Everybody wants to hop on the BRICS Express

Eurasia is about to get a whole lot larger as countries line up to join the Chinese and Russian-led BRICS and SCO, to the detriment of the west

October 27 2022

By Pepe Escobar

Photo Credit: The Cradle

Let’s start with what is in fact a tale of Global South trade between two members of the Shanghai Cooperation Organization (SCO). At its heart is the already notorious Shahed-136 drone – or Geranium-2, in its Russian denomination: the AK-47 of postmodern aerial warfare.

The US, in yet another trademark hysteria fit rife with irony, accused Tehran of weaponizing the Russian Armed Forces. For both Tehran and Moscow, the superstar, value-for-money, and terribly efficient drone let loose in the Ukrainian battlefield is a state secret: its deployment prompted a flurry of denials from both sides. Whether these are made in Iran drones, or the design was bought and manufacturing takes place in Russia (the realistic option), is immaterial.

The record shows that the US weaponizes Ukraine to the hilt against Russia. The Empire is a de facto war combatant via an array of “consultants,” advisers, trainers, mercenaries, heavy weapons, munitions, satellite intel, and electronic warfare. And yet imperial functionaries swear they are not part of the war. They are, once again, lying.

Welcome to yet another graphic instance of the “rules-based international order” at work. The Hegemon always decides which rules apply, and when. Anyone opposing it is an enemy of “freedom,” “democracy,” or whatever platitude du jour, and should be – what else – punished by arbitrary sanctions.

In the case of sanctioned-to-oblivion Iran, for decades now, the result has been predictably another round of sanctions. That’s irrelevant. What matters is that, according to Iran’s Islamic Revolutionary Guard Corps (IRGC), no less than 22 nations – and counting – are joining the queue because they also want to get into the Shahed groove.

Even Leader of the Islamic Revolution, Ayatollah Ali Khamenei, gleefully joined the fray, commenting on how the Shahed-136 is no photoshop.

The race towards BRICS+

What the new sanctions package against Iran really “accomplished” is to deliver an additional blow to the increasingly problematic signing of the revived nuclear deal in Vienna. More Iranian oil on the market would actually relieve Washington’s predicament after the recent epic snub by OPEC+.

A categorical imperative though remains. Iranophobia – just like Russophobia – always prevails for the Straussians/neo-con war advocates in charge of US foreign policy and their European vassals.

So here we have yet another hostile escalation in both Iran-US and Iran-EU relations, as the unelected junta in Brussels also sanctioned manufacturer Shahed Aviation Industries and three Iranian generals.

Now compare this with the fate of the Turkish Bayraktar TB2 drone – which unlike the “flowers in the sky” (Russia’s Geraniums) has performed miserably in the battlefield.

Kiev tried to convince the Turks to use a Motor Sich weapons factory in Ukraine or come up with a new company in Transcarpathia/Lviv to build Bayraktars. Motor Sich’s oligarch President Vyacheslav Boguslayev, aged 84, has been charged with treason because of his links to Russia, and may be exchanged for Ukrainian prisoners of war.

In the end, the deal fizzled out because of Ankara’s exceptional enthusiasm in working to establish a new gas hub in Turkey – a personal suggestion from Russian President Vladimir Putin to his Turkish counterpart Recep Tayyip Erdogan.

And that bring us to the advancing interconnection between BRICS and the 9-member SCO – to which this Russia-Iran instance of military trade is inextricably linked.

The SCO, led by China and Russia, is a pan-Eurasian institution originally focused on counter-terrorism but now increasingly geared towards geoeconomic – and geopolitical – cooperation. BRICS, led by the triad of Russia, India, and China overlaps with the SCO agenda geoeconomically and geopoliticallly, expanding it to Africa, Latin America and beyond: that’s the concept of BRICS+, analyzed in detail in a recent Valdai Club report, and fully embraced by the Russia-China strategic partnership.

The report weighs the pros and cons of three scenarios involving possible, upcoming BRICS+ candidates:

First, nations that were invited by Beijing to be part of the 2017 BRICS summit (Egypt, Kenya, Mexico, Thailand, Tajikistan).

Second, nations that were part of the BRICS foreign ministers’ meeting in May this year (Argentina, Egypt, Indonesia, Kazakhstan, Nigeria, UAE, Saudi Arabia, Senegal, Thailand).

Third, key G20 economies (Argentina, Indonesia, Mexico, Saudi Arabia, Turkiye).

And then there’s Iran, which has already already shown interest in joining BRICS.

South African President Cyril Ramaphosa has recently confirmed that “several countries” are absolutely dying to join BRICS. Among them, a crucial West Asia player: Saudi Arabia.

What makes it even more astonishing is that only three years ago, under former US President Donald Trump’s administration, Crown Prince Muhammad bin Salman (MbS) – the kingdom’s de fact ruler – was dead set on joining a sort of Arab NATO as a privileged imperial ally.

Diplomatic sources confirm that the day after the US pulled out of Afghanistan, MbS’s envoys started seriously negotiating with both Moscow and Beijing.

Assuming BRICS approves Riyadh’s candidacy in 2023 by the necessary consensus, one can barely imagine its earth-shattering consequences for the petrodollar. At the same time, it is important not to underestimate the capacity of US foreign policy controllers to wreak havoc.

The only reason Washington tolerates Riyadh’s regime is the petrodollar. The Saudis cannot be allowed to pursue an independent, truly sovereign foreign policy. If that happens, the geopolitical realignment will concern not only Saudi Arabia but the entire Persian Gulf.

Yet that’s increasingly likely after OPEC+ de facto chose the BRICS/SCO path led by Russia-China – in what can be interpreted as a “soft” preamble for the end of the petrodollar.

The Riyadh-Tehran-Ankara triad

Iran made known its interest to join BRICS even before Saudi Arabia. According to Persian Gulf diplomatic sources, they are already engaged in a somewhat secret channel via Iraq trying to get their act together. Turkey will soon follow – certainly on BRICS and possibly the SCO, where Ankara currently carries the status of extremely interested observer.

Now imagine this triad – Riyadh, Tehran, Ankara – closely joined with Russia, India, China (the actual core of the BRICS), and eventually in the SCO, where Iran is as yet the only West Asian nation to be inducted as a full member.

The strategic blow to the Empire will go off the charts. The discussions leading to BRICS+ are focusing on the challenging path towards a commodity-backed global currency capable of bypassing US dollar primacy.

Several interconnected steps point towards increasing symbiosis between BRICS+ and SCO. The latter’s members states have already agreed on a road map for gradually increasing trade in national currencies in mutual settlements.

The State Bank of India – the nation’s top lender – is opening special rupee accounts for Russia-related trade.

Russian natural gas to Turkey will be paid 25 percent in rubles and Turkish lira, complete with a 25 percent discount Erdogan personally asked of Putin.

Russian bank VTB has launched money transfers to China in yuan, bypassing SWIFT, while Sberbank has started lending out money in yuan. Russian energy behemoth Gazprom agreed with China that gas supply payments should shift to rubles and yuan, split evenly.

Iran and Russia are unifying their banking systems for trade in rubles/rial.

Egypt’s Central Bank is moving to establish an index for the pound – through a group of currencies plus gold – to move the national currency away from the US dollar.

And then there’s the TurkStream saga.

That gas hub gift

Ankara for years has been trying to position itself as a privileged East-West gas hub. After the sabotage of the Nord Streams, Putin has handed it on a plate by offering Turkey the possibility to increase Russian gas supplies to the EU via such a hub. The Turkish Energy Ministry stated that Ankara and Moscow have already reached an agreement in principle.

This will mean in practice Turkey controlling the gas flow to Europe not only from Russia but also Azerbaijan and a great deal of West Asia, perhaps even including Iran, as well as Libya in northeast Africa. LNG terminals in Egypt, Greece and Turkiye itself may complete the network.

Russian gas travels via the TurkStream and Blue Stream pipelines. The total capacity of Russian pipelines is 39 billion cubic meters a year.

Map of Russian gas route via Turkey

TurkStream was initially projected as a four-strand pipeline, with a nominal capacity of 63 million cubic meters a year. As it stands, only two strands – with a total capacity of 31,5 billion cubic meters – have been built.

So an extension in theory is more than feasible – with all the equipment made in Russia. The problem, once again, is laying the pipes. The necessary vessels belong to the Swiss Allseas Group – and Switzerland is part of the sanctions craze. In the Baltic Sea, Russian vessels were used to finish building Nord Stream 2. But for a TurkStream extension, they would need to operate much deeper in the ocean.

TurkStream would not be able to completely replace Nord Stream; it carries much smaller volumes. The upside for Russia is not being canceled from the EU market. Evidently Gazprom would only tackle the substantial investment on an extension if there are ironclad guarantees about its security. And there’s the additional drawback that the extension would also carry gas from Russia’s competitors.

Whatever happens, the fact remains that the US-UK combo still exerts a lot of influence in Turkey – and BP, Exxon Mobil, and Shell, for instance, are actors in virtually every oil extraction project across West Asia. So they would certainly interfere on the way the Turkish gas hub functions, as well on determining the gas price. Moscow has to weigh all these variables before committing to such a project.

NATO, of course, will be livid. But never underestimate hedging bet specialist Sultan Erdogan. His love story with both the BRICS and the SCO is just beginning.

The views expressed in this article do not necessarily reflect those of The Cradle.

