Putin Is Betting that US Shale Is On Its Last Legs, that He Can Knock It Out by Crashing the Oil Price
Putin Is Betting that US Shale Is On Its Last Legs, that He Can Knock It Out by Crashing the Oil Price by Eric Striker via Russia-Insider
Putin’s crude revenge.
Last week, OPEC called on Russian oil companies to lower production in response to reduced demand from China and a Eurozone bound for recession. They said no.
Just like that, oil took a nosedive, losing 25% of its value on Monday. The price of a barrel of oil closed at $33 dollars, compared to $45 late last week.
For the last decade, America’s rise as an oil exporting power thanks to the expensive shale exploiting process has allowed neocons to cripple the economies of Venezuela, Iran and Russia. Cheap gas is a welcome perk that has kept many working families afloat, but it is only a side effect of a broader geopolitical attack on countries Jews that own Washington see as threatening. The impact has indeed been devastating on these countries. The inflation adjusted price of a barrel of crude oil in 2008 was $109.25.
The Russian government has responded to US-led efforts to “deplatform” them from the world market via low oil prices and aggressive interventions to block projects like the Nord Stream 2 by nationalizing key industries, including oil, and setting aside 100s of billions to stabilize the ruble while the country pursues autarky.
While the Russian gambit is counter-intuitive and will lose them money in the short-term, the long-term goal appears to be to hang American capitalism with its own rope. Shale oil production is immensely unprofitable. It is an industry floated by about $1 trillion in Wall Street money — what it cost to explore it and get things up and running. From 2011 to 2019, the industry has been running at a loss, though the economy as a whole has benefited from the global reduction in gas prices. Nevertheless, some analysts are predicting that up to half of the heavily indebted shale oil companies could go bankrupt, wiping out 10s of thousands of decent paying jobs in the process.