IS, MbS, and US shale oil, and ....debt.

Why is the capitalist world backing every conceivable thug and bombing the Islamic State like crazy. The answer is simple. A huge oil crash is looming:

Only nine of 33 shale oil exploration and production companies reviewed in the report cited above had positive free cash flow for the first half of 2018. This is even though prices had risen all the way from a low of around $30 in 2016 to the mid-$70 range by the middle of this year.

http://resourceinsights.blogspot.com/2018/10/shale-oil-becomes-shale-fail-and-nice.html

Forecasts for world oil supply depend on a sharp increase of production from the Kirkuk, Iraq fields. But the IS has made drilling there unsafe. So while waiting for their defeat, the US has ramped up shale oil. But US oil is being pumped with borrowed money. [see linked article]

MbS will stay, they need him. Fascism will be needed in the US. As for the IS, they cannot defeat it with bombs, because each bomb brings ten recruits.

Why MbS will stay in power

A lot of people are engaging in wishful thinking. They are hoping that cutting up one's critics while still alive would cross a line that even the world's elites would not tolerate.

The opposite is true. This is just what they want. They love thugs. Then they can be "horrified" but benefit from the terror that the common people will suffer.

There is at least 50 trillion in cash and 150 trillion in debt.

Except for Kirkuk and what remains in KSA, cheap oil is gone. This cuts profits. So wealth is stored in cash and bonds. But debt just takes money out of what's left of productive economy and hastens the advent of default.

Hence the furious gas and oil wars. Well, not so much wars as civilian massacres. Because nations aren't fighting nations, it's the world elites, and the ten percent of people using 50% of resources, together against the worlds lower classes.

To keep their educated support in line, fascism is required. This is why MbS will remain.

KSA message to the world: our critics are not safe anywhere

Regardless of the outcome of the Khashoggi situation. Even if it is a hoax. It makes little difference. The message to the world from KSA is plain: There is no safe haven for our critics.

KSA is getting shakier every day. Their three pillars are all wobbling.

1. Oil - running out
2. US Military protection - overstretched
3. Fake Islam - exposed

They are hanging by a thread and getting more desperate.

US strategy in MENA backfiring badly, will get worse

US has used Kurdish nationalism to maintain access to Iraq oil. It has allowed Islam to prop up Saudi Arabia. It has cultivated an aura of human rights by appearing to care about civilians.

Things aren't working so they are flipping the chess board and scattering the pieces. The KRG will be sacrificed, the KSA will become a brothel, and they have already unleashed maximum civilian killing by the military.

They are desperate. They will spend all their political capital and printed money and last of their good will and lose.

China is waiting impatiently. 

KSA on thin ice

The Islamic State has thwarted the best laid plans of oil barons and bankers around the world. It was inevitable that a crash would come between the massive debt and the falling net energy. But there was one patch of easy oil left and the bankers thought they had another 20 years to go.

That oil is under Kirkuk Iraq. But the IS stands in the way.

The only way they can get them out of the way is to massacre Sunni Muslims. But to do this they need the cover of the Muslim puppet leaders.

The KSA is the biggest and weakest of these puppets. Its power has three legs. Oil, US, and Islam. The oil is running out, the US is overstretched around the world, and the Islamic State is exposing them as false leaders of Islam.

As the ice disappears from the arctic, it is also cracking under the king.

The collapse of Saudi Arabia is inevitable - via @nafeezahmed

Middle East Eye: "....They were right. From 2005 to 2015, Saudi net exports have experienced an annual decline rate of 1.4 percent, within the range predicted by Brown and Foucher. A report by Citigroup recently predicted that net exports would plummet to zero in the next 15 years.

...About a quarter of the Saudi population lives in poverty. Unemployment is at about 12 percent, and affects mostly young people – 30 percent of whom are unemployed.

Climate change is pitched to heighten the country’s economic problems, especially in relation to food and water.

...Yet the Saudi government has decided that rather than learning lessons from the hubris of its neighbours, it won’t wait for war to come home – but will readily export war in the region in a madcap bid to extend its geopolitical hegemony and prolong its petro-dominance."

via @nafeezahmed, US-Saudi desperate power grab as cheap oil runs out

Middle East Eye: "Since 2000, this has meant that the oil industry’s investments have risen by 180 percent, generating a puny global oil supply increase of just 14 percent – two-thirds of which comprises unconventionals.

