At the end of January, Scott Ritter published a very interesting article
on the price of Russian oil. ---- Scott Ritter is a former member of theUS Marine Corps Secret Service and a former UN inspector; he has often
taken critical positions towards US foreign policy. In this article, he
takes issue with Trump's post in which the new president announced his
peace plan for Ukraine. According to Ritter, this plan has no hope of
being accepted and the US president would have no choice but to apply
the strong manner, already threatened in the post.
What would this "strong manner" consist of?
According to Scott Bessent, Donald Trump's new Treasury Secretary, the
answer lies in tightening sanctions against the Russian oil industry.
But Bessent will have to deal with a narrative with which the United
States and its European allies have oversold sanctions as a tool to
destroy the Russian economy. Furthermore, given Russia's status as a
major oil producer, any sanctions could have a negative economic impact
on the United States.
This point seems to have escaped the attention of Keith Kellogg, Trump's
"peace deal" guru. Noting that, under the Biden administration, the
United States and its allies have capped Russian oil at $60 a barrel
(the market price of oil is around $78 a barrel), Kellogg noted that,
despite this, "Russia makes billions of dollars from oil sales."
"What if," Kellogg added in an interview with Fox News, "we lowered the
price to $45 a barrel, which is essentially the break-even point?"
The question is: "break-even" for whom?
The concept of "break-even" when it comes to Russia is two-fold. The
first aspect is the price of oil that Russia, which is heavily dependent
on oil sales for its national economy, must reach to balance the
national budget. This price is estimated at around $77 per barrel by
2025. There is no doubt about it: if the price of oil were to fall to
$45 per barrel, Russia would face a budget crisis. But not an oil
production crisis.
The second aspect of the "break-even point" for Russia is the cost of
producing a barrel of oil, which is currently set at $41 per barrel.
Russia would be able to produce oil without interruption if Kellogg
could achieve its goal of reducing the price of oil to $45 per barrel.
To achieve this goal, Trump would have to get the Saudis on the
bandwagon of oil price manipulation. The problem is that the Saudis have
their own "break-even point". To balance the budget, Saudi Arabia needs
oil to be sold at around $85 a barrel. But the cost of producing oil in
Saudi Arabia is very low, around $10 a barrel. If it wanted, Saudi
Arabia could simply flood the market with cheap oil. Russia could do the
same.
What about the United States? The Permian Basin in West Texas has
accounted for all of the growth in U.S. oil production since 2020. In
2024, to make new wells in the Permian Basin profitable, the break-even
point was about $62 a barrel. For existing wells, the figure was about
$38 a barrel. If drilling stopped in the Permian Basin, U.S. oil
production would decline by 30% over two years.
In short, if Keith Kellogg were to execute his "plan" to reduce the
price of oil to $45 a barrel, he would effectively destroy the U.S. oil
economy. And, Ritter concludes, if you destroy the U.S. oil economy, you
destroy the U.S. economy.
Ritter's comments on sanctions are best understood when you remember
that on January 10, outgoing President Biden tightened sanctions against
Russia, which temporarily disrupted the oil market.
The International Energy Agency (IEA) released its latest forecast for
oil supply and demand this week, noting that the latest sanctions will
only prove to be a temporary drag on Russian oil exports. Not only that,
but the IEA also estimated Russia's oil production for January to rise
by 100,000 bpd to 9.2 million bpd. The IEA has had to revise its
estimates of Russian oil production on numerous occasions.
The idea that the fossil fuel industry is the main industry of the
United States, and that any damage to it is a damage to the US economy
as a whole seems to be an outdated idea.
Donald Trump's election was greeted with an increase in the stock market
value of the corporations of his main supporters. According to what
Davide Magliuolo writes on "Investireoggi" reporting data from the
Bloomberg Billionaires Index, among the main beneficiaries of Trump's
victory there would obviously be Elon Musk, who saw his wealth grow by
26.5 billion dollars, reaching a total of 290 billion dollars. After
him, Jeff Bezos saw his increase by over 7 billion dollars. Larry
Ellison, former CEO of Oracle, also recorded an increase in his wealth
of almost 10 billion, reaching a total of 193 billion dollars. It is
worth noting that Mark Zuckerberg has seen his net worth drop by more
than $80 million, which likely influenced Meta's decision to ease
content moderation on Facebook.
This result is the product of political expectations in support of
technology companies that have now replaced oil in the strategic choices
of the US administration. The big tech oligarchs of Silicon Valley fear
Chinese AI companies like "Deep Search". Billionaire Peter Thiel, a
supporter of Donald Trump, admits that they want monopolies, arguing
that "competition is for losers". Anthropic CEO Dario Amodei has stated
that the United States must maintain a "unipolar world".
This centrality assumed by technology in Washington's imperial policy
explains why for the Trump administration the rare earths owned by
Ukraine (partly in the areas occupied by the Russian Federation) have
become more important than oil.
On one side we have the US president who declares himself willing to
continue military support for Zelensky on the condition that he
guarantees the delivery of 500 billion dollars in rare earths, on the
other we have Zelensky, the Ukrainian president, who refuses to sign the
proposed agreement to give the United States access to Ukraine's rare
earth minerals because the document was too focused on US interests.
Zelensky stated that any mining exploitation by the United States must
be linked to security guarantees for Ukraine that discourage future
Russian aggression. Evidently the negotiation is ongoing and each of the
contenders is aiming to gain advantages.
The impression, however, is that the current presidency's days are
numbered, and a regime change in Ukraine is ready. Zelensky's figure is
too discredited at a mass level due to the policy of war and compression
of freedoms and the standard of living of the popular classes, he is too
connected to the narrative of Ukrainian independence to be used in an
exchange negotiation between opposing imperialisms. Zelensky's exit from
the scene would allow Putin to declare the denazification of Ukraine
complete, which could be celebrated on May 9. If Russia does not accept
the conditions of the United States, there is nothing that suggests that
peace is the goal at all costs of US policy.
The scenario that is emerging is the worst possible for the people who
sold their souls for Putin's defeat, propagating enlistment in Kiev's
army alongside and under the orders of the Nazis, raising money to allow
Zelensky to continue the war and sell their country to the highest
Western bidder. As I have written since before the Russian Federation's
aggression against Ukraine began, the United States cannot afford for
Putin to lose. A strong Russia remains a potential ally in the fight for
China, and Ukraine is just one of the many battlefields on the world's
chessboard, where hundreds of thousands of pawns die, while kings remain
entrenched, waiting for an agreement that is always possible with the
opposing king.
Thus Trump's "peace" would end up resembling Biden's war.
Tiziano Antonelli
https://umanitanova.org/la-maniera-forte-la-pace-di-trump-somiglia-alla-guerra-di-biden/
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