(Reuters) - A Libyan navy ship was hit and 13 people killed during heavy fighting with aircraft and tanks on Monday between the army and Islamist militants near the port of Benghazi, residents of the Mediterranean city said.Its off the front pages but the world continues to burn. What seemed to be just another run of the mill insurgency is taking on the look of the fighting in Ukraine, with almost conventional style forces engaging in combat.
The battle was part of a wider conflict in the North African state where former rebels who helped oust dictator Muammar Gaddafi in 2011 are fighting for power and a share of Libya's large oil revenues.
Army special forces, backed by troops of an ex-general, launched an offensive in the Benghazi area two weeks ago against Islamist militants blamed by Washington for a 2012 assault on the former U.S. consulate which killed the American ambassador.
The Red Crescent evacuated 53 foreign workers and 14 sick people trapped inside a hospital next to the port, medics said, while the army moved more tanks and artillery into the city.
A Reuters reporter could see smoke rising from the port, an important conduit for food, wheat and fuel supplies to eastern Libya. A security source said the unidentified navy ship was sinking but this could not immediately be confirmed.
All this and yet gas prices continue to fall.
How do you explain it? Where is all this excess capacity coming from?
UPDATE: Fox Business is speculating that the Saudi's are trying to kill the shale oil boom in the US. They fear both the US becoming energy independent AND a competitor on the global market. It makes sense but that would mean that this shaky ally is actually attempting to hurt our economic interests. That takes them from shaky ally to outright enemy.
Solomon, pardon my confusion on this but what actualy qualifies as an Army/Govt. Force in Libya nowadays ? Its not ignorance but genuine confusion as to what group of people or what militia structure identiy themselves as the main Govt. Force ?
ReplyDeletewhatever group the western nations supported when the push to overthrow Khaddafi was in play. if you lined them up side by side we probably couldn't tell the difference but thats what happens when you push an agenda and don't have a plan.
DeleteApart from the US, which is booming, most of the world is stuck in / near recession.
ReplyDeleteSo demand is low
The Saudis are pumping everything they can to bankrupt Russia
So production is high (Libya is producing quite a lot, the fighting hasn't progressed to scorched earth yet)
The dollar is starting to appreciate heavily as well
So its all downside for oil, to a point of course.
The US financial sector is the only thing booming. But that's because the Fed is basically handing them free money.
DeleteNot to mention the huge drilling that is currently going on in the Dakotas
ReplyDeleteFox Business is speculating that the Saudis are trying to kill the shale boom. they don't want the US to become independent.
DeleteIf that happens, and the Saudis really become a enemy, I'm pretty sure a extreme makeover will happen in the middle east.
DeleteThe Saudi Royal Family is an ally...Saudi itself, not so much. Surveys show about 30% of the population are fans of the Islamic Fascists. The West is popular among the ruling class of oil execs, banker, etc. most of whom have lived or been educated overseas. Their power resides in the oil. That is why the Saudis are buying military equipment like crazy now. If oil starts to bottom out in price and the Saudi economy goes in the dumper, you will see the "Arab Spring" in Arabia with ISIS and Al-Caida on the side of the revolution.
DeleteThe Saudi's are trying to hurt region rival Iran not the Americans. Fox Business is wrong and they are making it all about the American's and not seeing the bigger picture of Russia and Iran battling for influence right now.
ReplyDeleteBelmont clubs Richard has a good video of gopro tank action in Syria from youtube.
ReplyDeleteModern tank and AFV warfare on the fly.
http://pjmedia.com/richardfernandez/2014/11/03/the-dreaded-gopro-tanks/#more-40260
This move by the Saudi's is a part of the current Islamic world war they are fighting within Islam.
I don't think they much care about an impotent America at this point they are after a deadly enemy, each other.
The Saudis and US are working together. The US/Saudi break point on oil production is between $70-$80 per barrel. It is a game of chicken because Iran and Russia's break point is north of $100.
ReplyDeleteThat means right now this instant Russia is not going to be doing that military reboot, Iran is going to be even more stressed to keep the people under control. If this goes on for long both Russia and Iran will be in high danger of revolution as the payoffs and skimming to keep the cronies fat and happy are either eliminated or cut into the gen pop's basic life. Venezuela is another one taking it raw.
