side. There are geopolitical factors way above oil which we are now seeing in this ongoing battle. In the future we’ll probably see this also with water and with food. So we have to get ready for very, very difficult times as the following months and years are coming about.

RT: Russia has been recently developing good ties with Latin American countries. Has the oil factor influenced the establishment of these new mutual relations?

AS: I don’t think that oil will be the only crucial factor. President Putin knows that Russia does not need oil; it does not need Venezuela’s oil. I think what President Putin and Russia are very intelligently doing is forging an alliance with specific countries in South America which are very important to the US.

It already has one with Brazil through the BRICS alliance. It has moved much closer to Argentina where I live. And it is now moving even closer to Venezuela especially after the overtures of the so-called normalization of relations between the US and Cuba which took place only a few weeks ago. I think that Russia’s overtures to come closer to the Latin American countries certainly with Venezuela where there is ongoing common problem merely shows very shrewd and very intelligent political thinking on the part of the Russian leadership.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily

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