Ukraine: military (Aug '14 to mid-June '15) closed

[Dayuhan]

JMA---notice the Russian FM comments on "receiving the US call" concerning the "humanitarian convoy" that was not an "invasion force" from my previous link.

Cryptic was all one can say about his comment--would have been interesting to have learned what the US told Russia on that call? Word has it that just minutes after the US called the Russians informed the US that the convoy had indeed stopped.

If a mere phone call from the US can force the Russians to abort a plan, they must be seriously running scared, and whatever the US is doing must be working.

Secondly, I for one believe the reason for the collapse of the Soviet Union was the price of Russian sour crude collapsing under pressure of the KSA that opened the flow of sour crude and drove the price down for a long period thus denying Russian an extremely large amount of cash flow that they had planned for their internal budget.

Thus the SU collapse---now what is interesting is who together with the KSA thought up that pricing maneuver?

The oil glut and the price crash were certainly a major cause of the Soviet collapse, but nobody "thought it up". If you look at the data it wasn't just the KSA that increased production: almost all producers did. The price started dropping, and producers pumped more to try to cover their budgets, depressing the price further. OPEC tried to stop it by tightening quotas, but the quotas were ignored, across the board. Classic case of short-term thinking and distrust for other members of the cartel: the interests of all would have been best served if everybody had cut production to support the price, but nobody trusted the others to follow their quotas and nobody wanted to be the fool who cut production and then got shot down by the combination of low production and a lower price.

The oil glut was catastrophic for all producers, including the Saudis; I don't think there's a serious oil analyst anywhere who believes that it was deliberately contrived as a weapon.

[OUTLAW 09]

If a mere phone call from the US can force the Russians to abort a plan, they must be seriously running scared, and whatever the US is doing must be working.

And Dayuhan why was there a common word used during that period "oil cartel" and it was being led by the KSA so what motivated the KSA to flood the market if pricing went lower which would cut into their earnings as well?

Think it though and ask the question why?

[Dayuhan]

And Dayuhan why was there a common word used during that period "oil cartel" and it was being led by the KSA so what motivated the KSA to flood the market if pricing went lower which would cut into their earnings as well?

I just explained that; possibly it wasn't clear.

Nobody really "led" OPEC at that point, because OPEC effectively collapsed. Its production quotas, its only tools for supporting the price, were voluntary and when countries ceased to follow them, the cartel lost all power.

What has to be understood is that this process started slowly. When prices dropped slightly, oil producers pumped more because their political masters wanted the money. When prices dropped a little more, they pumped even more, because the political masters still wanted more money.

If they were thinking long term and if they trusted each other, they could have all decided to cut back production and forced the price back up. They weren't thinking long term, and they didn't trust each other, so they didn't do that. They acted to bail themselves out in the short run, by pumping more and selling more. Once the spiral started they couldn't break out of it, largely because they didn't trust each other enough to cooperate.

As a result the US had a 10 year cheap oil joyride, the Soviet Union went broke, and oil producers everywhere had a very miserable decade, very much including the Saudis.

This has been picked apart in near infinite detail by oil industry analysts, and I don't know of anyone in that community who buys into the idea that the oil glut was intentionally contrived as a weapon. It had a lot to do with chaos, suspicion, and mistrust, not much to do with conspiracy.

[OUTLAW 09]

I just explained that; possibly it wasn't clear.

Nobody really "led" OPEC at that point, because OPEC effectively collapsed. Its production quotas, its only tools for supporting the price, were voluntary and when countries ceased to follow them, the cartel lost all power.

What has to be understood is that this process started slowly. When prices dropped slightly, oil producers pumped more because their political masters wanted the money. When prices dropped a little more, they pumped even more, because the political masters still wanted more money.

If they were thinking long term and if they trusted each other, they could have all decided to cut back production and forced the price back up. They weren't thinking long term, and they didn't trust each other, so they didn't do that. They acted to bail themselves out in the short run, by pumping more and selling more. Once the spiral started they couldn't break out of it, largely because they didn't trust each other enough to cooperate.

As a result the US had a 10 year cheap oil joyride, the Soviet Union went broke, and oil producers everywhere had a very miserable decade, very much including the Saudis.

This has been picked apart in near infinite detail by oil industry analysts, and I don't know of anyone in that community who buys into the idea that the oil glut was intentionally contrived as a weapon. It had a lot to do with chaos, suspicion, and mistrust, not much to do with conspiracy.

Really Dayuhan you are still stating the KSA does not "guide nor influence" OPEC---even in times of overproduction which if you really do look at the numbers from that period-- then why did the two major producers of sour crude the exact same quality as that which comes out of the Urals overproduce?

Why would anyone cut their income deliberately via overproduction if that is what you are saying ---it was general overall overproduction that caused the low income earnings. The OPEC is smart enough to fully understand overproduction in a normal demand market does not lead to a great cash flow--so again why did they over produce?

Ask the question again why was there an over production strictly in sour crude when the refineries of the west could not handle the volume that was being offerred?

