Saturday, August 2, 2014

US attempt to control Russian oil will backfire and lead to more war

EcoWatch: "The foreign policy wonks at the State Department may not understand that Russian oil production has just hit a post-USSR peak and will be declining anyway. The effect of the sanctions will be to speed the Russian decline, forcing up world oil prices as soon as U.S. tight oil maxes out and goes into its inevitable nosedive in the 2017-2020 time frame. Russia, which will still be an oil exporter then, will benefit from higher oil prices (perhaps nearly enough to compensate for the loss of production resulting from the sanctions). But the U.S., which will still be one of the world’s top oil importers, will face a re-run of the 2008 oil shock that contributed to its financial crash."
Bankers are forcing US government to pursue desperate, dangerous policy. If oil price were to drop suddenly, the US tight oil would be inaccessible and the US petrodollar would take a sharp wound. But trying to control the world market has proved difficult and will become more so.