There were some happy campers in Moscow recently when the price of crude oil pushed past $50 a barrel.
The Kremlin seems to have successfully talked up the market by signaling it was ready for a production ceiling deal with OPEC. You could hear the collective sigh of relief from those controlling the Russian federal budget.
But that euphoria ebbed once again as American shale producers picked up the slack to boost production and reduce prices. Brent crude is now back down to the mid-$40s because of a supply glut of oil and natural gas.
The sustained low price of hydrocarbons is beginning to cause substantial pain in Russia: Last month, Moscow again dipped heavily into its reserve fund to plug a whopping hole in the budget. Officials can’t keep doing this. The rainy-day funds could be exhausted at some point in 2018.
The employment picture inside Russia is worsening as well. Companies are moving out of high-rent districts in Moscow to the suburbs, meaning workers face higher commuter fees in addition to all the other economic hardships.
It’s an employers’ market. Workers can work for peanuts or find themselves without a job.
This is the reality facing the Kremlin over the next several years as American shale production seems to have changed the oil markets for good. Now that they’re built, these fracking wells clearly can be turned back on quickly with minimal cost. That provides for an instant injection into the markets whenever pricing becomes attractive. Restarting a conventional well is expensive and risky.
The Kremlin has made a bet that it can inject enormous funds into its military as a way to provide a safety valve for social unrest due to a worsening economy.
If things get too bad, Russia can always get involved in another conflict, blame the U.S. or the West, and ask the long-suffering Russian people to tighten their belts further for the good of the Motherland.
The fact that Moscow knows it enjoys a free rein under President Obama’s lack of a foreign policy also enables this policy.
This could be why Moscow has massed troops on the Ukrainian border and complained of a fictitious Ukrainian “border excursion” into Crimea. The Ukraine feint serves two purposes: providing a rallying cry for the Russian people and putting pressure on the West to remove painful economic sanctions.
This is also why Moscow wants so strongly to show that the U.S. and Russia are working together to destroy the Islamic State in Syria. This tactic is for domestic consumption. The message is that the pain that Russians are feeling right now is worth it: “See? Russia is saving the world from terrorism. We are leading the only superpower in the world to do the right thing!”
The West should not underestimate the Kremlin’s ability and need to maintain this strategy. It is an imperative for President Putin and his aides, who have failed to diversify the energy-dependent economy or to tackle the question of pervasive corruption. In the short run, Moscow will continue to sell Iran shiploads of sophisticated weaponry to bring in foreign hard currency and support an industry that is vital to the Russian economy.
All of those billions in cash that President Obama flew to Iran in the middle of the night in January went straight to the Russian federal budget.
The ramifications of continued oil price weakness will inflict further pain on ordinary Russians. The misery index — unemployment plus inflation — will continue to rise. Moscow will need to find new ways to relieve this pressure.
The remaining months of the Obama presidency will be an especially dangerous time, but it’s the next U.S. president who will have to deal with a bear backed into a corner.
• L. Todd Wood is a former special operations helicopter pilot and Wall Street debt trader, and has contributed to Fox Business, The Moscow Times, National Review, the New York Post and many other publications. He can be reached through his website, LToddWood.com.
The kings of Spain brought us the conquistadores and masters, whose footprints remained in the circular land grants assigned to those searching for gold in the sands of rivers, an abusive and shameful form of exploitation, traces of which can be noted from the air in many places around the country.
Tourism today, in large part, consists of viewing the delights of our landscapes and tasting exquisite delicacies from our seas, and is always shared with the private capital of large foreign corporations, whose earnings, if they don’t reach billions of dollars, are not worthy of any attention whatsoever.
Since I find myself obliged to mention the issue, I must add – principally for the youth – that few people are aware of the importance of such a condition, in this singular moment of human history. I would not say that time has been lost, but I do not hesitate to affirm that we are not adequately informed, not you, nor us, of the knowledge and conscience that we must have to confront the realities which challenge us. The first to be taken into consideration is that our lives are but a fraction of a historical second, which must also be devoted in part to the vital necessities of every human being. One of the characteristics of this condition is the tendency to overvalue its role, in contrast, on the other hand, with the extraordinary number of persons who embody the loftiest dreams.
Nevertheless, no one is good or bad entirely on their own. None of us is designed for the role we must assume in a revolutionary society, although Cubans had the privilege of José Martí’s example. I even ask myself if he needed to die or not in Dos Ríos, when he said, “For me, it’s time,” and charged the Spanish forces entrenched in a solid line of firepower. He did not want to return to the United States, and there was no one who could make him. Someone ripped some pages from his diary. Who bears this treacherous responsibility, undoubtedly the work of an unscrupulous conspirator? Differences between the leaders were well known, but never indiscipline. “Whoever attempts to appropriate Cuba will reap only the dust of its soil drenched in blood, if he does not perish in the struggle,” stated the glorious Black leader Antonio Maceo. Máximo Gómez is likewise recognized as the most disciplined and discreet military chief in our history.
