Larry On State Department, And I--On Pipelines.

First, Larry, who himself is not just the veteran of CIA but of the State Department too, penned today an excellent rebuttal to State Department very own Mr. Van Buren who waxed "strategic" and immediately exposed his lack of understanding of Russia, modern warfare, modern economy--in other words, a whole bouquet of (lack) competencies US "diplomats" are known for the world over. Larry was reacting to my reaction to Van Buren's "strategic choices" for Russia. 

I worked alongside some of these folks for four years and can attest to the arrogance and air of self-importance that imbues the typical FSO as they parade around State Department headquarters aka Main State. While there are some exceptions (i.e., normal people you would enjoy sitting with as a dinner guest or bar mate), the FSOs are a weird lot produced through years of self-selection. One of my former colleagues, a gent named “Tony” was a devout Christian Scientist who had a permanent case of the sniffles. I found it hilarious. He was always sick. He did not appreciate the irony. Anyway, back to Mr. Van Buren. Peter appears to be a break with the stereotype. He is a big, beefy guy and does not appear to be deficient in testosterone. Testosterone is in short supply at Main State. It is metro sexual heaven. FSOs also are known for being fairly reticent personalities. They normally shy away from attracting attention unless there is a promotion on the line. Looks like Peter was not afraid to rock the boat and go to where the action was:

Read this excellent piece at Larry's blog.  

Now to this blog. Our very own SCM, when commenting on my post about Russia's oil for Asia and its price being way above "price cap" suicidal EU established today, reasonably noted:

ESPO is exempt I believe.  

This is great that he brought this point up, because it requires some serious strategic elaboration. Here is why. ESPO oil is just the oil provided THROUGH... ESPO, which is a Eastern Siberia Pacific Ocean pipeline which pumps the oil from Russian fields in Khanty-Mansi District (Okrug) and Tomsk Oblast. I don't think that ESPO deliveries are NOT-capped, I think they are:

As of Monday, the European Union will ban the import of crude oil produced in Russia and transported by sea. There is an exemption for Bulgaria, which can continue to import Russian crude by sea until the end of 2024, under contracts that were concluded before June 4, 2022. The UK and EU will also introduce a ban on maritime services for the transport of Russian oil, including to third countries. The list of banned services includes insurance, brokerage and crucially the EU-based tanker fleet including ships owned in Greece and Cyprus. These restrictions won’t apply if oil is bought at or below the capped price.

In other words, while Asia-bound oil is delivered by pipe, with the exception of the direct branch to China, it still terminates at the refinery and oil port of Kozmino near Nakhodka:

And that means it is still MUST be loaded on tankers to be delivered to customers in Asia. Oil terminal in Kozmino is designed and built for that.  

Well, my friends, here is the news, while our very own Rima excellently described the issue of "insurance":

The way this thing is supposed to work, through disrupting ability of shippers to obtain insurance, who transport Russia originating oil that was bought above $60, is one that occurs during the end phase of peak civilizational idiocracy. Eventually, of course, the whole shipping insurance business will be reorganized, as the entry barriers are not that high or difficult. Just capital, and a bunch of lawyers.

We have to go back to the ABC of applied geopolitics and this is always the issue of power--a euphemism for military might. While Vladimir Putin explicitly ordered an accelerated rerouting of all energy streams to Asia on April 15 this year (in Russian), we all can bet our asses on the fact that this whole thing was in plans and ongoing for a while now. Russians are really good at strategic planning, I mean it and it is not Russian rah, rah. But allow me to point your attention to the fact of Russia's Pacific Fleet being built up as if on steroids. Here is a brief review of Russian version of WiKi, because English version doesn't reflect the dynamics. 

Let's start from capital ships which are in campaign or are being built. 

