About 80 per cent of China’s oil imports pass through the Strait of Malacca, between Malaysia and Indonesia, giving the US navy a potential chokehold. Tensions peaked in May when the Chinese deployed their largest deepwater drilling rig, the HD-981, in waters claimed by Vietnam. Brent crude, the global benchmark, was down 45 cents at $64.92, while West Texas Intermediate crude slipped 52 cents to settle at $59.04. Putin’s continued confidence over the Ukraine this week can be explained by a simple fact: winter is coming, and the countries complaining about him need his gas rather badly. By entering into the agreement, EU officials claim, Ukraine will begin “a process of approximating its energy legislation to the EU norms and standards, thus facilitating internal market reforms.”. So if Europe wants to break its addiction to Russian energy, it will need to start doing its own fracking – rather than wait for American imports. Iran responded to the U.S. drone strike on Jan. 8 with a missile attack on Iraqi air bases hosting U.S. forces that left no casualties. One element of this post-Cold War American grand strategy has been the attempt to minimise the dependence of the European Union on Russia, which supplies about a third of Europe’s natural gas. Instead, much of the money disappears into the pockets (and foreign bank accounts) of Nigeria’s well-connected elites. Someday, perhaps, the development of renewable sources of energy may invalidate this dictum. Claiming an imminent coup attempt by his rivals, led by Vice President Riek Machar, he disbanded his multi-ethnic government on July 24, 2013, and began arresting allies of Machar. Of special concern, however, are the provisions about energy, given Russia’s economic reliance on gas sales to Europe -- not to mention the threat they pose to the personal fortunes of well-connected Russian elites. “Many locals in Raqqa accuse IS of collaborating with the Syrian regime,” a Kurdish journalist, Sirwan Kajjo, reported in early June. The biggest share came from Canada (33 per cent). Nigeria is the largest oil producer in Africa, pumping out some 2.5 million barrels per day. The US military is not in the Persian Gulf to protect oil destined for the US so much as to secure the oil supplies of Europe, Japan and South Korea, and to implicitly blackmail China. It had all evidently been diverted to private accounts. George W. Bush expressed this idea in a 2002 address at West Point: ‘America has, and intends to keep, military strengths beyond challenge, thereby making the destabilising arms races of other eras pointless and limiting rivalries to trade and other pursuits of peace.’. The resulting power struggle quickly turned into an ethnic civil war, with the kin of President Kiir, a Dinka, battling members of the Nuer group, of which Machar is a member. Now, most of the country’s oil fields are under the control of rebel groups, including IS, the al-Qaeda-linked Nusra Front, and local Kurdish militias. But look more closely and they share several key characteristics -- notably, a witch’s brew of ethnic, religious, and national antagonisms that have been stirred to the boiling point by a fixation on energy. At this stage, the government has displayed zero capacity to overcome the insurgency, while its ineptitude and heavy-handed military tactics have only further alienated ordinary Nigerians. But look more closely and you’ll see that each of these conflicts is, at heart, an energy war. middle east; Is the fight over a gas pipeline fuelling the world’s bloodiest conflict? Disputes over the price Ukraine pays for its own imports of Russian gas twice provoked a cut-off in deliveries by Gazprom, leading to diminished supplies in Europe as well. The so-called Carter Doctrine sums up … In each of these conflicts, the fighting is driven in large part by the eruption of long-standing historic antagonisms among neighbouring (often intermingled) tribes, sects, and peoples. And despite two decades of US support for non-Russian pipeline routes, Europe remains highly dependent on Russian gas. It’ll be there somewhere on this fossil-fuelled planet of ours. Indeed, many of the US-supplied weapons it acquired from the fleeing Iraqi army after its recent drive into Mosul and other northern Iraqi cities have been moved into Deir al-Zour to help in the organization’s campaign to take full control of the region. Make no mistake about it, these are twenty-first-century energy wars. Although production from the fields has dropped significantly, enough is being extracted and sold through various clandestine channels to provide the rebels with income and operating funds. At the same time, it is engaged in a conventional nation-building project, seeking to create a fully functioning state with all its attributes. The trade deal was not only the biggest in history but also a dramatic rebuke to the US attempt to encircle and weaken both powers. The rebel forces, led by former Vice President Machar, are trying to seize those fields to deny this revenue to the government. Got a confidential news tip? But a Revolutionary Guards commander said Iran would take "harsher revenge" soon. “We want to take control of the oil field. It remains to be seen whether this and other projects fall victim to European sanctions against Russia arising from the Ukraine crisis. A Division of NBCUniversal. But oil prices may find support in coming months due to improving fundamentals as the United States seems to have "plateaued on production, and OPEC is sticking with its cuts," said Phil Streible, chief market strategist at Blue Line Futures in Chicago. By annexing that