Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on November 6, 2014
Why are global oil prices dropping? Vladimir Putin has a theory.
Global oil prices have been plummeting, and Russian President Vladimir Putin on Thursday offered a theory why: politics.
Oil prices fell to a four-year low this week, and that has further tightened the screws on Russia’s economy, already hit hard by sanctions and fears of recession. The Russian ruble has been plummeting, in part because the country’s economic well-being is so closely tied to the price of oil. On Thursday alone, the ruble dropped 3.64 percent against the dollar.
With tensions again spiking in Ukraine, Putin has been quick to lash out against perceived enemies. Accusations that oil prices are being manipulated to hurt the Kremlin date to 1986, when Saudi Arabia unleashed a torrent of cheap oil onto global markets, hurting the Soviet Union when it was already teetering economically.
Putin said Thursday that the falling oil prices can be blamed on increased production and decreased consumption – but also on other, less visible causes.
“The obvious reason of the decline in global oil prices is the slowdown in the rate of economic growth, which means energy consumption being reduced in a whole range of countries,” Putin said in written responses to questions from Chinese news outlets that were released Thursday.
“In addition, a political component is always present in oil prices,” he said. “Furthermore, at some moments of crisis it starts to feel like it is the politics that prevails in the pricing of energy resources.”
A board lists foreign currency rates against the Russian ruble in central Moscow on Thursday. The ruble’s value is plummeting; on Thursday alone, it dropped 3.64 percent against the dollar. (Dmitry Serebryakov/Agence France-Presse via Getty Images)
The claim that Saudi Arabia increased oil production in the late 1980s to hurt the Soviet Union has been advanced by none other than Michael Reagan, the son of former president Ronald Reagan.
“Since selling oil was the source of the Kremlin’s wealth, my father got the Saudis to flood the market with cheap oil,” he wrote in March.
(The truth is far less conclusive – the dropping oil prices in the late 1980s probably had little to do with the Soviet Union in the cross hairs.)
Still, with relations between the West and Russia at their worst since the Cold War, Putin appears to be accusing global oil producers of a modern-day repetition.
One of the only silver linings for Russia is that as the value of the ruble drops, each dollar it makes from oil sales can fund a bigger part of its domestic budget, because its budget commitments are in rubles.
27 Comments on "Why are global oil prices dropping? Vladimir Putin has a theory."
Makati1 on Thu, 6th Nov 2014 7:26 pm
WaPo, the DC Ministry of Propaganda mouthpiece…lol. As if anything they say can be taken as truth. It’s currently “in” to put down the new “Bad Guy”, Russia, and especially Putin who is foiling all of the Empires plans.
The last sentence is the real headline of the story. The efforts to destroy the Russian economy is NOT working. Why? Because the thousands of drones in Dc have only two brain cells, in total. They have not been successful at anything except destruction and chaos for the last 20 years. But, they are managing to take down the USSA economy.
It is now a 3rd world country covered by a thick layer of lies and corruption. When you have more suicides in your military than war deaths in Iraq, in the same time period, you are a failed nation. When you have a food line 18,000+ miles long, you are a failed nation. When your medical system is getting worse while the costs are getting higher, schools ditto, etc…
The USSA is now up against two nuclear armed nations, not some 3rd world backwater …
Makati1 on Thu, 6th Nov 2014 8:23 pm
FYI: Vladimir Putin Is The World’s Most Powerful Person, According To Forbes.
http://www.ibtimes.com/vladimir-putin-worlds-most-powerful-person-according-forbes-1719387
The US lost another “Number 1” slot. LMAO
steve on Fri, 7th Nov 2014 12:33 am
The US lost another “Number 1″ slot. LMAO
Makati you are such a dumbsh5t…why don’t you put your money where your mouth is and stop taking that check from the U.S every month….it is not about one country winning and another country losing….when one goes down they all go down that is it and it is over….you will get your wish soon enough but be careful what you wish for…
Makati1 on Fri, 7th Nov 2014 1:49 am
steve, I paid in more than I will ever get back, as it will all collapse in a few more years. I’m getting ready, are you?