Ask the question again why did the market dip when the US made their recent sells of sour crude when in fact the general product sour crude was running fairly stable---why the price dip which exactly matched the US sales period of their reserve sour crude?

You really need to start asking the question why---until you fill in the why answer in ---all other questions such as who what when where and how jet unanswered into space---answer the why and then the answers to the above questions make sense.

[OUTLAW 09]

The same stolen white tractor trailer that long hauled the Buk SAM11 out of the Ukraine into Russia after downing MH17 is back again from Russia headed towards Donetsk with a T80 on the long haul trailer.

Man he is racking up the per diem and mileage these days---there must be even a night time hauling fee that he also gets as it rumored he is making the nightly runs quite often these days.

https://twitter.com/tombreadley/stat...876224/photo/1

[Dayuhan]

Really Dayuhan you are still stating the KSA does not "guide nor influence" OPEC---even in times of overproduction which if you really do look at the numbers from that period-- then why did the two major producers of sour crude the exact same quality as that which comes out of the Urals overproduce?

Actually everbody was overproducing, of all types of crude: the various indices moved together and rarely deviated from each other by more than a very small percentage. The glut was in no way a phenomenon specific to any given type of crude.

Why would anyone cut their income deliberately via overproduction if that is what you are saying ---it was general overall overproduction that caused the low income earnings. The OPEC is smart enough to fully understand overproduction in a normal demand market does not lead to a great cash flow--so again why did they over produce?

Because they didn't trust each other. For all intents and purposes, the cartel ceased to function as a cartel, and become every producer for himself. At any given price point, pumping more earns you more. Of course you can push the price up if everybody cooperates... but they didn't cooperate. Of course by the 80s non-OPEC production was a majority of global production anyway, which cut into OPEC influence even more.

Ask the question again why was there an over production strictly in sour crude when the refineries of the west could not handle the volume that was being offerred?

Again, not correct: the glut extended across the entire spectrum of crude types.

Ask the question again why did the market dip when the US made their recent sells of sour crude when in fact the general product sour crude was running fairly stable---why the price dip which exactly matched the US sales period of their reserve sour crude?

Of course if you put oil on the market, the price will drop, unless somebody somewhere cuts back production to compensate. Of course the ability of the US to sustain those sales is limited, and everybody knows that releases from reserves will have to be replaced, creating excess demand that will drive prices back up.

You really need to start asking the question why---until you fill in the why answer in ---all other questions such as who what when where and how jet unanswered into space---answer the why and then the answers to the above questions make sense.

You need to stop assuming that everything that happens is the result of intentional planning.

This is a good general briefing on what went on:

http://www.e-ir.info/2012/12/28/worl...es-and-crises/

These are key paragraphs:

One of the major factors causing overabundance of world oil was OPECs inability to limit its production sufficiently to support a given price level. Between 1979 and 1982, demand for OPEC oil dropped by 40 percent, consequently all members decreased production by at least 20 percent. Nearly all OPEC members bore the brunt of limiting production, although certain members made larger cuts: Saudi Arabia, Kuwait, and Libya reducing output by 65 percent, 60 percent, and 50 percent respectively. Yet even with this drop in output, prices continued to fall. This put pressure on producers to make up for falling revenues by increasing their output.

Eventually, towards the end of 1985, Saudi Arabia announced that in riposte to other OPEC members’ repeated violations of their respective production quotas, it would no longer play the role of ‘swing producer’ and would instead attempt to increase its share of world oil by selling oil at whatever prices the market would bear. As OPEC abandoned all production and pricing agreements, OPEC output rose by 25 percent, between 1985 and 1986.[8] (Gately 1986: 241-242) Of course, this only added to the world oil glut, causing oil prices to fall below $10 a barrel, which in real terms is lower than the $3 per barrel price that prevailed before the 1973 price shock. (Georgiou 1987: 298)

It's all worth reading, though. Again, I don't think there's a single serious oil market analyst on the planet who buys your premise. Do you know of any?

EIA has a similar take:

http://www.eia.gov/pub/oil_gas/petro...2000.htm#T_10_

[JMA]

Actually everbody was overproducing, ...

Why?

[JMA]

If a mere phone call from the US can force the Russians to abort a plan, they must be seriously running scared, and whatever the US is doing must be working.

Good point.

The question that should be asked is why didn't the US make this persuasive call back when Russia first invaded Crimea?

[Dayuhan]

The question that should be asked is why didn't the US make this persuasive call back when Russia first invaded Crimea?

Impossible to answer without knowing what was said and what else was going on at the time.

Why?

Because they desperately needed money, and efforts to support the price by cutting production had failed catastrophically. The cartel broke. Cartels often do when under stress.

[Dayuhan]

I think we all understand that this is not just "humanitarian aid", but...

Can the Russians bring in enough force in this convoy to change the momentum in the conflict? Outlaw estimated elsewhere that 500-600 individuals will be involved, but haven't the Russians already infiltrated much larger numbers? Is it a game changer, or a face saver?