Germany’s energy suicide: an autopsy

September 08, 2022

by Pepe Escobar, posted with the author’s permission and widely cross-posted

When Green fanatic Robert Habeck, posing as Germany’s Economy Minister, said earlier this week “we should expect the worst” in terms of energy security, he conveniently forgot to spell out how the whole farce is a Made in Germany cum Made in Brussels crisis.

Flickers of intelligence at least still glow in rare Western latitudes, as indispensable strategic analyst William Engdahl, author of A Century of Oil, released a sharp, concise summary revealing the skeletons in the glamour closet.

Everyone with a brain following the ghastly Eurocrat machinations in Brussels was aware of the main plot – yet hardly anyone among average EU citizens. Habeck, Chancellor “Liver Sausage” Scholz, the European Commission (EC) Green Energy VP Timmermans, EC dominatrix Ursula von der Leyen, they are all involved.

In a nutshell: as Engdahl describes it, this is about “the EU plan to de-industrialize one of the most energy-efficient industrial concentrations on the planet.”

That’s a practical translation of the UN Green Agenda 2030 – which happens to be metastasized into crypto Bond villain Klaus Schwab’s Great Reset – now renamed “Great Narrative”.

The whole scam started way back in the early 2000s: I remember it vividly, as Brussels used to be my European base in the early “war on terror” years.

At the time, the talk of the town was the “European energy policy”. The dirty secret of such policy is that the EC, “ advised” by JP MorganChase as well as the usual mega speculative hedge funds, went all out into what Engdahl describes as “a complete deregulation of the European market for natural gas.”

That was sold to the Lugenpresse (“lying media”) as “liberalization”. In practice, that’s savage, unregulated casino capitalism, with the “free” market fixing prices while dumping long-term contracts – such as the ones struck with Gazprom.

How to decarbonize and destabilize

The process was turbo-charged in 2016, when the last gasp of the Obama administration encouraged massive export of LNG out of the US’s huge shale gas production.

For that one needs to build LNG terminals. Each terminal takes as much as 5 years to build. Within the EU, Poland and Holland went for it from the start.

As much as Wall Street in the past invented a “ paper oil” speculative market, this time they went for a speculative “paper gas” market.

Engdahl details how “the EU Commission and their Green Deal agenda to ‘decarbonize’ the economy by 2050, eliminating oil, gas and coal fuels, provided the ideal trap that has led to the explosive spike in EU gas prices since 2021.”

The creation of this “single” market control implied forcing illegal rule changes on Gazprom. In practice, Big Finance and Big Energy – which totally control anything that passes for “EU policy” in Brussels – invented a new pricing system parallel to the long-term, stable prices of Russian pipeline gas.

By 2019, an avalanche of Eurocrat energy “ directives” by the EC – the only thing these people do – had established a totally deregulated gas market trading, setting the prices for natural gas in the EU even as Gazprom remained the largest supplier.

As lots of virtual trading hubs in gas futures contracts started popping up across the EU, enter the Dutch TTF (Title Transfer Facility). By 2020 the TTF was established as the real EU gas benchmark.

As Engdahl points out, “TTF is a virtual platform of trades in futures gas contracts between banks and other financial investors. Outside, of course, of any regulated exchange.

So LNG prices soon started to be set by futures trades in the TTF hub, which crucially happens to be owned by the Dutch government – “the same government destroying its farms for a fraudulent nitrogen pollution claim.”

By any means necessary Big Finance had to get rid of Gazprom as a reliable source to allow powerful financial interests behind the Green Deal racket to dominate the LNG market.

Engdahl evokes a case very few know about across Europe: “On May 12, 2022 although Gazprom deliveries to the Soyuz gas pipeline through Ukraine were uninterrupted for almost three months of conflict, despite Russia’s military operations in Ukraine, the NATO-controlled Zelensky regime in Kiev closed a major Russian pipeline through Lugansk, that was bringing Russian gas both to his Ukraine as well as EU states, declaring it would remain closed until Kiev gets full control of its pipeline system that runs through the two Donbass republics. That section of the Ukraine Soyuz line cut one-third of gas via Soyuz to the EU. It certainly did not help the EU economy at a time Kiev was begging for more weapons from those same NATO countries. Soyuz opened in 1980 under the Soviet Union bringing gas from the Orenburg gas field.”

Hybrid War, the energy chapter

On the interminable soap opera involving the Nord Stream 1 turbine, the crucial fact is that Canada deliberately refused to deliver the repaired turbine to Gazprom – its owner – but instead sent it to Siemens Germany, where it is now. Siemens Germany is essentially under American control. Both the German and Canadian governments refuse to grant a legally binding sanction exemption for the transfer to Russia.

That was the straw that broke the (Gazprom) camel’s back. Gazprom and the Kremlin concluded that if sabotage was the name of the game, they couldn’t care less whether Germany received zero gas via Nord Stream 1 (with brand new Nord Stream 2, ready to go, blocked by strictly political reasons).

Kremlin spokesman Dmity Peskov took pains to stress

“problems in [gas] deliveries arose due to sanctions that have been imposed on our country and a number of companies by Western countries (…) There are no other reasons behind supply issues.”

Peskov had to remind anyone with a brain that it’s not Gazprom’s fault if “the Europeans (…) make a decision to refuse to service their equipment” which they are contractually obligated to do. The fact is the whole Nord Stream 1 operation hinges on “one piece of equipment that needs serious maintenance.”

Deputy Prime Minister Alexander Novak, who knows one or two things about the energy business, cleared up the technicalities:

“The entire problem lies precisely on [the EU’s] side, because all the conditions of the repair contract have been completely violated, along with the terms of shipping of the equipment.”

All that is inscribed into what Deputy Foreign Minister Sergey Ryabkov describes as “a total war declared against us”, which is “being waged in hybrid forms, in all areas”, with “the degree of animosity of our opponents – of our enemies” being “enormous, extraordinary.”

So none of this has anything to do with “Putin weaponizing energy”. It was Berlin and Brussels – mere messengers of Big Finance – which weaponized the supply of European energy on behalf of a financial racket, and against the interests of European industry and consumers.

Beware of the toxic trio

Engdahl has summarized how, “by systematically sanctioning or closing gas deliveries from long-term, low cost pipelines to the EU, gas speculators via the Dutch TTP have been able to use every hiccup or energy shock in the world, whether a record drought in China or the conflict in Ukraine, to export restrictions in the USA, to bid the EU wholesale gas prices through all bounds.”

Translation: casino capitalism at its finest.

And it gets worse, when it comes to electricity. There is a so-called EU Electricity Market Reform in progress. According to it, producers of electricity – from solar or wind – automatically receive “the same price for their ‘renewable’ electricity they sell to the power companies for the grid as the highest cost, i.e. natural gas.” No wonder the cost of electricity in Germany for 2022 increased by 860% – and rising.

Baerbock incessantly parrots that German energy independence cannot be secured until the country is “liberated from fossil fuels.”

According to Green fanaticism, to build the Green Agenda it’s imperative to completely eliminate gas, oil and nuclear power, which happen to be the only reliable energy sources as it stands.

And it’s here that we see the toxic trio Habeck/Baerbock/von der Leyen ready for their close up. They pose as saviors of Europe preaching that the only way out is to invest fortunes in – unreliable – wind and solar power: the “answer” from Providence to a gas price debacle manufactured by none other than Big Finance, Green fanaticism and Eurocrat “leadership”.

Now tell that to struggling pan-European households whose bills will surge to a whopping, collective $2 trillion as General Winter knocks on the door.

Europe fails with German help

July 01, 2022

Source

by Jorge Vilches

Robert Habeck, Vice-Chancellor of Germany and Federal Minister for Economic Affairs and Climate Action, jointly with Annalena Baerbock — Germany´s Anglophile Minister of Foreign Affairs — have patronized the world from the German Green Party´s self-proclaimed moral high ground thru their ´we truly care´ and ´superior knowledge´ mantras.

Now, both German officials — quite active in the European War Party led by also German Ursula von der Leyen – are behind NATO´s announced increase of military presence in Europe with US headquarters and troops in Poland… plus a 10-fold enlarged rapid-response force up to 300,000 with yet additional troops in Romania and the Baltic states… plus yet more destroyers and F-35s in Europe´s waters and skies… and now considering itself the “unique, essential and indispensable”(sic) bloc while sweeping under the rug the deep existential crisis it has dug Europeans into with no way out for energy and commodities sourcing security. Ref #1 https://www.rt.com/news/558088-biden-troop-deployments-nato-europe/

C:\Users\Jorge Vilches\Desktop\777.jpgPower Outage. Electricity Symbol in Red Ban Circle with Text Below Stock Vector – Illustration of concept, cable: 151740792

