Moon of Alabama Brecht quote
November 10, 2021

Why Joe Biden Will Soon Talk With Mohammed Bin Salman

An author for the HuffPost has written a way too long screed on Biden's perceived lack of action against the Saudi clown prince Mohammed bin Salman.

Akbar Shahid Ahmed @AkbarSAhmed - 12:23 UTC · 9 Nov 2021

NEW: 9 months into the Biden era, the Khashoggi file is "lost" & Saudi Arabia is getting > $1 billion in new weapons. Here's the story of how Biden betrayed Democrats in Congress & fumbled the best chance for accountability for MBS's human rights abuses.

Joe Biden Promised To Take On Saudi Arabia Over Jamal Khashoggi. The Saudis Won.
Biden pledged to root his foreign policy in values like human rights, but didn't apply that standard to the long and morally dubious U.S.–Saudi relationship.

I find the piece delusional:

As president, Biden started off by making good on campaign promises about Saudi Arabia.
Then, in February, Biden unveiled what he described as his Khashoggi policy.

It contained no sanctions for the prince and no details on what evidence American officials used to identify him as responsible. It punished only low-level Saudis without naming most of those who would be affected.
The Washington Post, Khashoggi’s last employer, slammed Biden. The president “let the murderer walk,” wrote Nicholas Kristof of The New York Times.
Three weeks after Biden pledged to root his foreign policy in values like human rights, he showed he did not apply that standard to America’s long and morally dubious relationship with Saudi Arabia.

Here is news for Akbar Shahid Ahmed. International relations are never about values or human rights. They are about interests.

It is not in the U.S. interests, nor in Biden's personal ones, to further worsen the relations with Saudi Arabia.

Biden has sound reasons to hold back on bothering the clown prince. One is that the Saudis are a major reason for the predominance of the U.S.-dollar in the global financial system. If they were to decide to sell oil in Chinese Yuan the U.S. dollar would no longer be the main reserve currency. The U.S. taxpayers would actually have to pay for their government's deficits. (The chance for this is low as the U.S. would probably rather invade Saudi Arabia than let that happen.)

It is Saudi Arabia that has the most available capacity to pump oil beyond the current production rate. And it is here where MbS has direct power over the U.S.

Wolf Blitzer @wolfblitzer - 16:55 UTC · Nov 9, 2021

FYI. Gas prices today here in Washington DC.


With gas prices at their current height and still rising it is no wonder that Biden's approval rating is down to 38% and that the Democrats are likely to lose in the midterm elections.

Last week the Biden administration tried to pressure Saudi Arabia and Russia into pumping more oil. Either said: "No!"

OPEC and allied oil-producing countries rebuffed pressure from U.S. President Joe Biden to pump significantly more oil and lower gasoline prices for American drivers, deciding Thursday to stick with their plan for cautious monthly increases even as prices surge and the global economy is thirsty for fuel.
That hasn’t gone down well with Biden, who has made repeated calls to pump more oil. The U.S. used the Group of 20 summit last weekend in Rome to consult with other oil-consuming countries on how to exert influence over the producing countries and what they might do if the Saudis and Russians continue to hold back.

The OPEC+ decision came on the same day as the Biden administration's approval for new weapon sales to Saudi Arabia. That 'bribe' was either late or did not work.

As Biden continues to shun the clown prince for murdering the Brotherhood propagandist Jamal Kashoggi there is no incentive for him to help Joe Biden by pumping more oil.

The Financial Times notes that Washington is well aware of this:

[T]he suspicion is that the reluctance to bow to US pressure is not solely related to market dynamics as Riyadh continues to smart over Biden’s coolness towards Crown Prince Mohammed bin Salman.

“There’s a clear view in Washington that this is probably more than just about oil, that Prince Mohammed is annoyed Biden hasn’t called him personally, hasn’t shown him enough respect and wants greater recognition before he becomes king,” one energy analyst said.
Now, with US petrol prices having risen about 40 per cent since Biden’s inauguration, Prince Mohammed controls a lever that has the power to help or hinder the White House. As the president’s frustration highlights, despite the US markedly reducing its dependence on Gulf crude over the past decade and a creeping disengagement from the Middle East, it’s not immune from global market forces. And Saudi Arabia is the key player.

So called 'values' and various 'moral outrages' may sound good on the campaign trail. But they do not help when one has to pursue a realistic foreign policy.

Posted by b on November 10, 2021 at 18:03 UTC | Permalink


I would note that a number of analysts have noted that periods of increased Saudi pumping are directly correlated with drawdowns on their above-ground storage.
There continue to be questions on just how much of Aramco's excess capacity is hyperbole.

Posted by: c1ue | Nov 10 2021 18:07 utc | 1

good thing for team biden the tax donkeys are fully on board with starvation of the lessers (including themselves) so the rich folk can Build Better Bunkers

Posted by: ld | Nov 10 2021 18:07 utc | 2

good analysis. And yeah, values? Please. The USA has one value - profiteering.

But really why didn't the USA invade Saudi Arabia right after 911? The case was so easy to make. But, no Afghanistan and an imaginary global terror network is so sexy... Imperial leadership has no imagination whatsoever.

And the cost for our weakness against the fabricated House of Saud? As b suggests, in no position but to beg.

Posted by: gottlieb | Nov 10 2021 18:15 utc | 3

Gasoline prices in Los Angeles are about a dollar more than those in the picture above from Bolf Wilitzer.
That is why I commute to work on my bicycle. Can I sell myself as a carbon credit? The Brandon administration is doing a great job. The USA is like the Soviet Union in 1991. We are going down.
Thank you Mr. b!!

Posted by: lex talionis | Nov 10 2021 18:20 utc | 4

Oil is wasting & terminal anyway.

High prices - and US prices are low by most West country standards - change consumer behaviour.

Less use of fossil fuel.

The imperative of this crisis pivot point.

So celebrate the inevitable.


Posted by: Powerandpeople | Nov 10 2021 18:28 utc | 5

To the sadness of all Keynesians of the world:

Inflation spiked in October, sinking Washington’s hopes that price gains would slow down.

If you don't have the economic foundations, you won't receive the goods. The USA has to produce value in order to receive value, there's no such a thing as a magic money tree.

Posted by: vk | Nov 10 2021 18:31 utc | 6

If they (SAudi Arabians) were to decide to sell oil in Chinese Yuan the U.S. dollar would no longer be the main reserve currency. The U.S. taxpayers would actually have to pay for their government's deficits.

(The chance for this is low as the U.S. would probably rather invade Saudi Arabia than let that happen. <=disagree again.. I believe this is the intended outcome of the global monopoly powered corporate monsters who control the quality of life allowed to USA governed Americans. They are hell bent on denying the USA reserve currency status.

It is Saudi Arabia that has the most available capacity to pump oil beyond the current production rate. And it is here where MbS has direct power over the U.S. <==disagree here, Iran could fill the capacity deficit.. the Yemeni war has challenged Aramco severely et al. that's why Biden sold weapons to Saudi just the otherday.

Posted by: snake | Nov 10 2021 18:34 utc | 7

stop the presses, news at 11, USA is hypocritical phony!
Yet Biden is preparing the "meetings of Democracies" for December and has already invited such notable "democratic" countries such as Congo and Ukraine to attend.
Yeah, USA's biggest buddies such as Saudi Arabia are neither democratic nor free but that doesn't matter as long as they support each other. But we get to endlessly hear about how evil the Taliban is and how evil China is.

It pisses me off man, Putin is a meandering do nothing kissing and licking joo's ass and China is just seething but knows it cant really do anything about USA.
Yes, the Democrats will lose the House and the Senate in 2022 and the White House in 2024. Will anything change, though? NOTHING WILL CHANGE. This stupid American told me "And everything will be perfect". I had to use all my will powers not to laugh in her face.