I have a record of what I paid every year, sent to me by S.S. when I retired, and at an average of 3% interest annually, it is way over my current total received. Only the fools still paying into it will get shafted totally. I paid for 45 years and plan to get as much of it back as possible.
I would guess you have no parents or grandparents that are, or soon will be, getting those checks, or soon, if they are lucky.
As for countries ‘going down’ you only hope they do. The US could collapse and the rest only be diminished a bit, but have a fast recovery . The ones who will hurt the most are the Western countries (US, Canada, EU, Japan, Australia, New Zealand, etc.) and the wannabees, not the other ~140 counties that are not NOT to the USD and account for over 50% of world trade.
If you haven’t noticed, the world is moving away from the USSA as fast as it can and turning to China and Russia for trade and banking that excludes the USD. Only American’s belief that they are ‘exceptional’to every rule allows them believe that they will take down the rest of the world when they go.
I concede that they can, in a nuclear manner, but not from a collapse of their economy. Cause a depression, maybe, but not total destruction. Not when the rest of the world totals 96% of the population.
Makati1 on Fri, 7th Nov 2014 2:05 am
steve, FYI:
From the last 4 days news:
http://www.zerohedge.com/news/2014-11-03/how-petrodollar-quietly-died-and-nobody-noticed
http://www.zerohedge.com/news/2014-11-03/how-petrodollar-quietly-died-and-nobody-noticed
http://www.mybudget360.com/soft-default-government-debts-low-interest-rates-and-inflation/
http://theeconomiccollapseblog.com/archives/national-economic-suicide-the-u-s-trade-deficit-with-china-sets-a-new-record-high
Not the US but it’s Siamese twin.
http://theeconomiccollapseblog.com/archives/the-economy-of-the-largest-superpower-on-the-planet-is-collapsing-right-now
http://www.shtfplan.com/headline-news/we-have-just-witnessed-the-last-gasp-of-the-global-economy_11062014
And on and on. For every negative you can find on Asia/East, I can find 10 on the West easily. I read 20-30 articles from 20-30 web sites every day. I want to know what is coming and approximately when. Don’t you?
pinkdotR on Fri, 7th Nov 2014 6:40 am
Whether politically manipulated or not, THIS low oil price was one of the things he did not take into account starting his last war.
Thanks to fracking US has tools available to politically influence the price of oil. If they will be used – we don’t know. Helping fracking companies with some dollars to keep the production level and their businesses profitable despite of the low price could keep sanctions against Russia work better, ISIS earn less and US being less dependent on imports. Yet this would be only a short term effect. On the long run it would only make global PO happen earlier.
Davy on Fri, 7th Nov 2014 6:54 am
Makster this article is about Russia why are you turning it into your usual and boring “USSA” discussion? You remind me of the bitch that tells a couple how bad their marriage is and how wonderful hers is. In reality the bitch has a shitty marriage and needs to feel better about it by cutting someone else’s down. On this board you are the propaganda bitch.
I echo Steve. If you hate the USA so much quit taking our money. You can crow all you want about how much you paid in. SS is an unfunded liability for all practical purposes which means you don’t deserve what is not there and never really was. So in effect we are paying you to sit on your ass and troll the Americans on this board from your small Makati studio apartment. Get out and get a job and quit taking our money you ungrateful troll bastard.
If any of you feel that too harsh just ask Mak why he does not respect his friends here on this board or does he have friends? He is a long term troll inciting hatred and division what kind of friendship is that? We can conduct ourselves as friends with differing opinions in a balanced, fair, and friendly way. Mak, insults me, my family, my tribe, and my country on a daily basis. I criticize my country and culture regularly as needed per the discussion. I get tired of a troll doing repetitive daily insults and the repetitive daily praise for their dumbass competitor. It is frankly poor manners.
Boat on Fri, 7th Nov 2014 7:09 am
I suggest citalopram for all. The US economy is doing fine. The drop in gas prices will add 80 billion a year to the little guy so he can buy another tv. Am thinking of going to 60″ for my 24×24 new man cave. Life is good in the US. Wish nat prices would crater more. It still costs to much to keep the pool warm.
