Well, President Joe Biden has just gotten another kick in the teeth from our loyal friends in Saudi Arabia. This week a group within the OPEC+ revived petroleum cartel announced that they would be cutting production quotas by over 1.1 million barrels per day for the remainder of 2023. So much for the Treasury/Fed efforts to “fight inflation” while throwing the US regional banking system into turmoil. Goldman Sachs immediately revised their estimates of oil prices this year back over $100 a barrel for the duration–and that is assuming there is no new Gulf crisis or other disruption.

Russian President Putin is one of the beneficiaries of this new quota. Russia has already cut their output by over 500,000 barrels per day, but higher prices will make up for some of that loss of revenue. According to the International Energy Agency monthly report for March, a higher percentage of exported oil is at sea without identified destination, which probably means that Russian and other oil is being traded on the spot markets by Asian buyers (China, India in particular) who are rerouting it to Europe and other locations that took a self-imposed hit by cutting off direct purchases of Russian oil. The amount of oil diversion is hard to estimate, but some of the steep discounted Russian oil that China and India have been buying up is being sold at full market price and a handsome profit.

The OPEC+ move will prompt China’s President Xi Jinping to drive an even tougher bargain with the Kremlin over discounted oil and gas deliveries and the investment China will make into the Power of Siberia 2 gas pipeline. It was notable at the recent Putin-Xi summit in Moscow that when Putin announced the Power of Siberia 2 deal was completed, Xi Jinping did not concur, and the official communique only said that plans “were progressing.” Deputy Premier and energy boss Alexander Novak commented days later that Russia hoped the Power of Siberia 2 deal might be finalized by year end.

The China-brokered deal between Saudi Arabia and Iran is moving forward and could even lead to a revival of the negotiations around the JCPOA (reports today are that a partial lifting of sanctions is being considered by the Biden Administration in return for some reduction in Iran’s nuclear program). But the Biden Administration will get little or no credit for whatever transpires around any possible revived JCPOA talks.

In yet another sign of changing dynamics in the Middle East, the Prime Minister of Iraq Mohammed Shia al-Sudani told Al Jazeera in an interview today that there is no longer any need for U.S. troops to remain in Iraq, as ISIS has been driven out of the country. He wants training and other security assistance, but no American boots outside the embassy compound.

The U.S. still maintains a strong military presence in the Persian Gulf, but the Biden Administration has clearly dropped the diplomatic ball or so badly bungled diplomacy with the Sunni Arab world that both China and Russia have skated into the vacuum. China is the number one destination for Saudi oil, and the recent Beijing diplomacy has deepened the ties beyond energy economics. Russia, with all the mess on Putin’s hands with the failed war in Ukraine, has deepened ties with Iran’s Islamic Revolutionary Guard Corps, and under the Russia-Iran latest strategic partnership agreements, Russia has a veto over where Iran’s Caspian Sea gas gets delivered–meaning not to Europe.

Even the “only democracy in the Middle East” (sic)–Israel–has balked at supporting Ukraine with any level of military assistance, despite persistent Biden Administration pressure. Netanyahu is sensitive to the more than a million Russian citizens of Israel, who form a part of his fragile political base. And he is more concerned about maintaining his deconfliction arrangements with the Russian military in Syria to prevent Iran from establishing an even stronger beachhead on Israel’s northern border. Recall that a few years back, Israel and China signed a 25-year contract giving a Chinese State-Owned Enterprise control over the new Haifa port.

This entry was posted in China, Middle East, Oil, Russia, Ukraine Crisis. Bookmark the permalink.


  1. gordon reed says:

    If we hadn’t ousted Gaddafi, sanctioned Iran and Venezuela there would probably be 6 to 8 million barrels more on the market and gas prices would be lower.

  2. jim ticehurst.. says:

    That Problem was Fixed…With a Legal Election…Policy Changes…75 Executive Orders….and Strategic Reserves…With Strategic Stabilizers…You All Know
    What Hed Did..And Why They Took Him Out… And What The Game is Now..

