Russia loses the oil war and the Middle East

US, WASHINGTON (ORDO NEWS) — Over the past few years, the foreign policy community has believed that a new era is beginning in international politics. Distinctive features of this order, which developed after the end of the Cold War, are the rivalry of superpowers and the restructuring of American relations with the outside world. And nowhere are they more clearly felt than in the Middle East, where the US allies develop diplomatic, trade and military relations with exactly those powers with which Washington is supposedly competing, with China and Russia.

At the same time, many American experts, analysts, officials and politicians are urging them to leave the Middle East. All this led many of them to conclude that a new regional order would be created in Beijing or Moscow.

However, there are many reasons for doubt, and some of them have clearly manifested themselves in recent weeks. The most acute of them is the ongoing oil price war between Moscow and Riyadh, which demonstrated that Russia has overestimated its capabilities.

Nearly 30 years after the end of the Cold War, the leaders of the Middle East are really more favorable looking at the expansion of Russian power. Since Moscow dumped the ideological baggage of Soviet communism, and America looks more and more exhausted, helpless and stupid, regional players see in Russia, if not an alternative to Washington, then at least a player not an example of a more constructive one. The contrast between the former U.S. President Barack Obama allegedly leaving Egyptian leader Hosni Mubarak to the mercy of fate, and Russian President Vladimir Putin invading Syria to help Bashar al-Assad, made a lasting impression on the Arab rulers. The negative image of the United States is compounded by the fact that the economic and political systems of the Middle East have much more in common with Russia than with the United States – this is also dependent on oil revenues,

Washington himself contributed a lot to this. In pursuit of “energy independence,” no matter what Donald Trump puts into these words, the United States has relied on fracking technologies and flooded markets with natural gas and oil from shale. Energy prices crawled down, and in 2016, OPEC members (mainly Saudi Arabia) and Russia agreed to limit production in order to increase them.

The agreement – essentially the result of the previous oil war, when the Saudis refused to cut back on production in the vain hope of undermining the positions of American shale oil – stabilized energy markets. The price per barrel of oil has returned to a level where the Saudis and Russians have enough money for their plans – be it wars (see Ukraine, Syria, Yemen, Libya) or social transformations. After all, the plan of the Crown Prince of Saudi Arabia, Mohammed bin Salman, for 2030 is not a cheap pleasure.
The agreement concerned oil production, but paved the way for reformatting relations in the Persian Gulf.

For the Saudis, the Russians became a kind of protection against the unpredictable US, where, despite political dysfunction and polarization, there is clearly a wide consensus that sooner or later they will have to leave the Middle East. Russia, in turn, thanks to cooperation with Saudi Arabia, received support for its regional policy and expanded its influence. Whether America’s expense or not is a moot point, but often the image overshadows reality. At least Putin wanted everyone to believe that he could push the Saudis away from the United States, as he had already done with the Turks and Egyptians. That is why when Trump did not answer Iran with a military strike for shelling Saudi oil refineries in September 2019,

And yet, despite the obvious coincidence of the interests of Saudi Arabia and Russia, especially in the energy sector, the Saudi-Russian era was not destined to happen. And there is nobody to blame for the Russians, except for themselves. Even before the assassination of The Washington Post journalist Jamal Khashoggi, Muhammad bin Salman was spoken of as an impetuous and arrogant person. He repeatedly proved the correctness of these words, and it is not difficult to imagine that the price of oil over the past month brought down just his ardor. But this is not the case.

In early March, Saudi Arabia came to the OPEC + meeting (which includes ten countries that are not members of the oil cartel, including Russia) and essentially said the following: now the global pandemic, the demand for our products has fallen, so let’s remove a million barrels from the market. From the point of view of Saudi Arabia, a reasonable proposal, but the Russians rejected it, saying that they want to evaluate all the consequences of coronavirus for the global economy before cutting production. This was very ridiculous, because by that time it had already become clear to the majority that the economies were shutting down from the coronavirus one after another and the demand for oil and gas was falling.

Most likely, the Russians did not want to reduce production, because they hoped to harm the American shale and squeeze market share from the Saudis. That’s why they got angry – they didn’t like that they were bred like suckers. Then the Saudis proposed that they, Russians and the United States reduce production proportionally. The Russians, they said, demanded that the Saudis cut the most.

The Russian position has excited Riyadh’s fears that no matter what agreement they conclude, the Russians will still have an incentive to deceive in order to undermine Saudi Arabia’s income and market share – the worst possible outcome. As a result, Saudi Arabia withdrew from the meeting, promising to increase production to 10 million barrels per day, and began to offer large discounts on its oil. It was an attempt to intimidate the Russians and force them to return to the negotiating table, but the Russians said that low oil prices would stand. Then the Saudis replied that they too could stand it, and world oil prices collapsed.

The United States seems to have fallen victim to this oil war. The congressmen from the oil and gas states were most worried. But there will be no winners. Only the Chinese can claim this: they can expect that the recovery from the epidemic will begin with cheap oil.

Analysts predict that the oil war could end at an OPEC meeting on Thursday. Be that as it may, this incident will most likely erase the idea that Moscow will play an important role in establishing a new regional order. The Italian political scientist and theorist of Marxism, Antonio Gramsci, once wrote about interregnum or interregnum – a time when one order fell and the new one was never born. Just then, Gramsci noted, “painful symptoms” appear.

Now we are in just such a transition period, and let those who seek a new order do not deceive themselves about the obvious strengthening of Saudi-Russian ties – these are signs of collapse, and not the harbingers of a new global system.


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