Davy on Fri, 7th Nov 2014 7:48 am
*) 80BIL? Boat, I am not sure how much that is anymore. Sounds like enough to offset the rising cost of breakfast.
paulo1 on Fri, 7th Nov 2014 8:11 am
Call this politics? When someone is trying to shove an oil barrel up your heenie to kill your country you term it as politics?
The cold war….the gift that just keeps taking.
And Russia is trying to dethrone the Petro-Dollar and screw any perceived threat or rivalry.
I say put ’em in a sack and leave people alone. I wish there was an international plan to cull politicians. 10 years of influence, then go back to real life. Leave the money and influence when you go. No auto-biographies allowed. Or else. We now get to see Hillary on the news for the next 2 years with her smarmy cheating husband at her side. At least we won’t have to hear any more ‘folks’ speeches from Obama. If he could only take Putin along. Sigh.
Paulo
JuanP on Fri, 7th Nov 2014 9:48 am
The idea that Putin started a war is hilarious. Please explain your delusion in detail. What the f are you talking about?
Russia’s budget was made to balance out with the annual average oil price of US$ 96, and a higher ruble. The 2014 oil price average will be close to the one estimated by the Russian government, and their dollars buy more rubles because of the devaluation, so, their budget is fine for now.
It is 2015 that will be challenging, but they will be fine. They have virtually no debt, a balanced budget, and huge savings. Russia will be OK next year.
JuanP on Fri, 7th Nov 2014 9:49 am
That was for Pink!
Northwest Resident on Fri, 7th Nov 2014 10:01 am
JuanP — I just read an article where the writer is stating point blank that the big reason for Europe’s recent wave of financial downturn is due to the conflict with Russia (and resulting Russian sanctions). As if they would be doing “just fine” if it weren’t for those pesky Russians trying to protect their Russian brothers in East Ukraine.
My strong suspicion which I’ve stated on this forum several or more times is that the whole Russian/USA/EU/Ukraine conflict is a massive PR Stunt intended to provide cover for a number of things TPTB would rather not have to explain, among them, why Western Europe’s economy is in a nose dive.
If you’re the captain of the ship and it is bouncing off icebergs, taking on water and sinking fast, and all the angry passengers are staring at you wondering what the hell is going on, you better have some good excuses. This Russian B.S. is all they need. OF COURSE it is the Russians’ fault — haven’t you seen all those Russian bad guys in the movies and TV shows. Geeezz…
Northwest Resident on Fri, 7th Nov 2014 10:06 am
Davy — Instead of beating up Mak all the time for the insane crap he constantly spouts on this forum, how we make friends with him, get to know him, then get a patent so that we can make Mak Dolls. These Mak Dolls will be mean looking little cretins, and when you pull the string on the doll’s back, you’ll get angry venomous sounding phrases like:
* Death to all Americans
* Americans suck
* All evil derives from America
* Americans are the devil’s spawn
* Just wait until the world drops the dollar
and a few more choice phrases — we’ll have to get the wording perfected, but you get the idea.
We can market these in ME countries, in Russia, in all places where Americans are loathed and hated — which excludes the Philippines where everybody actually tends to love America, except for Mak of course.
Dude! We’ll get rich!!!
JuanP on Fri, 7th Nov 2014 10:14 am
I Am sick and tired of all the articles in Western MSM that are based on biased lies. All they do is attack Syria, Iran, Venezuela, Russia, and China.
Is this what the Western world has been reduced to? Are we reduced to hate, resent, attack and envy those who choose their own destiny because we are no longer free to do so in our countries? Is that all we are?
I will just attack one Western delusion today. This is the delusion that the ruble’s fall is terrible for Russia. This can only be claimed by people who don’t know enough about the Russian economy.
A little research would soon lead one to learn that Russia’s government has been increasingly devaluing the ruble on purpose for a very long time because it was overvalued. The goal was to reach market parity and free float the ruble by January 1, 2015. The ruble is now undervalued and it has overcompensated due to Western sanctions, attacks, and agression. It may not be free floated as planned.
