Military Review

Alexander Zapolskis. What has shaken the petrodollar card house

Alexander Zapolskis. What has shaken the petrodollar card house

Recently, especially in the light of the Ukrainian events and the aggravation of the confrontation between Russia and the West, the theory of a large conspiracy and secret governments has become fashionable again. Only the candidacy for the throne of the supreme ruler of the world remains uncertain. Rockefellers are tipped there, then Jews. In Europe, they are increasingly talking about Vladimir Vladimirovich, while in Ukraine he is generally considered to be to blame for everything. The rebellion of the battalion of national guardsmen in the administration of the President of Ukraine, in their opinion, “was also organized by Putin”. In general, it is understandable, usually almost everything in the outside world is created, planned, or caused by someone in particular. However, one should not forget that in life a lot happens only because it just happens.

The fact is that the world oil market has long been just such a complex and huge house from a variety of cards. For example, it is assumed that oil prices are determined by OPEC. And the most important country in this country is Saudi Arabia. Hence the conviction that the specific value of the price of black gold depends on the decision of a Saudi prince. At the same time, it remains behind the scenes that the production of all OPEC member countries does not exceed 40% of the world daily oil production. For example, in the 2011 year, the entire world produced 84,09 million barrels per day. Of these, twelve OPEC countries accounted for all 30,89 million barrels, and all other producing countries 53,20 million. The maximum daily production of Saudi Arabia in 2010 was 10 million barrels. So the times when this stereotype was formed are long gone. Together with the fall of the Iron Curtain. In the same year, 2010, the world's largest oil producer, who would you think? - was Russia. 10,27 million barrels daily. Even more than in Saudi Arabia, and certainly more than in the US (7,513 million barrels).

There is another point of view on the essence of the process, based on the balance of supply and demand. Its supporters operate not only with production volumes, but also with the general structure of oil consumption in the world. They say that the market is somewhat over-stocked, which explains some price reduction. Yes, countries like China continue to increase consumption, and the number of cars in the world is only increasing from year to year. So the demand is growing. But the volume of production is growing even faster, and it turns out to be sad.

In fact, if you look not at particulars, but at the general nature of the processes, the picture becomes much simpler. For a long time, the United States diligently lined up the oil market, as they say, for themselves. Two fundamental problems were solved. First, to ensure the country's own energy security. The lessons of the 1973 crisis of the year have been well and solidly learned. Secondly, ensuring the work of the first stage of the American dollar loan. It is the “Arabic” oil that turns colored paper coming out of the American printing press into money. World oil trading is in US dollars. This means that the same Saudi Arabia receives dollars for its oil, which are sent “for storage” to the American banks. Including in the form of purchases of US government debt.

The second influencing factor is the speculative component of world markets for raw materials in general and oil in particular. Oil is not only raw material, it is also an asset with a floating price. If you correctly calculate the price trend, then in the market today you can buy some of its volume in the calculation later to sell at a higher price. The system of futures contracts allows even without the rental of oil storage facilities. According to experts, in 2013, the speculative component in the current price of oil reached 40-42%.

The third component is politics. Oil is always a lot of money. Where is the money, there are all sorts of "state" decisions. The “shale revolution” in the USA began not only because of the rise in oil prices to the 100 level of dollars. To a large extent, it was launched by its own American politicians, worried about the US economy being too heavily dependent on foreign energy supplies. And the new business that emerged soon began to live its own life. Replacing up to a third of US oil consumption in shale oil is politically good for America, but this means that around the world market about 3 million completely extra barrels were formed daily.

But they did not become the trigger mechanism of the process. No matter how trite, but the straw that broke the camel's back was the "Islamic State" (IG), formerly known as ISIS. The fact is that in June of this year, his field units established control over a significant part of the territory of Iraq and occupied the largest oil refinery in Baiji. Theoretically, the main oil fields in Iraq are located in the south, but while the IG was ruining the US-formed government of the country, the Kurdish militia of the Peshmerga had already established full control over the city of Kirkuk.