And precisely to address the current self-inflicted energy debacle, German Minister Habeck is compounding this ugly all-inclusive European conundrum in at least 14 different ways and has (1) shut down Germany´s nuclear power plants including the domino impact upon the inter-connected European electrical grid without any foresight or consideration whatsoever (2) banned excellent, cheap Russian hydrocarbons and distilled petroleum products thereof to which Europe´s entire economy and energy infrastructure is uniquely matched and tuned for, including the superb, proven, mostly un-replaceable Russian Urals crude oil blend and the most convenient Russian Druzbha door-to-door pipeline rendering 24x7x365 already vetted exceptional performance (3) shut down and indefinetly cancelled the most-needed NS2 pipeline for delivery of Russian hydrocarbons, with possible partial expropiatory theft yet again beyond bank deposits and other assets (4) fully ignored the very loud Siemens compliance warning regarding the EU ban on return-delivery of NS1 equipment back to Russia under well-known, scheduled and mandatory Canadian maintenance requirements (5) re-introduced the dirtiest of coals, namely brown coal, as feedstock for German and EU coal-fired power plants (6) rationed hot water and fuel consumption including the amount of time that Herr Habeck himself spends in the shower (7) shamefully placed Russia´s Gazprom Germania in a ´trusteeship´ of sorts which will also prove to be a very expensive mistake (8) promoted a fully counter-productive wind-mill expansion program requiring fossil-fueled equipment for the extraction and transportation of thousands of tons of nickel and rare earths that Europe does not have, plus subsequent movement, erection and maintenance of such wind mills with other fossil fueled equipment that Europe has to import, plus additional fossil fuel power-generating equipment always needed as backstop during low wind seasons such as the last several months, plus tons of fossil-fuel powered equipment to eventually de-commission such wind-mills (9) fast-tracked the LNG Acceleration Act to favor in every possible way the construction of fully unnecessary and super-costly Liquefied Natural Gas terminals in detriment of many other much needed infrastructures so as to many months from now eventually buy über-expensive LNG from the USA which is really the Master Pupeteer behind this anti-Europe Master Plan (10) with direct benefit to Russia, the current lower volume of its oil exports at much higher prices thanks to EU sanctions allows the Ruble to become ever stronger while saving Russian oil for sale to others (11) pushed for a naïve buyer´s oil price cap cartel in a seller’s market (!!!) (12) seized Russian LNG tankers (13) crashed German nat-gas giant Uniper now ready for bail-out and Lehman moment (14) launched Germany and the EU in the most nonsensical “firehose” oil & gas policies already explained to death and with excruciating details Ref # 2 https://thesaker.is/herr-habeck-firehoses-oil-gas/ Ref #3 https://www.rt.com/business/558116-germany-seizes-russian-lng-tankers/ Ref # 4 https://www.rt.com/news/558073-nato-adopts-new-strategic-concept-russia/ Ref #5 https://www.rt.com/business/558126-skepticism-russian-oil-price-cap/ Ref #6 https://www.zerohedge.com/commodities/uniper-crashes-russian-natgas-supply-crunch-bailout-talks-germany

So, Herr Habeck and Fräulein Baerbock, on behalf of the few future European survivors, please enjoy a loud and clear “bravo, bravissimo, bravo” from your colleague Mario Draghi – Italy´s NATO Prime Minister courtesy of Goldman Sachs – for such creative and successful ´green solutions´ that will have both of you go down in history forever.

Die Grünen: “Regieren ist radikal” | ZEIT ONLINE

Unbeknownst to EU politicians and to these two ignorant dilettantes, Europe´s diesel is now strictly in Russian hands.

I have said it before and I´ll say it yet again: no imagination can ever be creative enough to make this stuff up. No way.

Could it be a deliberate insider attack of the West on the West? Will Joe Six-Pack figure all this out soon enough?

Ref #7 https://www.mondaq.com/germany/oil-gas-electricity/1204198/liquefied-natural-gas-projects-in-germany-the-lng-acceleration-act

Ref #8 https://www.spiegel.de/international/germany/german-economy-minister-on-the-gas-shortage-there-is-a-black-hat-and-putin-is-wearing-it-a-e387bacf-70ce-447f-b7dc-3b48d0ac4178 Ref #9 https://www.rt.com/business/557554-europe-coal-energy-crisis/

Russia rules diesel

European transportation of anything and everything — from people to peanuts to 500,000 metric tons ULCC oil tankers — is 99% diesel-powered. Whomever in Europe wishes or needs to move whatever with whichever vehicle or craft from point A to point B anywhere — either very close or very far away — will need diesel-powered engines somewhere along the line, and sometimes all along the long line. This is a fact, not an opinion. No diesel, no Europe. By the same token – and if so far you´ve only been browsing from now on please focus sharply on every word — less diesel, less Europe… and not enough diesel, no longer Europe as we know it. Furthermore, less diesel necessarily means even far less diesel yet as explained below. But first, let´s recall where diesel comes from.

Diesel comes from distilled crude oil which, as of December 2022 will no longer be from Russia but per the EU sanctions package No.6 from somewhere else yet an unfathomable mystery. Now then, so far nothing to write home about as we all know such circumstances very well and mostly pray and hope for the best right?. Unfortunately, it´s much much worse than that. Why so? Please keep reading, we´ll get there soon enough, in the next couple of paragraphs at the most. Because when we all generically talk about “diesel”, we automatically and exclusively think

of diesel fuel, the beautifully colored liquid we fill up our fuel tanks with. But actually, the problem is three-fold as we have, yes indeed, (1) diesel fuel of course… but also (2) diesel exhaust fluid or DEF + (3) diesel engine lube oil…

and all three are required by diesel engines. And to compound the problem further, the vessels absolutely required for seaborne delivery of non-Russian diesel-refinable crude oil from December 2022 also run on diesel-powered engines. So that´s why above you read “less diesel necessarily means even far less diesel yet ” clear enough?

By the way, other Russian commodities besides their superb Urals blend for diesel distillation are also involved.

(1) diesel fuel

Diesel fuel is required and consumed all along the transportation vectors, from container ships with goods from wherever and the trucks that pick up such goods from European ports and bring them to warehouses and then to homes etc., etc., etc. Same thing for farms that grow food produce and have tractors and vehicles to move stuff around. Trucks, cars, ships, industrial machinery, buses, factories, homes, etc., etc., etc., all require diesel fuel.

(2) diesel exhaust fluid (DEF)

DEF is a solution of urea + de-ionized water required by diesel engines in order to reduce harmful gases released during combustion by catalytic conversion of the nitrogen oxide into nitrogen and steam. In most cases diesel engines will not even start without urea-derived DEF — manufactured as a derivative of natural gas – and normally produced partly in Europe but mostly in Russia and China, the world´s two largest exporters. Europe is now having very serious natural gas supply problems, so no urea — and thus no DEF — will come from Europe. And both China and Russia have stopped exporting urea in order to produce fertilizers for themselves. So without urea anywhere around either of European origin or imported from wherever then no DEF for Europe which means no diesel engines for Europe okay?

(3) diesel engine lube oil

Because of the Ukraine war and previous Covid supply chain problems, key manufacturers of certain additives have curtailed operations, and thus diesel engine lube oil has suffered serious shortage problems worldwide. With foresight, some countries have stockpiled such raw materials for additive manufacturing or improvised new ones. This includes Russia, India, China, and others in Southeast Asia. The additives involved are antioxidants, anti-corrosion agents, dispersing additives, antirust mechanisms, friction modifiers, EP additives, antifoaming agents, antioxidants, and others. Without these additives, traditional manufacturers cannot produce the final oil products for the internal lubrication of diesel engines. Please do remember that all three “diesels” explained above are required by any diesel engine.

Ref #10 http://theeconomiccollapseblog.com/a-warning-about-the-coming-shortages-of-diesel-fuel-diesel-exhaust-fluid-and-diesel-engine-oil/

Ref #11 https://www.newsweek.com/diesel-exhaust-fuel-shortage-us-drivers-fuel-prices-russia-ukraine-war-1716503

Ref #12 https://www.motorbiscuit.com/what-could-a-def-shortage-mean-for-diesel/

Ref #13 https://www.naturalnews.com/2022-06-22-red-alert-entire-us-supply-of-diesel-engine-oil-wiped-out.html

Ref #14 https://www.zerohedge.com/personal-finance/summer-preview-rolling-blackouts-higher-gas-prices-natural-gas-rationing-europe

So then, let´s summarize the European crude oil-dependency factors that impact availability of diesel products

(A) Crude oil shortage

Source yet unknown, below please see “what NOT to do” as non-sensical and foolish as it might sound.
Also please see Ref #15 https://thesaker.is/no-fuels-for-europe/

(B) Crude oil seaborne delivery is either poor or has failed

Diesel fueling problems for tankers, so less crude oil delivery means less diesel refined (vicious circle)
Suez limitations + Cape Horn problems + piracy + very long trips from far away with serious issues
Much higher freight costs + much longer distances complicate logistics compliance of batch deliveries.
Tanker problems & port labor union issues re schedule non-compliance both out-bound and in-bound
Tanker size limitations in a very tight batch-delivery quantum-discontinuous system
Tanker availability as 50% of the existing fleet is still fully dedicated to the delivery of Russian oil exports
Please see Ref #16 https://www.maritime-executive.com/article/sovcomflot-has-worked-around-sanctions-to-keep-sailing

(C) Crude oil serious port limitations & compromised loading & unloading capabilities

Port limitations + reforms per the Rostock example at Ref # 17 https://thesaker.is/dear-ursula-you-are-dead-wrong/
(D) Crude oil serious land logistics very limited capabilities

• The Schwedt pipeline example per Ref # 18 https://thesaker.is/germans-schwedt-hard-for-russian-oil/

(E) None (zero) refinery modifications planned for, coordinated, or made for new crude oil- refinement capabilities

• Please see Ref # 19 https://thesaker.is/for-europe-from-russia-with-love/

European DEF shortage per the description above
European diesel engine lube oil shortage per the description above
European diesel fuel shortage affecting the distribution of diesel fuel per the description above
the sequence

The process starts by defining the desired output, in this case with the focus on much-needed diesel fuel for all-around transportation and industrial machinery up and downstream of every sort which ends up governing everything else.

