LEVERS OF INFLUENCE

LEVERS OF INFLUENCE

June 11 in Vienna next meeting to be held the countries - participants of OPEC. It to individual countries - Iraq, Libya and Iran can be formally agreed to increase their export quotas . These quotas country partially lost at different times due to several factors - the hostilities , internal conflicts , international sanctions.

 

To date, total exports of OPEC quotas on at the level of 30 million barrels per day ( mb / d ) , exceeds that in March - 30.3 mb / d in February - 30.49 mb / d This is due to the dynamic growth of production in Iraq - to the highest level in 35 years , that is, before the start of the Iran-Iraq war of 1980-1988 . !

 

While OPEC refrained from commenting , will it be possible to increase the total quota , limited reference to the fact that global oil demand this year rise by 1.1 mb / d The International Energy Agency predicts an increase in demand for the current year 1.4 mb / d - up to 92.7 mb / d , which is associated with the improvement of the macroeconomic state of the global economy.

 

Meanwhile, the three named countries hold an active policy of increasing production . Potential for production increases and, consequently, exports may be 1 million barrels a day over the next one to two months . Undoubtedly, all three countries will make all possible efforts in order to maximize the export quotas . And here the important position take on a momentum of other major suppliers, including Saudi Arabia, is the clear leader to increase production . And its potential impact on the oil market kingdom demonstrated twice - in 1973 and 1986 , with global implications .

 

And here may appear consistent with the U.S. policy . According to the results of a one-day official visit to Saudi Arabia Barack Obama have not made any official statements about the possible use of " punishment petrodollar " Russia . There is no information about whether the two leaders agreed regarding synchronization efforts with the introduction of economic and energy sanctions against Russia . However, both sides agreed that the oil leverage may be applied only in response to a further escalation of the Ukrainian conflict and, if possible , in a limited dimension, because it threatens the financial losses not only for Russia but also for Saudi Arabia.

 

Nevertheless, the theoretical commitment of the parties to the use of leverage over oil RF confirm the following information:

• According to estimates Bank of America Merrill Lynch, Saudi Arabia to balance the budget expenditure needs an oil price of $ 90 within the barrel ;

• Saudi Arabia holds the potential to increase the volume of oil exports in the amount of up to 1 mb / d to the current level of production ( in 2013 - about 9.6 mb / d );

• permission to use the U.S. Strategic Petroleum Reserve (US SPR) can lead to a drop in oil prices at $ 12 per barrel on the world market ;

• uncritical for the U.S. and Saudi Arabia, lower prices will lead to financial losses for Russia during the year of about $ 40 billion , which will result in the state budget deficit and a negative GDP .

 

However, the United States and Saudi Arabia are hoping that in the next period they will not have to apply their own mechanisms of influence on the world price of oil. Instead, it can make Iran, which should resume oil supplies to Europe and confirms announced plans to increase production from 2.7 to 4 mb / d in 2014, without reference to the price level . Iraq has also has similar plans to increase oil exports to 1 mb / d by year end. Overall, Iraq's ambitious plans are to increase production thrice - to 9 mb / d in 2020, Iraq intends to press Saudi Arabia and become one of the top playmakers in the world oil market.

 

We can expect that by the end of May this year the price of oil could fall to $ 07.05 and that will have an actual impact on the Russian Federation. Deter Iran from building up oil exports to the world market for Russia will be almost impossible , as the country is in dire need of financial resources. U.S. sees the main task of countering any attempts to slow down the process of negotiations with Iran over its nuclear program failure and, consequently, the lifting of sanctions , for what now can stand the Russian Federation. It should be noted that Saudi Arabia does not share the U.S. perspective on the possibility of maintaining control over Iran's nuclear program and considers it premature lifting of sanctions on oil exports . But if Iran still resume oil exports , it will be an additional incentive for Saudi Arabia to increase exports and undercut to prevent the growth of financial income and , accordingly, Tehran 's geopolitical ambitions like Moscow dreams.

