this is the continuation of my previous essay What Energy Crisis ?
The world literally floats in oil, not only because currently, 1 Million barrel are produced more as the global consumption of 90 million barrel per day, but because the claim that oil would be a fossil fuel and we would have exceeded the so-called 'Peak Oil', is completely wrong, and a fairy tale.
Oil is not finite and is actually available in abundance, namely constantly produced in the interior of the earth.
See my article about 'abiotic oil'.
The current price of oil is so low as not anymore for a long time.
Currently a barrel is at 82 dollars, almost 30 percent lower than at the beginning of the year.
About why this is so and what is the reason for the pricing pressure, there are different opinions.
I want try to list these possible causes for a drop in price.
The above chart shows the fluctuations in the oil price in the last 36 months.
Currently the cost of a barrel of crude oil nearly as little as in July 2012, as the global economy crashed into recession and the need, therefore, fell sharply.
This raises the question, is the price so low because we are again in front of a worldwide recession, or are other factors at work ?
For example, a deliberate and controlled price war ?
Parsifal, October 15, 2014
Here is a list of possible reasons for the low price:
As already said, the industry experienced worldwide a significant decline in orders and therefore less oil as an energy source is needed, therefore, the afresh recession is to blame.
Europe and Japan will experience an economic downturn; the U.S. economy is woolgathering, and would appear as if it shrivels again.
An additional reason for the global economic downturn are the sanctions against Russia, which cause considerable damage, especially in Europe.
If the economy stagnates, and therefore less oil is consumed than is being produced, there is an excess squeezing the price.
Since the OPEC countries, as just confirmed want not adjust their production to the lesser need, but keep the flow rate constant and not reduce, the price goes down.
Supposedly, only in November at the next OPEC Meeting over a throttling of the flow rate will be decided.
New providers for oil are also on the market, because of the respective conflicts so far have failed, such as Libya and Iraq.
The ISIS also sells the stolen oil from the conquered Kurdistan with the help of Turkey for dumping prices.
How this under the watchful eyes of the Americans is possible, is a different question.
Their own child Al-Qaeda to rename in ISIS is probably the reason.
But overall there is too much oil on the market.
Saudi Arabia, one of the largest oil producers in the world has decided on a reduction of the price, to increase their market share, and wants to disable the competitors.
To the Saudis and the other Gulf States doesn't fit the declared energy independence of the United States, which has been achieved with the massive use of fracking, in their plans.
By the reduction of the price to below USD 80 is the extraction of oil from shale uneconomical and slips into the red.
So the Saudis want the oil production over this new controversial method - which is relatively expensive to stall.
The goal is generally to squeeze all oil producers with high production costs out of the market.
Since the Saudi production works just unprofitable under USD 70 a barrel and Riyadh have a disposal on huge reserves of 750 billion dollars, they can sit through this price pressure for a long time until the troublesome competition in the United States is broken and stops.
If Obama puts up with that price fight is another question, as actually Saudi Arabia is the second most important ally of the US.
At the same time, the Saudis want to weaken The Iran as a competitor on the regional power with a low oil price, because if the agreement in the nuclear debate is concluded, the sanctions against Tehran will be repealed, then can The Iran again sell oil and with the higher income will be stronger.
The sudden reduction of the price of Oil at USD 80 a barrel is a joint plan from the United States and Saudi Arabia to weaken Russia and bring Putin to fall.
Washington is trying to revenge because the regime change in the Ukraine assumed in a debacle.
Because the strategic goal of the Americans, by the coup in Kiev, to grab the Crimea, evict the Russians and take over the naval port of Sevastopol on the Black Sea, failed miserably.
Putin has them all completely outmaneuvered and the Crimea has just felt him without using violence in his lap.
Riad is crossed with Putin because Russia supports Assad which but the Saudis would like to have away.
The plan to take over Syria has so far failed.
If the price of oil is low, then is missing Moscow important revenue for the years 2015 to 2017, but have been budgeted as government spending with USD 100 per barrel.
The Russian government needs to drastically save, what may trigger civil unrest, and even the fall of Putin.
At least this is the thought which bend the Americans and Saudis with a price war.
It is exactly vice versa.
The Price erosion control Moscow as the largest oil and gas producer in the world, and China, as the largest consumer in the world, to harm the Saudis and Americans tremendous.
This maneuver is part of the plan of the 'De-dollarization' of the energy market - and indeed, the world economy - both want to go ahead with.
This fits the agreement between the Central banks of Russia and China over a three-year Currency-Swap-Deal of 150 billion Yuan, and 815 billion rubles (the equivalent of 25 billion dollars).
It is the goal for a massive expansion of the trade between the two countries and reduce their Dollar and Euro-dependence.
The trade between Russia and China now accounts for almost 100 billion dollars and, in the coming years should increase to 200 billion dollars.
Moscow has enough currency and gold reserves to withstand low oil prices in the longer term, to and has massively reduced its foreign debt in the last few months.
China is happy about a low purchasing price for oil and helps Russia in a price war.
As already mentioned above, is so also the oil production of the Americans greatly damaged, because fracking is too expensive and does not pay below 80 dollars.
One of the cited reasons for the drop in price of oil may be right, or several, or even all.
Each of the participants in this market has a motive for the price war.
The question resulting is, who will survive this struggle and who will carry away a significant damage ?
Most pleased will be the consumers, because the price of petrol at the petrol station is also decreased.
Should the OPEC countries first run out the road, they probably need to decide a throttling of the flow, so the price rises again.
Strictly speaking, there can no oil producer really economically produce under USD 100 per barrel and generate enough government revenues.
This is why 'cheap oil' will only be temporarily available.
What we must be clear, oil is the most important resource in the world besides water and is why virtually all of the interventions and wars of the West were in any way related to that.
A price war which likely ends in a shooting war.
related in BOLE
What Energy Crisis ?
Russia Proves 'Peak Oil' Is A Misleading Zionist Scam