The process does NOT start by deciding to buy some whatever good or bad or intermediate quality oil at a “fair” price somewhere else wherever with whatever freight & delivery terms from whichever somebody you don´t even know yet. No, it doesn´t work that way. If skeptical, please ask other sources, and then understand, accept, and act accordingly.

Benjamin Franklin once said: “ Experience is an expensive school but fools will learn in no other”. That is humbly true.

C:\Users\Jorge Vilches\Desktop\index.jpg

what NOT to do

Reuters – “ France wants to replace Russian oil with oil from Venezuela and Iran ”. Really, do they? First of all, there is the very live and sensitive political memory both in Iran and Venezuela of years-long damaging sanctions and always constant Western aggressions, be it with Soleimani´s brutal in-your-face acknowledged assassination or Guaydo´s now supposed ownership of the Venezuelan gold vaulted in the Bank of England. But beyond the enormous geopolitical obstacles involved now even with Iran officially requesting admission into BRICS, the ignorant fools in charge should be whispered to in their ears that they will NEVER EVER distill the quality and amount of diesel that Europe requires from readily available either Venezuelan or Iranian oils. The reason is that both are heavy (or very heavy) and also ´sour´ meaning with relatively high sulfur content and are thusly very complicated to process into diesel, let alone by European refineries which simply can´t do it no matter what or how hard they try. Very exceptionally some very rare Iranian and Venezuelan blends could possibly be found to be somewhat better adapted to European needs. But the price of such would be ultra-high while constantly available volumes are ultra-low for European requirements or simply non-existent. In sum, not good, forget about those, please do not blow up the refineries (I kid you not) just stick to “the science” as Herr Habeck would have it, and for Heaven´s sake please do hurry up and stop proposing foolish ideas which you should know much better about.

Ref # 20 https://www.rt.com/business/557918-france-replacement-russian-oil/

Ref # 21 https://thesaker.is/europes-mad-ban-on-russian-oil/

Ref # 22 https://thesaker.is/why-russias-oil-ban-is-impossible/

Ref # 23 https://thesaker.is/europe-now-cheats-or-suffers/

Ref # 24 https://thesaker.is/pitchforks-soon-in-europe/

Now please repeat out loud after me, word by word… refineries-are-pretty-much-built-and-later-matched-and-finely-tuned-for-the-feedstock-they-will-use-for-the-rest-of-their-useful-service-lives… and can only be tweaked so far to be able to use even a slightly different feedstock, let alone completely different crudes such as traditional Venezuelan or Iranian oils. That is the reason why crude oil procurement contracts are so difficult to agree upon with a humongous amount of lab data, tests all-around, back & forth, and highly intense negotiations (meaning lots of TIME) which also necessarily require the guarantee of decades-long constant-quality supply. Crude oil blends are always at least slightly different (possibly a lot) but are definitely never fungible, not interchangeable in any way, shape or form. European refineries were built, matched, and mated to the Russian Urals blend to which everybody has become used to in more than one way. Iranian and Venezuelan oils are perfectly good for refining very important petrochemical distillates but are mostly very different from those which Europe now needs. Instead, Europe needs massive amounts of high-quality diesel and they better have lots of it soon enough, or else… What part of this is so hard to understand?

So please stop the wishful-thinking dead in its tracks, right now. Please. Many hundreds of millions of people depend upon a correct judgment nowhere to be seen today. Time is of the essence and in more than one-way time is already up. Once that diesel is defined as the preferential output, then – and only then – you look for the right type of crude oil to be refined ( … not from Iran or Venezuela…) but always delivered in the agreed quality and quantities, means, and terms, including guarantees provided by the right type of reliable vendor. There is a whole LOT to unpack in that last sentence so do not breeze by it lightly. Rather stop and focus on the many key difficult features yet to be found for the Urals substitute which will not happen. It may though possibly be that several different blends are found from different vendors, not a single well-known reliable supplier as Russia, which would complicate the matter tremendously as it would not be a “universal” substitute, but rather many. And finally – and never ever before – all the European refineries would be modified according to a (1) “coordinated plan” which now does not exist and (2) per the specific crude oil to be refined which now does not exist and (3) with the due process for each and only one by one (which does not exist) one at a time, not all simultaneously throughout Europe as these fools have decided without even knowing yet the source crude oil(s) to be refined (!!!!). Do you now understand why I say that it´s impossible to make this stuff up?

C:\Users\Jorge Vilches\Desktop\index.jpg

the chicken and the egg

Despite being a clear priority, so far Europeans are acting as if they did not need diesel production as the main desired output of their refineries. Furthermore, the diesel portion extracted from any new non-Russian crude oil – if ever found in the right terms with the delivery of large and continuous quantities and quality – would never be identical to what the Urals blend renders today, no way. At any rate, if the already approved game plan is to change such Russian Urals blend, the modifications to all European refineries would have to be made necessarily after the new crude oil feedstock is precisely known and made available, not a second before. And after decades of constant only-Urals processing, the switchover to whatever is finally found – yet unknown, if ever – is unfathomable. The only way to do it is to close down the distillation process throughout Europe for months. And precisely who, how, and by when will keep on supplying the European market with the quantity and quality required by the all-important diesel and other distillate fuels and petrochemicals, huh? We need an answer for that right now, before messing things up forever, okay?

not a drill

I am listening but can´t hear a single sound, anyone and all please do respond. This is for real, not a drill. If you don´t have the answer to the above question, come December 2022 — unless EU politicians backtrack with a humiliating 180 rewind, something which is definitely in the cards — supposedly the seaborne Russian Urals blend will be fully banned from Europe, meaning that a different non-Russian blend would be its substitute. But until a definition of such is made, nothing can be done, no plans, no bids, no contracts, no modifications, no calibration, no fine-tuning, no certification, no permitting, no commissioning, nothing. And whenever it is finally known, the switch-over sequence will be the hardest trick on planet Earth. The only known procedure is to very gradually stop the inflow of Urals (which takes time) and slowly “purge” the system, then shut down the refineries (not easy to do and yet more time) but always having ready at hand the continuous feed of the new (but yet-unknown) batch-delivered crude oil substitute right there and then – and only then — start with operational trials after lots of lab tests and back & forth until finally the bosses – not technical folks, but the political bosses — feel ´comfortable´ ( I did not say ´sure´) to re-start operations with the traditional comings and goings and – quite frankly – just see what the hell happens until the refinery achieves cruising speed, if ever, and then lock on the operating parameters. A very messy and risky experiment done simultaneously throughout all of Europe´s refineries … and winter is coming… And please do not blow up several European refineries in the process, I beg you because that would perpetuate the problem pretty much forever. Only harebrained fools can plan for this, but the price will still be paid by all Europeans, not only by two German Greens.

Slightly off-topic ( still very much EU energy-related ) per the Financial Times the UK has warned that, if push ever got to shove, it would shut down its nat-gas supply pipeline to Europe. Yes, it will. Meanwhile, a fully unsubstantiated report from Fitch without any details whatsoever, concludes that “it could take the EU more than three years to offset a full loss of Russian gas supply”. No kidding Fitch. How about never ever as it´d had to be mainly through non-existent LNG terminals and non-existent supplies plus hundreds of un-existent pipelines and lots of additional land-logistical infrastructure. And just from where exactly would Europe find the nat-gas required to survive during such “three years or more“? Are only harebrained ´experts´ available or shall we ever get any no-nonsense reporting from the West?

Ref # 25 https://www.rt.com/business/558053-europe-gas-threat-uk/

Ref # 26 https://www.rt.com/business/558048-eu-russia-gas-replacement/

Ref # 27 https://www.rt.com/business/557967-eu-gas-crisis-domino-effect/

Russian Judo Tears the West Apart

Washington’s sanctions on Moscow will destroy Europe, not Russia

MARCH 8, 2022

Washington’s ‘replacement strategy’ for sanctioned Russian oil and gas imports appears to be to cozy up to its oil-producing arch-enemies Iran and Venezuela. Photo Credit: The Cradle

PEPE ESCOBAR  

The official Russian blacklist of hostile sanctioning nations includes the US, the EU, Canada and, in Asia, Japan, South Korea, Taiwan, and Singapore (the only one from Southeast Asia). Notice how that ‘international community’ keeps shrinking.

The Global South should be aware that no nations from West Asia, Latin America and Africa have joined Washington’s sanctions bandwagon.

Moscow has not even announced its own package of counter-sanctions. Yet an official decree “On Temporary Order of Obligations to Certain Foreign Creditors,” which allows Russian companies to settle their debts in rubles, provides a hint of what’s to come.

Russian counter-measures all revolve around this new presidential decree, signed last Saturday, which economist Yevgeny Yushchuk defines as a “nuclear retaliatory landmine.” .

It works like this: to pay for loans obtained from a sanctioning country exceeding 10 million rubles a month, a Russian company does not have to make a transfer. They ask for a Russian bank to open a correspondent account in rubles under the creditor’s name. Then the company transfers rubles to this account at the current exchange rate, and it’s all perfectly legal.

Payments in foreign currency only go through the Central Bank on a case-by-case basis. They must receive special permission from the Government Commission for the Control of Foreign Investment.

