Russia
is the target of a multi-faceted, asymmetric campaign of
destabilization that has employed economic, political, and
psychological forms of warfare -- each of which has been specifically
designed to inflict maximum damage on the Kremlin.
PART 2 -
How Wall Street targeted Russia using oil
In July
2013, Sen. Sherrod Brown, chair of the Senate Banking Subcommittee on
Financial Institutions and Consumer Protection, opened a hearing to
probe just how connected major Wall Street banks were to the holding
of physical oil assets, and the attendant ability of these companies
to manipulate oil prices. The findings of the hearing, considered
damning by multiple analysts knowledgeable on the subject, prompted
an investigation by the Senate’s Permanent Subcommittee on
Investigations, published as “Wall Street Bank Involvement with
Physical Commodities.”
The report
highlighted just one of the big banks, Morgan Stanley, noting:
“One
of Morgan Stanley’s primary physical oil activities was to store
vast quantities of oil in facilities located within the United States
and abroad. According to Morgan Stanley, in the New York-New
Jersey-Connecticut area alone, by 2011, it had leases on oil storage
facilities with a total capacity of 8.2 million barrels, increasing
to 9.1 million barrels in 2012, and then decreasing to 7.7 million
barrels in 2013. Morgan Stanley also had storage facilities in Europe
and Asia. According to the Federal Reserve, by 2012, Morgan Stanley
held ‘operating leases on over 100 oil storage tank fields with 58
million barrels of storage capacity globally.’”
Pam and Russ
Martens of the well-respected financial analysis site
WallStreetOnParade.com succinctly noted in their analysis of this
issue: “With financial derivatives and 58 million barrels of
physical storage capacity, it might not be so hard to manipulate the
oil market.”
Indeed, the
sheer scope of Morgan Stanley’s market influence demonstrates the
obvious fact that the major Wall Street banks, and their cousins in
the city of London, are able to significantly affect global prices
using multiple levers like supply and derivatives, among others.
The Senate
report’s brazen honesty is likely the main reason the corporate
media failed to cover it all. As noted in the report:
“Due to
their physical commodity activities, Goldman, JPMorgan, and Morgan
Stanley incurred increased financial, operational, and catastrophic
event risks, faced accusations of unfair trading advantages,
conflicts of interest, and market manipulation, and intensified
problems with being too big to manage or regulate, introducing new
systemic risks into the U.S. financial system.”
But perhaps
most jaw-dropping is this January 2014 statement by Norman Bay,
director of the Office of Enforcement at the Federal Energy
Regulatory Commission, who testified before the Committee on Banking
and Financial Institutions and Consumer Protection Subcommittee. He
plainly outlined how the big banks manipulate global oil markets:
“A
fundamental point necessary to understanding many of our manipulation
cases is that financial and physical energy markets are interrelated
… a manipulator can use physical trades (or other energy
transactions that affect physical prices) to move prices in a way
that benefits his overall financial position. One useful way of
looking at manipulation is that the physical transaction is a ‘tool’
that is used to ‘target’ a physical price.”
When one
considers how much influence these large banks have on global prices,
it’s almost self-evident that they would be able to use oil prices
to execute a political and geopolitical agenda. With that in mind, it
seems highly suspicious (to say the least) that the collapse of the
oil price coincided directly with Russia’s move to annex Crimea and
assert its dominance over its sphere of influence, thereby
effectively stopping the eastward expansion of NATO in Ukraine.
It’s
amusing then when one reads The New York Times reporting this month
that “simple economics” explains the drop in oil prices. In fact,
it’s clear that it’s just the opposite: The collapse of oil is
the result of financial manipulation by Wall Street in the service of
the broader agenda of the Empire.
Indeed, in
late 2014 Russian President Vladimir Putin implied strongly that the
oil plunge had less to do with economic factors than with political
decisions. Putin openly theorized: “There’s lots of talk about
what’s causing (the lowering of the oil price). Could it be the
agreement between the U.S. and Saudi Arabia to punish Iran and affect
the economies of Russia and Venezuela? It could.”
Of course,
Putin was not alone in this assessment, as many international
observers spread “conspiracy theories” about collusion between
the U.S. and Saudi Arabia to deliberately depress oil prices by not
cutting production despite all market indicators pointing to a needed
decrease.
With
U.S.-Russia relations having reached their nadir at precisely that
moment, and with Venezuela and Iran also on the enemies list, it is
no surprise that many analysts around the world concluded that
Washington and Riyadh were conspiring on oil for political reasons.
Of course,
the other major impact of the oil plunge on Russia has to do with the
burgeoning energy-trade relationship between Russia and China. After
the massive oil and gas deals announced between Russia and China in
2014 — deals worth hundreds of billions of dollars over the next
three decades, it seems that Washington calculated that while it
could not prevent the deals from moving forward, it could undermine
them by fundamentally changing the calculus of the deals by tanking
oil prices. In so doing, not only have the contracts been rendered
less profitable for Russia, they are now subject to decreasing demand
from China, which is experiencing its own economic slowdown.
In short,
Russia’s attempt to break free of its dependence on revenue from
gas sales to Europe by shifting its focus eastward has left Moscow in
a bind. Facing the prospect of significantly less revenue than it
anticipated coming from the deals with Beijing, Russia has been
forced to adjust its own estimates and outlook for the coming years.
Source:
What we see in Ukraine is probably
another failure of various think tanks, mostly from Washington,
which they are funded, of course, by the international capital. It
seems that, apart from the fact that they have underestimated
Putin's abilities, they have also wrongly estimated that Russia
had passed permanently in the neoliberal phase and would be ready
to become an easy victim to promote their plans. According to
these plans, the ultimate goal would be probably to dissolve the
vast Russian territory in future and bring in power
Western-friendly puppet regimes, in order not only to conquer the
valuable resources, but also to impose permanently the neoliberal
doctrine on "unexplored" regions and populations.
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