How Russia and Iran Plan to Push Oil Prices Back above $100

by John Galt
September 27, 2015 09:30 ET

And in turn, Remove the United States as a Superpower in the Middle East

On post super blood moon Monday, Vladimir Putin will be meeting with President Obama to discuss the ISIS crisis in the Middle East. There are many within the U.S. media who are promoting this meeting as some strange idea that the Russians are about to ask the Americans for help against ISIS. While there might be a small gnat’s hair bit of truth to this, in reality, Putin is about to dictate terms and the United States is ill prepared to deal with the consequences.

In 2014, I penned a piece reflecting the true reason ISIS was created so that the Arabian sheikdoms could establish pipelines through Iraq and Syria to permanently shift Europe’s dependency on Russian oil and natural gas over to their own private market where they can re-assert control over the world market price. The problem is that Russia failed to see the US, British, and Arab point of view and offered what they thought was enough support to block ISIS from overthrowing Bashir Al-Assad and keep this dream from becoming reality.

TURKISH_PIPELINE_PROJECTSjgfla

Unfortunately for the people of Iraq and Syria, the West failed to provide enough material support to collapse the Syrian dictator and the war has been a giant slaughter killing over 200,000 people and displacing over millions throughout the region.

The bigger story however has not been the fighting but the subterfuge which was ignored by the Western mainstream media with regards to an economic war against Russia and Syria has been quite successful thus far in the guise of sanctions and destroying the price of crude oil(via CNBC as of Friday, 9/25):

BRENT_CRUDE_092515jgfla

This indiscreet economic and political war on Russia might have been perceived as a clever method to keep the bear trapped inside the Ukrainian box, contained so as to prevent any further impact on Western economies and enough to help the West’s Middle East petro partners. The reality is that it has provided Russia, in cooperation with China, the one opening they needed to usurp and replace the United States as the premiere superpowers on the world stage while causing massive harm to the economic prowess of the West at the same time.

Russia depends on oil and natural gas prices to remain at levels far above their current prices to expand its economy and as a result the Russian economy has flat lined in the past year and a half (chart courtesy of TradingEconomics):

RUSSIA_GDP_10YRSjgfla

As Russia was beginning a massive and overdue military overhaul and modernization, this decline in the economy occurred at an unfortunate moment for Vladimir Putin. The West however, has miscalculated the strategic nature of this former KGB officer’s long term planning which means that once again the US and Europe have underestimated Putin’s resolve.

The Middle East is aflame right now and the economic situation along with terrorist Islamist ideologues have exported their problems into Europe with a massive migration of millions of refugees from Syria, Jordan, Libya, and Iraq. Mixed within these people are numerous terrorist operatives as was promised by ISIS and Al Qaeda years ago but ignored by the naive European Union. The future problems this will create are another story but the question has been promoted by some in the United States asking why the Arab nations of the Arabian Peninsula have not taken any of the refugees. That answer is obvious; their economies and domestic political situations are so tentative and fragile that an influx of millions of new residents would probably tip nations like Kuwait and Saudi Arabia closer to full blown civil war within their own borders. Russia of course, is acutely aware of this and plans to use the weakness in the region to their full advantage.

 

The Fox News report misses the target on the big issue which happened last week where Syria, Iran, Iraq and Russia all started to lay down the framework for a plan to eradicate the Arab nation funded ISIS militia. The hilarious aspect of the story is the perceived notion that Russia is getting in “over its head” with regards to the ISIS combatants. In reality, Russia’s history in the Chechnya conflict indicates that Russia has no plans to offer any quarter for the terrorists but in fact plans to work with Iran to drive ISIS out of most of Syria and Iraq. that leaves the question as to where would they go and what would be the impact of such a move?

The map I have drawn below should provide some proper perspective as to their plans:

ISIS_RUSSIA_IRAN_UPCOMINGWARjgfla

The idea is a not so subtle message to the United States and Saudi Arabia; if you continue to support ISIS and the various rebel forces in Syria and Iraq, a new united front will push them back into your lap for your nation to deal with it. By later on this year and early next year their should be sufficient forces on the ground in Syria and Iraq to push the ISIS militants into a meat grinder, eventually cutting them off from their northern forces somewhere in north central Iraq. Without any supplies crossing from Turkey or Saudi Arabia, those forces will attempt to migrate into the Kurdish controlled portions of Iraq and Turkey where they will eventually be dispersed or destroyed.

Meanwhile in the southern part of Iraq, ISIS will be left unchecked for a short duration and eventually pushed into Saudi Arabia and the GCC states, to let the sponsors of this terrorist army deal with the problems they funded and created. The brilliance of this strategy by the new alliance of Egypt, Russia, Iran, Iraq, and Syria (which may soon include Jordan) is obvious; the return of the malcontents who will feel betrayed by the House of Saud and other various sheikdoms of the region will create domestic instability and as a result the destruction wrought on Iraq’s oil infrastructure will now become a GCC problem.

Saudi Arabia is ill prepared to fight a two front war with Yemen on it south and ISIS/Al Qaeda to its north thus there is a high probability that terrorist units will have little trouble penetrating deep into Kuwait and the Saudi kingdom. Russia and Iran will view this as justifiable payback for the Sunni militias that the kingdoms sponsored and as such, destabilize the monarchies to the point where oil prices will be severely impacted in 2016; eventually driving the price of Brent Crude back over $100 per bbl. As China has already locked in their prices via long term supply contracts with Iran and Russia the opportunity for their forces to act in support of such an offensive in a “peace keeping” role is viable, usurping the U.S. hegemony in the region.

The idea by Europe, the United States, and Arab kingdoms that a pipeline was a viable plan using mercenaries funded and supplied in the name of Syrian liberation was a myth from the beginning. Now the incompetency of their strategy may soon backfire and impact their economies far more severely than Russia’s, leaving a greater vacuum of power on the world stage; a void which will be filled by the new Sino-Russian alliance to purge American influence from the Middle East after twenty years of relative peace.

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