What this mean in practice is that the bulk of the $478 billion or so in Russian foreign debt may “disappear” from the balance sheets of western banks. The equivalent in rubles will be deposited somewhere, in Russian banks, but western banks, as things stand, can’t access it.

It is debatable whether this straightforward strategy was the product of those non-sovereignist brains gathered at the Russian Central Bank. More likely, there has been input from influential economist Sergei Glazyev, also a top former advisor to Russian President Vladimir Putin on regional integration: here is a revised edition, in English, of his groundbreaking essay Sanctions and Sovereignty, which I have previously summarized.

Meanwhile, Sberbank confirmed it will issue Russia’s Mir debit/credit cards co-badged with China’s UnionPay. Alfa-Bank – the largest private bank in Russia – will also issue UnionPay credit and debit cards. Although only introduced five years ago, 40 percent of Russians already have a Mir card for domestic use. Now they will also be able to use it internationally, via UnionPay’s enormous network. And without Visa and Mastercard, commissions on all transactions will remain in the Russia-China sphere. De-dollarization in effect.

Mr. Maduro, gimme some oil

The Iran sanctions negotiations in Vienna may be reaching the last stage – as acknowledged even by Chinese diplomat Wang Qun. But it was Russian Foreign Minister Sergei Lavrov who introduced a new, crucial variable into Vienna’s final discussions.

Lavrov made his eleventh-hour demand quite explicit: “We have asked for a written guarantee…that the current [Russian sanctions] process triggered by the United States does not in any way damage our right to free and full trade, economic and investment cooperation and military-technical cooperation with the Islamic Republic.”

As per the Joint Comprehensive Plan of Action (JCPOA) agreement of 2015, Russia receives enriched uranium from Iran and exchanges it for yellowcake, and in parallel, is reconverting Iran’s Fordow nuclear plant into a research center. Without Iranian enriched uranium exports there’s simply no JCPOA deal. It boggles the mind that US Secretary of State Blinken does not seem to understand that.

Everyone in Vienna, sidelines included, knows that for all actors to sign on the JCPOA revival, no nation must be individually targeted in terms of trading with Iran. Tehran also knows it.

So what’s happening now is an elaborate game of Persian mirrors, coordinated between Russian and Iranian diplomacy. Moscow’s Ambassador to Tehran, Levan Jagaryan, attributed the fierce reaction to Lavrov in some Iranian quarters to a “misunderstanding.” This will all be played out in the shade.

An extra element is that according to a Persian Gulf intel source with privileged Iranian access, Tehran may be selling as many as three million barrels of oil a day already, “so if they do sign a deal it will not affect supply at all, only they will be paid more.”

The US administration of President Joe Biden is now absolutely desperate: today it banned all imports of oil and gas from Russia, which happens to be the second-largest exporter of oil to the US, behind Canada and ahead of Mexico. The US’ big Russian-energy ‘replacement strategy’ is to beg for oil from Iran and Venezuela.

So, the White House sent a delegation to talk to Venezuelan President Nicolás Maduro, led by Juan Gonzalez, the White House’s top Latin America adviser. The US offer is to “alleviate” sanctions on Caracas in exchange for oil.

The United States government has spent years – if not decades – burning all bridges with Venezuela and Iran. The USG destroyed Iraq and Libya, and isolated Venezuela and Iran, in its attempt to take over global oil markets – just to end up miserably trying to buy out both and escape from being crushed by the economic forces it has unleashed. That proves, once again, that imperial ‘policy makers’ are utterly clueless.

Caracas will request the elimination of all sanctions on Venezuela and the return of all its confiscated gold. And it seems like none of this was cleared with ‘President’ Juan Guaido, who since 2019, was the only Venezuelan leader “recognized” by Washington.

Social cohesion torn apart

Oil and gas markets, meanwhile, are in total panic. No western trader wants to buy Russian gas; and that has nothing to do with Russia’s state-owned energy behemoth Gazprom, which continues to duly supply customers that signed contracts with fixed tariffs, from $100 to $300 (others are paying over $3,000 in the spot market).

European banks are less and less willing to grant loans for energy trade with Russia because of the sanctions hysteria. A strong hint that the Russia-to-Germany gas pipeline Nord Stream 2 may be literally six feet under is that importer Wintershall-Dea wrote off its share of the financing, de facto assuming that the pipeline will not be launched.

Everyone with a brain in Germany knows that two extra Liquefied natural gas (LNG) terminals – still to be constructed – will not be enough for Berlin’s needs. There is simply not enough LNG to supply them. Europe will have to fight with Asia over who can pay more. Asia wins.

Europe imports roughly 400 billion cubic meters of gas a year, with Russia responsible for 200 billion of this. There’s no way Europe can find $200 billion anywhere else to replace Russia – be it in Algeria, Qatar or Turkmenistan. Not to mention its lack of necessary LNG terminals.

So obviously the top beneficiary of all the mess will be the US – which will be able to impose not only their terminals and control systems, but also profit from loans to the EU, sales of equipment, and full access to the whole EU energy infrastructure. All LNG installations, pipelines and warehouses will be connected to a sole network with a single control room: an American business dream.

Europe will be left with reduced gas production for its – dwindling – industry; job losses; decreasing quality of life standards; increased pressure over the social security system; and, last but not least, the necessity to apply for extra American loans. Some nations will go back to coal for heating. The Green Parade will be livid.

What about Russia? As a hypothesis, even if all its energy exports were curtailed – and they won’t be, their top clients are in Asia – Russia would not have to use its foreign reserves.

The Russophobic all-out attack on Russian exports also targets palladium metals – vital for electronics, from laptops to aircraft systems. Prices are skyrocketing. Russia controls 50% of the global market. Then there are noble gases – neon, helium, argon, xenon – essential for production of microchips. Titanium has risen by a quarter, and both Boeing – by a third – and Airbus – by two thirds – rely on titanium from Russia.

Oil, food, fertilizers, strategic metals, neon gas for semiconductors: all burning at the stake, at the feet of Witch Russia.

Some Westerners who still treasure Bismarckian realpolitik have started wondering whether shielding energy (in the case of Europe) and selected commodity flows from sanctions may have everything to do with protecting an immense racket: the commodity derivatives system.

After all, if that implodes, because of a shortage of commodities, the whole western financial system blows up. Now that’s a real system failure.

The key issue for the Global South to digest is that the “west” is not committing suicide. What we have here, essentially, is the United States willfully destroying German industry and the European economy – bizarrely, with their connivance.

To destroy the European economy means not allowing extra market space for China, and blocking the inevitable extra trade which will be a direct consequence of closer exchanges between the EU and the Regional Comprehensive Economic Partnership (RCEP), the world’s biggest trade deal.

The end result will be the US eating European savings for lunch while China expands its middle class to over 500 million people. Russia will do just fine, as Glazyev outlines: sovereign – and self-sufficient.

American economist Michael Hudson has concisely sketched the lineaments of imperial self-implosion. Yet way more dramatic, as a strategic disaster, is how the deaf, dumb and blind parade toward deep recession and near-hyperinflation will rip what’s left of the west’s social cohesion apart. Mission Accomplished.

(Republished from The Cradle by permission of author or representative)

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Russian gas export; Russia oil export; European energy market. Alexander Novak is currently the Deputy Prime Minister of the Russian Federation; previously served as the Minister of Energy

Thanks for E. for subtitling this CRUCIAL statement: (please press on “cc’ to see the English language subtitles)

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Buy a brick! The USA is selling Ukraine

July 28, 2021

by Rostislav Ishchenko

Source: 

https://ukraina.ru/opinion/20210723/1031902943.html

Translated by Eugenia

As we all know, to sell soothing useless one first has to buy something useless. At some point, Washington bought Ukraine – for a high price. The process of buying took a long time, as Ukraine was bought part by part.

When finally in 2014 all of Ukraine became the property of the US, White House quickly realized, to its horror, that several US administrations had been investing significant amounts of money in a completely useless product.

The Americans did not feel it necessary to hide their emotions. That is why as far as in 2015 some of the “Maidan heroes” guided by some emotional reactions of their American owners, overheard but not understood a proposed theory that Putin organized Maidan himself with the aim to take Crimea and burden the Americans with the rest of Ukraine. While the residents of the controlled territory entertained themselves with the conspiracy theories, the Americans were thinking about who they could unload Ukraine on.

At first, they though that Russia absolutely had to show interest in Ukraine. The reasons were obvious:

Long common history;

Personal and family connections;

Importance of cooperation in the industry and of the Ukrainian gas transit for the Russian economy;

Solution of the Crimea problem (with the disappearance of Ukraine, the claimant for the peninsula would disappear as well).

The US intended to trick Russia into buying Ukraine at the exchange for a free hand in Syria and the Middle East. They thought that the sanctions introduced for “the occupations of Crimea” would be left in place, this time under the guise of the sanctions for “the occupations of Ukraine”. In short, Washington planned to exchange something useless for something quite useful, preserving at the same time all the means of pressuring Russia. The Americans would not be the Americans if they did not manage to make money, even when faced with a potential loss.

However, this time the US was doomed to disappointment. Moscow did not show any interest in that useless product. It was not even clear whether Moscow would take Ukraine if it were paid to do so. As to paying something to get Ukraine – that was out of question. The next series of sanctions, aimed at creating a situation for Kremlin when annexing Ukraine would be less ruinous than keeping the status quo, also did not solve the problem. It turned out that Russia, although suffering short-term financial losses from the sanctions, learned how to use them to win strategic victories in the long-term game.

