Category Petroleum

Mar 30 2022

Weaponizing Russian Energy


Armstrong Economics Blog/Energy Re-Posted Mar 30, 2022 by Martin Armstrong

In an attempt to boost the ruble and avoid sanctions, Russia will stop accepting payments in dollars and euros from “unfriendly countries.” India is on board and willing to change to a SWIFT alternative to easily convert rupees to rubles. The G7 has declared that they will not pay for gas in rubles. “[A]ll G-7 ministers agreed completely that this (would be) a one-sided and clear breach of the existing contracts,” German energy minister Robert Habeck stated. “Payment in ruble is not acceptable, and we will urge the companies affected not to follow Putin’s demand,” Habeck said.

Kremlin spokesman Dmitry Peskov said “we clearly aren’t going to supply gas for free” and Russia would not “engage in charity for Europe.” Europe’s pipeline systems are largely connected so it would be difficult to cut off flows to individual nations within the continent. Gazprom, the largest supplier of gas from Russia, has been notified. The company provided “unfriendly countries” with around 70% of exports in 2021 totaling $69 billion.

The contracts are already in order. “I want to emphasize that Russia will definitely continue to supply natural gas in line with the volumes and prices and pricing mechanisms set forth in the existing contracts,” Putin said as he knows that gas exports are essential to the Russian economy. “It’s pretty clear that it makes no sense for us to supply our goods to the European Union, to the U.S. and receive payments in dollars, euros, other currencies,” Putin also stated.

Europe still imports 40% of gas and 25% of oil from Russia. Since the Kremlin is open to all possible outcomes, Europe is preparing for gas shortages. Germany, the largest importer of Russian gas, has asked some energy companies to be aware of possible shortages. The current contracts in place should be safe if Putin keeps his promise, but then a real problem will arise.

Mar 21 2022

Premier of Alberta Calls on Biden to Reimplement Keystone XL Project


Armstrong Economics Blog/Energy Re-Posted Mar 21, 2022 by Martin Armstrong

Jason Kenney, premier of Alberta, Canada, is calling upon President Joe Biden to reimplement the Keystone XL pipeline project. “If President Biden had not vetoed that project, it would be done later this year – 840,000 barrels of democratic energy that could have displaced the 600,000 plus barrels of Russian conflict oil that’s filled with the blood of Ukrainians,” Kenney stated. Kenney seems confident that the project could be completed by Q1 2023.

“None of this makes sense, so I will be speaking truth to power in the bluntest terms possible,” Kenney said. “If the U.S. administration wanted instead of going cap in hand to the Venezuela, Saudi and Iranian dictatorships to replace Russian conflict oil, we could turn this around, I believe in less than a year,” the premier stated. Meanwhile, the White House maintains that America should simply reduce its reliance on fossil fuels when there are no other alternatives available.

These nations might as well continue purchasing gas from Russia opposed to funneling money to other dictatorships. Kenney also noted how Canada was supposed to be America’s closest ally. Maduro of Venezuela hates the US and is an illegitimate leader. Both Venezuela and Saudi Arabia have asked the US for help in recent years, and none was provided. Iran is one of the world’s top funders of terrorism and turning to them should be considered a threat to national security.

Categories: Energy

Mar 19 2022

Planning To Use Oil Crisis, the Global Climate Change Agenda Is Triggered – Biden Declaring Climate Emergency, IEA Proposing Global Economic Changes, AOC and Bernie Sanders Join Drumbeat


Posted originally on the conservative house on March 18, 2022 | Sundance

We could all see this coming.  The Ukraine-Russia conflict creates the opportunity for the Build Back Better initiatives to get triggered.  None of this is happening organically.  All of this is opportunism based on a series of dominos purposefully triggered.  Three government solutions to rising oil prices surface simultaneously in an effort to exploit the crisis they created.

Keep in mind, this economic roadmap was strategically outlined in the World Economic Forum “Build Back Better” initiative, and that was built upon the economic ‘climate change‘ opportunity that COVID-19 created.  The U.S. version of BBB was called the Green New Deal.

First, Biden proposes to trigger a useful “Climate Change Emergency” (LINK).  Second, the International Energy Agency proposes a “Ten Point Plan” to change energy use in the modern society (LINK).  Third, comes AOC and Bernie Sanders with the “Executive Action Agenda” (LINK).

All of this is the fundamental change represented by western government in the agenda of ‘building back better’.