Experts perceived what is happening only in the form of the threat of a drop in production volumes in Iraq and the resulting supply shortage in the market. In general, yes, the total production of Iraq in 2010 year - 2,5 million barrels per day. Saudi Arabia solemnly promised to compensate for the fall by increasing its own production. But what is curious. First, the extraction of the Saudis and so is at the limit of their capabilities. They are no longer able to raise it in principle. Secondly, there was no shortage of oil supply on the market. Thirdly, from that moment on, IG suddenly had money. Very big money. So big that the rebels began to reformat their army into a regular one, with official salaries, and purchase weapons on the black market, where prices are always high, several times higher than the already cheap official ones. For example, the Ukrainian BTR-4 officially cost 1,5 million dollars.

Formally, of course, nobody caught anyone by the hand. In theory, terrorists from the Middle East cannot sell illegal oil in a market fully controlled by Washington. For example, in May, Libyan separatists attempted to go to sea on the tanker Morning Glory, but the US Navy intercepted it and returned to the port of Benghazi. But! The IG controls two oil pipelines: one supplies Syria, the other the Turkish port of Ceyhan. So - the first Islamists blocked completely, what caused interruptions in electricity in Syria, and the second works to its fullest. Because it is used by the authorities of Kurdistan.

Kurdistan is already exporting Iraqi oil almost officially. Of course, scandals do happen. Two tankers of Palmali Shipping & Agency JSC were chartered for refueling in Ceyhan. But then the Iraqi government made a fuss and managed to block the process. None of the international oil corporations decided to buy this oil. However, Kurdistan just wiped it off and announced a "new price" of $ 57,5 per barrel, and continued to accumulate reserves. Two more tankers are currently under loading. This means that the Kurds and IS have either a buyer or firm guarantees of the deal. Obviously - not the first.

And yet ... additional oil has appeared in Saudi Arabia, which has never produced 10 million barrels per day. Of course, there is an opinion that this is a consequence of the depreciation of reserve reserves, but ... the Saudi budget is balanced at a price of about 90 dollars per barrel, and the current price is already floating around 87. No doubt, for half a century, the Saudis have accumulated a lot of "oil profits" and can live on these stocks for some time. But the costs of the Kingdom are extremely high. Not only for oneself, but also for the policy pursued in the region. And they are absolutely not nervous. However, if we assume that they get some additional volume on 57,5 dollars, then the incomprehensibilities become not so unbelievable.

In general, the world's oil is not just more. Although this is the place to be. A significant amount appeared on the market, somewhere up to 3-4 million barrels / day of oil at a dumping price, very much lower than the market price.

And the market ran out of money. Inflate the credit bubble to infinity is impossible. In fact, by the present moment it turns out that almost all printed dollars are already in the USA. Either in the form of treasures, or in the form of foreign deposits. Formerly, to continue pumping the world economy with waste paper is no longer possible. In view of the risk of its collapse. And the crash itself is already underway. First, the derivatives and stock markets were blown away. But their capacity for tying a giant dollar mass was not enough. The precious metals markets were blown away. Then the fall touched the commodity markets. Finally, the turn has come to the largest recycling mechanism - the oil market. And now the American stock indices went down, breaking through all existing levels of support. Translated into simple Russian, this means, relatively speaking, that all American money is already concentrated in American debt obligations. All, no more money. To refinance the debt take them from nowhere. Attempting to release more paper will bring down the real market. Totally.

So the Americans are the first to be interested in maintaining high oil prices, no matter what the politicians say in Washington. But, alas, the world is changing. The system, built from the end of the 19th century to the middle of the 20th century, ceased to correspond to reality and begins to crack. The United States can not cope with patching holes and inventing temporary patches. Temporary, because neither the time nor the resources to develop something long-term they do not have. At all.

And then on the 40% speculative component ... Even without other factors, only in connection with the departure of speculators, the price should fall to about 67 dollars per barrel. No, it will fall even lower. Both because of the inertia of the process, and because of the interest of its key consumers in the lowest possible energy prices. But the cutoff level of shale extraction in the US is from 80 to 70 dollars. So, minus 3 million barrels of daily production. Somewhere on 73 dollars, Venezuela’s mining challenges are pressing. This is still a minus 2,5 million barrels. Then Brazil. And so on.