In 2016, Ukraine stopped playing a significant role in the American initiatives with regard to Russia. Ukraine was kept ready for sale, but it was understood that it was necessary to look for a new buyer. Furthermore, since by that time even pigmies in Africa realized just how useless Ukraine really was, it was critical to find a buyer that would not be able to refuse the offer. The sale of the Kiev colony of the US empire entered the mode “buy a brick” (1), which allowed to present an ordinary robbery as a voluntary purchase.

Obama during his term failed to find an appropriate “buyer”. Trump was not much interested in the Ukrainian problem, preferring to intrigue against China and fight against Nordstream-2 for the benefit of the US gas industry. However, in the end it were the Trump policies that helped the Biden administration to bind a “buyer” that would not be able to refuse the offer of a brick.

Fighting against Nordstream-2 and trying to minimize the cost of the American global hegemony, Trump seriously damaged the relationships with Germany. The Germans, finding themselves in an unexpected situation when the US turned from an ally to an economic competitor and stopped guaranteeing the military and political protection, had not dared to sharply change gears and go under the Russian wing. Besides, that could have easily caused an irreversible split in the EU. Berlin started to look for ways to restore the good relations with the US.

As a result, the Biden administration was able to execute a turnaround. Not being bound by the interest of the US oil and gas industry (Biden favors “green” energy instead of the traditional one) and with full understanding that the Germans were determined to complete Nordstream-2 at all costs, Washington pretended that it was super-concerned about the fate of Ukraine. A talk with Germany on the subject was presented as essentially a prerequisite for the normalization of relations. At the same time, the US made an unusual move refusing to impose sanctions against the German politicians and companies involved in the Nordstream-2 project.

Normally Washington never yields anything first during negotiations demanding concessions from its partners instead. In this case, however, the Americans were remarkably constructive. The real reason for that attitude was soon revealed: the Americans made Germany sign onto a deal purportedly serving the interests of Ukraine.

The celebrations in Kiev turned out to be short. When the details of the deal were revealed, it became quite clear that nobody guarantees anything to Ukraine or intends to compensate it for anything. Germany made a vague promise to fight for the interests of Ukraine and to push Gasprom to negotiate with Ukraine the extension of the transit contract. This, by the way, the Russian government never refused to do, provided Ukraine could offer competitive transit conditions. But this is precisely what Kiev does not want to do dreaming about continuing to profit from the “exclusiveness” of its transit capabilities. That is why Ukraine is fighting so fiercely against Nordstream-2. But nobody promised to force Moscow into an unprofitable deal. This was finally understood in Ukraine, and loud whine about betrayal immediately followed.

Ukraine is mistaken: it has not been betrayed; it has been sold. Furthermore, in spite what Biden’s opponents say, Biden did not sell it to Putin. Putin is using the Ukraine situation to serve Russian interests quite effectively, but he has not paid a dime or made a single political concession. On the contrary, Gasprom and Russia are planning to make a profit from all this, compensating for forced losses of the previous period. Biden sold the Ukrainian “brick” to Merkel.

In order to go away in style and leave her party a chance to remain in power, Bundeskanzlerin needed to restore mutual understanding with the US. However, the Nordstream-2 was such an important project that in this case Merkel was not prepared to make a single concession. The Americans are tough negotiators, though, so they did manage to make her an offer she could not refuse.

They have removed Nordstream-2 from the equation. The existing sanctions were left in place, for they did no harm, whereas no new sanctions, particularly against the Germans, will be imposed. All Germany’s obligations towards Ukraine would be expressed as vaguely as possible. It would be up to Berlin to decide what exactly these obligations are.

The only specific promise was that the US would collect money in the West in the amount of 1 billion dollars, which would be given to Ukraine to develop “green” energy in order to be able to compensate any potential problems with natural gas supplies. Germany would serve as a manager of the “green” energy development in Ukraine contributing 150-200 million dollars to that 1 billion (a tiny sum for Germany).

Biden killed two birds with one stone. First, he demonstrated to his supporters in the US how effectively he fights for ecology introducing “green” energy even in such a distant and God forsaken place as Ukraine.

Second, the Germans that have been fighting nuclear and coal power stations at home for years, could apply their experience in Ukraine at the same time making use of a billion dollars. They would, of course, have to share some with the aboriginies, but not that much. Besides, the Germans would be in a position to solve the problem of a dozen of nuclear blocks in Ukrainian nuclear plants all potential Chernobyls – that are still in the playful Ukrainian paws.

Thirdly, since after this “support” and “reforms”, Ukraine would inevitably face a deficit of electric power, the EU would be able to sell it not only natural gas “via reverse”, but also electricity.

Fourthly, the US finally got rid of the Ukrainian “suitcase without the handle” successfully forcing it onto Germany. Now it is time for the Merkel’s successors to think how to sell Ukraine back to Russia even if with added financial compensation.

Merkel herself has no cause to complain. She bought a “brick”, of course, but a brick nicely packaged in golden foil. While the purchase is being unwrapped, the elections will be over and the Chancellor will retire. If CDU/CSU fail to remain in power, that would definitely not be her fault. Merkel is passing on a solid well cared for country without debt or problems. The promises, which Kiev troublemakers would cling to, will surface later when the fate of the elections and the coalition will have been decided.

We have to give the honor where the honor is due: the Americans never discard anything and manage to get their pennies for the most useless and unattractive product.

As far as Ukraine is concerned… Well, nobody concerns himself with Ukraine anymore. The Ukrainian citizens are left with the only hope that at some time in the future, after a series of re-sales, this invalid, which is Ukraine, in spite of its obnoxious personality, a habit to gnaw at the owner’s furniture, damage wallpaper, and crap all over the place, would end up an good hands.

But this is very unlikely.

(1) “Buy a brick” – a common Russian joke. A big guy holding a brick approaches a passerby: “Ah, dude, buy this brick”. The person responds: “No, thank you, I don’t need it”. When the big guy waives the brick menacingly over the head of the other: “You’d better buy this brick and not tempt your fate”.

Russia Leaves the European Commissioner for Energy Union out in the Cold

 Apparently, it *really* did happen

First, from the horse’s mouth:

then these other sources:

http://www.focus-fen.net/news/2015/01/14/360134/europe-amazed-by-gazproms-intention-to-redirect-all-gas-from-ukraine-to-turkey.html
http://www.euractiv.com/sections/energy/russia-says-it-will-shift-gas-transit-ukraine-turkey-311291
https://euobserver.com/news/127216
http://rt.com/business/222619-bulgaria-south-stream-gazprom/

Here is a useful graphic from RT article above:

POSTED BY VINEYARDSAKER: AT 16:51 

Russia Leaves the European Commissioner for Energy Union out in the Cold

by Aleksei Kettunen

GAZPROM–EU: 6–0

Yesterday on Wednesday the EU negotiated with Gazprom in Moscow. The EU negotiators had three aims:

1. Pressure Russia into extending the special winter pricing on gas supplies to Ukrainian due to end in March,
2. Force Russia to further unilateral concessions by forcing all European energy purchases to happen through a new “European Energy Union”,
3. Pressure Russia to resurrect the canceled South Stream gas pipeline project and build it in accordance with the restrictive rules of the Third Energy Package.

The Russian response was a cold shower.

Firstly, Gazprom said there is no need for a special summer agreement on Ukrainian gas purchases, as a valid contract already exists.

In practice, this means that all the concessions Kiev has received for the winter season are temporary and there is no space for negotiations. If the EU wants to ensure their gas transits through Ukraine then it must put pressure on Kiev to comply with existing agreements. If Kiev needs gas it cannot afford to pay – thus endangering transit deliveries to EU countries – it is not Russia’s problem. The same applies to Kiev’s gas debts; the EU will have to pay both the Ukrainian gas debts and any future gas purchases.

Secondly, Gazprom announced that the South Stream gas pipeline project is dead and will not be realized. The project collapsed under US and EU pressure. The greatest obstacle turned out to be EU’s Third Energy Package. It heavily restricts how Gazprom could use their own pipeline; Gasprom could only use 50% of South Stream’s capacity and would be forced to offer the remaining 50% of the transportation capacity to third parties. Although all of the agreements between Gasprom and the various transit and consumer countries were made before the Third Energy Package entered into force, the European Commission now demands that it is applied retroactively.

Russia’s solution is as follows: Gazprom will build the pipeline to Turkey and extend it the Turkish-Greek border. The pipeline will end in a gas distribution hub near the EU border. If the EU wants to buy gas, it will have to build a pipeline to Turkey at its own expense. It will also need to expand the gas transport capacity between its South European member countries – and do so under the constraints imposed by its own Third Energy Package.

The final punch to EU arrogance was Gazprom’s declaration that after the completion of the gas hub and the Turkish pipeline Gazprom will end all gas transit through Ukraine. Russian gas will only be available through Turkey! The Ukrainian pipeline network will be used exclusively supply gas to Ukraine. Gazprom based its decision on Ukraine’s instability and the high transit risks.