region, Russia virtually doubled the offshore territory it controls in the Black Sea, which is thought to house billions of barrels of oil and vast reserves of natural gas. It sometimes seems that way. -Michael T. Klare is a professor of peace and world security studies at Hampshire College and the author, most recently, of The Race for What’s Left. As the United States learned to its dismay in Iraq and Afghanistan, nation-building is expensive: institutions must be created and financed, armies recruited and paid, weapons and fuel procured, and infrastructure maintained. “They know well the frustration that would drive someone to take up arms against the state,” said National Geographic reporter James Verini of people he interviewed in battle-scarred areas of northern Nigeria. Russia is proceeding with its own alternative, the South Stream gas pipeline, which would bypass Ukraine and bring gas from Russia under the Black Sea to Bulgaria, Serbia, Hungary, Slovenia and thence to Italy. China’s claims to the South Sea islands, which have embroiled it in recent conflicts with Vietnam, the Philippines and Japan, are doubtless motivated in part by the desire to develop offshore oil reserves. Most of the world’s oil and gas is the property of government-owned companies, and even private oil companies like ExxonMobil and BP generally defer to their home-country governments. For many Nigerians -- a majority of whom subsist on less than $2 per day -- the corruption in Abuja, when combined with the wanton brutality of the government’s security forces, is a source of abiding anger and resentment, generating recruits for insurgent groups like Boko Haram and winning them begrudging admiration. For both sides, the resulting struggle has been about political legitimacy and national identity -- but as in other recent conflicts, it has also been about energy. © 2020 CNBC LLC. All Rights Reserved. Had George W. Bush been an Iranian mole, the clerical regime in Tehran could hardly have benefited more from the suborning of the military power of the US and its allies to remove two of Iran’s major enemies: Saddam and the Taleban government in Afghanistan. "With the standing down of Iran there was a sense that oil supplies were pretty safe but now with the institution of sanctions and this report that a Russian ship was acting aggressively toward a U.S. ship, it's put a little bit of fear back into the market place," said Phil Flynn, oil analyst at Price Futures Group in Chicago. The fracking revolution means that America will have so much oil and gas that it needn’t import any by 2035, according to the International Energy Authority. China’s territorial claims in the South Seas are doubtless motivated in part by the desire for offshore oil reserves. More specifically, when the world’s highest oil producing region is in turmoil, prices are affected across the world. As the world’s biggest consumer of energy, China is desperate to acquire fresh fossil fuel supplies wherever it can. The Bush administration cynically used popular panic following the 9/11 attacks and false claims about Iraqi ‘weapons of mass destruction’ to justify the US invasion of Iraq in 2003. There will be much discussion of the world’s future at next week’s Nato summit in Wales. Negotiations over the gas price remain a major issue in the ongoing negotiations between Ukraine’s newly elected president, Petro Poroshenko, and Vladimir Putin. As a result, that country plays a critical role in the complex energy relationship between Europe and Russia, one that has proved incredibly lucrative for the shadowy elites and oligarchs who control the flow of gas, while at the same time provoking intense controversy. “The South China Sea is estimated to have 23 billion tons to 30 billion tons of oil and 16 trillion cubic meters of natural gas, accounting for one-third of China's total oil and gas resources,” the Chinese news agency Xinhua noted. An energy-rich offshoot of the western Pacific, that sea, long a focus of contention, is rimmed by China, Vietnam, the island of Borneo, and the Philippine Islands. A documentary movie version of his book Blood and Oil is available from the Media Education Foundation. Whoever controls these states, or the oil- and gas-producing areas within them, also controls the collection and allocation of crucial revenues. "We're heading into a slack (fuel) demand period ahead of the summer driving season and rising inventories reminded folks this is still a somewhat oversupplied oil market," said John Kilduff, partner at Again Capital LLC in New York. Oil fell on Friday to cap its worst week since July as tensions in the Middle East over Iran eased for now and investors focused on rising U.S. inventories and other signs of ample supply. Also, a Russian navy ship "aggressively approached" a U.S. Navy destroyer in the North Arabian Sea on Thursday, the U.S. Navy's Bahrain-based Fifth Fleet said in a statement on Friday. Were these revenues -- estimated in the tens of billions of dollars per year -- used to spur development and improve the lot of the population, Nigeria could be a great beacon of hope for Africa. “Now they are being stolen by those who are profiting from the revolution.”. An estimated two million people lost their lives in this round of fighting. Syria was never a major oil producer, but its pre-war production of some 400,000 barrels per day did provide the regime of Bashar al-Assad with a major source of income. The stationing of US troops in Saudi Arabia and other Gulf allies enraged anti-American jihadists, Osama bin Laden among them.
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