Wednesday, April 29, 2020

Basic Arithmetic.

$250,000 x number of days. Say, one month of renting such a storage will cost you $250,000 x 30= $7,500,00. Boy, I am in the wrong business, can I get myself a tanker to rent out? There you go, everything you need to know about current state of the oil war and availability of the oil storage in the United States. 
Daily fluctuations of plus-minus 5-7% of the oil price mean absolutely nothing because price corridor is visible and, most likely, will stay more or less stable for months to come. This hurts, so much so that some cretin came up today with this.  
Paul Brandus, who wrote this butt-hurt drivel has an "impressive" by Western "standards" background, and you guessed it right--in journalism. American journalism, I stress, no less. And, of course, Brandus has it exactly backwards when he bundles Saudi Arabia and Russia together, especially when stating a deliberate lies that Russia needs "petrodollar". It is Saudi Arabia which needs it, Russia doesn't need it at all. In fact, as already has been stated not for once, and even this loser Brandus admits it:
If the Russians were out to inflict pain on the U.S. oil patch, they’ve succeeded. But what happens over the long term? If Moscow thinks they’re going to put the Americans out of business, they’d better think again.
The issue here is not "inflicting" pain on US "oil patch"--at issue for Russia here is what to do with a gigantic bubble of financial trash, aka US Dollar and US T-bills, in the nearest future since once this bubble begins to deflate, the issue of petrodollar, which is being obliterated as I type this, will be of secondary importance. This is happening precisely because Russia, in a long run, doesn't need petrodollar and views it as a main driver behind a financial catastrophe which is in progress. Russia and China, as an example, long ago, have no problem with Rubles and Yuan oil trade.
But, of course, Brandus, being a journo, doesn't read news which he doesn't like. That is why he doesn't get it, that specifically for Russia "killing" US shale is a secondary aim, not to speak of oil market being artificially "elevated" precisely to keep shale oil alive. In other words, there was no real economic sense in propping up inherently economically senseless US shale oil by pouring billions of nonreturnable loans into it. And then, of course, there is this "power element" which goes missing in Brandus' moan, because Saudis are expendable in this big geopolitical transformation and nobody would cry if this backward shithole of a country disintegrates tomorrow, Russia is a completely different player--the only country which can wipe the United States off the map, and which has excellent real industry and real economy which even such radically pro-Western neo-liberal fundamentalists as Kudrin begin to believe in (in Russian).  

Remarkably, it is precisely US client state, Saudi Arabia, the pillar on which petrodollar rests, which is most interested in killing US shale oil. Russia here is just for the ride, doing what any sensible strategist would do--use someone's efforts, in this particular case by bat shit crazy MBS to improve own position. An additional benefit, so to speak, easily gained through the effort of others. In the end, Russia doesn't operate in tankers on the scale of Saudis: 
So my suggestion to Brandus is to calm down and start learning about how real geoeconomics, geopolitics and power balance form and work, before expressing his opinions on any Russia's topic because it is the only country which realistically holds world from sliding into a global war. Especially when one operates with such numbers, which even 4 months ago would have been inconceivable, but then again--I warned, the time of real valuation of economy is coming:
Does Mr. Brandus even know when such numbers happened before? Right, before World War Two. But that would require at least some brief acquaintance with the nature of conflict and warfare. So, no matter what Brandus and his ilk write on the issue, they will never grasp a full picture of the current events and they better pray that these events remain only in the realm of economic conflict without spilling into the realm of a practical military confrontation, which is far closer than Mr.Brandus can ever wrap his brain around. Especially when proper valuation of the US economy completes and we all will see the actual scale of devastation inflicted upon majority of Americans as a result of mindless and criminal robbery by the American financial class.

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