Maroš Šefčovič, the week-old European Commissioner for Energy Union must have had the worst day of his life. EU arrogance hit a brick wall. A major scandal is brewing about how Germany ruthlessly secured its own gas supply through the Nord Stream Pipeline and then used all means possible to sabotage the South Stream pipeline. There is no better cause inflame the North-South conflict in the EU. The prospective users of the South Stream pipeline are sure to feel “eternal gratitude” to the United States for killing the project.

The perpetual EU candidate Turkey will feel Schadenfreude watching the EU’s plight while calculating the future revenues from gas transits. Turkey also happens to be Gazprom’s second-largest customer after Germany. The biggest loser will be Ukraine, the world’s preeminent gas siphoner and blackmailer.

Despite all the arrogant talk the EU has no real alternative to Russian natural gas. Brussels has to swallow it pride and come to its senses.

Now we are anxiously waiting for the Western mainstream media’s spin on the story.

Sources:

ЕК: Россия решила перенаправить идущий через Украину газ на новую трубу в Турцию

Миллер: Снять риски транзита через Украину ЕС поможет только «Турецкий поток»

See also:

Russia Cuts Off Ukraine Gas Supply To 6 European Countries

POSTED BY VINEYARDSAKER: AT 16:24

River to Sea Uprooted Palestinian   

The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Blog!

Time for the EU to re-evaluate its subservience to the USA before we freeze to death or are nuked

Europe Ready to Suffer from Cold to Please US

http://www.strategic-culture.org/news/2014/09/15/europe-ready-to-suffer-from-cold-to-please-us.html

The Ukraine-Russia gas conflicts have a history. Usually the differences have been narrowed down or resolved before the threat of collapse in Europe became imminent. Now there is a big chance Europe will be left without heating in the coming winter. Ukraine, Russia gas dispute Since the February coup Kiev has been doing its best to sever ties with Gasprom. The Russian gas deliveries were fully stopped on June 16, 2014. The controversy is to be tackled by the Stockholm Court. Ukraine wants the price to go down to 268, 8 dollars for a thousand of cubic meters. Gasprom insists Ukraine should redeem its debt of 4, 458 billion dollars. As soon as a hope for reaching an accord appears Ukrainian negotiators use the tactics of bringing the achieved results to naught by putting forward new conditions. For instance, this August Russia offered to return the 100-dollar discount and make the price go down to 385 dollars a ton. In turn Kiev offered to establish two different prices: a winter price of 385 dollars, and a summer price equal to 320 dollars. Kiev had planned to make the offer at the Russia-European Union-Ukraine round of talks slated for September 6. But suddenly it all had been changed just a week before the talks started. Now Ukraine wants the price to be the same as at the spot market minus transit costs. The difference between spot market and long-term contracts prices is significant. The offer is unacceptable. Ukraine also wants the gas terminals be moved to the eastern border. It will make Gasprom reconsider all the concluded contracts with European partners. The forever changing position of Ukraine made the talks stymied. On September 10 Petro Poroshenko signed a new law on reforming national transportation system. Under the document, the operational and technological control functions are transferred from the state company to an operator that must be approved by the Ministry of Energy and Coal Industry. Operator companies must be those founded and owned only by the Ukrainian state or owned or belonging to residents from the European Union, the United States or the European Energy Community. In this case, the state’s share may not be less than 51%, with the rest to belong to other gas transportation system operators or members of the European network of operators. On September 12 a new Ukrainian law on sanctions became effective. It allows Ukraine to stop gas deliveries to Europe. Everyone knows what the termination of gas supplies may lead to. The intention to sell the transit system will also entail grave implications. Being the mostpowerful pipeline in the world it starts to lose the importance because of Kiev’s myope policy. In 2007 115 billion cubic meters of Russian gas was transported via Ukraine. It was only 36, 571 billion in the first half of 2014. Even if nothing were changed the total gas deliveries would be 73, 14 billion cubic meters by the end of the year as North Stream has become operational and the territory of Belarus is used for transportation. After the projects are implemented 55 billion cubic meters will be delivered via North Stream, the Yamal-Europe pipeline’s full capacity is 33 billion. The figure is and 63 billion cubic meters for South Stream. It will bring the total capacity to 151 billion cubic meters making it exceed the gas supplies going through the territory of Ukraine in 2007. It is also twice as much as predicted for 2014. The estimates don’t take into account the second pipeline of the route being in the process of negotiation since 2013. The modernization of the pipeline offered for sale to Europeans requires the investments equal to 19, 5 billion dollars. It makes meaning only in case of stable supplies on the part of Russia. Nobody can say for sure if it would be the case as crisis hits Ukraine. Battle for diversification It a surprising fact that the threats to block the Russian gas transit finds support in Europe. On April 17, the European parliament suspended the South Stream construction saying it wants to reduce the Europe’s dependence on Russian gas thanks to diversification of sources, full implementation of the third energy package and suspension of gas imports if need be. Bulgaria stopped the implementation of the project. European MEPs did not take into account that the termination of supplies would not hit Gasprom only but also European shareholders: Italian ENI (20%), German Wintershall (15%) and French EDF (15%). In case gas deliveries were stopped South Eastern Europe will be hit. Serbia, Moldova, Slovenia, Slovakia and Slovenia depend 100% on the Ukrainian route, it’s 50% for Austria, Greece, the Czech Republic and Croatia, the figure is 40% in case of Italy. No way could the North Stream gas be re-routed to Bulgaria. In the contemporary Europe political considerations often outweigh good sense.Otherwise how can one explain the self-inflicted damage by launching reverse supplies? It has already created problems with gas storage. The storage facilities are only half full in Hungary. Austria and Poland have refused reverse deliveries in favor of their consumers. The decision of Slovakia to supply 10 billion cubic meters to Kiev looks strange. It’s a lot given the country’s size. Slovakian Slovensky plynarensky priemysel said it has received 10% less gas via the Ukrainian route; Polish PGNiG has got 24% less that usually as of September 9. According to Energy Aspects estimates, the gas prices in Europe may increase twice in case Russian gas supplies were interrupted. No matter that the European Union stays on the confrontation course. European energy Commissioner Gunter Oettinger said the price of $485 per 1,000 cubic metres of gas that Russia is demanding was “unacceptable” and not in line with market conditions and determined by politics. Ukraine insists on a price of $268.50 per 1,000 cubic meters. In return for Ukraine making a down-payment, Russia has to give the former Soviet republic a fair price in line with the amount paid by other European countries, he said. “After Ukraine has made a down-payment, we should expect Russia to guarantee a fair offer, a fair price in future.” In the medium-term the EU would be affected by Russia stopping delivery to Ukraine, Oettinger noted. Russia supplies around a third of Europe’s gas demand and about half of its gas imports from Russia flow through Ukraine. He does not like that the Russia-offered price envisaged the cancellation of export duties. The Russian government’s decision could be altered any time. According to him, the discount does not change the formula of defining the price for Ukraine. He never remembered those who risk to be left without heating in winter. Shale gas illusions The European establishment takes the decisions that run counter to the interests of Europeans while the United States goes to any length pursuing the goal of establishing control over the European energy market. US President Obama promises to supply the continent with gas transporting as much as Europe needs. The argument does not hold water. The United States lacks infrastructure for transporting liquid gas, it needs time to do it. The estimates say that all planned 37 infrastructure facilities should be constructed by 2020 before exports to Europe start. According to Fitch agency, with all 37 infrastructure facilities constructed only 68% of European consumer demands would be satisfied. Besides the prospects for shale revolution appear to be exaggerated. According to geologist David Hughes, US corporations have drilled more than 7 thousand wells to generate a 42 billion dollar income while the sales have brought in only 32, 5 billion. British Petroleum has lost 5 billion dollars, the losses of UK BG Group amount to 1, 3 billion dollars and Chesapeake Energy is on the verge of bankruptcy. In 2013 there was not a single well to bring profit in the United States. In his book Cold, Hungry and in the Dark: Exploding the Natural Gas Supply Myth Bill Powers writes that the information on shale gas presented by US government is too rosy. There is a huge bubble to blow up soon. The shale gas production may well go down before the infrastructure for sales to Europe is there. Washington has one more reason for instigating sanctions against Russia and it prefers not to talk about it. The US has plans to sell gas to Asia where the price is over 500 dollars. They want Europeans to pay at least the same price. It is an element of broader US policy aimed at putting an end to Russian gas deliveries to Europe and creating an artificial deficit to make the prices go up and benefit American companies. *** Having taken a decision to choose the policy of confrontation with Russia, Brussels did not assess the implications. Even under the most favorable conditions Europe cannot refuse Russian gas deliveries. But Russia can move to Asian markets. The “historic” contract with China is signed. The eastern Power of Siberia pipeline is being constructed. Japan has already said it wants a pipeline to connect the island of Sakhalin with Hokkaido. There are plans to sign an agreement with China in November this year to build a pipeline to Europe via Altai route. On September 11, 2014 the Russia-Mongolia-China summit gave the project a powerful impetus. Europeans would better think twice before scarifying their energy security for bolstering US shale gas plans.

Russia-China Putin-Xi Huge Gas Deal Could End Dollar and US Domination

Putin-Xi Huge Gas Deal Could End Dollar and US Domination

 

by: CLAYTON HALLMARK
Tuesday May 20, 2014 – 22:37

 

 

The situation between Russia and the USA almost has reached a state of “hot” war. Usually that is what happens when anyone threatens America’s dollar hegemony, which really is its hegemony. Russia and China soon may arrange for payments on their huge natural gas deal (and later a huge petroleum deal) to be made in OTHER THAN DOLLARS – a “RED LINE” for which lesser countries have been invaded and their leaders killed by US forces.