The Saudis will last the longest. They have a fantastic cut-off level for today, around 30 dollars, but for half a century, the Saudi deposits have been significantly depleted, and for fifteen years now, Saudi Arabia has been pushing the strategy of the highest prices, rather than the largest market share, with all its might. Therefore, having fallen lower, prices under serious pressure, to 20-30% of the current volume, will reduce the daily production again. By the same 65-67 dollars per barrel. But themselves, and not on the orders of the secret rulers of the fate of all things on this planet.

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  1. awersa
    awersa 21 October 2014 19: 08
    Yes, definitely not without the Americans ...
    1. Shaitan
      Shaitan 21 October 2014 19: 43
      A very interesting version of oil pricing has something to think about, the author is a definite plus
      1. Papakiko
        Papakiko 21 October 2014 21: 22
        Quote: Shaitan
        the author is a definite plus

        Is it oily?
        The author drove from the first line what is called a gallop and forgot to indicate in the article the Council on Foreign Relations and the Bilderberg Group, etc.
        Rockefellers, then Jews are read there
        His real name is still a secret. It is probably known only that at the same time he called himself “Dr. William Avery Rockefeller”, and having married, he officially legalized his pseudonym.
        I will single out that type "Protestants"
        And then there’s also a 40% speculative component ... Even without other factors, only in connection with the departure of speculators, the price should drop to about $ 67 per barrel.
        Without "help," nothing falls or stumbles anywhere.
        No, she will fall even lower. Both due to the inertia of the process, and because of the interest of its key consumers in the lowest possible energy prices. But the cut-off level for shale mining in the United States is between $ 80 and $ 70.
        Mlyakhkhkh "expert".
        For starters, check out the rehearsals of US-USSR grain deals in the 70s.
        No one will say the real cost of producing a cube of gas or a barrel of oil, and even more so with shale mining. But there are still bitumen sands.
        Therefore, as "dad" says, such a price will be.

        ps \ For those who disagree, the option of Christophe de Margerie is always possible.
        1. fzr1000
          fzr1000 21 October 2014 22: 45
          The author's information is not bad, but 3-4 million barrels of smuggled oil is less than 5% of world production, especially since before ISIS, Iraq under Saddam, Iran, and Libya were both smuggled, so ISIS is not strongly affected on pricing. And there is no exact information about dumping from the SA.
          1. Gluxar_
            Gluxar_ 22 October 2014 04: 41
            Quote: fzr1000
            The author's information is not bad, but 3-4 million barrels of smuggled oil is less than 5% of world production, especially since before ISIS, Iraq under Saddam, Iran, and Libya were both smuggled, so ISIS is not strongly affected on pricing. And there is no exact information about dumping from the SA.

            Where do these numbers come from? 3-4 million barrels of this entire oil production in Iraq. IG and Kurds control only a small part of the oil fields. The main oil production areas are controlled by Shiites in the south of the country. Now it’s fashionable to drive everything to the IG, but this is too small an animal to influence such processes.
            1. fzr1000
              fzr1000 22 October 2014 09: 08
              From this article.
          2. Bakht
            Bakht 22 October 2014 09: 54
            Quote: fzr1000
            The author’s information is not bad, but 3-4 million barrels of contraband oil is less than 5% of world production,

            5% is a lot. Enough and 1% to influence the price and manipulate.
            If there are 100 kg of potatoes in the market. But they want to buy only 99 kg, who will sell the potatoes? The one who will throw off the price earlier. Moreover, the price reduction will not be 1%, but much more. Oversupply reduces the price disproportionately. Excess supply is a fact. But no one will sell below cost. This is what Saudia is doing now. Its cost is about $ 30. But this is the tip of the iceberg. They put 90 greens per barrel in the budget. There is another furry animal. The fact is that Saudi deposits are depleted. all this is a lie and a bluff that they produce 10 million barrels. Real production is falling. The Gavar field has been exploited for almost 50 years. Formation pressure has dropped significantly. Half of the oil is there with water. There are strong suspicions that the Saudis are just trading in smuggled oil, passing it off as their own. This is beneficial: in a lush buy from ISIS at 25 and sell at 80. And say that we have increased production. Is ISIS funded by Saudis out of pure love?
      2. Gluxar_
        Gluxar_ 22 October 2014 04: 38
        Quote: Shaitan
        A very interesting version of oil pricing has something to think about, the author is a definite plus