(IEA) In the face of the emerging global energy crisis triggered by Russia’s invasion of Ukraine, practical actions by governments and citizens in advanced economies and beyond can achieve significant reductions in oil demand in a matter of months, reducing the risk of a major supply crunch, according to new analysis released by the International Energy Agency today.

These efforts would reduce the price pain being felt by consumers around the world, lessen the economic damage, shrink Russia’s hydrocarbon revenues, and help move oil demand towards a more sustainable pathway.

If fully carried out in advanced economies, the measures recommended by the IEA’s new 10-Point Plan to Cut Oil Use would lower oil demand by 2.7 million barrels a day within four months – equivalent to the oil demand of all the cars in China. This would significantly reduce potential strains at a time when a large amount of Russian supplies may no longer reach the market and the peak demand season of July and August is approaching. The measures would have an even greater effect if adopted in part or in full in emerging economies as well. (more)

AOC and Bernie Sanders [LINK]

(Daily Mail) Progressive Democrats are urging President Joe Biden to take executive action to raise wages, combat climate change, cancel student debt, and lower health care costs.

The Progressive Caucus – led by Rep. Pramila Jayapal and consisting of high-profile liberals like Reps. Alexandria Ocasio-Cortez and Ilhan Omar and Senator Bernie Sanders –  outlined their lists of demands they said ‘would provide immediate relief to working people and their families.’ (read more)

(CNN Reports) […]”As a result of Russia’s appalling aggression against Ukraine, the world may well be facing its biggest oil supply shock in decades, with huge implications for our economies and societies,” IEA Executive Director Fatih Birol said in a statement.

The proposals reflect a recognition that the world has few realistic options to quickly replace oil supplies from Russia, the world’s No. 2 oil producer in 2021.  OPEC has signaled it’s in no rush to ramp up production and the release of emergency oil stockpiles has done little to ease shortage fears.

“The US and other IEA countries now realize that the potential loss of Russia’s oil exports constitutes a bigger supply shock than either strategic stock draws or accelerated OPEC+ production hikes can solve,” said Bob McNally, president of consulting firm Rapidan Energy. (read more)

Mar 19 2022

Biden Warns China Not to Interfere in U.S. Proxy War Against Russia


Posted originally on the conservative tree house on March 18, 2022 | Sundance

Keep in mind the cunning geopolitical perspectives of Beijing’s dragon that wears the panda mask.  Recently a person attempted to dismiss the strength of China by saying they had not won a war in a thousand years, to which I replied, “tell that to U.S. workers in the rust belt.”

There are two geopolitical battle spaces in the modern era to gain superiority without kinetic warfare, economics and information; China’s arsenal in the former is massive, the U.S. strategy has been reduced to using big tech in the latter.  This is why western propaganda and censorship control over the Ukraine narrative is so important.  This statement from the White House is weak:

WHITE HOUSE – President Joseph R. Biden, Jr. spoke today with President Xi Jinping of the People’s Republic of China (PRC). The conversation focused on Russia’s unprovoked invasion of Ukraine. President Biden outlined the views of the United States and our Allies and partners on this crisis. President Biden detailed our efforts to prevent and then respond to the invasion, including by imposing costs on Russia. He described the implications and consequences if China provides material support to Russia as it conducts brutal attacks against Ukrainian cities and civilians.

The President underscored his support for a diplomatic resolution to the crisis. The two leaders also agreed on the importance of maintaining open lines of communication, to manage the competition between our two countries. The President reiterated that U.S. policy on Taiwan has not changed and emphasized that the United States continues to oppose any unilateral changes to the status quo. The two leaders tasked their teams to follow up on today’s conversation in the critical period ahead. (LINK)

The conflict in Ukraine serves China’s interests.  The dragon is smiling, bigly.

♦ Russia becomes more reliant upon China for geopolitical as well as economic support.  Chairman Xi wins.

♦ The U.S. bleeds money in deficit spending to use Ukraine to fight a proxy war against Russia.  Chairman Xi wins.

♦ A new trade currency looms on the horizon due to western sanctions against Russia.  Chairman Xi wins.

♦ Western government push further toward totalitarian control over their citizens to demand compliance.  Chairman Xi wins.

The domestic and international problems created by the people around Joe Biden serve the interests of Chairman Xi.  Changing energy policy by chasing climate change nonsense weakens the U.S. economy, Chairman Xi wins.  The panda has no need to show the dragon underneath because the west is destroying itself.