Russia is the second-largest producer of dry natural gas and third-largest liquid fuels producer in the world. Sales of these hydrocarbons by Russia are nearly a trillion dollars a year.

For the first time, the present Russian and Chinese leaders met in China. Both attended the CISA meeting in Shanghai on May 20-21, 1914. Presidents Xi and Putin met to finalize a deal in which Russia’s state-owned Gazprom will supply, via pipeline to China, 38 billion or more cubic meters of natural gas per year – for 30 years — beginning in 2018. China is leading the world into a new Gas Age, a coming epochal change from the Oil Age, for the whole world. China’s gas use will double by 2020.

The Putin-Xi gas deal represents a huge income for Russia, as the price is being negotiated at 2201 to 2446 Chinese yuan (currently USD $360-$400), 11843-13159 Russian rubles, or 270-300 euros per 1,000 cubic meters. (See BBC article “Russia: Historic 30-yr gas deal with China set to be signed next week” http://rt.com/business/158396-gaspr…). That’s over $410 billion dollars.

FOR “CURRENCY OUTLAWS” INTERESTED IN SEEING THE END OF THE “PAX AMERICANA,” here is a site for currency conversion: http://www.unitconversion.org/unit_… .

The May 20, 2014, agreement could mark the first time a huge gas or oil deal in a currency other than dollars is agreed upon. Payments from China could be in any of the above currencies. For world trade in other than oil and gas, the volume in yuan already has surpassed that in euros. However, the vast majority of all world trade – not just trade involving the US — has been in dollars since the US emerged physically unscathed and enhanced by war profits from World War II, almost 70 years ago.

“Normally,” the US launches a military attack against any country that tries to abandon the dollar (Iraq, Libya, etc.). The trade in dollars is that big a deal, hence so is the Putin-Xi natural gas deal to be announced at the CISA conference in Shanghai (or soon after), where heads-of-state of countries of all religions, civilizations, and levels of industrialization will meet.

The Russia-Chinese alliance won’t stop at gas, of course. Russian state-owned oil company Rosneft’s president – and Putin confidant — Igor Sechin met with the chairman of the Chinese company Sinopec Fu Chenyu on May 15 to discuss possible long-term contracts for the supply of petroleum. These oil contracts , too, could be huge and for other than dollars. Last fall “Rosneft” and Sinopec signed a memorandum of export contracts, which provides crude oil sales to 100 million tons over 10 years on a prepaid basis. That is over 700 million barrels of oil for over $490 billion dollars. If China pays in yuan, rubles or euros instead of dollars, that would mean a huge loss of petrodollar profits for the US. The oil and gas deals together are worth almost a trillion dollars.

The US currently is getting a cut of the vast majority of all world trade as a result of the dollar supremacy, which also gives the its US economic and military supremacy.

The “dollar reserve,” or dollar as the world’s standard currency for trading and saving, causes dollars to return to the US as investments and loans, allowing Boehner and Obama to expand the government’s debt limit and Americans to get foreign goods cheaply.

How to Kick America Where It Hurts

“EVEN WORSE”: RUSSIA’S SPIMEX EXCHANGE TO START TRADING CRUDE OIL, and IRAN’S OIL BOURSE GROWS.

Even worse, for American hegemony, is when the dominance of the exchanges for trading in the two main grades of crude oil – the US West Texas Intermediate “benchmark” and the world Brent (based on UK North Sea fields) benchmark – is lost. Last week, WTI for “next month” (June) delivery was at $99.50 a barrel on the New York Mercantile Exchange after touching $100.42 earlier. Brent for June settlement was at $107.06 a barrel on the London-based ICE Futures Europe exchange. The nationwide-average US price for gasoline usually is approximately the Brent price divided by 42, then adding a dollar a gallon (figures to be $3.55 per gallon last week).

Russia, China, Iran, and many other countries are developing other crude oil benchmarks than WTI and Brent, and other exchanges than NYMEX and ICE on which to trade them – all to “eliminate the middleman” in transactions between themselves.

St. Petersburg, Russia, Oil Products Indices

Soon to join these indices is one for crude oil, as Russia establishes competition for US-WTI and world-Brent oil-price benchmarks and the US dollar for world trade

RUSSIA’S St. Petersburg International Mercantile Exchange, SPIMEX is the largest commodity exchange in Russia, organizing trading of real goods and futures contracts. (Futures are contracts for delivery of goods in the future rather than next month or “on the spot,” right now. If delivery would result in a financial loss for one party, that can settle up by paying the loss to the other.) Based on transactions in the course of trading, the St. Petersburg International Exchange calculates and publishes daily “indices“ of refinery products as shown in the ACCCOMPANYING CHART. The index, like Dow-Jones for stocks, is nondimensional, not in dollars or any currency, but a “pure” number calculated thus: http://spimex.com/upload/presentati… .

The “Big Deal at CISA Shanghai” resulting from Xi-Putin meetings Tuesday and Wednesday, May 20th or 21st, will hit all Americans in the pocketbook, removing what is called America’s “exorbitant privilege,” which has allowed the Twin Deficits — federal and trade — to grow continually since the 1970s. Of course, nothing grows forever.

As the world’s countries get off the dollar standard — which a big deal like this will put in motion — everything changes in America. The result probably will be not just a mere collapse, but the death of a world political-economic system , the “world-system” itself (a la Immanuel Wallerstein). We can build a better system, but not one with unlimited growth.

IRAN’S REAL NUKE: THE IRANIAN INTERNATIONAL MERCANTILE EXCHANGE The Iranian oil bourse on Kish Island (SEE PHOTO) has almost gotten Iran subjected to the Shock and Awe of the US armed forces. The problem is not Iran’s nuclear-power program; its is Iran’s oil-for-other-than-dollars program. Iran, OPEC’s second-largest oil producer, has the world’s second largest natural gas reserves after Russia.

The Iran International Mercantile Exchange on Kish Island

Iran has established its own exchange for crude oil and oil products (rivaling the US NYMEX and UK ICE), its own crude-oil price benchmark (for Caspian Sea oil), its own indices for oils, and oil trade in other-than-dollars.

The oil bourse was started up in early 2008. The bourse requires payment in Euros rather then US$, the current and only mode of payment for oil. Like the St. Petersburg bourse, the Iran Merc initially traded in refinery products, but in 2011 it began trading in crude oil directly, which might one day perhaps create a “Caspian Crude” benchmark price analogous to Brent or WTI crude. This was started only after the Iran bourse demonstrated a reasonable period of trouble-free running and fair prices (Russia’s SPIMEX is at that point now).

BRENT, WTI – OR ESPO? RUSSIA’S PIPELINE PUSH INTO ASIAN OIL MARKETS

Russia is expanding its Asia oil-delivery infrastructure through the ESPO pipeline. Historically Russia focused on supplying Europe with fuel, but that has changed in recent years, especially since the coup in Kiev, Ukraine.

The question is how? Refer to the MAP. “Currently Rosneft supplies China with 300,000 b/d via the Eastern Siberian Oil Pipeline’s (ESPO) spur from Skovorodino, Russia to Daqing, China, which is running at its design capacity,” notes the IEA. The capacity of ESPO pipeline is due to be inceased slowly, adding 100,000 b/d by the end of 2017, with another 300,000 b/d to be added up to 2037. That doesn’t seem like quite enough, especially with the huge Xi-Putin oil summit of May 20-21 in Shanghai.

Pipelines for Delivering Natural Gas From Siberian Oilfields to China’s Populous Northeast

The Altai pipeline was started but not completed. The Power of Shanghai line runs parallel to an existing Eastern China – Pacific Ocean (ESPO) line and is desired by China for the huge gas deal with Russia. Russia hopes to make the ESPO oil a standard oil for pricing, along with Brent and West Texas Intermediate. The pricing will be in other than dollars eventually.

In the gas deal negotiations with Russia, China is calling for a new pipeline, the Power of Siberia pipeline to be in parallel with the Eastern Siberia – Pacific Ocean line in the map. There may be an issue on who will pay for the line, and whether an upfront payment from China will be needed.

The pipeline moves will send more ESPO crude to China’s populous east coast and northern region and other Asian nations. Declines in the North Sea output (of Brent-standard oil) may also contribute to increased use of this new benchmark, ESPO, for pricing crude.

And finally we come to another declining oil source and the fracking oil (procured by fracturing rocks by use of high-pressure water ) of the Bakken, Eagle Ford, Marcellus, and Utica oilfields. Newly fracked well may produce 1,000 barrels a day, but this falls by 60 percent the next year, 35 by the third. Oil companies should replace about 40 percent of the current production each year to maintain/increase production.

No oil company has yet made any money at this – if you ignore the enormous amount of money the companies still have to pay back with interest to the banks. That is why major oil companies like Shell already have bailed out, sold off their fracking lands.

The money for the “The Fracking Recovery” was made available by the US Federal Reserve by creating money out of thin air to buy US bonds and bank assets. Banks hoarded much of this windfall but lent out enough to create the Fracking Recovery – without which there would be no recovery at all. As the interest payments of fracking producers of oil mount, and as their wells and oilfields become depleted and the Fed continues “tapering” its stimulus, the Fracking Recovery will end with this decade.

The end of the petrodollar and dollar reserve will insure that it will not return.