Posted by: Hoyeru | Nov 10 2021 18:39 utc | 8

thanks b... as you and others note - it was never about human rights, but all about profits... any suggestion otherwise is shown to be complete bullshit, as the usa's friendship with ksa highlights..

if what you say is true - if the chinese buy the oil in yuan instead of us$, the us$ no longer is the world currency. - i am not sure exactly how this works... why don't the chinese do it?? what are the reasons for holding back?? i hear russia and china are trading in their own currencies.... of course china can buy oil from iran too via the yuan.. sooner or later this cumulative approach is going to be the nail in the coffin of usa foreign policy... until it happens, i do wonder why it isn't happening more quickly...

Posted by: james | Nov 10 2021 18:40 utc | 9

James @ 9:

I should think the Chinese would look hypocritical if they insisted on buying Saudi oil in yuan when they themselves have bought US Treasury bonds in US currency and have yet to sell all of those completely. At the present time this might not be possible - war hawks in Washington might notice if US Treasury bonds were being dumped and the value of the US dollar suddenly dropped.

Posted by: Jen | Nov 10 2021 19:02 utc | 10

An ugly relationship, but high oil prices help the US reduce oil consumption, and US-KSA friction may help with a KSA-Iran rapprochement. The Financial Times concern with US "creeping disengagement" from the Middle East suggests more concern for Israel.

Posted by: Sam F | Nov 10 2021 19:22 utc | 11

james | Nov 10 2021 18:40 utc | 9; 'until it happens, i do wonder why it isn't happening more quickly...'

James, a couple of reasons come to mind.

1. China has several $trillion of reserves and investments denominated in dollars (as well as Euros and British Pounds). Moving quickly against the $US would destroy the value of these reserves and investments.

2. China is trying to diversify its economy away from the West, both by transforming to a domestic consumption model and through the Belt and Road initiative. However such a large scale transformation takes time. Moving too quickly would cause severe domestic problems.

3. China doesn't want to be blamed for an economic attack on the U.S.

4. Time is on China's side. With the level of current account deficits driven by $trillion dollar trade deficit and $hundreds of billions in interest payments, the dollar will soon expire on its own. China doesn't need to do anything.

Regarding MBS's reluctance to follow Biden's instructions, I think that MBS learned last year who really has control of world oil prices - VVP. I don't think that MBS will want to cross VVP again. And the Russians have no reason at all to help out the Americans.

Posted by: dh-mtl | Nov 10 2021 19:22 utc | 12

There are people in KSA who have the receipts for 9/11, including and especially who else was involved. That's a tar patch the US deep state will be wise to avoid.

Posted by: NoOneYouKnow | Nov 10 2021 19:27 utc | 13

Trump had gas prices pretty damn low.
Whatever he did, FJB seems to have undone.
What’s gas gonna look like 2 years from now?

Energy policies alone make FJB the worst President since Jimmy Carter.

Posted by: Cadence Calls | Nov 10 2021 19:27 utc | 14

I've never quite understood what it is about Saudi that makes its oil production essential for maintaining the value of the dollar. What would happen to the dollar, if Saudi oil were no longer sold in dollars? Isn't the US economy strong enough to keep going without it?

Posted by: Laguerre | Nov 10 2021 19:28 utc | 15

Outlaw US Empire gasoline prices can be explored here. The current national average price for regular is %3.417, which is about 10 cents more than in Newport, Oregon where I fill my car. Biden's getting lots of gas at COP26 for his attempts to ease the gas price situation which he has essentially no control over. Resource depletion is returning as a topic of concern.

As for the Saudis, their biggest problem is ending their war on Yemen, which they're losing despite launching daily airstrikes. Like Biden's, the Saudi's regional policies seem contradictory. The Saudi economy is getting a very welcome boost thanks to increasing oil price and escalating extraction rates, so I doubt they'll lower their extraction rate. Oil price projections for 2022 are mostly under the current Brent price of $83/BBl, often by amounts that elicit howls of derision like the EIA's $50/BBl. Some projections are based on the utterly unlikely return of the Outlaw US Empire to the JCPOA that would see sanctions against Iran's oil exports dropped thus easing the supply shortfall. Essentially, when it comes to the uncomfortable oil and gasoline prices bothering Biden and Ds, they have no one to blame but themselves for pursuing polices that distort global oil markets.

Posted by: karlof1 | Nov 10 2021 19:31 utc | 16

I imagine it wasn't, but I sincerely hope that your 16 was not a response to me, karlof.

Posted by: Laguerre | Nov 10 2021 19:44 utc | 17

No point in invading Saudi Arabia as some have suggested, as the US is already there and has been for a long time.

Even in the era of Bin Laden, the presence of US troops at Taif was claimed to be one of his reasons for 9/11. Even earlier than that, the US "ran" the SA Army and the UK "ran" the airforce.

The biggest defense Saudi Arabia has is the desert, and sand, lots and lots of sand. *1*

However, this post does bring to the fore the fact that US "exceptionalism" and productivity needs cheap energy. (As does Europe). Without it, increasing capital has to be expended on getting similar results. Which is why Biden is doing the logical thing in trying to keep the price down by getting preferential treatment. It isn't going to work, as nobody is going to "help" the US Empire keep up it's priviledges.
Let's go Brandon.

Note that the Oil stolen from Syria, ends up in Israel (Via Iraq and then Turkey), but it is US troops who are facilitating this crime.

*1*. When the Ottoman Empire invaded and "took" Riyadh, all the Saudis did was to cut off the water sources. (Keeping one or two carefully hidden wells for themselves). Then sat back and watched.
It is 500 km from Riyadh to the nearest coast. It was claimed that no Turkish troops made it out alive.

Posted by: Stonebird | Nov 10 2021 19:52 utc | 18

One curious statement in b's writeup.

With gas prices at their current height and still rising it is no wonder that Biden's approval rating is down to 38%...

How and why is the price of gasoline directly tied to a President's approval rating, and if so why was it never mentioned during either Obama or Trump that gas prices were rising. In fact looking at historical gasoline prices from 1990-2020 they are currently still lower than they were in 2012, an election year. I haven't seen any other media outlets directly tie Biden's approval rating to the price of petrol, which isn't to say none have; just not that prominent and definitely with no concrete basis for the correlation - or is it causation that's being alleged?

Posted by: Tom_Q_Collins | Nov 10 2021 19:59 utc | 19

@ Jen | Nov 10 2021 19:02 utc | 10 / @ dh-mtl | Nov 10 2021 19:22 utc | 12

thank you both... i keep on forgetting how important this is... on an interesting note, here in b.c. there was a huge amount of money laundering via the casinos and real estate... a friend told me of a story of a building being bought in manhattan by the chinese and they paid cash outright - 800 million i think was the price tag as memory serves.. this is another form of money laundering.. i wonder how much of this is inflating the real estate bubbles in both canada and the usa?? all the excess us$ has to go somewhere... i wish it would stop!

Posted by: james | Nov 10 2021 20:08 utc | 20

Re: the surging price of gasoline, isn't it likely the case that even if Saudi Arabia increased production, given the backups at the seaports with shipping containers and oil tankers moored in endless waits to dock, it wouldn't matter anyway?

The price of gas plummeted at the beginning of the pandemic in the USA (March/April 2020) and the prices have been rising since. They are right now about $0.20 less than their most recent peak in 2012. Looking at monthly oil production from Saudi Arabia, it doesn't appear all that different than it's been for much of the last 20 years, save 2018 when they upped output to slightly more than 11M barrels.

One wonders if refining or some other factor (besides production amounts and supply chain issues) could be the issue.

