Oil prices have plummeted in recent days as a result of the collapse of negotiations between OPEC and Russia to continue agreed upon production cuts to oil, which would have kept prices more stable.

According to reporting by both Ben Aris and Chris Weafer, Russia decided to let prices drop in order to end what they considered to be buoying of the U.S. shale industry. According to Weafer:

At last week’s meeting, Russia only offered to extend the existing OPEC+ deal, which is set to expire at the end of this month, for a three further months and then to assess the situation. Saudi Arabia wanted Russia to participate in cutting an additional 1.5mn barrels per day (bbl/d) through Q2 in order to try and balance the global oil market. Having been rejected by Moscow, Saudi has responded very quickly with an announcement that it has no intention of extending the current deal and will “open up the oil taps” from April 1. It is already reported that the Kingdom is offering discounted oil.

At first glance, this looks like a battle between Russia and Saudi over oil policy. But the context of the relentless rise in US oil production over the past ten years is also an important factor. Both Russia and the major OPEC producers have been openly annoyed with the refusal of the US producers to participate in past production cuts and the fact that the US industry has been the major beneficiary of the price support mechanisms. It is a stretch to say that Moscow and Riyadh are in any sort of cooperation to try and reduce US oil production; the body language at the Vienna meeting strongly suggests otherwise. But if a price war results in some US casualties and a greater reluctance by investors and lenders to fund future US marginal production, then Moscow and OPEC will be relieved.

The coronavirus has already cut global demand for oil in conjunction with a general economic slowdown. This all is giving rise to the question of what countries are best prepared to withstand a low oil price. The usual suspects in the west will contend that Russia will be in deep trouble if this goes on for any length of time. After all, they are simply a gas station posing as a country, right?

As I’ve discussed in previous posts, Russia has intentionally implemented economic policies to shield itself from economic instability. With oil sales only comprising 35% of Russia’s budget now, they are in a much better position to withstand lower oil prices than Saudi Arabia. Weafer explains:

Russia has had to allow the ruble free-float from early 2015. This was a policy forced on the Kremlin as a result of the combination of western sanctions and low oil. That has turned out to be a major silver-living for the budget, as well as for economic competitiveness, and it means that the budget break-even oil price moves lower as the ruble weakens. Assuming the ruble-dollar exchange rate drops below 70 then the breakeven will drop to $45 per barrel. If the ruble-dollar rate hits 75 then the budget will breakeven around $40 per barrel without any cuts to current planned spending. This compares with a breakeven of $115 per barrel in 2013.

Saudi Arabia reportedly needs $85 per barrel to balance its budget and does not gain from a currency offset as the Riyal is pegged to the dollar.

Russian oil producers now have a very low production cost, exactly for the same reason of the ruble flexibility and also efficiency gains that the industry also had to adopt because of western sanctions.

Aris adds the following details on what the Putin government has done in terms of buffeting the Russian economy against potential instability:

Russian President Vladimir Putin has spent much of the last four years building a “fiscal fortress” to sanction-proof Russia. He has sold down Russia’s US debt holdings, paid off debt and built up gross international reserves (GIR) to around $570bn now – enough to cover Russia’s entire external debt and still leave $100bn of cash. Moreover, a revolution of Russia’s tax service and new taxes, as well as a hike to the retirement age, have cut the breakeven oil price for the budget to around $42 from its peak of $115 in the boom years. All this means Russia can sustain a long war of attrition on US shale production.

In response to the drop in oil prices earlier this week, U.S. president Trump suggested the possibility of a government bailout of the shale industry, which is mired in debt and could be in deep financial trouble if the oil price drop lasts for any length of time. Common Dreams reported that executives from the industry had already reached out to the Trump administration to request assistance:

The administration began weighing a bailout after Trump supporter Harold Hamm—a Trump supporter whose company’s stock plunged Monday, losing Hamm $2 billion of his 77% of the company’s shares—reached out to the administration. Hamm confirmed the conversation to the Post. 

Hamm was not alone—the Post revealed that a number of executives have made overtures to the White House on policy aims that run counter to public health.

I always thought that major capitalists were ideologically opposed to the government providing any financial assistance to anyone. But I digress…

Some sources, such as Russia-based journalist Bryan MacDonald, have been reporting that Russia has been preparing for a rocky global economy for some time: “Moscow has been preparing for a major recession for years. Kremlin insiders believe it will devastate western economies.”