As you can see yourself, apart from LHD in 2028 and modernized Varyag, a much more upgraded sister-ship of sunk Moskva, we have 7 ocean-going FFGs coming on-line by 2026--all of them carriers of 3M22 Zirkon, Admiral Vinogradov is undergoing upgrade as I type this. Then we go to the "corvettes", but still ocean-going, component and we get:

Four of pr. 20380 are already afloat. 6 of the Zircon carriers of pr. 20385 are being built, sadly "Gremyaschii" sustained a fire damage while at shipyard and undergoes restoration, which, naturally, delays this scary ship joining the fleet. I am not going to elaborate on a very numerous ASW and small missile ships' component, including latest state-of-the-art Karakurt class ships. But we also have to view Pacific Fleet's submarine component, which is massive and it has already 5 new pr. 955/955A Borei class SSBN, pr. 885 Yasen-class Novosibirsk is in line, Krasnoyarsk is undergoing acceptance trials, two other Yasens are being built. Once you add here good ol' pr. 971 and 949A, not to speak of SSKs, you have a massive firepower and... you guessed it, a necessary force to provide safe passage (under escort) of oil tankers--Russia bought more than 100 of them--but, of course, let's not forget that China has a massive surface fleet, as does India and that means only one thing--if the combined West decides to "enforce" their "price cap", they will have to deal with a very real possibility of NATO naval assets sunk.  

Hey, that is what escorts do--they escort formed convoys. I know, for some people in London or Paris escorts mean something else entirely, not naval operations related, but can we blame those people? Of course not, they are stupid and are in panic. Russia plays a very long game and do not forget, she has other fleets too. And those too are being saturated with new ships and capabilities. You all heard, Russia just a few days ago increased dramatically military spending. Using dollar measure is absolutely meaningless because it doesn't translate into any calculable capability per American way of spending (wasting) its military budget. I can only remind you what Mr. Novak stated yesterday and it doesn't get any clearer than that. 

We believe that this tool is non-market, inefficient, grossly interferes with market instruments, contrary to all the rules, like those of the WTO, for example. We are not going to use price cap instruments. We are now working on mechanisms to prohibit the use of the cap,” Russian Deputy Prime Minister Alexander Novak stated on Sunday. He added that Moscow will only sell its oil to countries “that work with us on market terms,” even if it means reducing output. 

And when Novak speaks, world listens. Some soil their pants, but it is their problem. 

What Can Be better Than Stealing?

More stealing! LOL, Germany wants to expropriate Russia-owned refineries in Germany. Now, Poland wants the piece of the action too. 

As Poland desperately attempts to restore the flow of Russian gas to the country, its government has ordered Russian Novatek to hand over pipeline infrastructure or face legal action amounting to infrastructure expropriation.  On Friday, a Polish government spokesman told the Associated Press that Russian Novatek Green Energy had been ordered to make its pipelines available to Polish companies and that failure to comply would mean legal action. Invoking crisis management laws, AP cited government spokesperson Piotr Mueller as saying that the fate of Novatek, Russia’s second-largest natural gas producer, “depends on whether this Russian firm, linked to Russia, will cooperate in the proper way …. whether the employees, acting on some instructions, will not be trying to block this process in some way”.

But, wait a minute, it was Poland, if my memory doesn't fail me, who wanted spot-pricing initially, which drove prices through the stratosphere,  and then Poland underscored at every opportunity her independence from Russian totalitarian gas. And now she is desperate. Oh my, such a Polish thing to do. Sure, let Poland cease the pipe-line, see what happens. Polish political top brass should recall a fundamental principle of any war, bet that hot, cold or merely economic. It reads like that: war is a very democratic affair--the enemy also has a say. 

Understanding this fundamental principle seems to escape the minds of EU "elites" and as the result each time they get slapped in the face by Russia they get hysterical and forget, in addition to other forgotten things, that normal governance, same as normal war-fighting, is done based on contingency planning. Russians do contingency planning 24/7 and the results are showing in the last 8 years. Here is another demonstration of spoiled children running Europe into he ground.

