Where Are They Now.

We all know this old cliche'--one begins to recall some decades old TV show or film and then this question pops up regarding those actors who played our favorite heroes and what they are doing today. The Goddess of TV, the greatest mind of our time and moral compass of civilization, Oprah, even had a show titled "Where Are They Now?" Well, folks, today, it seems, the cycle of "where are they now" shrunk dramatically from decades to years, to weeks and even hours. And that is my question: where are those Bloomberg's, Russian liberda and other "experts" who even two days ago were spreading all kinds of BS about OPEC++ deal. This whole "where are they now" issue has, apart from very practical pure geopolitical and economics side, a huge academic issue--those are not "experts". Those are people who have some insights, often due to their social status, into rumors circulating on a fairly high level but have absolutely no professional apparatus to judge complex industrial processes, not to speak of a true systemic analysis. So, where are those "experts" now? Anyone cares?

Some people, however, begin to speculate if Russia and KSA are "in the same boat" in relation to US Shale oil unfolding catastrophe:

OPEC may have reached a deal to cut 10 million bpd, but for many U.S. shale producers, it is too little, far too late. Much ado has been made about Saudi Arabia and Russia’s push to end their cooperation in the production cut deal a month ago, flooding the markets with oil at a perilous time. While some have suggested that it was a deliberate attempt to break the U.S. Shale industry that has run roughshod over the oil industry in the last few years, upsetting the market balance of the oil cartel. Both Saudi Arabia and Russia have outright denied the claim that is was a purposeful attack on the shale industry—a wise proclamation given shale’s fastidious ally, U.S. President Donald Trump, who has praised the shale industry that has served as the platform for America’s energy independence efforts.

I agree, much ado about nothing since reality always trumps (pun intended) wishful thinking. As the piece continues:

Those efforts have been wildly successful by any measuring stick, and for that reason, shale will not be allowed to die no matter what Saudi Arabia and Russia dish out. But that doesn’t mean that some of the weaker U.S. shale players won’t wither up and die along the way, drowning in extra crude inventory and debt, saddled with inefficiencies and a business that couldn’t make it at even $50 crude, and without the lifelines of increased oil demand or stimulus money. For shale players in this category, your days are numbered—all signs point to this inevitable conclusion.

The conclusion is indeed, inevitable, and it is the fact that Trump can do whatever he wants and print as much money as he wants, US shale is dead to the level which will keep the United States a net IMPORTER, not a net exporter of oil. Of course, the issue here is what's the deal with Saudi-Russian alleged "collusion". I don't think there is any collusion at all. Remember, unlike all kinds of "experts" none of who ever worked a day in a productive capacity, I openly and readily admit that I am NOT an expert in oil industry. But I also know that in any combination of relations between Russia and Saudi Arabia, even despite Saudis' importance as a oil superpower, Saudis' status (read my latest book) is too insignificant to have a fully independent position vis-a-vis Russia. In other words, as events since Vienna OPEC+ summit demonstrate, it is legitimate at this state that Saudis do not really have much agency in these oil wars being allowed to do only what they can (oversupplying the market, thus crushing prices), while being used by Russia for a much broader set of geopolitical objectives which are simply beyond the grasp of Saudis. 

This may explain the fact that starting from Mnuchin's sudden change of MO and meeting with Russian Ambassador Antonov on March 9, to Trump's and Pompeo's one after another phone calls to Moscow, to suddenly "funny" issues of Russian-American cooperation in space, to discussing sanctions (why?) and investments (that is a wowser) seems to point out to Washington having a reality dawning on them that not only "oil market" (most of it a fraud drowned in paper derivatives) is not going to be the same but the same applies to Russian-American relations, you know "strategic stability" and all that jazz. As was stated from the very onset of this oil crisis--Russia was ready to ride this out for years, in fact Russian budget recently was recalculated to the oil price of $20 per barrel. Yet, all this "expert" community, including people who cannot have a clue by definition (Kortunov, are you reading this) continued to deny a reality of Russia gigantic currency (and gold) reserves being engaged. Yes, Covid-19 did play a role and threw the curved ball of sorts, but it was not just for Russia, the United States had ball flying at her too. Meanwhile reality on the ground is dramatic and even Reuters can not hide it anymore:

Oil fields from Texas and New Mexico to Oklahoma and North Dakota are going quiet as drilling halts and tens of thousands of oil workers lose their livelihood. Fuel demand has plunged by as much as 30 million barrels per day (bpd) - or 30% - as efforts to fight the coronavirus pandemic have grounded aircraft, reduced vehicle usage and pushed economies worldwide toward recession.

Some even proposed that Putin is exacting a revenge on the United States fro 1990s and 2000s. Possible? Possible, but how probable? Putin and his team do not seems as overcome with emotions in this matter, it is one thing to crush economies of the rabidly Russophobic Baltic states, totally another--to deal with superpower, however dysfunctional and largely ungovernable. In simpler words--we don't know the whole of a game, we observe only some partial manifestations of it and we surely do NOT have a massive and highly efficient, as events of the last 7 years demonstrated so dramatically, intelligence-analytical strategic forecasting apparatus at Putin's disposal. He knows what we don't and that makes the difference, a gigantic one. Is the United States being taught a lesson? Definitely possible, but for now I still stick to my proposition of superpowers' Noblesse Oblige because Russia is NOT interested in the US disintegrating or becoming completely ungovernable while having a vast arsenal of nuclear weapons on her territory. Yet, Saudis could be sacrificed in this game, in fact, Saudis' "cut" may happen "naturally" by the Kingdom disintegrating (which is a highly desirable outcome) and someone else taking control of oil fields, someone who is not used to driving Ferraris and living in mansions doing absolutely nothing of value. Is it possible? Absolutely, otherwise they wouldn't be desperately needing a truce:

DUBAI, April 14 (Reuters) - Saudi Arabia has resumed indirect talks with Yemen's Houthi movement to cement a faltering ceasefire, sources familiar with the discussions said, as the United Nations pushes for a de-escalation to prepare for a coronavirus outbreak. The Iran-aligned Houthis have yet to accept the nationwide truce prompted by the pandemic and announced by the Saudi-led coalition last week, and violence has continued on several frontlines.