But again, things seem mostly normal through 2020 except the larger $ amoutn allocated to marketing and advertising. They don't have 2021 stats up yet.

Posted by: Tom_Q_Collins | Nov 10 2021 20:10 utc | 21

Laguerre @17--

No, it's just a general comment. But since you mentioned Petrodollar recycling, here's what Hudson has to say:

"Oh, they’re both [Eurodollars] the same system, the petrodollars, the deal was – and this was what was done in the aftermath of my publication of Super Imperialism.

"I went down to the White House and met with the Treasury officials and the State Department officials, and they said, we have told Saudi Arabia – this is when the price of grain was quadrupled, and Saudi Arabia quadrupled the price of oil in response.

"So the Treasury told Saudi Arabia, you can keep charging whatever you want for the oil, but all the export proceeds you have, you have to invest back in the United States.

"You can invest it in the stock market. You can’t buy American companies. You can buy stocks and bonds, and especially government treasury bonds to finance things.

"So petrodollars were a means of recycling oil export proceeds into the American banking system and into the U.S. government budget."

Hudson provides a much longer, in-depth answer in this discussion with Pepe Escobar as the various versions of dollar recycling are related to how the Bretton Woods outcomes were organized. Here's Pepe's question that you and others can use to locate Hudson's reply:

"So my first question to you would be, do you see any realistic possibility of a Bretton Woods 2.0, which would imply the end of dollar hegemony as we know it? These petrodollar recyclings, on and on and on, with the very important presence of that oily hacienda in Saudi Arabia. And do you think this is possible considering that president Putin himself only a few days ago reiterated once again that the US is no longer agreement-capable. That destroys already the possibility of the emergence of the new rules of the game, but do you think this is still realistically possible?"

In answer to the question you posed, the upshot would be the need for the Outlaw US Empire to find another buyer of its debt; although as we've seen, there're already too few buyers such that the Fed is now forced to buy the debt which is causing the big inflation spike. Inflation would thus spike even more, but invading Saudi wouldn't solve that problem since the Empire would still lack buyers of its debt. "Would the economy keep going?" Yes, but the situation could get very ugly--Weimar Germany's economy kept going too.

Posted by: karlof1 | Nov 10 2021 20:22 utc | 22

I was able to find an article more or less answering my questions about Biden's options. It would seem he has few, one of which being releasing more oil from the US Strategic Reserve.

Here's Barron's on the issue.

The political angle surfaces here:

“It is astonishing that your administration is now seeking assistance from an international oil cartel when America has sufficient domestic supply and reserves to increase output which would reduce gasoline prices,” wrote Sen. James Inhofe, a Republican from Oklahoma, in an August letter also signed by 23 other Republican Senators.

The letter cites the administration’s decision to block a permit for the Keystone pipeline and Biden’s move to stop issuing oil and gas permits on federal land, a move that was overturned by a judge.

A rebound in U.S. oil production — which remains more than 1 million barrels below its daily peak — would make a big difference in the oil price.

But even if Biden hadn’t restricted pipelines and drilling, it’s unlikely that U.S. producers would be drilling anyway. The people funding oil-and-gas companies are not interested in growing production anymore. They want oil companies to drill only their best wells, and return cash to shareholders. Most companies say they will be increasing production at a modest rate in the coming months even though prices are high. If Biden opened more federal land to drilling, it wouldn’t change anything—U.S. companies have already secured rights to so much federal acreage that they have enough to drill for years without needing to apply for more permits.

And in comments this was an interesting reply:

Oil companies have lost money 21 out of the last 30 years. Consumers benefitted for a decade from the expansion of fracking in the US, too much capital coming into the market that drove surplus oil drilling, and US producers losing money with oil prices too low. Accelerated by Covid, these US companies have woken up and like the idea of making money to the detriment of US consumers. And while US oil needs have essentially been "re-shored", consumers are up in arms that US companies are not willing to sell one of America's most valuable natural resources (as the largest oil producer in the world) to them at a loss so they can get gas for $2 a gallon. This is not an issue of bank lending, or bringing in subsidized oil from Canada to compete against US oil (could you imagine if politicians argued to import subsidized Canadian food products putting US farmers out of biz), or permits(whose ban has been stalled in federal court) but an issue of making profits and earning a return on capital invested.

So it would seem that Saudi Arabia and OPEC aren't even necessary to ease the price hike and Biden isn't addressing the issue either in practice or in politics (i.e., making statements to goad the US based producers to increase production). Is this because he doesn't want to piss off the "green" faction of the Democrats or am I missing something?

Posted by: Tom_Q_Collins | Nov 10 2021 20:27 utc | 23

I was under the impression that the drop in oil prices a few years back was orchestrated by the US to punch Russia and Venezuela in the nose. Like many of their moves it has backfired on them.

Posted by: arby | Nov 10 2021 20:40 utc | 24

Tom_Q_Collins @19 & 21--

POTUS gets credit or blame for economic performance since 1946's Full Employment Act which charged POTUS with managing the macro economy with the help of the newly minted Council of Economic Advisors. In reality, that was very inane since Congress controls the budget strings while POTUS only controls the Treasury. Neither control the Fed, which is where the big problem lies.

As for queues affecting oilers/tankers, those ships have very specialized offloading terminals that are very different from normal port facilities. For example, you can learn about the LOOP here, which is why hurricanes greatly affect oil deliveries.

The other part of the equation is the dollar's declining purchasing power for commodities traded on international markets, which is all due to the massive amounts of debt the Fed must now buy because of the global dedollarization effort. Perhaps you recall the 1970s Stagflation crisis and how it was "solved." The tool Volker used isn't in play thanks to Fed and POTUS policies since Greenspan began his crime spree.

Posted by: karlof1 | Nov 10 2021 20:40 utc | 25

You can't get blood from a turnip, no matter how hard you squeeze.
And you can't get oil out of a played-out field, no matter how strenuously you complain about high gas prices.
The reason that China can't buy Saudi oil in yuan is that the Saudis sell oil in dollars.
That is what the petrodollar means.
It was a bargain the US struck with the Saudis back in the 70s. The US keeps the royals in power and the royals only sell their oil in dollars.
That means that the entire world has to get dollars in order to buy oil. That is the source of the Super Imperialism that Hudson wrote about.
To get the dollars every country in the world has to sell something to the US, either resources or cheap labor.
China sold so much cheap labor to the US that they ended up swimming in dollars. Hence, the US real estate and corporation (like Smithfield) purchases.
The US will kill for oil, as we have seen so many times. But the Saudis have already hit peak oil.
Iran does have a lot of reserves, as does Iraq.
And I think that Iran has been selling oil to China using other currency, including the yuan. That is when the whole bullshit about "We must stop Iran from producing nuclear weapons" ramped up.

Posted by: wagelaborer | Nov 10 2021 20:47 utc | 26

wagelaborer @26--

Don't forget Venezuela and Brazil. As I commented @16, the availability of oil on the global market or the lack thereof is mostly the result of illegal Outlaw US policy that's driven many millions of barrels per day off the market, which is one major reason for the high global price. But the reason behind gasoline price inflation is a result of Fed and Imperial policy, both of which BigLie Media don't at all want to have to explain since the Bradonites are already pissed and the Donors don't want their ranks to grow.

Posted by: karlof1 | Nov 10 2021 20:59 utc | 27

Posted by: james | Nov 10 2021 20:08 utc | 20

Money laundering into real estate is apparently a big problem here in Australia too:

Posted by: Patroklos | Nov 10 2021 21:17 utc | 28

I don't think the USD Standard is dependent on the Petrodollar anymore. The USD Standard would take a hit, but still survive if the Petrodollar disappears.

