by Tony Wikrent
Global power shift
Has the West lost control of oil?
[Unherd, via Naked Capitalism 7-10-2023]
Led by the odd pairing of the Saudi Crown Prince, Mohammad Bin Salman (MBS), and Vladimir Putin, the Opec Plus oil producers’ cartel exists to maintain a price floor for its fractious members in an energy environment where oil prices have crashed three times over the past two decades. But its importance in a geopolitical world defined by Sino-American competition is beginning to extend well beyond the gyrations of oil markets. Opec Plus has remained resilient even as the Beijing-Moscow-Tehran axis has hardened since Russia’s invasion of Ukraine, as well as the recent Chinese-brokered rapprochement between Saudi Arabia and Iran. This raises questions about whether Saudi Arabia is now defecting into the anti-Washington camp….
Forging an association between Opec and Moscow was an act of Saudi desperation. For the previous two years, Riyadh had sought to bankrupt the American shale sector by allowing prices to slump, but largely succeeded only in emptying its own foreign exchange reserves. When they finally reversed course in September 2016, the Saudis found that, having alienated most other Opec members with their recklessness, they could no longer control prices. Two months later, Russia and 10 other states agreed to support a second Opec oil output cut, and Opec Plus was born….
Undoubtedly, some broader geopolitical convergence between Riyadh and Moscow against Washington followed over the next three years. When King Salman visited Putin in October 2017 — the first ever state visit of a Saudi monarch to Moscow — the two leaders discussed military co-operation and the possibility of the Saudis purchasing Russian arms….
When, in September 2019, Iran — either alone or acting with its Houthi allies in Yemen — destroyed the large Saudi oil processing facility at Abqaiq with drones and cruise missiles, that chasm was laid bare. While the Saudis were crushed by the failure of their Patriot missile defence system, bought at great expense from the Americans, Putin appeared with the Iranian president and mock-solemnly pronounced that Moscow could sell Riyadh protection that would actually work….
The Trump administration’s Abraham Accords, which saw the UAE and Bahrain normalise relations with Israel in September 2020, compounded the cartel’s lack of internal coherence on Middle Eastern matters. In oil terms, the Accords also appeared strategic: the UAE is the only member of Opec Plus other than Saudi Arabia with clear spare capacity, and Bahrain has been sitting on a known large offshore shale oil formation since 2018.
But for the past three years, events have conspired decidedly to strengthen Opec Plus. With the new Democratic administration in Washington unable to bring Iran into another nuclear deal in 2021, and post-pandemic growth in the shale sector nearly entirely concentrated in the Permian Basin, Biden, just eight months into office, had to ask Opec Plus to increase production. His trip to Riyadh the following summer for the same purpose yielded little. Indeed, in the months after Biden’s visit, Opec Plus appeared to toy with the American president, announcing a major production cut just weeks before the mid-term elections. Unable at any time during his presidency to influence the cartel, Biden has had to release so much reserve US oil that in March 2023 the Strategic Petroleum Reserve contained only 58% of what it did three years previously.
The World China Is Building
[NOEMA, via Naked Capitalism 7-14-2023]
…The International Monetary Fund expects Asian countries to account for 70% of growth globally this year. China must “shape a new international system that is conducive to hedging against the negative impacts of the West’s decoupling,” the scholar and former People’s Liberation Army theorist Cheng Yawen wrote recently….
The world China is reorienting itself to is a world that, in many respects, looks like China did a generation ago. On offer are the basics of development — education, health care, clean drinking water, housing. But also more than that — technology, communication and transportation.
Back in April, on the eve of a trip to China, Brazilian President Luiz Inacio Lula da Silva sat down for an interview with Reuters. “I am going to invite Xi Jinping to come to Brazil,” he said, “to get to know Brazil, to show him the projects that we have of interest for Chinese investment. … What we want is for the Chinese to make investments to generate new jobs and generate new productive assets in Brazil.” After Lula and Xi had met, the Brazilian finance minister proclaimed that “President Lula wants a policy of reindustrialization. This visit starts a new challenge for Brazil: bringing direct investments from China.” Three months later, the battery and electric vehicle giant BYD announced a $624 million investment to build a factory in Brazil, its first outside Asia….
Across the Global South, fast-growing countries from Bangladesh to Brazil can send raw materials to China and get technological devices in exchange. The idea is that what China is today, they could be tomorrow….
The majority of human beings alive today live in a world of not enough: not enough food; not enough security; not enough housing, education, health care; not enough rights for women; not enough potable water. They are desperate to get out of there, as China has. They might or might not like Chinese government policies or the transactional attitudes of Chinese entrepreneurs, but such concerns are usually of little importance to countries struggling to bootstrap their way out of poverty.
The first world tends to see the third as a rebuke and a threat. Most Southeast Asian countries have historically borne abuse in relationship to these American fears. Most American companies don’t tend to see Pakistan or Bangladesh or Sumatra as places they’d like invest money in. But opportunity beckons for Chinese companies seeking markets outside their nation’s borders and finding countries with rapidly growing populations and GDPs. Imagine a Huawei engineer in a rural Bangladeshi village, eating a bad lunch with the mayor, surrounded by rice paddies — he might remember the Hunan of his childhood.
How China Came to Dominate the World’s Largest Nickel Source for Electric Cars
[Wall Street Journal, via The Big Picture 7-9-2023]
Across the Indonesian archipelago, new industrial plants are going up to process chunks of nickel ore for use in electric-car batteries. Five years ago, there were none. What changed? Chinese companies had a breakthrough.
They tamed a refining process that was once unwieldy, unlocking Indonesia’s expansive deposits for the nickel-hungry EV industry. In doing so, they established Chinese dominance over what has grown into the world’s largest source of the commodity. That gives China a leg up in the global race to secure minerals that are critical to the energy transition and is a blow to U.S. efforts to lessen American companies’ dependency on China.
China beats rivals to successfully launch first methane-liquid rocket
[Reuters, via Naked Capitalism 7-13-2023]
The Poles are rearming at a breathtaking rate and are now Europe’s rising power. Let’s embrace Warsaw – over Paris and Berlin
[Daily Mail, via Naked Capitalism 7-9-2023]
The Battle for Colombia
[New Left Review, via Naked Capitalism 7-15-2023]
Capitalism = democracy. Not.
The terrifying rise of ‘debanking’
[Spiked, via Naked Capitalism 7-10-2023]
Last week, former Brexit Party leader Nigel Farage announced that his Coutts bank account of over 40 years had been closed against his will and without any real explanation. The motive might have been political, he speculated. Perhaps Coutts, the prestigious private bank for the wealthy, had taken exception to his support for Brexit. Farage went on to claim that nine other banks have refused his custom, too. This seemed like a potential case of what has become known as ‘debanking’ – that is, the practice of withholding banking services to individuals, because of the views they hold….
As it stands, we do not know exactly why Farage’s account was closed. But we do know that he is not the only one claiming to have been ‘debanked’. In fact, over the past week or so, numerous cases have emerged of people being denied access to financial services, seemingly on the basis of their political views. This has included activists, parents groups and even people with no political background at all.
Unpopularity Behind Elite Demands For Spying And Censorship
[Public, via Naked Capitalism 7-12-2023]
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