Looking at it from another angle, how can we not admire the indignation of Bonifacio Byrne when, from a distant boat returning him to Cuba, he saw another flag alongside that of the single star and declared, “My flag is that which has never been mercenary…” immediately adding one of the most beautiful phrases I have ever heard, “If it is torn to shreds, it will be my flag one day… our dead raising their arms will still be able to defend it!” Nor will I forget the blistering words of Camilo Cienfuegos that night, when, just some tens of meters away, bazookas and machine guns of U.S. origin in the hands of counterrevolutionaries were pointed toward that terrace on which we stood.
Obama was born in August of 1961, as he himself explained. More than half a century has transpired since that time.
Let us see, however, how our illustrious guest thinks today:
“I have come here to bury the last remnant of the Cold War in the Americas. I have come here to extend the hand of friendship to the Cuban people,” followed by a deluge of concepts entirely novel for the majority of us:
“We both live in a new world, colonized by Europeans,” the U.S. President continued, “Cuba, like the United States, was built in part by slaves brought here from Africa. Like the United States, the Cuban people can trace their heritage to both slaves and slave-owners.”
The native populations don’t exist at all in Obama’s mind. Nor does he say that the Revolution swept away racial discrimination, or that pensions and salaries for all Cubans were decreed by it before Mr. Barrack Obama was 10 years old. The hateful, racist bourgeois custom of hiring strongmen to expel Black citizens from recreational centers was swept away by the Cuban Revolution – that which would go down in history for the battle against apartheid that liberated Angola, putting an end to the presence of nuclear weapons on a continent of more than a billion inhabitants. This was not the objective of our solidarity, but rather to help the peoples of Angola, Mozambique, Guinea Bissau and others under the fascist colonial domination of Portugal.
In 1961, just one year and three months after the triumph of the Revolution, a mercenary force with armored artillery and infantry, backed by aircraft, trained and accompanied by U.S. warships and aircraft carriers, attacked our country by surprise. Nothing can justify that perfidious attack which cost our country hundreds of losses, including deaths and injuries
As for the pro-yankee assault brigade, no evidence exists anywhere that it was possible to evacuate a single mercenary. Yankee combat planes were presented before the United Nations as the equipment of a Cuban uprising.
The military experience and power of this country is very well known. In Africa, they likewise believed that revolutionary Cuba would be easily taken out of the fight. The invasion via southern Angola by racist South African motorized brigades got close to Luanda, the capital in the eastern part of the country. There a struggle began which went on for no less than 15 years. I wouldn’t even talk about this, if I didn’t have the elemental duty to respond to Obama’s speech in Havana’s Alicia Alonso Grand Theater.
Nor will I attempt to give details, only emphasize that an honorable chapter in the struggle for human liberation was written there. In a certain way, I hoped Obama’s behavior would be correct. His humble origin and natural intelligence were evident. Mandela was imprisoned for life and had become a giant in the struggle for human dignity. One day, a copy of a book narrating part of Mandela’s life reached my hands, and – surprise! – the prologue was by Barack Obama. I rapidly skimmed the pages. The miniscule size of Mandela’s handwriting noting facts was incredible. Knowing men such as him was worthwhile.
Regarding the episode in South Africa I must point out another experience. I was really interested in learning more about how the South Africans had acquired nuclear weapons. I only had very precise information that there were no more than 10 or 12 bombs. A reliable source was the professor and researcher Piero Gleijeses, who had written the text Conflicting Missions: Havana, Washington, and Africa, 1959-1976, an excellent piece. I knew he was the most reliable source on what had happened and I told him so; he responded that he had not spoken more about the matter as in the text he had responded to questions from compañero Jorge Risquet, who had been Cuban ambassador and collaborator in Angola, a very good friend of his. I located Risquet; already undertaking other important tasks he was finishing a course which would last several weeks longer. That task coincided with a fairly recent visit by Piero to our country; I had warned him that Risquet was getting on and his health was not great. A few days later what I had feared occurred. Risquet deteriorated and died. When Piero arrived there was nothing to do except make promises, but I had already received information related to the weapons and the assistance that racist South Africa had received from Reagan and Israel.