Sure, if the USA manages to keep oil denominated in USD, and forces the main oil producers to pump up more oil and dump it into the free market, that would alleviate the inflationary situation in the American domestic economy.

However, that would just be an alleviation, not a solution. Marx's Law of Value would continue to operate because that's the fundamental law of motion of capitalism. The equation doesn't change: the USA cannot keep consuming way above its means forever. The absolute limit to capital is capital itself.

Posted by: vk | Nov 10 2021 21:18 utc | 29

If the petrodollar were destroyed, the US would still have dollars, but they would only be good in the US.
That means that the US would have to live on the resources and labor available in the US only, since other countries would no longer be forced to obtain dollars in order to pay for the oil every industrialized country needs.
That is a very big deal. We could eat, because we still have some topsoil and water left, but almost everything else we use in our lives is imported.
We manufacture WMDs, but not much else.

Posted by: wagelaborer | Nov 10 2021 21:34 utc | 30

Biden pissed away any leverage we had with Saudis when he destroyed domestic energy production.

Posted by: Robert Dinse | Nov 10 2021 21:46 utc | 31

@ Patroklos | Nov 10 2021 21:17 utc | 28... thanks.. i seems like this big us$ everywhere is being spent on r/e everywhere outside of china... maybe it is being spent in china too.. i don't know... i don't recall michael hudson talking about this aspect of the excess of money that other countries hold of us$ - like china - being recycled back into the usa and etc real estate market.. it would help explain this huge bubble in real estate prices here in canada for sure.. that and all the reits that are a permanent feature of the stock market which is chasing after greater profit, all at the expense of ordinary people who can no longer afford to own a house...

here is another local story - vancouver island, not far from viu - vancouver island university... a corner lot not far from the unversity was bought by some new chinese to canada..- it was a double lot.. they might have gotten this a few hundred thousand, maybe 3 -4 years ago... now they are asking 1.5 million for the same double lot..everyone is looking to profit.. i don't blame the new chinese to canada.. i blame our gov't for facilitating this and letting it happen, while not being concerned with the consequences...

Posted by: james | Nov 10 2021 21:46 utc | 32

reits - real estate investment trusts - traded on the stock exchange...

Posted by: james | Nov 10 2021 21:47 utc | 33

The real question.
How much oil do the Saudi field's actually have?
It's all very secretive.
But are the production limits well and truly hit?

Posted by: JPC | Nov 10 2021 22:15 utc | 34

Sorry, but can't let the fake news @31 stand. "US energy production saw steepest drop on record in 2020", when Trump was POTUS. But then, it wasn't Trump's fault either:

"Last year, energy production in the United States fell to just below 96 quadrillion British thermal units (quads), a 5-percent decline from the record production in 2019, according to EIA’s Monthly Energy Review. The decline in absolute terms was the largest annual decrease in US energy production on record, and this decline was primarily due to the pandemic, which slashed demand for energy."

Gee, 96 Quads doesn't sound like destroying "domestic energy production." In dealing with this topic, today I've read several other hysterical items predicting the freezing of housed people during the Winter and similar idiocy, although there will be more homeless this year than last Thanks to Congressional and Executive policies put into place over the last 20+ years.

Posted by: karlof1 | Nov 10 2021 22:32 utc | 35

A few years ago I commented on another website. There was this trend of comparing Canada with Saudi Arabia (simplifying but go with me here…). I did some searching and found a PR industry trade magazine online. MbS spends *a lot* of money on advertising. And in this industry mag, the firm working for Saudi Arabia actually said “we have to make Saudi Arabia look like Canada” (and as part of this, make Canada appear like Saudi Arabia). I posted the link — take that schmoozy a**holes. Anyway, back to the huffing in the HuffPost. Could this be another MbS funded strategy to stick it to Biden? My guess is he’d use a London or Paris-based PR firm?

Posted by: Bruised Northerner | Nov 10 2021 22:42 utc | 36

Hi james - I just wanted to add one comment to your excellent explanations of Chinese purchases of real estate. I can’t remember where I heard this so caveat emptor — I heard that the Communist Party of China was annoyed with Richmond, BC. All these immigrants from China who’ve settled there tend to eventually start new political movements, which can trickle back to mainland China. And become irritating. So Communist party faithful were being sent here to try and balance out the discourse. That’s in Vancouver where I heard that, but perhaps it applies to Vancouver Island as well.

Posted by: Bruised Northerner | Nov 10 2021 22:52 utc | 37

One more comment about Richmond (possibly) annoying the Chinese authorities. I remember this being discussed in a comment section. One commenter suggested that Merkel was doing something similar with immigrants from Turkey. That stuck with me, whether it’s true or not, I can’t say.

Posted by: Bruised Northerner | Nov 10 2021 23:06 utc | 38

JPC @34--

I was fortunate enough to listen to Matt Simmons talk about his book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy soon after it was published in 2005 where he provided us at the ASPO Houston Conference his reasoning for his conclusions. He discussed all sorts of technical factors, particularly the growing water cut percentage of Gwadar and other super-giant oil fields, the likes of which don't exist anywhere else on the planet, thus making comparisons difficult. If he were living today, I'm sure he'd be surprised but not startled that his prediction was a dry well. It's most likely that Saudi is now on the downward part of the extraction curve, but they can probably keep on exporting for another 20 years in ever slowly decreasing amounts until they cease to use what remains for themselves.

As I've commented above, the wedge/gap between supply and demand is artificial due to Outlaw US Empire's illegal policies that other nations allow to stand and damage them economically. The main point made by Collin Campbell back in the 1990s was that global energy sources would eventually peak and decline thus potentially causing an economic crisis if not prepared for. The wedge/gap problem still exists and was never anticipated being filled by green/renewable sources, which was and remains a contentious topic of debate. We even had people from the National Renewable Energy Laboratory speak at ASPO conferences about the difficulties faced with replacing fossil fuels AND their supporting infrastructure.

Big Oil has tried to transform itself into Big Energy, but hasn't done a very good job to date. Russia and China have a huge lead when it comes to filling the gap, which will arrive much sooner for China than Russia. The EU needs to be concerned about Russia's ability to satisfy its market demand over the next 20-40 years which will mark the start of Russia's resource depletion issues. But it has ROSATOM and its closed fuel cycle on its side as does China. The EU and Outlaw US Empire have no such energy ally. Then there's fusion which is on Russian and Chinese drawing boards and in their space exploration plans.

Posted by: karlof1 | Nov 10 2021 23:08 utc | 39

“ Foreign holders of United States treasury debt
According to the Federal Reserve and U.S. Department of the Treasury, foreign countries held a total of 7.03 trillion U.S. dollars in U.S. treasury securities as of June 2021. Of the total 7.2 trillion held by foreign countries, Japan and Mainland China held the greatest portions. China held 1.1 trillion U.S. dollars in U.S. securities. Japan held 1.28 trillion ”

What is extremely funny is who are the 3rd, fact the top 10 holders of the rest of the foreign debt. Ireland at 4 after the U.K.! Luxembourg, Cayman Islands , Taiwan, Belgium feature ahead of India. Followed by Hong Kong! And Singapore.

Holding Dollar debt is a two way street. Imagine if Japan suddenly decided to divest its top position. What would happen to the dollar exchange rate? And as China continues to build its selling power bullets the Fed will be getting worried about such a sword hanging over its head.

“ while 170 billion U.S. dollars in interest expense were intragovernmental debt holdings. Total outlays of the U.S. government were 4.45 trillion U.S. dollars in 2019. By 2025, spending will reach 5.45 trillion U.S. dollars.”