Bottom line cheep oil means boom to the western and Chinese economies which produce things and work, while at the sametime it clips the wings or outright endangers the tin horn oil dictators that appose our way of life. Win Win. The Saudis dog in the race is their enemies right now are our enemies Russia (supporting Assad/Iran), Iran (well that one is even older than the Muslim/Jew beef). I know what about ISIS and the soup of other radicals well one that group has no long term prospects to many major enemies but in the meantime they are useful to the Saudis and region to bleed their enemies (Iran/Assad/Shia) while at the sametime help identify and drain the radicals in their own nations. Only thing better than the pleasure of killing your enemies is getting to give the means to two enemies so they can bleed eachother dry.
if you and the others are right then i'm worried. name one of those clandestine power plays that worked out as planned?
DeleteI don't get your point. Not saying its a great super conspiracy just saying that the main players creating the change in oil all are motivated to keep it going and not motivated to stop it. It just happens to line up were it looks like a pre-planned event but in reality it is just multiple events and incentives lining up.
DeleteFox's theory that the Saudis are targeting the Shale boom is reasonable but they are not doing it through low oil. First Oil will have to go south of $80 to stop further US development from a financial perspective. Second the Saudis are fighting that war through the useful idiots in the green movement Al Gore selling out to the Gulf states, and the huge funds the Saudis have poured into the green energy movement.
I don't get your clandestine power play reference. What is the down sides you see to low oil? Personally when I look at events I look first for the US interest, then our allies interest, then finally our enemies interest. I don't see the downside on low oil for our interest (GOOD), our allies (GOOD), but then our enemies I see a huge loss (GOOD). I call that Win Win Win.
Do you have a negative I am missing?
the negative is that we don't know how these nations will respond to the Saudi attempt to manipulate oil prices...especially considering the fact that they're dependent on oil at a certain price to maintain stability.
DeletePutin invaded Ukraine for whatever reason. it surely didn't have anything to do with the economic security of his nation. how do you think he will respond if his intelligence services are telling him that in addition to the US and Europe slapping sanctions on his country, that the US and Saudi are jacking with oil prices?
they made a move on Afghanistan back in the day. do you think some type of punitive move against the Saudi nation would be out of the question? i'll tell you one thing though. if this is true then it explains the increase in Russian air activity.
we're being warned off . so would i rather a fairly stable three fifty a gallon gas or a price deep to two fifty followed by a zoom to five? give me the stable everytime.
Sol, I'm on the same page here as C-Low. My 2 cents ...
DeleteIf we take the entire Middle East as the playing field, and accept that Gen Wesley Clark's recollections about a plan to attack various countries in the Middle East for reasons other than stated (fighting terrorism) is true, then the intention was to deliberately destabilise the region, not pacify it.
Clark vid: https://www.youtube.com/watch?v=9RC1Mepk_Sw
The push to attack Iraq, using the cover of fictitious WMDs, with no work done on post war occupation, makes sense. If we go for the oil narrative on this one, then it's not so much about possessing the oil but also stopping it being sold in anything but US dollars. That is one clandestine power play that worked out fairly well for the political planners who set up systems to sell the war (ie the Office of Special Plans in the Pentagon, and the White House Iraq Group inside the WH to deal with the media aspect) plus they set the overall strategic parameters of the military operation.
The initial Libyan revolt is possibly a less clandestine affair where an uprising (which some commentators have questioned) in the East of that country was overwhelmingly supported by NATO such that Gaddafi's regime was overthrown. Overthrowing Gaddafi put an end to his oil dealings with the Chinese and his plans for building an African trading bloc that would have used a gold-based monetary system. The post war chaos again falls into an overall plan to destabilise the region.
When it comes to Syria there are reports from people like the journalist Seymour Hersh and ex-French Foreign Minister Roland Dumas who stated that efforts to overthrow Assad in Syria were underway from 2007 and definitely from 2009.
This is an interview with Dumas spilling the beans on French television, recalling that British officials were seeking to recruit him in a regime change operation (the other grey haired guy in this clip looks pretty pissed off with Dumas):
https://www.youtube.com/watch?v=Kz-s2AAh06I
Early in the Syrian conflict we know that unidentified snipers opened fire on the crowds, which were reported as being government snipers, but I never saw any hard proof of this (just as the snipers doing the initial shooting in the Kiev protests, where both police and protesters were shot, were not IDed). This is not to say that Syrian security forces did not themselves fire on groups of protesters, but it seemed like what was occurring could fit into a method of provocation - something falling under the agenda reported by Clark, Hersh and Dumas.