    The Same Game…When the Same Schmucks Took Out Gaddafi..or Sanctioned
    His Departure…..”and Others..But…”At this Point..What difference Does It Make..”?.
    We Are Seeing The Finishing Touches..The End Game..”Fist Bumps”? I know where We can start With Those…Whap a Mole..?

  3. Sam says:


    Gas prices will be lower in the US if we pump more. A big reason why we don’t pump more is regulation. Oil production particularly in the shale patch goes in a boom & bust cycle. If the government didn’t interfere as much as they do, production will also move in cycles more timed to market signals. We already are a large producer and have enough to supply domestic demand.

    Italy sets up Anti-Mafia Commission to investigate CCP infiltration, focusing on collusion bt. Chinese officials, gangsters & criminal orgs.

    2 Chinese have been arrested for illegal money laundering activities. Over 13 have been identified in the probe.


    This is the real threat. CCP is attacking the west and has for some time. Destabilizing our societies with alliance with criminals, trafficking lethal drugs, Stealing know-how, hacking into our cyber infrastructure, buying our ruling elites, taking an aggressive military posture with its neighbors.

    Hopefully our policy makers take this threat seriously and reshore critical manufacturing, establish competent counter-intelligence and as Col. Lang discussed taking out the Mexican criminal cartels.

    • TTG says:


      There’s no way our oil companies will voluntarily go back to the $20 to $40 a barrel of early 2020.

      • Sam says:


        In the past these current high spreads would have driven capital investment in E&P. Now not as much as the permitting and regulations are more costly, time consuming and onerous.

        The price always fluctuate and the producers need to maximize their return on investment. We’re gonna use petroleum for several more decades. Instead of letting the Saudis be the price setters we should encourage increased capital investment in production and distribution and refining here in the US.

      • Fred says:


        What force of law did Trump use to force oil prices down? Let’s not talk about economics of fracking and return on capital or regulatory costs. California banning diesel trucks by 2025 ought to free up a lot of diesel fuel thus driivng costs down, right? LOL.

        • TTG says:


          It was the Covid pandemic and the economic slowdown/shutdown in the US and the world that drove oil prices to the 20 to 40 dollar level. I doubt Trump will ever assume responsibility for that package. He shouldn’t. In this case he was truly a victim, a hapless, ineffectual victim. Would you know if the oil industry actually lost money during those times or just didn’t make much, if any, profit?

          The California diesel truck ban is a ban on diesel trucks with a GVW over 26,000 pounds with diesel engines older than 2010. It’s in effect now. I imagine we’ll soon see if this affects our supply chain.

          • Fred says:


            You mean Trump got conned by Fauci, Birx, the entire deep state machinery and especially the Chinese, along with help from Europe? Yes he should own up to getting scammed like the rest of us and go after all of the perpetrators. Then go after the ‘died suddenly’ because of vax mandates and defective ‘settled science’ crowd people who think they have perpetual immunity from legal action.

            You need to take another look at CA’s pending legislation on ICE vehicles. Yes, you will see the impact in everything shortly. It’s just the type of creative destruction socialists specialize in, to create a ‘crisis’, to drive that fundamental change in America.

          • TTG says:


            Are you trying to say that if Trump wasn’t a spineless dupe he could have kept Covid out of the US and avoided a million dead Americans? There was nothing he could have done to keep Covid out of the US. Even if he truly shut the borders and airports at the first recognition of trouble, we could not have pulled off a New Zealand. The first cases of Covid in my area came from travelers to Egypt before the hysteria hit. Once it was here, all the existing ivermectin, hydroxychloroquine and other advertised cures/preventatives wouldn’t have stopped it. In fact they didn’t stop it. Trump was the victim of a badly timed pandemic beyond his control. That’s what doomed his political prospects for 2020.

            California aims to gradually reduce the sale of ICE engines and prohibit their sale by 2045. A lot could happen between now and then, maybe even a collapse in the fracking industry.