Yup - there’s no end to the magic money tree being able to pay the ever increasing interest knowing that it will buy a lot less in the future and they don’t care as long as they have drawn real wealth with the inevitability worthless $. As usual it will be the average Joe with their hard earned savings who will suffer - as they wonder the streets with barrow loads of dollar bills (virtual by then) to buy a Big Mac.

Posted by: D.G. | Nov 10 2021 23:18 utc | 40

Posted by Patroklos @28, and Posted by James

The real estate bubble in both Australia and New Zealand is inflated by a number of factors. One is bureaucratic and difficult planning laws in both countries.

In Australia this is overcome by having political connections in local government. This leads to local government being a market place for the exchanging of favours. In some councils all councillors and parties are in on it. Add to this toxic mess the overpaid council staff. Corrupt developers know how to get around these 'rules.' Proper building standards are necessary.

For example the Brethren Church and other crackpots enrol en mass in the Liberal Party in branch stacking exercises and their members get favours from the council, notably in north western Sydney.

Developers can make millions overnight by having land rezoned for housing sub division. Here is an example,

Obeid INC, Four Corners, 45 Minutes:

It is not quite that bad in NZ so far. Draconian planning and building consent 'rules' are a driver of higher costs and corruption.

Posted by: Paul | Nov 10 2021 23:22 utc | 41

The US hit peak oil back in the 70s. The adults at that time, having lived through great deprivation in the 30s, and understanding what the word "limits" meant, responded by passing laws to decrease demand. They also passed a law forbidding the sale of US oil abroad.
But then came Reagan and his "they want us to freeze to death in the dark, but instead we are going on a giant splurge, using up every damn bit of energy we can and the heck with future generations". And he opened the borders, allowing 100 million more splurging people to join the party. In 2015, Congress repealed the law forbidding the sale of oil abroad, just to make it go a little faster, because none of them had gone through the Great Depression either, and they also don't understand the concept of making do with what you have.
And here we are, 40 years later, with the current people who literally cannot understand the word "limits", insisting that there has to be more oil available, because they want it to be available.
Like addicts they are demanding that the oil companies scrounge around under the couch cushions, looking for scraps that may make it possible for a little bit more partying. Screw the future generations, they can freeze to death in the dark.
Except that we are the future generation, and Biden has already told us that we are in for a Dark Winter. I think he's talking about freezing to death in the dark, but maybe he means something else. Whatever he means, it isn't going to be pleasant.

Posted by: wagelaborer | Nov 10 2021 23:32 utc | 42

Looks like the NYT commentariat finally lost their patience with the newspaper:

Fastest Inflation in 31 Years Puts More Heat on Washington

Joe Biden is losing the support of the "coastal elites", his last bastion.

Posted by: vk | Nov 10 2021 23:40 utc | 43

There is actually a c+c shortage.
In the past (like the early 70's, shortage was political)

It doesn't matter your perspective, this is a physical reality.
World production is over 6 million barrels below the peak in Nov 2018.
New reality---
Will we ever achieve Nov 2018?
Don't think so, but I could be wrong

Posted by: Duncan Idaho | Nov 11 2021 0:00 utc | 44

James @ 20, 32

"... a friend told me of a story of a building being bought in manhattan by the chinese and they paid cash outright - 800 million i think was the price tag as memory serves.. this is another form of money laundering ..."

Sounds like the Falun Gong folks buying the building for their media empire operations: among other things, The Epoch Times newspaper, New Tang Dynasty TV channel, Shen Yun dance company, cybersecurity activities. Bernhard had written previously about their operations.

Falun Gong's headquarters are in Deerpark in New York state as well.

A work colleague who has relatives in Mexico City tells me there is a lot of Chinese money flowing into Mexican property. It seems that much Chinese buying of property across the world is a form of money laundering as a way to avoid paying taxes. I suppose the Chinese high-flyers who engage in such money laundering don't think that the taxes they should be paying could be helping their fellow Chinese citizens get out of poverty sooner rather than later.

Property investment as a form of money laundering is popular because when property appreciates in value, the trail of monies going into the purchase disappears and the money that should have been declared to tax authorities in the home country can no longer be traced.

Of course Canadian and Australian national and regional governments who encourage such money laundering by launching stupid schemes in China and other parts of the world encouraging huge amounts of investments and giving investors concessions and Olympic-medal style labels ("gold", "silver", "bronze") if they invest millions are as much to blame.

Posted by: Jen | Nov 11 2021 0:39 utc | 45

Back in 2008 as we watched the price of fuel close-in on $5/gal, I was very pleased that we had the foresight to purchase a Prius in 2004, but I did feel for those who could only afford to buy used SUVs getting 10-12mpg with no other way to navigate the suburban sprawl they lived in. Most of those old SUVs are gone, but only to be replaced by those getting twice the mileage. Thus many people will be screwed like they were back in 2008, only this time it will be worse, and there's nothing the Saudis or anyone else can do to alter the situation. I still have my Prius, and it still gets 48-50mpg.

However, the fundamental critique leveled by the producers of The End of Suburbia still remains as many cities have copy/pasted the suburban sprawl development design which is totally dysfunctional from an energy standpoint and still requires a car to navigate. Then there's the lifestyle that's promoted by that type of development which is also dysfunctional. And neither MAGA or BBB address those twin problems residing at the core. Europe and Asia with their much older and functional living arrangements at least don't have to deal with that, but much of Africa and Latin America having copied the USA do.

Posted by: karlof1 | Nov 11 2021 0:59 utc | 46

October 2021: 413.93 ppm
October 2020: 411.51 ppm

As homo sapiens we have never lived at these levels of Co2.

Ideology will succumb to reality.

Posted by: Duncan Idaho | Nov 11 2021 1:44 utc | 47

Good piece. The relationship between Kingdom of Saudi Arabia (KSA) and US has remained essentially unchanged since the meeting between FDR and Saudi King Abdulaziz bin Abdul Rahman Al Saud, aboard the USS Quincy in the Great Bitter Lake, Suez Canal on Feb. 14, 1945 (see: This ‘relationship’ has endured through Democratic and Republican administrations. As Donald Trump, in my view, correctly stated ‘Saudi Arabia and its King would not last “two weeks” in power without American military support’. Joe Biden and the ruling elite he represents view KSA as a gigantic ‘piggy bank’ that spends large amounts of money buying: hi-tech weapons from US military contractors, US T bills and investing in equities on Wall St. The US is determined to continue the war on Yemen, using KSA as their proxy and have no intention of ceding control of the Bab-el-Mandeb strait or Arabian Peninsula to the Houthi/Ansar Allah movement, who they view as an Iranian proxy force. Further, the Pentagon will want to be in full control of this area for their upcoming US war on China.

Posted by: PaulB | Nov 11 2021 2:02 utc | 48

the saudi royals also throw lots of money at NGO's and big philanthropy, especially the likes of the Clinton Foundation. they and medicines sans frontieres need bandages for the yemeni wounded.

and when you are buying your F35's, don't forget to donate to!

Posted by: rjb1.5 | Nov 11 2021 2:15 utc | 49

>If they were to decide to sell oil in Chinese Yuan the U.S. dollar would no longer be the main reserve currency.

Sorry but this just isn't true. The US dollar (and to a lesser extent, other reserve currencies like the UK pound) is a 'reserve currency' because rich people, in America and around the world, hold their wealth in dollar assets like stocks, bonds, and real estate. Until rich Americans are hiding their wealth in Chinese real estate rather than the other way around, the yuan will not threaten the dollar's reserve status.

Part of this is Saudi oil wealth, but it's what they do with their assets that matters, not whether they denominate oil sales in dollars or yuan, which wouldn't matter at all for the dollar's reserve status.

