April Q&A: Oil Prices And US Support To Radical Groups

DEAR FRIENDS,

This is the third of our monthly Q&A videos. The questions were collected via a special post on the SouthFront Patreon account.

The first question comes from I. He asks – How will rising oil prices and decreasing US oil output affect the Middle East, Russia, and China?

In the first place, the modern world economy and its financial model, which is based mostly on the naked US dollar, secured solely by the US military power as well as demand-led growth regime, executing by the US, are moving towards systemwide crisis. Previously, this model meant that oil prices were an important tool influencing economic growth and geopolitical competition. Oil prices were bound to other elements of this system. Now, the US leadership and the Euro-Atlantic elites are working to delay the collapse of this system by any means. The goal is to buy time to reshape the system or even to create a new global economic model under their control.

In the short-run, a good part of the sides involved in the Big Game are interested in relatively high oil prices. Oil producers and financiers are gaining additional revenues. At the same time, the price remains within the comfort zone of the industrial sector and oil consumers of the US. This suits almost all except China and some EU countries.  One of the world’s largest oil consumers – China is not gaining any revenue from this situation. The US is happy with the case because they play into their hand in the trade confrontation with China.

However, the current situation with oil prices caused by the established balance of interests is artificial and cannot last for long. The open reasons for the relatively high oil prices are:

• Actions of OPEC, primarily of Saudi Arabia;
• The crisis in Venezuela and the US sanctions against the country;
• The US sanctions against Iran;
• The growth of US industry in 2018 and its continued growth in the first half of 2019 led to increased energy consumption by the US. In particular, this includes the manufacturing industry, extraction industry, vehicle-manufacturing industry and general production related to the military industrial and space complex.
• The US trade war and strengthening geopolitical confrontation with China.

These factors contributed to the current situation and became one of the groups of reasons behind the US geopolitical activity towards Venezuela and Iran. In the case of Venezuela, the US seeks to establish control of the country’s oil resources to feed its own industry at the necessary level and price, and to obtain additional levers of pressure on global energy prices.

If the US achieves success in Venezuela, it will be able to continue to preserve its own oil resources. At the same time, Washington would hold on to its range of tools, including its influence on Saudi Arabia, to impact and even cause a fall in oil prices. In this scenario, the next logical step would be aggressive actions against Iran, which can be expected in a few years. The goals would be similar:

• To get control of Iranian oil resources;
• To expand US presence in the Middle East and to remove a key competitor to its own influence;
• To capture new multimillion dollar markets.

In the medium term, Washington is preparing for what could be called a “final battle” against Russia; to win which, the US would have to be able to bring energy prices down to 30$ per barrel or less and to keep them at this level for at least 6 months.

Summing up, it can be expected that the current relatively high oil prices are a short term trend. In the middle term, there will be external pressure to lower oil prices. After this, they are likely return to their current level.

The second question is from Roy Assaf. Russia seems willing to expand its sphere of influence to include Lebanon. Also, the Lebanese government is LITERALLY asking for Russia’s protection as was seen during the recent visit of Lebanese President to Russia! USA on the other hand will do whatever it takes to stop this from happening and reassure its “ally” Israel that Lebanon is “under control” (already started with Pompeo’s visit to Lebanon). Are we going to see Lebanon in the medium term turn into a stage for a new armed conflict?

You may remember that a few decades ago, Lebanon was reasonably called the Middle Eastern Switzerland. During the last decades, Israel, the US and various destructive forces contributed significant efforts to change this. Now, many political figures in the Lebanese political leadership, including President Michel Aoun,  are deeply affiliated with the US and Israel and to some degree under their control. In this situation, there are no pre-conditions for Russia to include Lebanon in its area of geopolitical influence.

Moscow is concerned over the situation in Lebanon and the areas near its border: the US recognition of the Golan Heights as a part of Israel; the increasing radicalization in the population and among the refugees on Lebanese territory.

These factors influence the Russian agenda towards Lebanon. Russia does not play a leading role. It reacts to the changing situation and works with the current Lebanese leadership to solve various specific issues and situations at hand, alongside exchanging of time-sensitive information.

Will Lebanon become “the stage for a new armed conflict”? This possibility is high. The reasons are the ominous situation in which a notable part of the Lebanese population lives, the large number of refugees and the radicalization within religious and ethnic groups.

The number of situations, which are ready to flare up, is growing day by day. This region could be set on fire by any side: radical groups, pro-Iranian organizations or Israel, for example to solve its own internal political problems.

The third question is from Kaveh20. Please evaluate the degree of truth regarding repeated claims that some US state agencies actively and directly support (finance, arm, transport troops of) Al-Qaeda and ISIS in Iraq, Syria, Pakistan, Afghanistan and Yemen.

The history of such organizations as al-Qaeda and ISIS goes back decades. The US and its state agencies are the main global players that seek to re-shape the world in line with their own vision. This approach is officially declared at the highest level.

It is a rock-solid historical fact that the US provided the Taliban with direct support against the Soviets in Afghanistan. In the same way the US support other extremist groups, including various radicals inside Russia and nationalists in Ukraine. Therefore, we tend to think that at some moment in time US state agencies did provide direct support to radical groups in Iraq, Syria, Afghanistan and Libya. For example, we tend to believe that there is a high degree of truth in reports that the US supported ISIS in the first stages of the group’s expansion. This situation is more or less identical to the one, which existed in Libya, when Washington was backing radicals to overthrow the Gaddafi government.

In general, short-term support to radical groups to pursue their own geopolitical goals is the tool, which the Washington establishment appearingly validated as acceptable. However, it is done for short periods. The Afghanistan case became a painful lesson for the US. It became one of the reasons why the US changed its strategy towards such groups: from permanent supporting to short-term specific projects only.

We tend not to believe in rumors that at this very moment the US is providing direct support to ISIS or al-Qaeda in Iraq, Syria and Libya. Nonetheless, we do not exclude the possibility that US state agencies may stay in contact with these groups and provide them with occasional assistance in Afghanistan and Syria in support of their own tactical goals. This is likely the source of reports about US aircraft transporting militants across the Greater Middle East.

The fourth question is from Jean-luc Martel. Could you do a comparison of the economic growth or lack thereof of Russia vs the US/Canada?

This is a good, but very complex question. In such situations, we prefer to release an in-depth analysis. Such a piece would require time. If you wish to join this effort, please, contact us via info@southfront.org.

We also have a brief answer: The economic situation in the US and Canada was better than the one in Russia over the past years. Russia is facing significant difficulties in the economic field.  This situation is mostly the result of issues with the existing system of economic management, which we have repeatedly covered.

These are all the questions, which we received in April. On Patreon you will find a post where you can ask your questions for the May Q&A video.

We want to say a big thank you to all our friends, subscribers and readers supporting SouthFront. Our work is only possible thanks to your help.