*Next post will discuss latest developments relating to the constitutional changes in Russia, including a bombshell on presidential terms

After a tense phone call over a week ago that reportedly devolved at one point into a shouting match between Putin and Erdogan, the two leaders met in Moscow and agreed to another ceasefire in Syria’s Idlib province. The talks lasted for 6 hours last Thursday and concluded with agreement to a ceasefire and the establishment of a buffer zone, along the M4 highway, to be patrolled jointly by Turkey and Russia. Additionally, the “rebels” are supposed to evacuate from south of the highway.

Thursday’s agreement is considered an “additional protocol” to the Sochi Agreement of 2018. The ceasefire took effect on Friday morning and the joint patrols are due to start on March 15th.

Scott Ritter describes the reality on the ground after about a week of clashes between the Syrian Army and Turkish forces – the latter of which received no substantive support from Washington/NATO, which motivated the talks between Erdogan and Putin:

This [Turkish] operation soon fizzled; not only was the Turkish advance halted in its tracks, but the Syrian Army, supported by Hezbollah and pro-Iranian militias, were able to recapture much of the territory lost in the earlier fighting. Faced with the choice of either escalating further and directly confronting Russian forces, or facing defeat on the battlefield, Erdogan instead flew to Moscow.

The new additional protocol, which entered into effect at midnight Moscow time on Friday, March 6, represents a strategic defeat for Erdogan and the Turkish military which, as NATO’s second-largest standing armed force, equipped and trained to the highest Western standards, should have been more than a match for a rag-tag Syrian Army, worn down after nine years of non-stop combat. The Syrian armed forces, together with its allies, however, fought the Turks to a standstill. Moreover, the anti-Assad fighters that had been trained and equipped by the Turks proved to be a disappointment on the battlefield.

One of the major reasons behind the Turkish failure was the fact that Russia controlled the air space over Idlib, denying the Turks the use of aircraft, helicopters and (except for a single 48-hour period) drones, while apparently using their own aircraft, together with the Syrian Air Force, to pummel both the Turkish military and their allied anti-Assad forces (though neither side has officially confirmed the Russians bombing the Turks – that would be a disaster for the talks). In the end, the anti-Assad fighters were compelled to take shelter within so-called ‘Observation posts’– heavily fortified Turkish garrisons established under the Sochi Agreement, intermingling with Turkish forces to protect themselves from further attack. [Turkey’s] Operation Spring Shield turned out to be a resounding defeat for the Turks and their allies.

Forgive my cynicism but this sounds reminiscent of previous agreements that have broken down. The Turks did not live up to their obligations under the Sochi Agreement to remove jihadists such as terrorist group Hayat Tahrir al-Sham (HTS aka Al Qaeda/Al Nusra re-branded) from established de-escalation zones. Turkey’s failure to do this prompted the Syrian Army to remove the terrorists (“rebels”) themselves. According to Ritter, the additional protocol just agreed on reiterates the goal of pushing out the terrorists but does not elaborate on how it is to be achieved.

As military analyst Moon of Alabama points out:

This ceasefire is unlikely to hold over a longer period. But it brings a useful pause for the Syrian army that will allow it to recover a bit and to take care of its men and equipment.

This for now also ends the Turkish threat to attack the Syrian army and to reconquer all areas it had liberated over the last months.

Erdogan, who had made many demands, saw none of them fulfilled. The agreement will cost him political points within his party.

So it sounds like Erdogan took a big risk with his blustering action in Syria and ended up laying an egg. But I doubt Erdogan is suddenly going to give up the ghost rather than continue to find ways to throw sand in the gears of Syria’s push to regain full control over their sovereign territory.

A Redlines interview by Anya Parampil with Iranian professor, Mohammad Marandi, who just got back from Idlib, gives an update from on the ground as well as a good discussion of the history of the Syrian war.

For those who like symbolism – and have a propensity for Schadenfreude, here is a photo of Erdogan’s visit to Moscow and the decor he was subjected to during part of his meeting with Putin – courtesy of Russian historian and geopolitical analyst Nina Byzantina. (Note: you will only be able to see this image if you go to this post on my blog, it will not show up in the email version of this post – NB).