          • Fred says:


            You should at least read excerpts of Birx’s book to understand how much the medical establishment lied both to the president and to everyone else. Feel free to re-read the commentary in the archives to remind yourself of Chinese closure of domestic travel while allowing their own citizens to travel overseas, the censorship of HQZ and ivermetcin as well as creation of medical protocols forbidding their use in the US. Your annecedote is just that, and your strawman argument even weaker.

            You have willfully forgotten the media’s daily death counts, the summer of George Floyd and”mostly peaceful” and their effect upon the election of the 81 million ballot recipient who spent his time in his Delaware basement during his campaign.

  4. d74 says:

    A step aside: Israeli weapons for Ukraine.

    1- Bibi’s predecessor said that Israel does not deliver weapons to countries that massacred Jews.
    2-Bibi said that he would not deliver weapons because of “agreements with Russia on Syria”. These agreements must be maintained in the interest of Israel. Nevertheless, Israel will help build a sensor and warning system against Russian raids.

    A- Lapid was expressing a reality: the mass murderers of Jews are in power, at least partially, or this power protects the proponents of a historical mass murder policy.

    B- I have always found it strange that Russia, protector and restorer of the Syrian regime, only protests weakly against the bombings in Syria. Israel claims to target only Iranian installations in that country. Now that Russia and Iran are in a “strategic” alliance, how can they justify or accept these bombings, which have no reason to stop? (Israel boasts of having carried out 1,200 aerial interventions in Syria, in 2022).
    Benign neglect?
    The Russian diplomacy is going to get its feet in the carpet and fall seriously. The future will tell if the ambiguity can be maintained.

    • Yeah, Right says:

      With regard to Russia not complaining strongly against Israeli airstrikes in Syria, I am a firm believer that the simplest explanation is most likely the correct one.

      As in: the Russians can’t be bothered raising a stink over something that is so ineffectual.

      I know the Israelis just love to boast. Really, I do. But often times their boasting has a rather… hollow ring to it.

      As you say, “1,200 aerial interventions”. But to what end? To what effect?

      Probably not much at all: a few Syrian soldiers here or there, maybe they bag an unlucky Iranian Revolutionary Guard officer.

      Yeah, and? So?

      • d74 says:

        I don’t know. Russian indifference has been going on for a long time. The Syrian flak is entirely Russian (Soviet). Low efficiency, to say the least. Very big counter-advertising. Politically, it will become clear that being an ally or protector of the Russians is an unfinished business. Daesh/Isis yes, Israel, no. To this must be added the aggressions of the northern neighbor, who sees red as soon as the Kurds are involved. With the same bovine reactions, such as ‘Ok,do it but that’s not nice’.
        The picture is neither clear nor positive for the Russians.
        Maybe to keep Bashar under pressure?
        And what does Russia gain by sparing Israel? This country behaves like a free electron, unpredictable therefore. A new intifada is sought by Bibi. Old habit of domestic politics. In the world without the West, the publicity for Israel’s supporters will not be any better.
        A million Israelis of Russian origin? I doubt it.

        Nothing but questions and no answers. One, perhaps, the Russians are only ‘strong’ from our weaknesses.

        “We are drifting dry of sail and the coast is getting closer.” Lord Grey.

      • Razor says:

        As far as I’m aware, Israel does not put its aircraft at risk in Syrian airspace, launching their missiles either from over the Med or Lebanon, therefore any attack on the launch aircraft would have to target them probably inside Israeli airspace, which I image the Russians are not anxious to do. Probably because of the number of Russians living in Israel. Whatever the reason, Russia seems to value a good relationship with Israel.

        • d74 says:

          Yes, you are right: flak is inappropriate.
          Instead of Flugzeug read missile and even rocket, Lebanon +12 miles are not so thick.
          “Russia seems to value a good relationship with Israel.” Why?

  5. Whitewall says:

    I’m trying to discern if the Ukraine offensive against the Russian lines has begun yet.

    • TTG says:


      I haven’t seen any indications of that. NATO is still shipping in combat engineer equipment. And the mud is still deep.