Posted by: Rob P | Nov 11 2021 4:13 utc | 50

Posted by: Rob P | Nov 11 2021 4:13 utc | 50

"Sorry but this just isn't true. The US dollar (and to a lesser extent, other reserve currencies like the UK pound) is a 'reserve currency' because rich people, in America and around the world, hold their wealth in dollar assets like stocks, bonds, and real estate."

Energy securities is the main concerns of any functioning Nation states as all their economy, industrial base, and military defences rely on the availability of said energies. It is the interests of National states and therefore their central banks that precede any and all private entity whether they like it or not to secure their energy needs.

Countries central banks has to buy dollars whether they like it or not even when they don't need anything US produced because oils is sold only in dollars.

If Yuan started to be accepted as oil payments countries that doesn't need any of US services or products would surely switch over to use Yuan because Yuan is cheaper to exchange over USD relative to their own currencies and especially so if their trades and services mainly with China.

"Until rich Americans are hiding their wealth in Chinese real estate rather than the other way around, the yuan will not threaten the dollar's reserve status."

If you're wondering those bemoaning about "China steal our jobs and industry" And "China steal our technology" Is because rich and technocrats American are leaving US soils to gain wealth which is by the way in reality not measured in US dollars at all but in real productions and services.

Those so called Ultra rich would definitely not choose to abandon their base where they own both the economy in monopoly (the reason why the lesser technocrats is leaving US market in the first place) and their wealth guard dogs called US military and security apparatus (including their laws and judicial systems).

Posted by: Lucci | Nov 11 2021 5:24 utc | 51

Wait, where's Wakey Fakey? Does she only show up in threads where Grrrrrooof can't reasonably make any more posts under her own name? No opinion by the drive-by clown on issues other than silly American civil war statues and alarmist crime rates? Ohhhh please tell me otherwise.

Posted by: Tom_Q_Collins | Nov 11 2021 6:28 utc | 52

Saudi & Russia together are the marginal producers of oil, and together determine the oil price.

Both agree the about $US60/barrel is a price level that assures nett profit AND keeps economies (and demand) healthy.

However COVID has poked a hole in this, as release from COVID is starting to really stoke demand.

Ultimately, the climate crisis will force rapid (desperate) turn to nuclear power construction (long build-lag time). In the meantime, gas + jet engines will be the stop-gap to meet surging summer heatwave demand. (Without airco, people will die in badly affected regions.)

Additionally, gas in Mid East + Eurasia + Arctic periphery is plentiful - and Pres. Putin says Russia has 'planetary' levels of methane.

Russia is ~37% CO2 neutral - hydro, nuclear mainly. But they have plans run methane (natural gas) through steam re-formatting plants that split methane into 2 streams. One is CO2, which is re-injected into old oil/gas fields, locked up forever(ish).

The other stream is hydrogen gas. This can be used in many ways as an energy carrier - compressed, transported as a liquid, run thru a fuel cell to make electricity for vehicles, or used as a component in the manufacture of liquid synthetic vehicle or jet fuel.

So liquid transport fuels are assured. But won't be cheap. And there are limits to lithium supply (and other components of lithium batteries). So, once again, hybrids won't be cheap. Which is good - it makes recycling economic.

A million changes in our living circumstances will be forced by lifes course under these new conditions. So be it.

Saudi, the momentary object of attention for hydrocarbons, has an ultimate future as a producer of massive amounts of solar-power generated by solar panels. But it won't go to USA (albeit a little green H2 from solar might). Electricity will be exported by cable to Europe, or to the mid East and beyond. This is of no interest to USA.

So Pres. Biden 'should' be talking to Russia. (And, for the immediate future, to Venezuela. Of course USA will have to pay reparations first.)

Posted by: powerandpeople | Nov 11 2021 6:37 utc | 53

So Pres. Biden 'should' be talking to Russia. (And, for the immediate future, to Venezuela. Of course USA will have to pay reparations first.)

above Posted by: powerandpeople | Nov 11 2021 6:37 utc | 53

looks to me like Iran has a lot of excess oil to sell as well ?
I agree Venezuela would be a good other source of oil..and they already understand the USA market.. but what about producing oil and gas inside USA governed America..? in those hills, deep in America, that are many, job providing, 5 barrel each, a day for 90 day producer-fields most at shallow depths, (and lots of gas without pipelines to transport it to markets) and few of the small wells require fracing.. What is missing in America is conveniently distributed, crude to refined refinery capacity.. so do we need to buy the oil and gas already refined?

What ever became of the Canadian Pipeline that filled the reserve oil.. to the brim,, what happened to that oil?

Posted by: snake | Nov 11 2021 7:47 utc | 54

Biden has a ace up his sleeve: he can resolve the standoff with Iran and lift the sanctions, making an extra 2,000,000 barrels available in the market, immediately, reducing the gas prices in D.C. significantly.
In a year or two, that would become 4,000,000 and just the anticipation will dampen the prices dramatically.
However, as usual, Israel’s interest trumps (sic) U.S. taxpayers, further draining our pocket. The ace he has, he has to hiding it; up a different opening, instead of keeping it up his sleeves.
Republican- & Democratic Party are willing to spill the blood of our girls and boys, fighting Apartheid Israel’s enemies for them. White House will certainly not hesitate to enrich Banksters, supportive of Apartheid Israel, syphoning our blood and treasure into their bellies.

Posted by: Amir | Nov 11 2021 9:16 utc | 55

If Americastan invaded Bonesawmanistan, then it would be harder for mainscream media to explain away Americastan's support for moderate head-choppers in the War of Terror. Those who actually believe in the concept of "Constitutional Republic" and understand it, rather than uncritically accepting the weaponized fake version could cause trouble for the two factions of the Zionist, Neoconservative, Neoliberal Corporatist Party of the Unhinged States by ironicly and poetically false flagging us into a war with Bonesawmanistan.

If KKK KSA has the receipts for 9/11, all the better.

Posted by: William Haught | Nov 11 2021 9:19 utc | 56

To be consistent, I should probably go with Bonesawmanistan, Banderastan, and *UncleSchmuelistan*.

Posted by: William Haught | Nov 11 2021 9:40 utc | 57

It is not in the U.S. further worsen the relations with Saudi Arabia.

That has not been the case for decades. Remember how young Dubya Bush used to hang out on the Saudi Prince's diamond-studded yacht, drinking champagne and snorting lines off the hips of young models?

Posted by: mal | Nov 11 2021 10:04 utc | 58

" International relations are (...) about interests."
I wish it were. There wouldn`t be wars any more.

With some rare exceptions war is - even if one disregards the unspeakable human suffering - associated with such high cost, uncalculateable risks and even in the case of victory with even more costs (occupation for instance) that it`s never a good policy from a rational point of view. Dividing up the cake is virtually always the better choice.

Besides, Biden known very well why he comes up with this at the G20. High oil prices don`t only effect the USA or the West but all oil importing countries. Including such an apparently easily overlooked country like China.

Posted by: m | Nov 11 2021 10:12 utc | 59

Posted by: karlof1 | Nov 10 2021 23:08 utc | 39

Much appreciated Karlof1
And pretty sobering!
The water cuts were something I'd heard were increasing big time.
And as for fusion!
Lots of really good PR but it parallels the MIC in lot's of ways.

Posted by: JPC | Nov 11 2021 10:13 utc | 60

Posted by: wagelaborer | Nov 10 2021 23:32 utc | 42

Congress repealed the law forbidding the sale of oil abroad, just to make it go a little faster,

because none of them had gone through the Great Depression either, and
they also don't understand the concept of making do with what you have.