Members of the European Union are expected to agree on an embargo of Russian crude oil imports as early as next week, according to officials, in a move that would lay to rest a point of contention among its members. Such a measure has been discussed for weeks—with the United States adding pressure on the group to do its part to stop funding Russia with its payments for oil and gas supplies.The EU will continue to discuss the matter over the weekend, according to the New York Times, with the European Commission set to draft the finalized proposal to submit it to EU ambassadors for approval. Those ambassadors are scheduled to meet on Wednesday of next week, with final approval set to be delivered by the end of the week, anonymous EU officials told the New York Times.

Bloviation on the matters of "if Russia finds alternative buyers" is nothing more than verbal self-medication and PR. PR is the only thing Western "elites" are good at. Real governing and competent foreign policy--not so much. It is hard, one has to study hard, learn a lot and be incorruptible--a very tall order for both D.C. and Brussels. Plus, the news from the fronts in 404 are bad, really bad for NATO.  In fact, it is so bad, that great British mind, a strategist the likes of which world hasn't seen before to rise out of London, and who makes Winston Churchill and Disraeli look like amateurs, UK Foreign Secretary Liz Truss called upon creation of "global NATO" and concluded with this:

The war in Ukraine is our war – it is everyone’s war because Ukraine’s victory is a strategic imperative for all of us.

So, quoting Harry Dunne from Dumb and Dumber (love this movie) in relation to this woman: "You know, Liz, just when I think you couldn't possibly be any dumber, you go and do something like this...and totally redeem yourself!" Indeed, what other peaks of sheer idiocy will those people summit before they succeed in creating a wonderful mix of Orwellian horror and Idiocracy slap-stick comedy.  Especially UK, who really provides as of lately a bulk of stupefying geopolitical cretinism, while being the nation in precipitous decline on all fronts and being noting more than America's chihuahua who is allowed to bark at guests at the party from master's lap. 

To demonstrate how bad are things for Kiev regime propped up by NATO? Here is Sladkov talking to Hero of Ukraine Evgeny Bova (In Russian).

Bova, a devout Nazi, Commander of the First Battalion of Marines of VSU, finds himself in an unfamiliar territory, that is being taken POW and that is why he still cannot completely grasp the fact that he is now merely an object and possibly some sort of exchange material for Medvedchuk. May be not. Here is yet another American freedom fighter, a former US marine, who went to 404 to fight those nasty Roosskies.

But evidently misunderstood a little bit the meaning of a real war, not some safari of shooting those "sand niggers", because Russian "snow niggers" (as The Saker loves to use such a taxonomy) are a bit different. The name of this guy is Joseph Cancel. A handsome guy, young, with wife and child left behind. What a waste. Can anybody explain to those guys that those Russian subhumans are not Iraqis or Afghan dehkans. Those primitive Rooskies have at their disposal excellent ISR complex and a lot of (and I mean a lot) high precision stand-off weapons, plus excellent artillery, including SMART munitions and other things which the US Armed Forces thought only they have. There is nothing romantic in being blown up by Iskander or be on the receiving end of X-101. I don't even speak about getting acquainted with Krasnopol munitions or being torn apart by Kornet's ATGM. So, now Western mercenaries begin to be killed and captured in wholesale numbers.

But one thing really caught my attention today. It is really disturbing to read because the rate of suicides, even considering a repair mode of any ship, is downright bizarre. 

As her one-year anniversary with the Navy approached last May, Hannah Crisostomo swallowed 196 pain relievers. Her organs shut down. Her brain swelled during multiple seizures and she stopped breathing. She was on life support for eight days, during which time doctors had warned her family that she may never regain normal brain functions. When Crisostomo woke up, she immediately wondered why she was still alive. Her thoughts grew more despairing during the next few weeks in the hospital and then in the Navy’s psychiatric ward. “If they keep me in the Navy, and they put me back in the same situation, I’m going to kill myself,” she recalled thinking, “and I’m going to be successful the next time.” That spring, Crisostomo, an aviation boatswain’s mate handler on the aircraft carrier USS George Washington, had been moved to night-shift repair duties. Amid disorganization on the ship during an extensive overhaul, Crisostomo said she was constantly berated for things out of her control.