      • LeaNder says:

        During the last couple of month often something really crossed Cologne above me at night. Besides not on the usual track that flights take, it felt, since usually I don’t hear planes here in the center of town.

        Let’s check if others noticed, ah well yes:
        Posted by:
        vor 13 Tagen

        Untracked planes over Cologne
        What’s going on over Cologne? There is a significant increase of untracked airplanes over Cologne the last days. Just in the last 30min at least a dozend planes not tracked by Flightradar24. Most probably Military planes or sth. Coming from the east over Kalk and Deutz, going west. All sort of sizes. Estimated high: 1000-3000m.

        This is not a usual route for planes and not related to CGN airport.

        • Billy Roche says:

          That’s a puzzel. Coming from the east?? Immediately I thought west to east and looked to see where NATO supplies might be cached. But anything in Karlshruhe, Grafenwhor, Kaiserslautern, or anything left around Fkt would have to go out of the way to cross Cologne, and then continue west?? Anyway to tell if the east to west flights cross from Berlin or Munchen? If you’ve picked up this activity so have the Russians. I’d bet east-west flights are people not eqpmnt. People are being trained for a great Ukrainian adventure. May they walk w/god.

        • LeaNder says:

          That’s a puzzel. Coming from the east?? Immediately I thought west to east and looked to see where NATO supplies might be cached

          Bill, I wondered about his given directions too. I doubt that many people that noticed the really, really heavy sound I did, leave traces on the web. He may have observed something different. This showed up on a really, really superficial check, when TTG’s comments triggered those memories. Accidentally.

          What I noticed has been going on for longer now. Couple of month. It’s usually not more than four really heavy sounding airplanes. Sometimes only one, closely followed by another. You obviously cannot tell from where exactly sound originates or where it is moving to in our case. Interestingly: It is always night. It is just unusually loud, which for me somehow suggest they are not that high. Wrong? But yes, I gave it a West East direction mostly in my head too.

          I’ll keep a bookmark of the
          he/she/it refers to. Next time I hear the heavy sound again, I check if I can figure out the source. Or if it may indeed be connected to something undocumented. Lots of regular air traffic I do not hear even the tiniest bit of, anyway.

          These planes must not necessarily head to American bases in Germany, why should they? Wouldn’t Poland, the Baltics, even Romania make a lot more sense?

          But: I am obviously a nitwit on matters.

          • Billy Roche says:

            LeaNyder; east to west, at night, low flying, loud, strikes me as transport planes avoiding detection (we need an air force vet). Ukrainian troops being sent to Dutch and German training bases? Planes cant be C130s etc as they need too much field to land. Smaller/older planes.

          • LeaNder says:

            Took a slightly closer look, might be connected to:

            Not far, slightly West. It is one of eight low-flying-training areas in Germany. Thus they might have gotten a little more active lately. 😉

            Or for that matter, I did not pay attention before.

      • Billy Roche says:

        Is it time a lesson for the civies on board? The mud is still too deep, ergo no fwd movement by infantry. What do the army guys do while waiting? Ship in engineer eqpmnt/engineers. Why? The kind of equipment would tell you where the Ukrainian Spring advance is going. Does the UA intend to cross water, build bridges, or break out of Bachkmut? Will they try to cut RA lines completely to the Sea of Azov or are they using engineers to make trench warfare permanent. What else do army guys do? Ship in med supplies, blood, food, and ammo? Is there evidence of this. This war presents a primer on how to prepare for advance or how to prepare for defense. One fighter said to the other “come into my defenses my pretty and I’ll kill you”. Another fighter said “I’d like to throw a big left hook and cut my opponent in two. C’eptin if I don’t …”. What, General Geniusovich, would you do?

        • JamesT says:

          Billy – thank you for the lesson.