Therefore, Saudi Arabia’s accelerated supply output to keep prices low cannot last for long. In 2012, a Citigroup report predicted that more and more of Saudi oil production would be allocated to meeting rapidly rising domestic electricity demand, forcing Saudi Arabia to increasingly reduce its exports.

By 2030, within just 15 years, the kingdom’s exports would drop to zero, making it a net importer. The report thus showed that Saudi Arabia’s capacity to maintain its high level of exports onto global markets is likely to end well before then in coming years."

Saudi Arabia, besieged on all sides, gambling with last of its cheap oil

oilprice.com: "Saudi Arabia is not trying to crush U.S. shale plays. Its oil-price war is with the investment banks and the stupid money they directed to fund the plays. It is also with the zero-interest rate economic conditions that made this possible."

Saudi Arabia, forced into a gamble, precipitated the fall of expensive oil. Why? Demand in the west was falling and China teetering on edge of recession, while Russia and Iran taking market share. The US was propping up production way too long on printed money. It was time to take action to preserve market share. Saudi Arabia is gambling it's last cheap reserves to hold on to power -- as the three pillars are wobbling and the Islamic State will take it over in a sweep like the fall of Mosul.

Saudi oil running out, hence desperate grab for market-share, increased importance to US of Kirkuk

Resource Insights: What is Saudi Arabia not telling us about its oil future?: "If the Saudis are acting now to cripple U.S. and Canadian production for the reasons my friend suggests, it means world oil supplies are going to be much more problematic after 2020 than many people suppose. It implies that at some point in the next 10 years OPEC will cease to be able (rather than cease to be willing) to balance world oil supplies. And, it suggests that no one else will be ready to act in that role when the time comes."

Over 30% of what comes up from Saudi oil fields is water that was injected to bring up the oil. The oil is running out, getting more expensive. They are desperately trying to gain market share by putting rivals out of business with low prices. This just makes the oil under Kirkuk more important to the US.

#IslamicState forces Saudi Kingdom to take desperate gamble

Russia has been rising in power as the US is bogged down by resistance in Ukraine, Iraq, and Syria. Saudi oil is running out, costing more every day to pump water in and out. Cheap oil is the cornerstone of western power.

Now they have to use the last of their oil and risk financial chaos to weaken Russia. The cheap oil in Kirkuk, Iraq, may soon be controlled by the Islamic State. This would be a tremendous blow to western power.

The Islamic State is like a third player in a chess game. The US wants regime change in Syria, but now is forced to support its enemies.

The gamble will fail and the Kingdom of Saudi Arabia itself will fall to the Islamic State by September 2015.

Saudi Arabia will fall to Islamic State before September 2015

The three pillars of Saudi power are oil, US military, and Islam. All three are in desperate straits.

The oil is running out. They are pumping up as much water as oil.

The U.S. military cannot afford another multi-trillion-dollar effort in the Middle East.

Saudi Arabia has abused Islam, using it to terrorize and oppress. The people yearn for true Islam and most are silently supporting the new Caliphate.

photo from @RamiAlLolah

Poverty in Saudi Arabia proves that capitalism doesn't work even in the best of circumstances.

Saudi Arabia's riches conceal a growing problem of poverty | World news | Guardian Weekly: "The kingdom has a two-tier economy made up of about 16 million Saudis, with most of the rest foreign workers. The poverty rate among Saudis continues to rise as youth unemployment skyrockets. More than two-thirds of Saudis are under 30, and nearly three-quarters of all unemployed Saudis are in their 20s, according to government statistics.

In just seven decades as a nation, Saudi Arabia has grown from an impoverished backwater of desert nomads to an economic powerhouse with an oil industry that brought in $300bn last year."

'via Blog this'

Oil wars continue to escalate as Saudi Arabia is attacked

Saudi Arabia says cyber attack aimed to disrupt oil, gas flow - Technology on NBCNews.com: "Saudi Arabia's national oil company, Aramco, said on Sunday a cyber attack against it in August which damaged some 30,000 computers was aimed at stopping oil and gas production at the biggest OPEC exporter."

'via Blog this'

Saudi oil well dries up – Telegraph Blogs

Saudi oil well dries up – Telegraph Blogs:
If Citigroup is right, Saudi Arabia will cease to be an oil exporter by 2030, far sooner than previously thought.
...The basic point – common to other Gulf oil producers – is that Saudi local consumption is rocketing. Residential use makes up 50pc of demand, and over two thirds of that is air-conditioning.

'via Blog this'