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Saudi Arabia’s risk last week of leading the Organization of the Petroleum Exporting Countries (OPEC) into a concerted cut in its collective crude oil production, which would lead to even higher costs over a longer period, marks the end of the United States and the Middle East of the West. eastern dream. This dream, as discussed in my new e-book on world oil markets, began in earnest on May 26, 1908, when an oil drilling team led by British geologist George Reynolds discovered oil at Well No. Masjid Sulaiman. in Persia (part of modern-day Iran). ). The May 28, 1901 concession to Reynolds’ employer, William Knox D’Arcy, to explore, drill, produce, and export oil in Iran (excluding five northern provinces close to Russia) for an era of 60 years, included the provision that Persia was to obtain £20,000 in cash, £20,000 in percentages of the company operating the concession and 16% of the profits made through the first or any other company formed through that concession. Shortly after the discovery of Masjid Sulaiman, the Anglo-Persian Oil Company was discovered, and in 1914 a 51% share in the company was bought through the British government, and in 1954 it replaced its so-called British Petroleum Company. Around the same time, Mohammad Mosaddegh, the highly popular Iranian prime minister, nationalized the British company’s Iranian infrastructure assets and withdrew the new entity National Iranian Oil Company (NIOC). Shortly after, a military coup organized jointly through the UK Secret Intelligence Service (SIS) and the US Central Intelligence Agency (CIA) to build their control over the country, supported in particular through the United States. United States and the United Kingdom. A similar story played out in Saudi Arabia, the concession agreement whereby Iran’s share of pre-1951 oil profits of 16% seemed definitely generous. To secure exclusive rights to explore, drill, produce, and export oil to Saudi Arabia, Standard Oil of the United States made a one-time payment of US$275,000 in April 1933 (equivalent to just over US$6 million in the United States). present) in the Kingdom.
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For the countries of the Middle East, those facts – to this day – remain well known and express their point of view on relations with the West, which has long been seen as an occupant of the region to exploit it. its oil and fuel resources for as long as possible. the least expense possible. The first signs of widespread and concerted action across Middle Eastern states to counter what they saw as the West’s control over their herbal resources made their impression with the formation of the United Arab Republic union between Egypt and Syria of 1958 to 1961, the formation of OPEC in 1960, the series of conflicts with neighboring Israel for the constant period, and then the oil embargo of 1973/74. During this embargo, well, the first “oil value war,” as I also discussed in depth in my new e-book on global oil markets, OPEC members plus Egypt, Syria, and Tunisia began blocking oil exports. oil to the United States, the United Kingdom, Japan. , Canada and the Netherlands. It was in reaction to the US supplying Israel with weapons in the Yom Kippur War that it fought against a coalition of Arab states led by Egypt and Syria. The effect of the oil price increase was exacerbated by the slow cuts in oil production by OPEC members during the constant period and until the end of the embargo in March 1974, the price of oil increased from around USD 3 per barrel (bp) to almost USD 11 bp. and then got up again. The then Saudi Minister of Petroleum and Mineral Reserves, Sheikh Ahmed Zaki Yamani, widely credited with formulating the embargo strategy, under pressure that marked: “A basic change in the global balance of forces between emerging oil-producing countries and trading countries evolved”. . nations that fed on it.
This story and those concepts are exactly where the global oil and fuel market is at right now, and exactly why the current Saudi Energy Minister, Prince Abdulaziz bin Salman, said what was on his mind about the OPEC was willing to reduce crude oil production and, through extension. , see oil value increase for longer. For decades, this tension of petronationalism had been largely mitigated through the agreement canceled on February 14, 1945, in an assembly between the then United States. President Franklin D. Roosevelt and then-Saudi King Abdulaziz. The deal they reached, which had been the basis of all American policy in the Middle East until very recently, was this: The United States would get all the oil materials it needed as long as Saudi Arabia had oil in return. so the United States would guarantee the security of the ruling House of Saud and, by extension, of Saudi Arabia. On the US side, this deal was especially undermined when the Saudis launched the 2014-2016 oil value war, which aimed to destroy or disable the then-fledgling US shale oil sector. On the Saudi side, the key initial turning point came with the US-sponsored “nuclear deal” for its longtime enemy and great regional rival, Iran. Behind-the-scenes moves toward this deal begin around the same time as the start of the 2014-2016 oil value war, with the deal reached in 2015 and implemented in 2016.
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It is also this story and these ideas that are being used in Russia and China to stir up further discontent in the region. Russia’s foreign policy is largely about creating chaos and then projecting Russian solutions and force into that chaos, and China’s overall foreign policy, as a component of its multi-generational program of appropriation of force. “One Belt, One Road” is composed of projecting money and strength into this very chaos. Ironically, as I also discussed intensively in my new e-book on global oil markets, it is a strategy that countries copied from the United States National Security Advisor (January 1969 to November 1975) and the Secretary of State ( from September 1973 to January 1977). ), Henry Kissinger. Kissinger, a brilliant geopolitical strategist, was one of many American politicians who understood that the 1973 oil embargo had marked a fundamental shift in the global balance of power, just as Sheikh Yamani had said, and tried to ensure that this would never happen. again. Without having sufficient quantities of oil, the United States had few options to continue dealing with countries in the Middle East, however, according to him, the United States can also exert influence on them if they can also be weakened through their department This department can also be beyond nationalist borders, as underlined through the US sponsorship of the 1979 Egypt-Israel peace treaty, which wreaked havoc in the Arab world, as did the subsequent assassination of the Egyptian president in 1981 who signed the deal , Anwar. A lot of time has passed. Or it can also be done intra-nationally (and intra-regionally) by stoking devout sectarian tensions in key target countries such as Iraq and Syria, especially of late. Kissinger’s policy of “constructive ambiguity” is now used in Russia and China, but with the dual objectives of expanding their hydrocarbon strength (through increased source access and distribution and pricing) and pitting the Middle East against each other. opposition to the United States and the United States. the West (using the ancient preconceptions of the Arabs discussed above).
Given Kissinger’s clever use of strategy against the United States, there is no explanation for believing that the ongoing shift in the Middle East toward the Russia-China axis of influence will not continue. Since the withdrawal of the United States from the “nuclear agreement” with Iran in 2018, its withdrawal of troops from Syria (2019), the speech of President Donald Trump shaper “to end endless wars” (2020), its total withdrawal from Afghanistan (2021) and Since the end of the draft fighting in Iraq (2021), there have been multitudes of large, multifaceted, weekly agreements between Middle Eastern countries and Russia or China. Most notable, perhaps, in all of these cases are those involving Saudi Arabia. These have grown in importance and intensity since Russia came to their aid at the end of the 2014-2016 oil price war to bolster the then-shattered influence and reputation of Saudi Arabia and OPEC, to shape “OPEC+ “. These Russian measures were escalated through China through what Saudi Crown Prince Mohammad bin Salman still sees as a huge private favor done for him by Beijing to enable him to save face for his disastrous plans to float Aramco. For Saudi Arabia, severing essential ties with the United States as much as possible will also allow it to keep the value of oil at its peak, exactly where it wants it, and it wants it for its own economic benefit. and geopolitics, and neither be beholden to the United States. (or Western) economic or political imperatives to maintain power values are lower than they are now.
By Simon Watkins for Oilprice. com
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