Today, Putin held his meeting with Erdogan underneath Lanceray’s sculpture Crossing the Balkans. The sculpture depicts victorious Russians in the Russo-Turkish War 1877-8, which resulted in the independence or autonomy for Ottoman-occupied Serbia+Montenegro, Romania, Bulgaria. ? pic.twitter.com/zuASGL0wfu

— Nina ☦️ Byzantina (@NinaByzantina) March 5, 2020

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In response to Putin’s January call for a summit of the 5 permanent UN Security Council members to discuss peace and other global issues of importance, France and China had quickly announced their receptivity. The US and UK, however, had been mum.

Last Wednesday, Russian news agency TASS reported that Russian Foreign Minister Sergei Lavrov confirmed that president Trump has now agreed to the summit, which might take place at the UN on the sidelines of a General Assembly meeting in New York. Izvestia reported the following on March 4:

According to Lavrov, besides the challenging issue of nuclear disarmament, the parties are expected to discuss regional conflicts, new challenges and threats such as international terrorism, drug trafficking and other forms of organized crime, as well as human trafficking, migration issues and new technologies, which could slip out of control and pose a serious threat to humanity.

It’s easier to arrange this meeting of the five UNSC permanent members in New York, said Pavel Podlesny, Head of the Center for Russian-American Relations at the Institute for the US and Canadian Studies. “China and France backed the idea to meet a long time ago and now the US has agreed, and therefore Britain has no other option. It’s easier to hold the discussion in New York ahead of a session of the UN General Assembly as Donald Trump has offered,” he noted.

Matt Duss is Bernie Sanders’ adviser on foreign policy. He represents a mild improvement on post-Cold War foreign policy – he’s not a Neoconservative and he acknowledges that the Palestinians have rights.

However, I’ve noted some very poor takes by Duss on Twitter such as one comment in which he seems to suggest that the main problem with Trump’s Venezuela policy is that it has been handled incompetently and allowed “Russia to screw with us in our own backyard.” He invokes a cold war narrative against Russia and seems to suggest that our interference in Venezuela isn’t really a problem – all in one tweet. He did receive significant criticism from Bernie supporters about it.

More recently, he put out a tweet supporting an article in The Guardian in which he suggested that the United States should support democracy activists in Russia and highlighted Alexey Navalny as representing the democratic opposition there. Others had to school him on who Navalny actually is: a right-wing racist xenophobe who actually referred to Central Asian immigrants in Russia as cockroaches.

This underscores the problem with Bernie Sanders and his campaign’s dangerous ignorance on the world’s other nuclear superpower in particular, as well as with their overall Manichean framework of the world’s democracies taking on the world’s “authoritarian” governments as outlined in a major speech given by Sanders on foreign policy in 2017 at Westminster College.

Last week, Duss was interviewed at a conference put on by the new think tank the Quincy Institute for Responsible Statecraft, which advocates for restraint in U.S. foreign policy. A video was posted this past weekend of the event and I watched the first half, which included a discussion with Gen. David Petraeus – who said what one would expect him to say while also engaging in a lot of what Tim Black would call ear fatigue, yammering on about a lot of stuff that has nothing to do with the question asked until most people in the audience were wishing someone would pull the fire alarm and force an evacuation.

Congressman Ro Khanna also made an appearance and said some reasonable things, which cleansed the palate a bit after the bad taste left by Petraeus.

About an hour and a half into the conference Matt Duss was interviewed, along with Joe Biden’s foreign policy adviser and program director at the German Marshall Fund, Julianne Smith. Here are a few highlights of what Duss said in response to an initial set of questions from the moderator, Jonathan Tepperman – editor of Foreign Policy Magazine:

Most worrisome foreign policy issue facing a new president – Duss said climate change. It needs a multilateral response and will affect many other issues such as immigration.

How can damage Trump has done to alliances and “rules-based order” be repaired – Duss said that based on some of his conversations with allies in Europe, the election of Trump and his policies has made them begin to wonder if they’d misunderstood the U.S. Duss, however, did state that we should realize that Trump is not such a departure from the U.S.’s foreign policy of the last 20 years – i.e. after 9/11, which saw the “securitization of immigration,” the vilification of Muslims and a general demonization of diplomacy.

