Russia tips the balance

Russia, possessing unequaled energy-based leverage, has taken the leadership among the world’s producers and the rising powerhouse economies of the East to promote a vast worldwide

web of alliances and ties prominently featuring rigid bilateral, private long-term supply contracts.

This model runs counter to and increasingly circumvents the established liberal US-backed global oil market denominated in US dollars. The West relies on the current order for its energy security. It cannot function without it, and therefore the order is its single point of weakness. And Russia is acting as the “point man” to locate and exploit, with the help of its partners, this Achilles’ heel of the West.
Russia’s strategic resources have been brought firmly under de facto Kremlin control in direct opposition to the West’s loudly proclaimed liberal democratic principles of private ownership and control. Russia’s example and success in such endeavors have instigated a global wave of nationalization and consolidation of state control over energy resources, with an accompanying loss of leverage and control by the West’s oil majors. That wave is accelerating.

The rise of a powerful and wealthy resources-based corporate state in Russia (“sovereign democracy”), its rapidly expanding control over global strategic resources, and the resultant loss of leadership and control of the global oil market by the West’s oil majors are developments that move directly against the very foundations of the US-led oil-market order and the wider US-centric global economic order. This is because Russia is quite literally fueling the rise of the powerhouse economies of the East and helping to achieve a new global center of economic power in the East.

It was also Russia that fundamentally led, along with its key partner China, the opposition to the US invasion of Iraq in 2003. It has been Russia first and foremost that has taken leadership among its strategic partners since then to continue to stand firm inside and outside the United Nations in a hugely successful strategy to force the full and mounting geopolitical, economic and military burdens of Iraq on to US and British shoulders alone.

Thereby, Russia has taken the lead in proving that the US-dominated geopolitical order can be successfully opposed. Consequently, it has clearly been primarily under Russia’s leadership that the US-dominated global oil-market, global economic and geopolitical orders are being transformed, circumvented and opposed by growing numbers of the world’s nations.

Second installment of series The New World Oil Order from Asia Times