Read the whole thing, it is both disturbing and stunning. The rate of suicides is atrocious and why? Because they have been forced to do duties on the aircraft carrier which is undergoing overhaul? Yes, these are also military duties, I am sure written in many manuals and many of those duties are not glamorous and involve often physical effort. They also involve dealing with noise, dirt, boredom and repetitiveness. The article, actually, makes a good point:

Smith disagreed when a sailor said living standards on the ship were not “necessarily up to par.” He said that the sailors get to go home most nights and that they were not “sleeping in a foxhole like a Marine might be doing.”

Excellent point. You have a cot, you have three hot square meals a day, snacks and, apart from traditional overhaul work-place risks of trauma, nobody shoots at you, let alone you are not under fire from artillery in some basement without water, heat and food. Try that for a change and see how the attitude will change. Could it be the case of a generation of Americans becoming absolutely soft mentally, entitled and unable to cope with even minor difficulties? This is military service, people, not a summer resort. I think that is precisely the case here, notwithstanding some legitimate complains about improving the department of "reasonable accommodation". So, this is your primer for Friday.

Plans Within Plans, Within Plans....

You know, like in Dune's complicated saga of palace (interstellar) intrigue and of a conflicting interests we are dealing with a seemingly chaotic interaction of trends colliding, aligning or diverging. You may say why seemingly? Because it only seems as chaotic, in reality there is a very well defined method behind this seemingly chaotic events. It is called plans within plans, within plans. Just pay attention to the headlines:

WASHINGTON (AP) — A bipartisan Senate report released Tuesday confirms the U.S. intelligence community’s conclusions that Russia interfered in the 2016 presidential election to sow chaos. Senators warned that it could happen again this presidential election year. The heavily redacted report from the Senate Intelligence Committee is part of the panel’s more than three-year investigation into the Russian interference. The intelligence agencies concluded in January 2017 that Russians had engaged in cyber-espionage and distributed messages through Russian-controlled propaganda outlets to undermine public faith in the democratic process, hurt Democratic candidate Hillary Clinton and help Donald Trump.

Now, we  continue to browse these headlines and stumble into this curious headline:

(Bloomberg) -- China is falling behind in its promise to spend $52.4 billion buying U.S. energy over two years -- even as it is filling its storage tanks with Russian and Saudi crude -- independent oil producers warned the Trump administration Tuesday. The American Exploration and Production Council urged the administration in a letter to U.S. Trade Representative Robert Lighthizer to get tough with China. “China has only purchased a de minimis amount of U.S. crude in the first months of 2020, while it has increased purchases of crude oil from Saudi Arabia and Russia,” council chief executive Anne Bradbury said. “Rather than increasing imports from countries like Russia and Saudi Arabia, the Chinese government must take the necessary steps to remain in good standing with the U.S. as a trusted trade partner.”

Ah, a dawning reality after the whole absurd of stock and commodities exchanges and financial manipulations (fraud) also known as American "economy", which is run by financial fraudsters making money out of thin air collapsed and the pain of taking own medicine of lies and broken promises. I repeat ad nauseam my "tangibles" mantra because, as it is well documented throughout my writing over the years--I discard practically any information being fed into the US media about US finances as valid, because, as practical experience shows it is useless and, in general (some exceptions exist), is nothing more than a institutionalized lies for the consumption of sheeple who believe in "free markets". Well, last days, certainly, should have given all this cabal of "traders", "brokers", "market analysts" and other useless purveyors and procurers of the laissez faire cult a shocking doze of reality. Such as this:

What you see here is a material embodiment of the geopolitics (and geoeconomics) of the highest order and a bit of revelation of the game Russia (and China, I may add) were playing all along. I do not mention Saudis because for all their oil riches they are a minor player in all this. US Senate, in yet another manifestation of a complete dysfunctional state US governance exists today, confirmed that US political class in general IS NOT entity which is agreement capable and discussing anything with these people is useless since they, both deliberately and by faith, live in an alternative reality in which they do emulate some political activity which is as effective in international relations as putting a warm water compress on the head of a patient afflicted with a terminal brain tumor, effect in both cases is absolutely the same. Yet, one can sense a very real desperation coming through those attempts to dance on the rabble of Russian-American relations, thinking that the United States is a stronger party in this dyadic entanglement. 