        Pricing theory is not visible here. Not all factors are considered. An important factor in the price of oil has always been the price of the dollar. Amid global instability, the dollar has always risen in price, which it does today. Smuggled oil is a very dubious factor influencing the global oil trade, the volumes are not the same and there are not so many transportation opportunities.
        There are several objective reasons - international instability in relations between West-Russia and West-China. Shale bubble in the USA. And the most important is the increase in debt burden in Western countries. In fact, an increase in debt in the absence of GDP growth means a decrease in the latter, which means an economic recession and a decline in consumption. Hence the decrease in demand for energy.
        There are other factors, such as the printing of strategic US oil reserves. And also a few more, but less significant.
  2. Pattor
    Pattor 21 October 2014 19: 10
    For the Russian Federation, it is critical and fraught with big problems (
    1. Demob 2012
      Demob 2012 21 October 2014 22: 30
      but for this we have, unlike the other 2 airbags (life made us learn from past mistakes) so that we will be happy wink
    2. The comment was deleted.
    3. Gluxar_
      Gluxar_ 22 October 2014 04: 48
      Quote: Pattor
      For the Russian Federation, it is critical and fraught with big problems (

      As well as great opportunities, which is more likely. Russia occupies about 10% of the market, this is a lot but 90% is still more. The same European and American companies will suffer much greater losses, which, given the state budget deficit, will have a much greater destructive effect on the economies of these countries.
      Also, do not forget that in addition to oil production itself, there is also trade in it. And it is mainly in the hands of just Western companies. so the drawdown of this market will hit many industries. From this it becomes clear that nobody needs a price collapse. For Russia, a comfortable price is a figure of $ 70 converted to RMB. At this level, fiscal policy will be more reasonable and it will become profitable to develop processing industries.
  3. Giant thought
    Giant thought 21 October 2014 19: 10
    Who is to blame? So what to do? Was there a boy?
  4. kotev19
    kotev19 21 October 2014 19: 10
    Everyone needs oil urgently! So all these speculations for the price are just an ordinary zilch and a desire to cash in quickly!
    It would be better to decompose water into oxygen and hydrogen ...
    1. Denis fj
      Denis fj 21 October 2014 19: 23
      Here's an example.
      For speculation to be possible and to exist for a long time, it must have a different practical meaning. The spot price system does not exist to specifically speculate on prices. Its meaning is an attempt to increase price predictability for the right period of the future. Let's say you have a factory that consumes one hundred tons of diesel per month. Buying it every day is expensive. And the price is retail and cash must always be free. Buying immediately a stock for a year is also not convenient. It is necessary to contain large storage tanks. The wholesale price allows you to get diesel fuel cheaper than retail, but binds a significant amount of money for the whole year. On the other hand, the refinery would also like to have a guarantee that its products will be bought today, in a month and in a year. And it is very desirable to know today - for how much. So the spot, i.e. an agreement for the future that you, say, every fifth day of every month I will buy from me a ton of diesel fuel at a specifically agreed price. As a result, we both win. You know how much you will need to collect by the fifth number of money, I - that on the fifth of the ton you will take away the soryars at a specific price from me for sure. Of course, speculators intervene in the matter of future prices, who can agree with me to take all of my production volume, so that later, when the time comes, they will sell you a ton from it at a higher price, but in general your and my gains from the operation of the system are primary, and not the presence of speculators.
      1. Bakht
        Bakht 21 October 2014 21: 09
        Quote: Denis fj

        Are you sure that everything is laid out correctly?