Ah, Houthis, God bless your soul in your fair fight for freedom and democracy, wink, wink. If to remove, by force or by agreement, all those Pakistani, American, West European mercenaries from the front lines, I wonder how long will Riyadh defend itself against Houthis? But I am running ahead of myself here. 

Cognitive Dissonance.

You know, I stress it constantly, I am not an oil industry specialist but I can compare--you know, like I can tell the difference between black and white colors, I can also tell, most of the time, BS from truth. I am (semi)professionally involved in debunking Western media BS and here I go again. You already saw a Force 5 tornado of BS from US media on how Trump "brokered" the new deal and how Russia was "defeated". Here is an example from, who else, Bloomberg:

The ill-fated decision to face off against Saudi Arabia in early March was “a strategic mistake and now we’re paying the price, a much higher price than we could have paid,” said Andrey Kortunov, director of the Kremlin-founded Russian International Affairs Council. “This looks like a victory for the U.S., and Russia ends up a bigger loser than Saudi Arabia.”

Just one example of many. Who IS Mr. Kortunov and what RIAC is will talk about this later. Bloomberg also goes for the titles like this: 

Trump’s Oil Deal: The Inside Story of How a Price War Ended

And, in general, one is left to wonder what universe those people live in. I constantly repeat and I will reiterate that in modern world a profession of journalist or news handler is not a viable profession because it is based largely on a lack of any skills or well-trained analytical apparatus and is used primarily for propaganda purpose. The level of American journalism is well known and it is an Exhibit A of a serious case in cognitive dissonance, because in related news, very fresh, like an hour ago, one is forced to compare alternative and real universes.  

North America’s Oil Industry Is Shutting Off the Spigot. Energy producers are resorting to the desperate measure of shutting in productive oil wells.

It is understandable that in my case I could be accused of being biased, because I am Russian, and whatever else could be derived from this fact, but it is really difficult to accuse documented numbers of oil prices and radically anti-Russian outlet such as The Wall Street Journal in any desire to, for whatever reason, unnecessarily confirm a simple fact that US shale oil industry now has a noose around its neck. This is not to mention the fact that US shale oil is but one of few other objectives Russia pursues in her big game with the US and she has necessary cushion to play this game for a long time--time which neither US, let alone KSA, have. And here we come to Western media MO with opinions "from Russia". Let's take a look who US media draws its "opinions" from? Just one example out of many. 

For starters, let's get to RIAC. The first giveaway here is the year of its founding--2011. During Medvedev's Presidency and one after another failures of Russia's diplomacy starting from giving up Libya to being unable to stop the gang rape of Syria, yet still "integrating" with the West. In the end, enough to take a look at such people as Aven being on RIAC's board. So, in general, RIAC is a copy of a good ol' Western "think-tanks" whose real practical value approaches zero and which are involved deeply in doctrine mongering and are nothing but clubs of interests for people who think that they are good at something. RIAC is radically pro-western think-tank. Kortunov's biography is available at RIAC's site and reads exactly as a biography of any other American counterpart in US "think-tanks"--humanities degree (granted obtained at MGIMO), then white board "academic" career in fully discredited Institute of US and Canada, a teaching "tour" in the US, some "research" and writing of papers which lose any value even before they are published anywhere. It is obvious that Kortunov's "portrait" is that of a Russian "liberda" which is directly used by Western media and NGOs to distill opinions on matters of Russia's foreign and domestic policy  and present them as viable. Opinion "generators" for US media of this type which come to mind, of course, are Moscow Higher School of Economics (VShE), another zoo of confused globalists, rags such as Moscow Times, military "specialists" such as Pavel Falgnehauer, or creatures such as Masha Gessen among many others. So, you see how it works? 

As per reality, even Bloomberg had to publish later "attitude adjustment" piece:

“The scale of production cuts is a move in the right direction, but considering how badly demand is affected, it was never going to be significant enough to push the market closer to balance,” said Edward Bell, senior director for market economics at Emirates NBD PJSC in Dubai. “Is Russia going to cut production by 2.5 million barrels a day in two weeks? That’s a pretty steep ask.”

Remember this simple fact, everyone knows, that Russia is fine with the price of oil $30 per barrel, and she is happy as clam with $40 per barrel--prices which do not work for either Saudis or US. So what is the real target here? Obvious, having the US joining the emerging cartel and, in the end, Petrodollar. But as famous Mikhail Bulgakov's character of Professor Preobrazhensky from the Heart of a Dog used to say to his assistant, Dr. Bormenthal: "Don't read Soviet newspapers before lunch." You know what word to change in Preobrazhensky's advice in order to avoid a severe cognitive dissonance.