Northwest Resident on Fri, 7th Nov 2014 10:21 am
JuanP — Think of it as the last screams and violent thrashing about that a drowning person experiences as he sinks below the surface, knowing that his doom is certain. Don’t look for reason or logic because there isn’t any. Look instead for blame, finger pointing, lies, deceit and misdirection. Prepare yourself for even more of it because it is coming and will rise to a deafening crescendo before we hear the last final gasp of desperate propaganda spewed across the MSM channels. After that will be a deathly silence, with emphasis on “deathly”.
Davy on Fri, 7th Nov 2014 11:21 am
NR, love the idea. I always pictured Mak like senator Palpatine in Star Wars. Pale and gaunt with blood shot eyes.
I have tried to make friends with him. All I am asking from him is basic human respect.
Northwest Resident on Fri, 7th Nov 2014 11:35 am
Davy — I was just thinking that we’ve probably got our first customer right here on peakoil dot com forum — yes, I’m talking about the noobster! Heck, he’ll probably buy a crate of them on advanced order and hand them out as Christmas presents to all of his American-hating friends. I think we’re on to something BIG here… 🙂
Davy on Fri, 7th Nov 2014 11:47 am
Oh, NR, a Noob doll is the next in the series!
I see noob as a pale figure hanging about in his parents basement. He stinks because he is a hermit and does not shower regularly. He has no friends and doesn’t go out. He is addicted to porn and violent video games. I just can’t figure what ethnicity and part of the world he is from. Maybe he is like Mak a anti American American. They are the worst because they hate themselves for who there are. They can never change that and hate that they are a prisoner of their birth.
imrich on Fri, 7th Nov 2014 11:55 am
Russia’s economy stinks. The US economy is the strongest in the world. I’m so proud to be an American.
Northwest Resident on Fri, 7th Nov 2014 12:15 pm
Davy — Mak Dolls and Noob Dolls. Two distinct and yet highly complimentary not to mention highly marketable product lines right from the get-go. Now all we need is a business plan, some venture capital and a location for our manufacturing facility — I suggest right in Mak’s home town of Manilla. Plenty of dirt-cheap labor, lax-to-no pollution laws, thousands of hookers all working to feed their families, and bribing officials won’t cost too much. We can even use the water in that Manilla river that flows by the U.S. Embassy to “scent” the Noob dolls — sure to add a lot of appeal for potential buyers. I love it when a plan comes together!
Davy on Fri, 7th Nov 2014 12:25 pm
Well, NR, Mak will want to copyright the doll. That could cut into our profit and require an attorney otherwise Mak may decide to pirate the dolls.
Remember we need to put American flag underwear on the Noob and Mak dolls to symbolize the hypocrisy they both demonstrate.
Northwest Resident on Fri, 7th Nov 2014 12:50 pm
Davy — I like your creative style. Yeah — American flag underwear is a must! I could really get going on this “business plan”, but unfortunately, I have a lot of work to do today. The nerve of my employer to take away from my internet time, forcing me to do some actual work. What’s this country coming to?!!
nemteck on Fri, 7th Nov 2014 12:58 pm
There are 23 comments at present. 11 are from Dave and Northwest having a private vendetta against Makati, even suggesting a Mak doll to be produced. The text could have been written by 2 junior high school boys and is in no way contributing to the article in front of us.
Northwest Resident on Fri, 7th Nov 2014 1:09 pm
nemteck — Your post doesn’t contribute anything either. And Mak’s comments for sure don’t contribute anything. This forum is just his personal arena for venting his hatred and deep-seated frustration. I guess just about any sarcastic humor anywhere and at anytime could be written by 2 junior high school students. What’s your point?
Davy on Fri, 7th Nov 2014 1:19 pm
Oh Nem, get a life. Don’t read it if it hurts your sensibilities.
Makati1 on Fri, 7th Nov 2014 9:22 pm
Haha guys. That I point out reality is the real reason you try to put me down. No problem. If it makes your day, go for it. I’m just watching my home country commit suicide with a slow poison. Have another glass of that MSM cool aid.