The Biden presidency is already turning into very good news for Iran, Russia, Norway and Saudi Arabia, as oil prices soar and create massive wealth for these nations.
Biden’s choice to end shale, review existing oil permits and halt the Keystone XL Oil Pipeline, and thereby end U.S. oil independence, is a dream come true to many. Russia and Saudi must be overjoyed.
The order to stop new oil and natural gas leases on public lands aims to strengthen “green energy.”
Which is great! We all wish there were more green sustainable energy in the world. The problem is, we are not there yet. The question then becomes: Who will profit from the upcoming energy shortage?
To the endless applause of gullible Hollywood actors who pretend to be equipped advisers in the geopolitical game, Biden is, of course, cheered on. But the Biden push against fossil fuels may return the United States to its past dependencies on Saudi Arabia and other energy providers, as the green technologies are not yet able to provide sufficient energy – which leading analysts very well know.
The upcoming energy crisis will probably end up demonstrating the geopolitical shift toward the East even more, as the American lack of wisdom currently on display seems endless.
In early March, 2020, Russia and Saudi set the tone for the economic warfare strategy of keeping the prices low, arguably hoping this would affect U.S. shale and U.S. independence from foreign oil. Read our articles about this here and here.
The Mexican standoff between Russia and Saudi Arabia resulted in Russia pulling the plug on OPEC+ agreements. After Russia refused to support deeper oil cuts to cope with the dramatic fall in energy consumption following the outbreak of the COVID-19 crisis, OPEC responded by removing all limits on its own production, causing the price to dip even further, adding gasoline to the fire, so to speak.
Free flow of oil production produced low oil prices U.S. shale could not take without further bankruptcies. The question remains whether Russia or Saudi Arabia anticipated a market response of the COVID economic magnitude.
One of the main reasons for the Saudis’ push for lower oil prices back in March, was precisely to pressure U.S. oil independence through its high-cost shale oil production. The U.S. shale oil industry needed at the time a break-even oil price of around 60 USD a barrel. Russia only needs around 20 USD a barrel, and the nation is almost debt free, according to analysts.
The role of Russia is interesting. President Putin runs an economy on the rise, suffering less than the United States from low oil prices, being more self-supplied with goods after decades of U.S. sanctions. Russia has paid back much of its debt to the IMF and Western institutions, buying gold like there is no tomorrow and funding a mass rearmament of the military.
The past 20 years or so, the nation has shifted from being a Communist atheist state to now over 7 % of its people belonging to the Russian Orthodox Church. Read Norwegian professor Glenn Diesen’s new book “Russian Conservatism,” which examines how Russia, after a century of experimenting with communism and liberalism, has returned to its long conservative history, which dominated before 1917.
One may of course wonder who needs enemies when the Biden administration pushes its own country into the very wished-for energy shortage others long hoped for.
The geopolitical shift of power towards the East is yet again apparent. America is deep in its existing debt crisis, financial crisis, political crisis and mask crisis, with now also the upcoming energy crisis.
With the new, arguably somewhat premature Green Biden presidency approach, Saudi is thereby free to push the oil prices to new heights, which is happening as we speak.
To state the obvious: Green energy is great, yet so far not profitable or available to the degree that oil or coal is. CNBC writes that “the federal government is to conserve 30% of federal lands and water by 2030 and find ways to double offshore wind production by that time.”
Again, let’s go green, but knowing how massively dependent even the windmill production is on access to fossil fuel energy, one wonders from which other source of energy President Biden will produce these mastodon windmills at sea. How will these be profitable in only nine years, in 2030?
There is a high probability that the United States again will be dependent on massive oil imports that will slow down the economy and increase the cost base for the average driving American.
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