The Islamic Vortex (Note-10)

According to the geo-economic logic of the dying status quo, the Islamic Vortex supported oil prices by injecting menace into the supply chain. Peaks of turbulence were associated with oil shocks. ‘Middle East peace initiatives’ (or more drastic interventions) were so deeply entwined with oil supply security imperatives as to be scarcely distinguishable.

Not anymore:

Many energy analysts became convinced that Doha would prove the decisive moment when Riyadh … would agree to a formula allowing Iran some [production] increase before a freeze. … But then something happened. According to people familiar with the sequence of events, Saudi Arabia’s Deputy Crown Prince and key oil strategist, Mohammed bin Salman, called the Saudi delegation in Doha at 3:00 a.m. on April 17th and instructed them to spurn a deal that provided leeway of any sort for Iran. When the Iranians — who chose not to attend the meeting — signaled that they had no intention of freezing their output to satisfy their rivals, the Saudis rejected the draft agreement it had helped negotiate and the assembly ended in disarray. […] … Most analysts have since suggested that the Saudi royals simply considered punishing Iran more important than raising oil prices. No matter the cost to them, in other words, they could not bring themselves to help Iran pursue its geopolitical objectives, including giving yet more support to Shiite forces in Iraq, Syria, Yemen, and Lebanon. Already feeling pressured by Tehran and ever less confident of Washington’s support, they were ready to use any means available to weaken the Iranians, whatever the danger to themselves.

With ‘Peak oil demand‘ in prospect, and a brutal zero-sum struggle beginning for shares in a market tending to secular shrinkage, the deepening Sunni-Shia has become an engine of systematic oil price suppression. According to plausible Saudi calculations, the Iranian enemy will simply use oil revenues to pursue their geopolitical objectives more competently than the Saudis can themselves. A higher oil price, therefore, is comparatively advantageous to the Shia bloc (at least in the eyes of the Saudis, whose perceptions in this regard uniquely matter, due to their status as sole swing-producer). Any rise in revenues is overwhelmed by the quantity of additional military challenge it brings with it. This holds true whatever the level of social stress a low price inflicts on the Sunni side.

It’s quite a box the Saudis find themselves in. There’s no way out of it that doesn’t require winning a religious war.

April 30, 2016admin 12 Comments »


12 Responses to this entry

  • The Islamic Vortex (Note-10) | Neoreactive Says:

    […] The Islamic Vortex (Note-10) […]

    Posted on April 30th, 2016 at 8:21 am Reply | Quote
  • vxxc2014 Says:

    “It’s quite a box the Saudis find themselves in. There’s no way out of it that doesn’t require winning a religious war.”

    In which case the Persian Pivot by Obama is an act of strategic genius – if…IF…we stay out of it.

    Even we sergeants were discussing turning them on each other in a 30 years war when we were over there in 06.

    If we don’t stay out of it then we’re fools. Most likely given our desiccated will we’ll stay out of it.


    Posted on April 30th, 2016 at 9:39 am Reply | Quote
  • Brett Stevens Says:

    Modernity is the era in which we deferred problems only to have them blow up in our faces later, only because those problems were unpopular and the Crowd — not our peers — would judge us. Now, as all of these problems detonate in order, we have the makings of an excellent systemic collapse and world war, followed by that much-desired “Berlin 1945 moment” for liberalism, democracy and egalitarianism.


    Posted on April 30th, 2016 at 10:42 am Reply | Quote
  • grey enlightenment Says:

    Fracking may put a lid on oil prices and technologies to lower the price per barrel for fracking profitability will further help lower prices

    The Saudis , who can produce oil very cheaply, actually want lower prices to put the shale companies out of business, which is why they keep pumping


    Posted on April 30th, 2016 at 12:34 pm Reply | Quote
  • SVErshov Says:

    interesting to note an opinion on negative comditions in politics of Zizek and his other collegues on the left (no disagreement amongst most of them on that):

    “Whereas we sometimes differ on how the emphasis is to be made, we each offer accounts of universality which assume that the negative condition of all political articulation is ‘universal’ (Ziiek), that the contestatory process determines forms of universality which are brought into a productive and ultimately irresolvable conflict with each other (Laclau), or that there is a process of translation by which the repudiated within universality is readmitted into the term in the process of remaking it (Butler).”


    Posted on April 30th, 2016 at 3:53 pm Reply | Quote
  • SanguineEmpiricist Says:

    Ah yes, the economic imperative of the price system itself is punishing any sort of feeble ally-enemy considerations, and so saudi arabia had to bear the brunt of said cost. Gnon wins once again!


    Posted on April 30th, 2016 at 4:07 pm Reply | Quote
  • Ananda Hohenstaufen Says:

    What, gritty analysis on Salon?

    Oh, its Michael Klare from Tom Dispatch.


    Posted on April 30th, 2016 at 5:23 pm Reply | Quote
  • Irving Says:

    Saudi Arabia doesn’t need high oil prices simply in order to maintain their own high standard of living and to maintain political stability within their own countries, nor do they need it only to fund their proxy armies in Syria and elsewhere who are fighting the Shi’a, and by extension Iran, for them. It is also to subsidize the otherwise economically unsustainable Arab countries, like Egypt, which, without those subsidies, would likely collapse.

    I mention Egypt specifically because it is the largest Arab state and the state is, in my opinion, not likely going to make it in the long run. Economically, it is a basket case, politically, it is incredibly unstable and under assault by both Western-influence progs and Islamic militants, and not, it is so weak that it is now being slapped around by Ethiopia, which is currently in the process of strong-arming Egypt out of its water supply through its dam construction and impending irrigation projects on the Nile River. Without Saudi subsidy, the collapse that I think Egypt will inevitably face will probably be very harsh.


    SanguineEmpiricist Reply:

    Why will Saudi Arabia make it? Last I heard there were stuck in some massive mess.


    Irving Reply:


    Saudi Arabia will collapse, my point though was that a collapse of Saudi Arabia means the collapse of pretty much the rest of the Arab countries that haven’t already collapsed, except maybe the UAE, which seems to have a pretty good leadership which has put their oil money to good use.


    SanguineEmpiricist Reply:

    Maybe what we need to find out is what the UAE was doing, or hell, didn’t do that saved themselves from this mess.


    Posted on April 30th, 2016 at 7:48 pm Reply | Quote
  • cyborg_nomade Says:

    so they’re gonna burn through all their reserves to try and fail Iran companies (and keep the old plan of breaking shale oil companies in the US)?

    if that’s that, I hope we have more oil than predicted. or that Musk gets on with his solar energy thing


    Posted on April 30th, 2016 at 8:24 pm Reply | Quote

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