          • Billy Roche says:

            Thanks but I’m not qualified to give any one a lesson. My prod was to the Twisted Genius (Gen’l Geniusovich).
            But I’ve been learning herein. Accountants are as necessary to the military just as business.
            How big an opn do we plan-how many soldiers
            What kind of soldiers, which div., units
            How much ammunition- kind and quantity
            What % will die- how many body bags
            How many wounded-how much blood
            How much food/fuel
            What’s the line of march-where to cache supplies
            How do we transport it all- and how often
            Who’ll be in charge- line/staff elements
            For G2 and spooks on this site, how will we organize and implement our intel gathering and opn monitoring.
            Now that we know what we want to do; how (and who) will prepare the field of battle. Psyopns/air/artillery
            It goes on and on. You just don’t get up and go fight. Imagine the calculations going on in the UA Chief of staff offices in preparation to this spring. There’s an MOS for this, betcha.

  6. Fred says:

    The international committe of the red cross is laying off 1,500 people. Maybe Zelensky can free up some of that unaccountable aid money he’s got to help them out.

  7. peter mcloughlin says:

    I do not have the insights into military or diplomatic intelligence. But it seems logical that Russia would welcome a front in the Persian Gulf, something which would severely threaten energy supplies to the West. The same reason the US wouldn’t want it. Yet Israel might be forced into attacking Iran to protect its stated national interests, inadvertently aiding Moscow. Where I do have some insights is in history. And the pattern of events clearly point to another world war. The war states do not want is the one they don’t see coming.

    • Fred says:

      Welcome how, by coming over land? The Monteaux Treaty has closed the Black Sea to naval traffic from belligerents in the UA-RU war. They want to sail the long way through the Baltic to accomplish what, guarantee NATO intervention by threatening Europe’s oil supplies? They aren’t that stupid. Will they start guarding China’s oil supply line? China now has the largest navy in the world. They can defend their own sea lanes of communications. Not that you will see that reported much in the MSM.

      Israel is going to attack Iran with what, the same force structure that has been inadequate to the task for decades, as discussed here numerous times?

  8. Soothsayer says:

    There is a way out of the impending economic disaster for the US.

    1. You want BRICS and all it entails? Fine. Screw you and BRICS. The US is declaring bankruptcy. As of two hours ago, the US will not redeem all of those bonds and other debt instruments foreign governments and individuals are holding. US citizens will be held harmless, but no foreigners.

    2. The US is restructuring. Part of that plan is to take a percent of the debt that would have been paid to foreigners and use it to strongly incentivize US manufacturing and other critical industry to establish domestic plants, etc

    3. Some of the debt that is not being paid to foreigners will be used to establish STEM education programs, for children and adults, so there will be a well trained work force to fill the open positions in domestic manufacturing, etc.

    4. The borders are closed. All illegal aliens will be deported immediately.

    5. All superfluous government regulation, Green New Deal BS and other ideology based scams that represent hindrances to business are hereby eliminated.

    6. US military bases around the world are to be shut down immediately, but an extraordinarily powerful US military will be developed to defend the US’ borders, air space and oceans.

    That would cushion some of the immediate economic fallout and damage to the markets due to stratospheric debt and loss of reserve currency status, in the short run – and the country would be stronger in the long run. Screw Europe. They can go back to killing each other like stupid savages, or become China controlled socialist zombies, for all we care. Eventually, we will normalize relations with Russia.

    No surprise that Trump is being persecuted. I think he’d be down with is feasible plan.

  9. Sam says:

    For the perennial petroyuan & dedollarization crowd some education:

    If you are an investor or a trader, do not worry about the death of the dollar. It’s always imminent. It’s totally irrelevant to any investment process. The external value of the dollar and its usage in global transactions is incredibly stable. You can take a cyclical view on the USD (bullish or bearish) but taking a structurally bearish view has not been and will not be the way to optimize your portfolio or your framework for decision making.


    The USD as reserve currency is only beneficial to some segments in the US. For those of you who would like to see the US fail, the less use of USD in trade finance will not be the cause. Please educate yourself on balance of payments accounting & global capital flows and the underlying plumbing of the global financial system.

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