Moving forward – Duss said that we shouldn’t necessarily just return to the past on all foreign policy issues. Some challenges will require creating a new consensus and a comprehensive review of what institutions and policies are needed to meet current challenges. He also said that foreign policy should be rooted in an overall U.S. political consensus. I wasn’t really sure what this meant as he didn’t elaborate.

Israel/Palestine – Duss reiterated the need to return to a 2-state solution framework and international law and resolutions governing this basic framework. He did note that Israel’s actions, such as expansion of settlements, has undermined this. He said that Sanders would be more willing to put pressure on Israel to abide by its obligations. He mentioned Sanders’ characterization of Netanyahu as a “right wing nationalist” and connected that to the campaign’s overall critique of “right wing” “authoritarians.”

At this point, questions from the audience were allowed.

Are there any justifications ever for regime change wars and, if so, what are they? – Duss eschewed regime change wars, saying simply “Let’s not do it.”

What is the guiding principle or “north star” of your foreign policy? – Duss said that the strength of our democracy would guide our foreign policy in addition to reliance on allies and partnerships with other countries to create a “democratic consensus.”

This sounded vague to me. What does this actually mean in practice?

What role should sanctions have in foreign policy? Individual v. sectoral sanctions? – Duss said there should be more coherence on the use of sanctions, acknowledging that there had been an “over use” of them and that they sometimes have the effect of preventing diplomacy. He seemed to be more amenable to individual sanctions over sectoral sanctions so as not to harm civilian populations.

Duss was asked about the Manichean framework of democracies v authoritarian governments and whether democracy promotion could just be used as a tool for regime change – Duss stated that Sanders is not neutral on the issues of democracy and human rights. Although the U.S. needed to be more humble in terms of intervening in other countries, there should be a push for international norms.

Again, I’d like to know what exactly this means. What types of intervention are acceptable under this framework and who defines what constitutes democracy and violations of human rights? Do small countries get to tell larger (more powerful) countries that they are violating democracy and human rights? If so, what recourse do they have in effecting change in the larger country? If the U.S. is going to decide whether Russia, for example, is violating democracy and human rights, what sources are they going to be relying on to determine that? Alexey Navalny? Matt Duss – who clearly knows squat about Russia?

Grayzone journalist Max Blumenthal asked Duss about Ro Khanna’s recent twitter comment in the aftermath of the Russiagate accusations against Bernie’s campaign that we should trust the intel agencies. He also asked why Bernie is not demanding proof of the allegations – Duss said that Sanders had been briefed convincingly regarding Russian election interference (for 2020) and that Sanders would oppose any election interference by any foreign country.

What should our nuclear posture and position on “no first use” of nuclear weapons be? – Duss said Sanders supported a no first use position.

Interestingly, one member of the audience asked about reining in the defense budget and how such a reduction could be implemented with respect to congress, etc. This question was ignored.

[Recording] FP-Quincy Institute Forum: A New Vision For America In The World

On February 27th, Interfax [a private Russian news agency that is generally considered reliable] reported that a criminal investigation has been opened up by Ukraine’s State Bureau of Investigation regarding alleged pressure put on Ukraine’s former prosecutor Viktor Shokin by former Vice President Joe Biden.

The investigation was opened in response to a motion filed by Shokin. The State Bureau of Investigation was court ordered to register the case.

In his motion, Shokin spoke of pressure put on him by Biden, Teleshetsky said.

“The reason for the pressure was the investigation being conducted by the Prosecutor General’s Office of Ukraine into grave crimes of international corruption linked with the activities of former Ecology Minister of Ukraine Mykola Zlochevsky and top managers at the Burisma company,” he said.

Shokin’s motion was filed with the State Bureau of Investigation back on January 28, 2020, but information about the criminal offence was added to the Unified Register of Pre-Trial Investigations only on February 24 after the country ordered the bureau to register the case, Teleshetsky said.

The case was opened on the charge of interfering in the work of an official of a law enforcement agency, he said.

Even though Shokin included Biden’s name in the motion, which prompted the opening of the case, the investigation itself mentions only a “U.S. citizen,” without giving any names, Teleshetsky said.

The State Bureau of Investigation is also handling criminal cases opened in response to Shokin’s motion on charges of disclosing pretrial probe secrets to employees of the National Anti-Corruption Bureau of Ukraine, he said.