<=maybe there is a another reason.. ? maybe private owners of the LNG business located America want to sell their natural gas in liquid form to Europe ..? did that law prevent this kind of sale? Maybe Trump was selling reserve oil to Europe? Maybe.. maybe.. and so on.. congress does not repeal laws because they become stale, there has to be a strong impelling reason.. to repeal a restrictive law. Why was that law put in place in the first place. take a look at this I think I have it right. its complicated.

12.18. 2015, the Consolidated Appropriations Act of 2016, H. H. 2029, repeals the 1975, the Arab oil embargo solution, called, Energy Policy and Conservation Act, Section 103, 42 USC Section 6212 ( "Domestic use of energy supplies and related materials and equipment, <=president makes export of crude oil and natural gas produced rules and decides exemptions in USA governed America. <= is this a removal of power from congress to the President in preparation for globalism?

Apparently old law generally prohibited the export of crude oil produced in the USA governed America, but not refined oil and gas? AFAICT the Export adm regulated by export license it all see 15 CFR Part 764. Apparently refined petroleum products manufactured ie USA governed America were exempt from export restrictions and that exemption made a lot of people a lot of money what is behind rising domestic price hikes?? ? Why has the president been given the authority to regulate import and export of oil and gas.. I thought that was a congressional matter?

I think I have it right. IANAL

Section 101 of Division 0, Title I, "oil Exports, Safety Valve and Maritime Security. Section 101 (a) eliminated section 103 oe 1975 act. Section 101 (b) National policy on oil Export restrictions, 'no Federal official shall impose or enforce any restriction oe export of crude oil, but
Section 101 (c), President can impose sanctions prohibiting exports to any person or government that is designated as a state sponsor of terrorism. and
Section 101 (d) President can require crude oil export licenses (<1 yr each renewable) if national emergency or national interest facilitated or ife Sec. of Commerce and Secretary of Energy, discover the export of crude oil is adversely affecting the American economy.

Funny to me that at a time America needs greater supplies of oil and gas to fend off unwanted inflation that to remove ban on export of oil and gas makes little sense? Maybe this somehow explains it.. but I doubt it..

ms. Saule Omarova Treasury Department Nominee Says Biden Administration Purposefully Wants to Bankrupt Oil, Coal and Gas Companies Nov. 10, 2021.. Biden adm wants deprive people of oil and gas in favor of climate change?

Posted by: snake | Nov 11 2021 10:20 utc | 61

a building being bought in manhattan by the chinese and they paid cash outright - 800 million i think was the price tag as memory serves.. this is another form of money laundering..
Posted by: james | Nov 10 2021 20:08 utc | 20

"Paying by cash" can have different meanings according to context. If you buy a loaf of bread and pay cash it means notes and coins. But if you buy property and "pay cash" that generally means immediate full payment by bank transfer, as opposed to debt. That is my understanding.

Posted by: BM | Nov 11 2021 11:55 utc | 62

Posted by: dh-mtl | Nov 10 2021 19:22 utc | 12

Yes, VVP holds the cards.

It is becoming increasingly clear that we live on a finite planet. It is also becoming increasingly clear that OIL is finite. Oil is the world's most valuable "asset;" it represents the greatest daily trade flows. Oil, energy, trumps "money/cash/USD."

The tipping point for the USD as world's reserve currency is directly tied to the oil trade. The more that Russia (the number one or two producer- depends on who is reporting) trades outside of the USD the more pressure is placed on other oil producers to do the same. The realized value of the USD is decreased and at some point we see the empire standing naked.

China knows that at some point it'll have to take losses on the USD. The way to diminish the losses, before the house of cards falls, is to increase its energy trade with Russia. And expect that Iran will also be playing into the China energy market. Saudis and other large producers will struggle (Saudis have been feeling the pressure of growth for a while and it's just a matter of time before the royals have to pick between the US [protection] and the people- figure the end of the royals, though Russia and China might toss a lifeline [but the royals' shelf life is getting long]).

The US faces the conundrum of rising energy prices, but needs those prices to go up in order to keep the fracking ponzi from kicking a leg out from under the stool. Similar situation as the Saudi royals find themselves in: damned if you do, damned if you don't- no way out.

Lastly, I've wondered whether "climate change" (though I believe in the concept) isn't being used to try and shift away from oil due to the above dynamics (the oil game is now no longer in the US's favor).

Posted by: Seer | Nov 11 2021 12:44 utc | 63

Biden is a shell of a human. He lies, cheats, kills for power and recognizes others whom he perceives as the same: MBS, in this case. Biden's been living like that for over 60 years. One big caveat-- he is losing his sociopathic mind which, while it might be somewhat entertaining and maybe even informative among some clinical researchers, scares the bejeebers out of me. I'm hoping Doctor Jill will continue doing whatever she does to keep him from getting triggered.

Posted by: migueljose | Nov 11 2021 13:06 utc | 64

As many have already said. Biden and all other Presidents had to make a choice between distancing the U.S. from the loathsome Saudi regime or stop unjustly tormenting Iran / Venezuela.

Why do we do it?
That I can answer in one word [start playing music from famous musical]

Tevye, 'Tradition! ... Traditio-ooooo-n Tradition, la-la-la-la LAH, TRADITION!'

Posted by: Christian J. Chuba | Nov 11 2021 13:39 utc | 65

It is not clear that low oil prices are good for USA. One reason for higher (not record) prices is that a large part of American production came from small companies with high costs. High cost comes from reliance of fracking that "squeezes out" oil from geological formation from each oil does not flow out otherwise. The result is that oil wells drilled for fracking deliver most crude in the first 5 years or so, and then substantially taper off. If you stop drilling, the production goes down faster than for "traditional oil". Fracking wells are probably more vulnerable to damage when you stop them, hence episodes with negative prices.

Thus there is a room for fuel prices to go down, but not a lot.

Pandemic dented production of many commodities, inflation has wide reasons, perhaps temporary.

Posted by: Piotr Berman | Nov 11 2021 14:37 utc | 66

I am with Karlof1 #27.

Take Venezuela, Syria, Iran, Russia gas and oil out of the market and the price goes up.

Imperialist sanctions create and artificial shortage. The next Prez Republican or Dem will continue this policy.

Posted by: oily joe | Nov 11 2021 14:39 utc | 67

Posted by: oily joe | Nov 11 2021 14:39 utc | 67

I have considered it obvious for some time now that the sanctions on oil producing countries were intended to keep the price of oil up. Only with high prices could fracking make us the world's #1 producer again. So yeah, blame it on the Clinton-Obama gang.

And other motives too, of course.

But yeah, I agree about the oil "shortage". What we have is a shortage of cheap oil, but there is plenty of oil still, and with enough energy we can make all we want. The problem is the price, and the lack of cheap, portable alternatives for energy in particular.

Maybe it will occur to our "elites" somewhere in here to invest more in high capacity storage that will not blow up in your face, even if it is not that profitable.

Posted by: Bemildred | Nov 11 2021 14:49 utc | 68

[Biden] losing his sociopathic mind which, while it might be somewhat entertaining and maybe even informative among some clinical researchers, scares the bejeebers out of me.
Posted by: migueljose | Nov 11 2021 13:06 utc | 64

Biden, and the circle of his people (with no neurological problems) live inside an electric fence. If you stray too far from the tenets like necessity of American domination and all actions (some quite vile), that support it, sparks fly and with one extra step, you get an electric shock. Trump started with wobbling positions, but after a few shocks, he did whatever Deep State wished, even if his large mouth was not totally confined in this enforced inner Overton Window. Biden himself had some shocks in the past, and his circle are opportunists.

