Wednesday, October 07, 2015

US Analysts Conclude, Russia Is Attacking US-Aligned Fighters, Not ISIS - Is Putin's Goal Control of OPEC?


Get the story at Ace of Spades.

Meanwhile, uh, yeah:
U.S. officials said Russia’s targeting of its allies on the ground was a direct challenge to Mr. Obama's Syria policy. Underlining the distrust, the Pentagon decided against sharing any information with Moscow about the areas where U.S. allies were located because it suspected Russia would use that information to target them more directly or provide the information to President Bashar al-Assad's regime. 
"On day one, you can say it was a one-time mistake," a senior U.S. official said of Russia’s strike on one of the allied rebel group’s headquarters. "But on day three and day four, there's no question it's intentional. They know what they’re hitting."
And as for OPEC:
Three facts motivate Putin. 
First, two regions utterly dominate world oil markets. The Middle East and Russia together ship 60 percent of all oil traded (45 and 15 percent, respectively). Meanwhile, American firms are by law prohibited from engaging in this vital global marketplace; more on this shortly. 
Second, oil matters. It provides 97 percent of the global fuel needs for all the engines that transport everything on land, sea and air. No viable substitutes exist at any price for liquid hydrocarbons at the scale society needs. And the world will consume more oil, not less, as far into the future as it matters for sensible policymaking. 
Finally, price matters. Here the U.S. has upset the apple cart. Entrepreneurs using new technologies have unlocked a shocking increase in oil supply. U.S. shale fields have recorded the fastest increase in oil production in history. As a result, crude prices have collapsed from north of $100 to south of $50 a barrel. 
The emerging consensus? Cheaper oil is the new normal. 
How does Syria matter? While it's no oil-producing powerhouse by OPEC standards, even Syria's paltry production accounted for 25 percent of that nation's economy (although ISIS now controls most of Syria's oil fields). But Syria is ideal transit territory for pipelines to European markets for oil or gas originating in Iraq and Iran. 
More important, given the build-up of Russian military men and materiel in Syria, is geography. Damascus is closer to Baghdad than Washington is to Boston, and not much further away from Riyadh than New York is from Chicago. Russia's military is now no longer deployed mainly on its Baltic borders but is in the world's premier petroleum neighborhood. Russia is not an OPEC member and has often claimed no desire to join. But they may have just joined by default.

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