 

Up to U.S. President Putin and joyful mood after D.Kerri Riyadh - very revealing and testify in favor of the conversation about the prospects for Russia to undergo " punishment petrodollars " was . It should be recalled that the punishment petrodollars USSR also happening simultaneously . It took several years before the United States and the West realized that the invasion of Afghanistan - a long time. And just in time in Saudi Arabia, making sure that Iraq , Iran is not stopped, turned to the "oil weapon " - the beginning of the active expansion of exports . Other countries have picked up this trend by trying to keep the volume level of foreign currency earnings .

 

Is it possible to achieve the same effect in the current situation ? Will it the desired effect ? These issues are set in Ukraine, Europe , Asia, America ... What can be stated with greater or lesser measure of confidence is the fact that a simple copy here nevozmozhno.Lyubye historical parallels are inaccurate . In today's situation has a number of features .

 

First of all, none of the Cold War , when the West was sufficiently consolidated in the confrontation with the USSR. But the war is not far off . And it is not cold and hot . Practically it is already underway. Just as the German aggression in Europe began with the Anschluss of Austria and Russia's aggression started with the gradual annexation of Ukrainian lands. With a range of special operations consistent with the use of force and the widest possible use of military means - information and resource influences both the victim countries and the others. Resource influence Russia beat the ranks of individual countries protesting against Putin's aggression. Bulgaria and Slovakia - good examples of this . Although the official position of these countries is close to Brussels , but in practice they passively contribute Russia .

 

All countries - exporters of oil in the turbulent times of change is much more sensitive to changes in the revenue part from oil exports. Here " pain threshold " Russia may be even lower than that of countries - members of OPEC as a deliberate government propaganda allows us to represent a significant part of the economic difficulties in the form of the destructive influence of the enemy of the West , whereas a significant drop in revenues in Saudi Arabia can instill fears of unrest following the example other countries which hosted the "Arab Spring ." The reason for this , among others , there were failures in the financing of social programs to which people are accustomed . Accordingly , this country is largely interested in the controlled process changes in oil prices .

 

Countries - exporters of oil , of course, interested in maximizing revenue. This is especially true of Iran , tried to compensate for the loss of sanctions and catch up , and tend to act by increasing the volume of exports.

 

Unreasonably increased the influence of multinational companies, especially European energy concerns , the priority of which is profit, not the defense of democracy . Question the origin of money , which funded projects proposed by Russian companies , it is slowly becoming the subject of rigorous study . For example, even very obvious abuse , committed "Gazprom" against a number of Central European countries is still not reflected in the specific findings and punishment of offenders , although the Commission has had to do it .

 

Arab countries would be most acceptable to the eve of OPEC meeting an agreement was reached between the U.S. and the EU to impose sanctions in the form of at least a partial rejection of the acquisition of Russian oil and its further substitution Arab supplies , for example, the Iraqi oil grade Kirkuk, close to the Russian export mixture Urals. In this controlled release to the market of American stocks could help to reduce the price to an acceptable level for the Middle Eastern countries , while Russia will face the problem of guaranteed long-term decline of foreign exchange earnings and the need for marketing the surplus oil. In parallel, it is necessary to restrict imports of gas to the EU.

 

Now ambitious agreement with the Russian Federation " oil-for- goods" looks unattractive for Iran. From talks in May sanctions relief may depend even from the U.S., not to mention the potential is quite quick resumption of cooperation with European energy companies . Landmark for Iran in the current year was participation in the Davos forum , where he headed the newly elected President of the Iranian delegation drew on the order of a higher level of attention than the Russian .