I do not know what Obama would have to say about this story now. I am unaware as to what he did or did not know, although it is very unlikely that he knew absolutely nothing. My modest suggestion is that he gives it thought and does not attempt now to elaborate theories on Cuban policy.
There is an important issue:
Obama made a speech in which he uses the most sweetened words to express: “It is time, now, to forget the past, leave the past behind, let us look to the future together, a future of hope. And it won’t be easy, there will be challenges and we must give it time; but my stay here gives me more hope in what we can do together as friends, as family, as neighbors, together.”
I suppose all of us were at risk of a heart attack upon hearing these words from the President of the United States. After a ruthless blockade that has lasted almost 60 years, and what about those who have died in the mercenary attacks on Cuban ships and ports, an airliner full of passengers blown up in midair, mercenary invasions, multiple acts of violence and coercion?
Nobody should be under the illusion that the people of this dignified and selfless country will renounce the glory, the rights, or the spiritual wealth they have gained with the development of education, science and culture.
I also warn that we are capable of producing the food and material riches we need with the efforts and intelligence of our people. We do not need the empire to give us anything. Our efforts will be legal and peaceful, as this is our commitment to peace and fraternity among all human beings who live on this planet.
WASHINGTON — Ending a seven-year political saga, President Barack Obama killed the proposed Keystone XL pipeline on Friday, declaring it would have undercut U.S. efforts to clinch a global climate change deal at the center of his environmental legacy.
Obama’s decision marked an unambiguous victory for environmental activists who spent years denouncing the pipeline, lobbying the administration and even chaining themselves to tractors to make their point about the threat posed by dirty fossil fuels. It also places the president and fellow Democrats in direct confrontation with Republicans and energy advocates heading into the 2016 presidential election.
The president, announcing his decision at the White House, said he agreed with a State Department conclusion that Keystone wouldn’t advance U.S. national interests. He lamented that both political parties had “overinflated” Keystone into a proxy battle for climate change but glossed over his own role in allowing the controversy to drag out over several national elections.
“This pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others,” he said.
Although Obama in 2013 said his litmus test for Keystone would be whether it increased U.S. greenhouse gas emissions, his final decision appeared based on other factors. He didn’t broach that topic in his remarks, and State Department officials said they’d determined Keystone wouldn’t significantly affect carbon pollution levels.
Instead, the administration cited the “broad perception” that Keystone would carry “dirty” oil, and suggested approval would raise questions abroad about whether the U.S. was serious about climate change.
“Frankly, approving this project would have undercut that global leadership,” the president said.
Obama will travel to Paris at the end of the month for talks on a global climate agreement, which the president hopes will be the crowning jewel for his environmental legacy. Killing the pipeline allows Obama to claim aggressive action, strengthening his hand as world leaders gather in France.
Though environmental groups hailed Friday as a “day of celebration,” Obama’s decision was unlikely to be the last word for Keystone XL.
TransCanada, the company behind the proposal, said it remained “absolutely committed” to building the project and was considering filing a new application for permits. The company has previously raised the possibility of suing the U.S. to recoup the more than $2 billion it says it has already spent on development.
“Today, misplaced symbolism was chosen over merit and science. Rhetoric won out over reason,” said TransCanada CEO Russ Girling. His criticism was echoed by Republicans including House Speaker Paul Ryan, who said Obama had rejected tens of thousands of jobs while railroading Congress.
“This decision isn’t surprising, but it is sickening,” Ryan said.
On the other side, climate activists noted the widespread assumption early in Obama’s presidency that he’d eventually approve Keystone, and said his apparent about-face proved how effective a no-holds-barred advocacy campaign could be.
“Now every fossil fuel project around the world is under siege,” said Bill McKibben of the environmental group 350.org.
Already, the issue has spilled over into the presidential race. The Republican field is unanimous in support of Keystone, while the Democratic candidates are all opposed — including Hillary Rodham Clinton, who oversaw the early part of the federal review as Obama’s first-term secretary of state.
TransCanada first applied for Keystone permits 2,604 days ago in September 2008 — shortly before Obama was elected. As envisioned, Keystone would snake from Canada’s tar sands through Montana, South Dakota and Nebraska, then connect with existing pipelines to carry more than 800,000 barrels of crude oil a day to specialized refineries along the Texas Gulf Coast.
But Democrats and environmental groups latched onto Keystone as just the type of project that must be phased out if the world is to seriously combat climate change. Meanwhile, Republicans, Canadian politicians and the energy industry argued the pipeline would create thousands of jobs and inject billions into the economy. They accused Obama of hypocrisy for complaining about a lack of U.S. infrastructure investment while obstructing an $8 billion project.