        Delivery for the future is not a swap but futures. Which is evident from its name. The problem is that the author of the article does not quite correctly indicate the percentage of futures. On the exchange there is such a thing as "non-deliverable futures". That is, you do not even have the intention to buy or sell oil in your thoughts. It is non-deliverable. Bought at one price, sold at another. And such futures are traded on the exchange daily 50 times more what actually produces oil. So speculators expanse.
        Unlike a swap, where the delivery is exactly agreed and the price is indicated. But oil swap deliveries are only now in vogue. Oil exchanges do not want to trade swaps. Then you have to trade REAL goods, not air.
        For example, as a first approximation, you can look at gas prices. The Gronningen pricing model is now being replaced by a swap model. And they want to transfer Gazprom to this very swap. The problem is that the gas swap hub is in London. And Putin has already instructed to create a similar hub in St. Petersburg.

        So for all positions, futures trading is dying. This is pure speculation that does not depend on either the manufacturer or the consumer. Unlike swap trading, where real goods are sold for real money.
        1. Gluxar_
          Gluxar_ 22 October 2014 04: 57
          Quote: Bakht
          And there are 50 times more such futures traded on the stock exchange daily than oil is actually mined. So speculators expanse.

          Deliverable futures has nothing to do with real oil. This is a derivative of a financial organization, real buyers work on real contracts. And futures are a kind of currency denominated in oil and in faith in the issuing financial institution. It is actually difficult for speculators to have any significant impact on the real oil market. There were examples with the freight of tankers and the subsequent release of additional volumes to the market ... but these are isolated cases. Do not forget that the main participants in this market are interested in stable prices and speculators are trying to cut off.
          1. Bakht
            Bakht 22 October 2014 09: 46
            Quote: Gluxar_
            Deliverable futures has nothing to do with real oil.

            So am I about the same. Non-deliverable futures exist and have nothing to do with oil. But there are a lot of such trades on the stock exchange (oil exchange, by the way). In 2009, during oil price spikes (during one year from December 2008 to December 2009), the oil price changed from 148 to 36 and then again reached $ 100. No economic growth in production or consumption can explain this. Then Obama proposed to ban futures and trade in real goods. But he was quickly explained that he was nobody and there was no way to call him. He did not stutter about this anymore.
            What happens if oil is traded in rubles (yuan, peso or tugriks)? Huge volumes of oil will be withdrawn from trading floors. Petrodollar (namely, it is now the real currency) is blown away. The consequences are almost impossible to predict. All this will pull along the chain a lot of factors about which we do not even have a clue. Therefore, sudden movements are unacceptable. Only step by step and very carefully.
            The collapse of the American financial pyramid is a direct path to war. And not virtual, but quite real. I’m afraid that everything goes to this. Amers have nothing to lose but their debts.
  5. ando_bor
    ando_bor 21 October 2014 19: 17
    Yes, there were times and hail only witches conjured, and now he goes.
    Only a hail cloud can sometimes be shot down from a cannon.
  6. Anchonsha
    Anchonsha 21 October 2014 19: 20
    Americans squealed, jumped with pleasure, that it was they who began to put Russia on meager content without even delving into what was happening. Although the beginning was possible and it was laid precisely by the amers with their bad policy of betraying their own allies as waste material. There was not enough information in the press about the voyage of the Secretary of State to Saudi Arabia this summer, but it seems the Americans or were left without the Saudis as a faithful doggie in the form of the British Tony Blair. The Saudis realized that their inept policies left them face to face in the Middle East, flirting with Iran and Israel. Here ut Saudis began to roll out their oil cheaper than it would have been necessary even for amers. So now it is still unknown who will lose the most in the world from falling oil prices.
    1. saag
      saag 21 October 2014 19: 34
      Quote: Anchonsha
      Here ut Saudis began to roll out their oil cheaper than it would have been necessary even for amers.

      This is Iraqi oil
  7. vdtomsk
    vdtomsk 21 October 2014 19: 21
    What shook the petrodollar house of cards