END of PART 1
There is also the issue that the NATO airbase at Incirlik in Southern Turkey that was being used very early by defectors to support the 'uprising' in various part of the country - that the Turkish border was open allowing arms and fighters to freely move into the war zone.
DeleteA report from late 2013 reveals the Turkish government's role in directly supporting the war:
http://www.voltairenet.org/article181676.html
In 2012 there were reports in The Guardian and Der Spiegel newspapers that US, French and UK advisors were training anti-Assad fighters (ISIS members) how to use anti tank weaponry in Jordan:
http://www.reuters.com/article/2013/03/10/us-syria-crisis-rebels-usa-idUSBRE9290FI20130310
So, it sure looks like this is evidence of the (clandestine) plans to destabilise the various countries named by Gen Clark. And it looks like the plans have worked out reasonably well.
Insurgents and failed states, in the open desert terrain, do not pose a serious threat to neighbouring governments - their presence justifies neighbouring regime militarism and the strengthening of their police states (these places are not democracies as we all know). So far the fighting is only leading to massacres of people within the targeted countries.
The fighting certainly serves the interests of Saudi Arabia that can either raise or lower oil prices as they see fit. At present the aim seems to be to undermine the Russians and Iranians. War in the Middle East and North Africa has also served Europe and the US by driving out Chinese influence in these regions.
This is one take on events that helps make sense of the mess and the shaky alliances - where under the table the countries involved have overlapping agendas.
Actually, I'm not on the same page as C-Low .. my take is that these actions involve a slightly higher level of cooperation. I was typing this up and didn't see the recent comments. I can include a lot more links if needed to support this point of view. I've put it out there, people can make of it what they want.
Deleteyour theory is actually more disturbing than C-Lows! you do realize that if what you're saying is true then we're already involved in a low grade world war with China. first economic gamesmanship and then conflict. that was the seeds that led Japan to attack in WW2 and it seems like history is slowly repeating itself.
Deletegive me a day to dig through the links and i'll get back to you.
I remember that before 911 the Bush Administration was directing a lot of attention towards China. An ELINT bird was forced down as I recall. Confronting China in any capacity is gonna be messy. Imported goods will have to be made 'at home' or from another location.
DeleteI had a typo in the above section: ... There is also the issue that the NATO airbase at Incirlik in Southern Turkey [that] was being used very early by defectors ...
A link to the use of Incirlik as a staging area can be found here:
http://www.boilingfrogspost.com/2011/11/21/bfp-exclusive-syria-secret-us-nato-training-support-camp-to-oust-current-syrian-president/
The denials of it's use don't seem credible. It's best to read that really short article to get the point. Thanks for taking time to consider the material here.
Spooky - that is a huge bundle of strings requiring thousands of participants who all must keep the secret secret. I just don't buy it to complicated to many actors.
DeleteSolomon - What exactly do you see as a threat, Putin/Russia, Iran, what would they do? Their options are limited unless they are going martyr, Iranian mullahs maybe but not Putin, he is not stupid. Putin is calculating he knew full well O would not challenge him over Ukraine and the EU were just bark without the US. The fact Ukraine solidified and rolled the "rebels" back so quickly was a low odds surprise.
Also don't forget that all these nations do not want direct war with the US. Whether it Russia or Iran a direct war with the US will be their undoing with negative odds of anything short huge cost and questionable regime survival.
Iran has the odds to go martyr but they are at a low of power already. Hezbollah/Assad are tied down with Assad in a struggle for survival. Hamas is a isolated irritant that while expensive is not a real threat. The Gulf states have bulked up to defend against Iranian direct military attack. The sunnis are fighting the shia across the me draining the Iranians resources. Low oil while it hurts and further strains Iran's resources it is not a game ender pushing them into a hell mary martyr.
C-Low All I'm doing is presenting information that I think points to a larger picture of events. The material at the links is real, each point complements the others, and is individually credible. I can't avoid it, and I'm simply sharing what I've discovered.