 

On April 14, during a conference in Dubai Deputy Oil Minister for Foreign Affairs and Trade Ali Majedi said that being competitive in the global oil market , Iran and Russia are progressing extremely difficult negotiation process , so in the short term should not expect any - or radical shifts. Even if Iran , as before, has plans to continue its nuclear program, more profitable for him to distance himself today , as far as possible from the Russian Federation. If the EU and the U.S. will apply a third package of economic sanctions against Russia and limit the import of Russian hydrocarbons , Iran will be able to recover some of the lost markets in Europe without apparent competition with Russia . Moreover , the continuation of the policy of peaceful settlement would allow Iran to create preconditions for attracting European investment and return energy companies with new technologies. Having generally sufficient study of the structure of deposits of gas reserves in South Pars , Iran can very quickly build up its prey. After the change of political leadership Iran managed to dissociate themselves from the tutelage of some of the Russian Federation , which is an additional incentive not to rush back again to the relations that could harm H.Ruhani plans to realize the slogan of his presidential campaign to increase the economic attractiveness of the country and attract international investment.

 

However, contrary to competition among oil exporters , the main role is played not so. According to some estimates and projections , the main role is played by increasing competition between coal , oil and gas. High oil prices and the financial crisis of 2008-2009 . renewed attractiveness of coal. High oil prices , shale gas revolution , the need to reduce CO2 emissions have increased the attractiveness of natural gas from both traditional and non-traditional sources . Now in the U.S. and Canada continues next wave of revolution - shale oil . To maintain its position in the global energy balance , countries miners conventional oil will have to managed decline in oil prices in order to make the extraction of unconventional oil and marginal increase the competitiveness of conventional oil compared to coal and gas. And the one who will make the first steps of lowering and will win. Probably , Saudi Arabia, UAE and Iraq can do it first.

 

Energy exports - the basis of Russia's foreign trade , while its weak spot , because mainly oriented to the EU market , where it receives the lion's share of foreign exchange earnings . According to the Russian Federal Customs Service in 2012 , exports of energy products brought Russia 69.8 % of total revenues of Russian exports as a whole - 366 billion dollars of the total 524.7 billion in oil exports brought $ 180 billion , petroleum products - 100 billion , gas - 63 , coal - 13 electricity - $ 1 billion

 

Therefore, the EU has a unique opportunity to use grown Russia's dependence on the European market as an element of pressure . The EU should take the decision to reduce the import of Russian gas , oil, petroleum products and coal. It's time to wrap " energoresursnoe weapon" against Russia itself. Over 70 % of Russian gas exports and 87 % of oil closed on the EU. And the EU quietly gone without Iranian oil. A Russian coal can be substituted on the EU market to American , which is becoming more and more due to the shale gas revolution in the U.S. , as well as Colombian , Australian , Indonesian .

 

Russian Export gas, oil , and largely focused mainly on petroleum pipeline capacities and terminals aimed on the EU. They will not be deployed in Asia for several years , it is necessary to build new highways , what need of money and time - at least 10-15 years .

 

U.S. and EU should make an effort to accelerate the adoption of the necessary decisions on projects LNG export from the U.S. to the EU. Algeria , Oman , Yemen , Norway and others have underutilized capacity LNG . They can be used to replace Russian gas supplies. Existing capacity LNG- terminals in Europe may take additional volumes of gas . Possible and freeze all construction projects of Russian design nuclear power plants on the territory of EU Member States .

 

By the EU and member countries may sound a categorical refusal of Russia in the project "South Stream" as preserving the monopoly provider, and does not increase competition. As Western companies, especially American "Chevron" , able to abandon the pipeline expansion project of the Caspian Pipeline Consortium's Tengiz -Novorossiysk pipeline passing through the territory of Russia. Then the flow of oil from Tengiz can refocus on the Baku-Tbilisi -Ceyhan oil pipeline , which is currently underused .

 

EU must deliver to Russia categorical requirement to provide free transit of Turkmen gas to Europe under WTO rules.

 

Strategic blow to Russia would freeze for the next 50 years to develop oil and gas deposits in the Arctic, which may be initiated by the EU.

 

According to recent reports from Bulgaria, the pipe "South Stream" dismantled the installation site . If they do not assemble in another place, it means the beginning of a real decline in Europe's energy dependence on Russia.

 

 

World media monitoring

 

 

 

 

14.05.2013

 

 

 
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