Posted by: Piotr Berman | Nov 11 2021 14:51 utc | 69

Bemildred @ 68 I agree keeping the price of oil high

I think it is more advantaged to reduce the demand for oil than it is to increase the supply for oil given that hydrocarbon is a slowly renewable energy source.. concentrating on heating, cooling, and gasoline engine units and efficiency promises far greater returns to humanity than finding more oil to exploit. where is that in the national energy policy?

its true also with water.. though water is more renewable than oil. and
finding ways to remove the dangers of nuclear waste would be helpful.. instead of chasing into space, Americans need a government that will work to
solve the problems at home.

Biden begging MBS is likely not to return long term gain to humanity; in fact, its likely to kill off alternatives that otherwise might be developed. I think Biden should talk to MIT, Cal Tech, the American people, the people of the the gateway to the USA Treasury to persons or companies that actually deliver gains in energy production and energy use efficiency.
Some guy in the back of a garage may figure out how to make a gasoline engine that can drive a car, plane, a jet engine, a heat exchanger, a diesel engine, a lawn mower 4x or 5x current energy efficiency.
The entire world could use it, and everyone would be better off.

Posted by: snake | Nov 11 2021 14:58 utc | 70

Posted by: snake | Nov 11 2021 14:58 utc | 70

Yes,thanks, I think we are on the same page there.

Some guy in the back of a garage may figure out how to make a gasoline engine that can drive a car, plane, a jet engine, a heat exchanger, a diesel engine, a lawn mower 4x or 5x current energy efficiency. The entire world could use it, and everyone would be better off.

Posted by: snake | Nov 11 2021 14:58 utc | 70

And that is one heck of a lot more likely than some big corporation doing anything so useful. What they like to do is sell you nothing in a big plastic package.

Posted by: Bemildred | Nov 11 2021 15:56 utc | 71

There are several reasons why it’s not a bad thing to keep the sanctions on Iranian oil. Ease that, and the prices will drop like a rock.
1) Keeping oil in the ground, is environmentally friendly.
2) Keeps oil prices high, so Iran can sell less and earn the same.
3) Iran will diversify — as it has been — it’s economy away from oil. If I recall correctly, at shah’s time oil accounted for 79% of the revenue, now less than 29%.
4) Iran will go, from a rentier state to a producing state.

The only negative I can see is the oil payments being held up in some foreign bank. Of course, it is said that, Iranians have a phd in sanction busting.

Posted by: Sakineh Bagoom | Nov 11 2021 16:38 utc | 72

@ Bruised Northerner | Nov 10 2021 22:52 utc | 37 /38

sorry for the tardy reply... i was tied up yesterday in an afternoon sound check and gig in the evening! i'm back now! what you say sounds plausible and i am sure some of that happens... it was mostly really wealthy people from hong kong that weren't sure of the transition in 1997 and wanted a security in case things didn't go the way they hoped... i am not sure where all that is now, but we see how hong kong was a hot spot for hostility towards china the past few years.. ultimately it has been unsuccessful..
it is also interesting what you say about merkel doing something similar with turkish immigrants... different set up, but could be used similarly - yes..

@ Jen | Nov 11 2021 0:39 utc | 45

that's interesting.. could be falun gong who bought the people.. my friend didn't know - just that they had paid cash, and i am guessing this 800 mil is us$ owned by chinese, going into buying up manhattan real estate.. and yes - the politicians are very much to blame for allowing all these dynamics to happen..

@ BM | Nov 11 2021 11:55 utc | 62 - correct.. it is pure speculation on my part - "is this another way to get rid of the us$ - buy us real estate?"

@ Seer | Nov 11 2021 12:44 utc | 63 - good post.. thanks for your insights..

oily joe / bemildred / snake and karlof1... i think it goes without saying the reason for the sanctions is for keeping oil prices high.... the jig is up for the us$ if this merry go round stops and i think it will...

Posted by: james | Nov 11 2021 17:35 utc | 73

I personally don't think sanctions have anything to do with the price of oil.
The US was sanctioning like crazy and got the Saudis to crush the price of oil to wound Venezuela and Russia. They through their own frackers under the bus plus managed to push Russia to the top in OPEC. Venezuela was hurt for sure but they are surviving and making their economy much less reliant on oil revenue.

Posted by: arby | Nov 11 2021 20:26 utc | 74

@ arby... that's interesting... i suppose i can entertain the sanctions are doing a few things at the same time, but i do find it more then coincidental that the countries that are being severely sanctioned are venezuala and iran - 2 countries with large oil supplies, followed by russia which also has huge oil supplies.. maybe that is just a coincidence, but i kind of doubt it..

Posted by: james | Nov 12 2021 0:13 utc | 75

"Why Joe Biden Will Soon Talk With Mohammed Bin Salman"

With all the complex reasons discussed here, I suspect that the answer is actually very simple.

Americans are deprived their own monarchs, a lamentable result of a rebellion in 18-th century. Thus they view monarchy as something fabulous. And absolute monarchs are absolutely fabulous. And Mohammed Bin Salman is fabulously absolute, like imprisoning scores of family members to squeeze cash out of them (wouldn't you love to do it if you had some billionaire uncles?). MBS also has fits of royal anger, e.g. with President of Lebanon who was his own stooge. There are other absolute monarchs, say in Morocco, Qatar etc., but MBS is in the league of his own. To summarize, there is no more fabulous person on this planet than MBS.

If I was president, after surviving the first week, I would put my wife in burka and fly straight to Riyad on Air Force One as soon as I could secure an invitation.

Posted by: Piotr Berman | Nov 12 2021 3:12 utc | 76

You are correct to discount the Kashoggi execution as some high moral issue, it certainly isn't. It is, however, a Shibboleth to tell which side in the Saudi CivilWar someone is on.
I see little point in putting Biden under MBS's close inspection. If the Dems have to make concessions to avoid this embarassment, they .should

Posted by: RealBilly | Nov 12 2021 17:42 utc | 77

All we have to do is lift useless sanctions on oil producing nations like Iran and Venezuela etc.

Posted by: Atm | Nov 14 2021 19:12 utc | 78

"One is that the Saudis are a major reason for the predominance of the U.S.-dollar in the global financial system. If they were to decide to sell oil in Chinese Yuan the U.S. dollar would no longer be the main reserve currency. The U.S. taxpayers would actually have to pay for their government's deficits."

No, this is completely wrong. Especially the last part, which is just pure gibberish.

The dollar as GRC depends on the US running constant trade deficits, not oil.

And the ability to deficit spend has nothing to do with being the GRC. Not only can any country with a sovereign currency deficit spend, every country with one *does*, by definition. Central government taxes do not drive central government spending. Tax payers don't pay for anything at a federal level.


The dollar as reserve currency is dependent on the US maintaining that trade deficit. China won't take over unless it wants to become a net importer, which it clearly doesn't.

As for the interest payments, aside from the fact that they're an accounting fiction mandated by Congress and not actually necessary, those payments are paid for in US dollars, which only the US can create. The Federal Reserve is paying off bond payments constantly; it clears trillions in obligations regularly as part of normal operations and no one beats an eye. This is all literally just numbers in a ledger (here's where someone jumps in and decries all this 'fake money' and claims it's all going to collapse any day now).

Posted by: Ben | Nov 19 2021 23:28 utc | 79

All we have to do is lift useless sanctions on oil producing nations like Iran and Venezuela etc.

Posted by: Atm | Nov 14 2021 19:12 utc | 78

As I understand it, they (VZ) are being allowed to send us hydrocarbons at this very moment, despite the sanctions. The Russians are sending us 4 tankers of diesel. And we are trying to get the Asians to open up their reserves too. Putin doesn't want Belarus to freeze the Yurpeans buns off this WInter either. Nobody wants the globalized economy to collapse, since we all depend on it.

Posted by: Bemildred | Nov 19 2021 23:39 utc | 80

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