“Bearing in mind the fact that a possible suspect in all three of these criminal offences could be Joseph Biden, as a person who, in our opinion, is involved in these events, we deem it necessary to merge all the cases into one, in order to ensure an effective investigation and set up a competent investigative group, as well as a group of experienced prosecutors who can ensure the investigation within a reasonable period of time,” Teleshetsky said.

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The Russian news agency, TASS, conducted a comprehensive interview with Vladimir Putin on 20 different topics for the 20th anniversary of his initial election as Russian president. It will be a multi-part video series to be posted at intervals through the end of March. Below is a link to the first video with English subtitles. Unfortunately, I could not embed the video.

https://putin.tass.ru/en?_ga=2.127845517.142265297.1581953885-311200542.1578148349

On Saturday, February 29th, the U.S. and the Taliban signed a peace deal in which U.S. forces will the leave Afghanistan in stages. Stars and Stripes reported the following details:

DOHA, Qatar — The United States and its foreign allies will withdraw all forces within 14 months and end the war in Afghanistan if the Taliban renounces terror groups and abides by a joint agreement signed in Doha on Saturday.

The agreement mandates a phased drawdown of American, NATO and foreign partner troops from Afghanistan and a disavowal of al-Qaida and other terror groups by the Taliban.

It also calls for intra-Afghan talks to include the Taliban and the government in Kabul beginning March 10, as well as security cooperation by all sides in fighting the Islamic State…

…The U.S. is expected to reduce its troop strength in Afghanistan from about 12,000 to 8,600 within 135 days, the agreement states. All U.S. troops and their allies would also completely withdraw from five unspecified bases. Remaining troops would leave within 14 months of Saturday’s accord.

A reduction in troops to 8,600, about the number in Afghanistan when President Donald Trump took office in 2017, would not harm a counterterrorism mission that combats ISIS and other groups, U.S. military officials have said since last fall.

According to the agreement, the U.S. will continue to fund the Afghan government and can halt the drawdown of forces if it determines that the Taliban are not living up to their end of the deal. How this would be determined is not explained. Additonally, an exchange of prisoners – 5,000 Taliban fighters and 1,000 Afghan government troops – will occur on the first day of negotiations between the Taliban and the Afghan government on March 10th.

Analysis of the deal is provided by journalist Azmat Khan on Democracy Now!

https://www.democracynow.org/2020/3/2/us_taliban_peace_deal

In the aftermath of clashes between Syrian troops and Turkish forces, the Russian government has announced it will be sending two warships armed with cruise missiles to the coast of Syria. The parties to the conflict have given different explanations for the clashes and the Turkish president is threatening to continue attacks on Syria:

Over 30 Turkish troops were killed in Idlib Province, and Russia says that they hold Turkey responsible for their own casualties. They said Turkey was not disclosing the location of their troops, and also were embedded with Islamist rebels, making themselves a target.

Turkey has denied this, saying they weren’t with the rebels, and that they’d told Russia where their troops were when they got killed. The Turkish forces are threatening more attacks on Syria going forward.

On Sunday and into Monday, Turkey continued both air and ground attacks on the Syrian army in Idlib:

Throughout Sunday and into Monday, Turkey has launched a flurry of airstrikes against the Syrian military in Idlib Province, and new ground offensives aiming to reclaim territory in the border province, to expel the Syrian government and ultimately replace it with Turkish-backed rebels.

Turkish officials have vowed to continue to move against Syria, and have promised to move against any Syrian government targets as legitimate military targets. On Saturday, 48 Syrian soldiers were killed. Turkey subsequently downed a pair of aircraft.

According to al- Jazeera, Turkey shot down the two Syrian fighter jets in retaliation for Syria’s downing of a Turkish drone hours before. The pilots, however, survived by parachuting to safety. The Syrian government claims it has now closed airspace over the province:

Amid the escalating tensions, the Syrian government closed the airspace over Idlib, with one official telling [Syria’s state run news agency] SANA any aircraft “that violates our airspace will be treated as a hostile flight that must be shot down and prevented from achieving its objectives”.

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With respect to the extradition hearing for Julian Assange in London, the court has continued the hearing until May 18th. Below is an interview of Consortium News editor Joe Lauria, who has been covering the Assange hearing from London, by Chris Hedges.