Biden can gnash his teeth as much as he wants, fat panda smiles.

Mar 19 2022

Col Douglas Macgregor Discusses Outlook for Ceasefire in Ukraine


Posted originally on the conservative tree house on March 18, 2022 | Sundance 

During a segment last night, Colonel Douglas Macgregor discussed the perspective for a ceasefire and peaceful resolution to the Ukraine conflict.

The resolution issue is a very critical point, because the U.S. State Dept (CIA) and the DC political machine are standing firm in their collective desire for a long-term insurgency campaign against Russia using Ukraine as a proxy war.  Macgregor notes the geopolitical and global economic outcomes from a protracted interventionist NATO/western approach at using Ukraine for conflict against Russia.  WATCH:

Additionally, Michael Tracey (via Substack) has some background information on the Russian cruise missile attack against the military training facility located outside Lviv, near the border with Poland.  This is well worth reading, because it connects to the larger effort of the U.S. to conduct an insurgency campaign regardless of what Ukraine President Zelenskyy might desire.

(Tracey) – […] The city of Rzeszow, Poland, about 60 miles from the Ukraine border, is currently crawling with all manner of spooks, freelance war adventurers, sketchy profiteers, and assorted others. I just overheard a top official at a Washington-based NGO, which I won’t name at the moment, bragging that their “security” operations on the front lines in Ukraine are being manned by a “former Special Ops guy” — meaning a veteran of the US Military who formerly worked in “Special Operations.”

Of course, to what extent these guys can truly be characterized as “former” military, especially if they’re doing active logistics in a combat zone, is an open question. 

I also heard a translator working for a notable US journalist state that he/she personally helped facilitate the entry of American “veterans” into Ukraine through Poland, en route to do God knows what exactly. Putin has said that incoming supplies of “aid,” as well as inflows of “foreign mercenaries,” will be considered legitimate military targets — and Russia’s strike Sunday on a military facility just 15 miles from Poland was said to be an example of him following through on the threat.

This raises the very distinct possibility of US combat fatalities in the near future, even if the US individuals in question are not technically on active duty — or at least publicly acknowledged as such. What do you think the public response will be, if Russian missiles successfully strike a group of “American veteran volunteers” who have shown up to fight in Ukraine? Especially given the mounting predictions about the alleged imminence of chemical and/or biological attacks? (read more)

There were reported 200+ mercenaries killed in the cruise missile attack against the facility near Lviv.  The Daily Mail reported over 1,000 foreign fighters were housed in the facility at the time. […] A Ukrainian officer said there were around 1,000 foreigners at the camp – officially known as the International Center for Peacekeeping and Security – at the time. (read more)

After a few initial media reports about the cruise missile strikes at the training facility, the story essentially disappeared.  The question remains if any U.S. nationals, mercenaries or contractors, were at the compound and whether any were killed or injured.

An American foreign fighter, who would identify himself only as “Zander,” said he was injured March 13 in a Russian airstrike on the “International Center for Peacekeeping and Security” in Yavoriv, located in far Western Ukraine. The strike drew much notice because it was the most westward attack yet committed by Russia, just around 15 miles from the Polish border. (more)

Mar 18 2022

Saudi Arabia Considers Accepting Yuan for Oil


Armstrong Economics Blog/Energy Re-Posted Mar 18, 2022 by Martin Armstrong

Russia is not the only country turning to the yuan. Beijing is in talks with Saudi Arabia to begin purchasing oil with their own currency opposed to the USD. Saudi Arabia has long had a volatile relationship with the US, and seeing the harsh sanctions imposed on Russia is only making the yuan more appealing.

Around 80% of global oil sales are exchanged in dollars, with Saudi Arabia using the USD exclusively for oil sales since the 1970s per agreement with the US government. Crown Prince Mohammed bin Salman was unable to have diplomatic relationships with President Biden after the publicized 2018 assassination of journalist Jamal Khashoggi. “We were going to make them the pariah that they are,” Biden stated in 2019. Add to this America’s nuclear negotiations with Iran and dismissal of Saudi Arabia’s request for support with military operations in Yemen.

The illusion of the dollar being an impenetrable safe haven has shattered due to Biden’s policies. Countries now know that their dollar reserves could be confiscated or frozen at any time and deemed utterly useless. The Saudis have been toying with the idea of accepting the yuan for oil payments for the past six years, but recent events just may be the final straw.