DeletePerhaps the most important aspect to consider here is the admitted fact that the Saudis are supporting the insurgents in Syria. They have admitted it publicly. Recently, in late 2013, there was a report in The Guardian (http://www.theguardian.com/world/2013/nov/07/syria-crisis-saudi-arabia-spend-millions-new-rebel-force) about the Saudis wanting to train a separate jihadist group, made up of existing groups, to fight both Assad and Al Qaeda. The problem is that the alleged moderate forces have been cooperating with the more extreme elements, on and off, during the course of the conflict. Just days ago it was reported in the Telegraph that one of the moderate rebel groups had surrendered their equipment to Al Qaeda: http://www.zerohedge.com/news/2014-11-03/not-again-us-trained-syrian-moderates-surrender-jihadists-hand-over-heavy-weapons
This meddling in the Syrian War involves Prince Bandar, their intelligence head, who is a friend of the Bush family (aka Bandar Bush). Please remember that Bandar is connected to sections of US intelligence. Recently Prince Bandar was replaced by Mohammed Bin Nayef because he failed to properly manage the situation in Syria. The wiki page on Nayef states this fact, but also contains material showing he was targeted by Al Qaeda (allegedly). I don't know if this Nayef guy was really targeted in an assassination attempt, but I do know that the Saudis are recklessly supporting jihadists in the war, and I do know that the Turks are doing similar things from reports of arms and fighters crossing their wide open border into Syria. Not everything is kept secret though, because we do have information leaking out about what's going on.
And the idea that individual private sponsors in Saudi Arabia, and not the government, are responsible for running a proxy war hides the fact that these rich Saudi donors are part of the extended family and government.
I don't know if there are thousands of players here keeping secrets, but there are certainly a number of indications that a few people are pulling the strings of useful dupes - like the extremists who believe they are building a new Islamic state, on the blood of their fellow Muslims. The other side of the coin is that a proposed Iran-Iraq-Syria oil pipeline was derailed.
I'm sure that elements within the US political/intelligence community approve of these activities, since, as Wes Clark mentioned, Syria is on the hit list.
In terms of the oil price manipulation - I think it is very likely that there is an agreement to not step too harshly on each other's toes whilst undermining the opposition - like Russia and Iran. There is no real government in Saudi Arabia, only a rich elite that makes decisions and has personal contacts with high level people in other Governments. As TtT pointed out below there are mutual targets of a low oil price, and no problem to the US shale oil program so long as the oil price does not go too low and that, in the event of excessive US production, that this oil is not exported. There are already sanctions on Russia and Putin has come out recently to say that the low oil prices are going to hurt 'everyone' - which means it's hurting Russia.
I don't think there's gonna be any large scale overt conflicts just continued attempts at internal destabilisation and eventual regime change in all the rival nations.
It doesn’t have to be a clandestine plan for oil prices to come down. And if there was a US/Saudi oil arrangement, they’re doing it wrong.
ReplyDeleteLowering the price of oil is not good for Saudi Arabia. Although Sharia is technically the law of the land in Saudi, it is really just the law of the land for the poor and middle class. The rich and politically connected live by different rules. Same goes for Bahrain, UAE, and others friendly to the US. But they face the same problem with extremists everyone else does. Saudi Arabia’s solution has been to buy them off, and of course enforce sharia on most of the population. When bribery fails, they turn to the military and intelligence operations. All three-bribery, military, intel—require money. As they used to say in NASA “no bucks, no Buck Rogers”.
But the Saudis can’t really control basic capitalism; supply and demand. The US is making more oil. In fact everybody is making more oil. In the US, the Dakotas have plenty, and some think that there may literally be oil in every state in CONUS whether it is crude oil, oil shale, or even coal gasification. New Oil has been found off the coast and in the jungles of South and Central America, all over Asia and the Pacific. Heck, the tiny country of Belize may be energy independent in a few years as they found oil in part of their country. If the US ever opens up Alaska, and Canada continues to find more oil (and they are) North America will return to the status we had before WW2; the world’s largest producer of oil.
The not-so clandestine thing between the US and Saudi is that we are selling them more weapons than ever before. This is to keep the Saudi regime in power, even if prices drop further. It is why the Saudis and other Arabs are actually fighting ISIS. They have to be seen themselves as being able to fight off the extremists as a warning to their own people. Remember: bin Laden and the 9/11 hijackers were nearly all Saud.
The Saudis can afford 7 years at $80 a barrel with current spending, and selling their US treasuries.
DeleteThere are 4 targets to Saudi oil policy
ReplyDeleteThe first, is the axis of blowhards.