    Definitely an American "democracy". But we are RUSSIAN !!! And therefore we will hold out !!!
  8. Grbear
    Grbear 21 October 2014 19: 28
    The author is right (IMHO). The decline in oil prices is a purely political thing with some conflicts such as ISIS. It would be interesting to know his assessment of Russia's actions to reduce production repeat P said that we have a reserve. It would be half a year to reduce the offer on the exchange in the context of sanctions (futures). That's what speculators twitch. Who knows what's on his mind request
    1. Demob 2012
      Demob 2012 21 October 2014 22: 55
      (IMHO). why reduce the supply? Let the kites bite each other, they don’t help us much (sanctions and only sanctions and nothing but sanctions), we also have an airbag, unlike some, and the government whether or not we want to help the oil industry. It’s a huge duty to take the states from them: who is the main sponsor of their defense industry is the oil industry. If, after low prices, several companies go bankrupt, then there is less money in the military-industrial complex and for the maintenance of the army. You want it or not, but after that the states need to cut costs. However, there is one big BUT - this is the IG, what should be done with it now, and not later. While the IG will prices will live by their own laws.
  9. Stinger
    Stinger 21 October 2014 19: 32
    Greed will prevail and prices will go up. This is the basis of the market.
  10. The comment was deleted.
  11. Idolum
    Idolum 21 October 2014 19: 46
    Damn you still want the truth.
    The answer is in sight, EXPANSION OF THE RUSSIAN FEDERATION.
    Russia now (under new circumstances) with market opportunities (cost of 80 green, then only minus for the world's energy campaigns) 35 per barrel is FAVORABLE.
    OPEC (sitting on a gold toilet) now eats itself and in the USA squints gee gee))))))))
    Understand now not VITI (USA) oil is the tastiest (cheapest in the world) but oil of the Russian Federation (EMPIRE from 01.01.2015)

    HERE ........
    1. saag
      saag 21 October 2014 20: 15
      the most "delicious" is Norwegian
      1. Idolum
        Idolum 21 October 2014 20: 40
        Do not be smart ........
        You are not supposed to be with your rank ........
      2. Idolum
        Idolum 21 October 2014 21: 21
        Okay, the tastiest one, which does not lie deep and where you need to drill less (cost), that is, it is on the OAI map from about 50 to 150 meters, stupidly dig a well and scoop up, but the United States has a buck loaded into all the pockets of the world (the only reserve currency the world since 45 years).
        Well, is Norway drilled on platforms? count it up?
        No offense........
    2. clidon
      clidon 21 October 2014 20: 29
      A GROWTH is made, as I understand it, "with a snap of fingers" from the bottomless storerooms of the Motherland?
      1. Idolum
        Idolum 21 October 2014 20: 44
        Damn, where did you get the drain? ????????
        Is everyone here MILITARY.
        Already here I made a remark somewhere, about a muttering according to the CHAPTER))))))))
      2. Idolum
        Idolum 21 October 2014 21: 27
        The main thing is that the Homeland is always in the black, but of course the Russian Federation is not profitable in lowering prices, we’ll just reach the peak when it will not be profitable for them to sell oil and we will take their place on the market and that’s all (as they were with us 80 years to 2014)
        Remember the story of the "Cuban Missile Crisis", just everything in reverse))))))))
  12. Idolum
    Idolum 21 October 2014 20: 09
    I think who followed he managed to read.
    We have malicious structures (no offense).
  13. sanyavolhv
    sanyavolhv 21 October 2014 20: 23
    I wonder what will happen if a few racquets, incendiary, accidentally flies to this factory ISIS? Well, it's clear the clouds of dirty smoke. spoil the nature ....
  14. Bakht
    Bakht 21 October 2014 21: 02
    All factors have a place to be. But a big plus to the author for indicating dumping prices by ISIS. This dumping is that opportunity to lower the price below a plinth. So, if we assume that the price of oil will fall, then no one will fight with ISIS. Or vice versa. What happened before - a chicken or an egg, philosophers have not yet figured out.
    1. Idolum
      Idolum 21 October 2014 21: 11
      Everything is simpler than you think, everyone will just go home)))))))))
      Well, as they say, their problems)))))))))
  15. Idolum
    Idolum 21 October 2014 22: 14
    Forgive me for being rude, just money for .... no longer (and not to be expected) switched to alcohol (Damn a cruel thing)
    From here and not understanding.
    It seems to be in the way with a morsik.
  16. rotmistr60
    rotmistr60 22 October 2014 03: 49
    So the Americans are the first who are interested in maintaining high oil prices, no matter what politicians say in Washington.

    Then what was Obama whispering about in Saudi Arabia? Probably just dropped by on a harem to see.