Yet, as the second headline suggests, US oil industry is worried about...China. Why so? The answer is simple, as you can see from Oilprice chart, futures, you know useless funny papers which allegedly indicate the actual price of oil (hint, they don't--just another paper BS concocted in the dark minds of US money-"makers"), for any US produced oil stay in red. Well, obviously, price on anything cannot be negative--all this red is merely a figment imagination of "market" speculators BSing each-other in attempts to create BS money. But those "prices" give a good idea why Urals (which is Russian oil brand) stays in black (or green)--because China not only wants this brand and already contracted a shitload of this oil both through pipe and Russian tankers but it will increasingly depend on specifically Urals at the expense of Saudi oil precisely for the reasons of the FIRST headline which is a testimony that the United States is run by hysterical "exceptionalists" who may arrive to a completely insane solution in their attempts to preserve own (largely fictional) hegemony and actually start cutting Indian Ocean Shipping Lanes of Communications through which Saudi oil flows to China. Some even offer.... a piracy. That shows you a level of desperation (and stupidity). 

Because the US may unleash a war on SLOCs, and I described this scenario not for once, latest attack on China, and Russia, in media field tells us that not only it is possible but probability of this begins to grow. China inevitably will gravitate towards Russia's both gas and oil pipelines and Northern routs well defended by Russian Navy and Coastal Forces capable to keep China's supply of vital energy secure and operational. Even when China hits a recession (if not already)--China's economy for all her massive size is extremely energy inefficient and requires massive amounts of oil, gas and other products of their processing constantly. There is NO competition to Russia's pipelines and costs of delivering oil to China, period. In other words, Russian oil is contracted by China and Chinese are not interested in speculations on the "market", they are interested in actual oil (and gas) being in China here and now. Russia can provide this, the United States cannot, including for a purely geopolitical reasons because whatever China receives from the US WILL inevitably be CUT in coming volatile weeks and months. In other words, geopolitics becomes a driving force behind real economy, especially against the background of fake American "markets" of oil, which are completely disintegrating as I type this and this is just the start. The return to a grim, for the United States, economic and geopolitical reality will be extremely chaotic and painful, despite US "elites" trying to weave sophisticated, as they think, plans within plans within plans, which are seen by any high school graduate who has a rudimentary knowledge about how actual, not virtual, economy works. Ah, yes, shale oil--it is dead, so is petrodollar, the process of clean up will continue and, of course, oil cannot worth -37 or -13 or whatever minus USD, these are just convulsions of US (and global) speculators before many of them go bust completely. So, whose those plans within plans really are? Mind you, this is just a look at one player, China. There are many more.  

P.S. Forgot completely. Good luck to them, LOL. 

HOUSTON (Reuters) - The day after U.S. crude prices crashed into negative territory for the first time, Texas oil and gas regulators on Tuesday declined to force producers to curtail oil output for the first time since 1972. Oil and gas companies have been gushing red ink and cutting tens of thousands of workers as prices tumble, prompting regulators in the largest U.S. oil-producing state to wade into global oil politics and consider some producers' calls for cuts. On Monday the May futures contract for U.S. crude closed at a negative $37.63 a barrel as traders desperate to avoid owning oil paid others to take it. Two of the three commissioners of the Texas Railroad Commission, Chairman Wayne Christian and Christi Craddick, said they want the state attorney general to weigh in on the legality of production curbs. Commissioner Ryan Sitton said he was ready to cut output by 1 million barrels per day, or 20%. The issue is likely to be discussed again at a May 5 meeting.