People like Iran and Venezuela, loud mouthed and verbally aggressive towards the arabs, treating them as junior partners in OPEC when the reverse is true. (Think the UK lecturing the US on COIN as it was rapidly losing control of Basra and Helmand).
They need oil prices over $130 to balance their books.
Irans dreams of a united Islamic state ruled from Persia are rapidly being replaced by hopes of being able to import food next year and thats not an exaggeration.
Russia
The Saudis offered Russia an OPEC 2.0
Russia responded by leaking the memos hoping to embarrass the Saudis.
No one cared, except for the Saudis, who want blood. The Russian budget starts to look very shaky at $100 a barrel.
US Shale
The Saudis can tolerate the US becoming self sufficient in oil and gas
They cant survive the US exporting it in vast quantities.
Its no more "enemy" than the US putting pressure on allies who look at the Typhoon, Rafel and Griffon rather than the F35.
Knock it back a bit or tie the US in to an OPEC type body.
Solar
The Saudis have long been of the opinion that the stone age didnt end because the world ran out of stones (fun fact, it did), and that the oil age wont end because the world runs out of oil.
Solar is officially, under very specific circumstances, competitive in a free market with oil.
Now, that is long distance truck tankering and and two stroke cart generator at the end, but, the winds they are a changing.
Those small areas jump every time oil price goes up, and grow everyday as solar is further refined.
They may have decided $80 today beats $40 tomorrow
"I'm a yankee doodle dandy, yankee do or die, A real live nephew of my Uncle Sam, born on the fourth of July!"
ReplyDelete>George M. Cohan/James Cagney in Yankee doodle dandy 1942<
I paid my land tax and voted on the same day, I'm the favorite nephew of my Uncle Sam today!
Ok here's a few thoughts. First of all the Chinese are loving lower prices. The Chinese government, along with Indonesia and India spend tens of billions of dollars a year to subsidize oil prices for consumers. Their gasoline prices do not go up and down with the market, so what the new government in Indonesia lead by Widodo and in India lead by Modi have (very wisely) done is not lower prices and use this decline to star to wean the population off of subsidies. Indonesia and India will use the savings to build infrastrucutre which they desperately need. Who knows what the Chinese will do. Also. shale wells have high decline rates. A Bakken North Dakota well starts out producing 2k barrels a day, but within a year it is more towards 300 barrels a day or less. This is why the cost of shale oil is in the 40-70 range instead of the price per barrel in the Middle East which is often less than 10. If the oil prices get below 65 you will see drilling stop, and within a year the production will decrease dramatically, and the price will then rise again. Sol, no need to worry about prices of gasoline rocketing back to 5 bucks. You would see a massive supply response if prices started rallying again. 5 dollar gas implies West Texas crude north of 140. If that ever happened even the garbage shale fields would be gold mines and production would go nuts.
ReplyDeleteThe subsidy thing is right. It was eating us alive. Our subsidies on 3 vital sectors- Food, Fuel and Fertilizer were and still are eating us alive. More than 40 Billion USD and counting. Thats bigger than our Defence Budget with neighbours like Pakistan, China and Burma. The food subsidy alone is worth 19 Billion USD and a chief irritant whenever WTO talks happen. The Fuel Subsidy in India is worth around 10 billion USD.
DeleteAdd to that fact that the Rupee isnt the same dtable 40-45=1 dollar currency anymore. Its a 58-63=1 dollar currency. Even if a billion dollars are saved from the overall subsidy bill thats a quantitative easing of the Rupee to the extent of Rs.6000 Crore. which is a heck of a lot of money in Indian terms. You could wipe out AIDS in India with that kind of money if spent correctly.
The funny thing about subsidies in India is that the Govt. tells you to sell at a price deemed best by it. Companies then sell their product/services and keep records of the sales which are then sent back to the govt. so that they can make recoveries of the "Margin" money i.e the difference between a profitable market price and the Govt. set price. And thats where the trouble starts. At the end of each year, the Govt. owes the Private and Public sectors Billions in Margin Money. You never get the margin money on time. Its always years late and even then the Govt. expects you to take a slight discount in what you are legally supposed to get from them. And nobody is even counting the opportunity lost on Interest Accumulation on that sum.
Far from helping the people.....these biblical scale subsidies are actually taking a huge big amount of Money away from our Formal Banking sector and General Economy and just locking it up in red tape and litigation.