Is it possible that the convoy is intended not to bring military aid, but to provoke the Ukrainians into stopping it, which could then serve as a pretext for more aggressive action? I don't know how devious the Russians are prepared to be, but it would be a huge embarrassment for the Ukraine if they descended on the convoy with full armed force only to discover (publicly, of course) that there's nothing remotely military about it. The Russians could then accuse the Ukraine of obstructing humanitarian aid and use that to justify forcing an opening... or is that too convoluted to enter their minds?

Not trying to imply an answer, just looking for opinions.

[mirhond]

Is it possible that the convoy is intended not to bring military aid, but to provoke the Ukrainians into stopping it, which could then serve as a pretext for more aggressive action? I don't know how devious the Russians are prepared to be, but it would be a huge embarrassment for the Ukraine if they descended on the convoy with full armed force only to discover (publicly, of course) that there's nothing remotely military about it. The Russians could then accuse the Ukraine of obstructing humanitarian aid and use that to justify forcing an opening... or is that too convoluted to enter their minds?

Not trying to imply an answer, just looking for opinions.

You have vivid imagination Major channels several hours before reported that convoy is to cross the border near Kharkov, trucks get Ukrainian plates and crews.

[mirhond]

Putin might be a dick, but this georgian guy is now as good as dead.

upd. Crap, there are a lot of dead guys with such plastic carpets, so this particular adventurer is probably alive and well.

[OUTLAW 09]

Putin might be a dick, but this georgian guy is now as good as dead.

upd. Crap, there are a lot of dead guys with such plastic carpets, so this particular adventurer is probably alive and well.

comrade mirhond---here is a report that your favorite Russian commander from the FSB/GRU is evidently seriously wounded by a Ukrainian Seal team.

so much for quality Russian mercenaries.

https://twitter.com/MrKovalenko?orig...70919530876928

[Nyxilis]

You have vivid imagination Major channels several hours before reported that convoy is to cross the border near Kharkov, trucks get Ukrainian plates and crews.

See, what major channels? Russian? Because multiple EU, US, Japanese and Ukraine sources are saying different on their news channels.

In fact to quote Ukraine: "No humanitarian convoy of Putin's will be allowed to cross the territory of the Kharkiv region," Ukraine's interior minister Arsen Avakov wrote on Facebook. "Provocation by the cynical aggressor will not be permitted on our territory."

http://in.reuters.com/article/2014/0...0GD0P320140813

[Nyxilis]

http://www.bbc.co.uk/news/world-europe-28768746

But the BBC's Daniel Sandford in Moscow says that long discussions are continuing about whether the lorries will actually be allowed to enter.

Hardly so much has been confirmed, everyone is squabbling around it and way it's looking right now all those trucks might get passed off.

Those trucks mostly mean, to me, Russia is disengaging. Putin gets to look like, hey I'm doing stuff. Within my means. Food and stuff. Will give him leeway when sending more. Keep himself kosher with the Russian population in the east for essentially 'abandoning them'. Because if he doesn't invade, and Ukraine finishes off the rebels, and they will unless Russia comes, they're not going to like him much anymore either.

[mirhond]

In fact to quote Ukraine: "No humanitarian convoy of Putin's will be allowed to cross the territory of the Kharkiv region," Ukraine's interior minister Arsen Avakov wrote on Facebook. "Provocation by the cynical aggressor will not be permitted on our territory."

http://in.reuters.com/article/2014/0...0GD0P320140813

I'd rather believe Poroshenko's Executive Office

Украина не возражает против участия России в работе гуманитарной миссии в Луганск и область. Об этом заявил заместитель главы Администрации Президента Украины Валерий Чалый в эфире телеканала ICTV в понедельник, 11 августа.

Ukraine doesn't object to Russian participation in humanitarian mission to Lugansk, said Deputy Head of Executive Office Valeri Chalyi, 11 Aug.

http://korrespondent.net/ukraine/340...yia-prezydenta

then Facebook minister Avakov who is well-known liar and clown.

[JMA]

Impossible to answer without knowing what was said and what else was going on at the time.

LOL... loyal to the end.

Caught unawares, dithering, scared, etc.

History will show whether the CIA provided advanced warning or failed again. Either way it has been a Keystone Cops situation.

[Dayuhan]

LOL... loyal to the end.

Caught unawares, dithering, scared, etc.

History will show whether the CIA provided advanced warning or failed again. Either way it has been a Keystone Cops situation.

We still have no idea what was said in this rumored phone call, or to what extent the rumored call was responsible for a change in Russian plans. Given that lack of knowledge I can't see how the incident can be used as a basis for a conclusion, unless of course you've already reached the conclusion.

[JMA]

We still have no idea what was said in this rumored phone call, or to what extent the rumored call was responsible for a change in Russian plans. Given that lack of knowledge I can't see how the incident can be used as a basis for a conclusion, unless of course you've already reached the conclusion.

Likewise.