There are as many hot takes on the Trump phenomenon as there are bronzer-addicted blatherati jockeying for airtime on cable news. But there is one take that rarely makes it past the outrage, the sycophancy and the psychobabble that fills all those endless hours of Trump-related “programming.” It’s the fact that President Donald J. Trump is NOT an outlier when it comes to the central organizing principle of American politics over the last 75 years … and that’s oil.
Quite to the contrary, his presidency is an unseemly continuation of oil’s barely-questioned imperium both at home and abroad. It’s an oil-slicked empire that birthed a world-wide network of bases (Hello, Bahrain!), along with a slew of arms sales, deployments, interventions, political coups, deadly proxy wars and, saddest of all, the still unprocessed destruction of a bystander nation under false pretenses. Perhaps most problematically, it also joined the United States’ interdependent oil and defense industries into a sordid alliance with the petrodollar-dealing, terrorism-sponsoring Saudis.
That lucrative, often surreptitious alliance — first forged by FDR, then expanded by Nixon’s deal to “recycle” Saudi petrodollars back into US debt and finally intertwined with US covert power during the war against the Soviets in Afghanistan — has worked for decades to keep key repositories of the world’s fulsome oil supply in the ground and, therefore, off the market. From Iraq to Iran, from Libya to Central Asia and beyond, it’s been a profitable practice that can modulate the price of oil by restricting supply, by scuttling transmission routes and by magnifying or artificially creating geopolitical “instability” to manipulate the market’s fragile “psychology.”
Simply stated, the more market access there is to oil from uncooperative, reserve-rich nations like Iran or, say, from Venezuela (home to the world’s largest proven reserves), the more it dilutes the ability of the American-backed Saudis to use their domination of OPEC to control the global oil market. For instance, with Iran’s oil largely off the market (along with Venezuela’s Trump-sanctioned oil and the Saudi-financed mess that is Libya’s embattled oil landscape) the Saudis can leverage their lagging share of the world’s proven reserves to modulate the price through output cuts … cuts that the Saudi-led OPEC oil cartel is newly coordinating with a powerful non-member, President Vladimir Putin’s Russia.
Therein lies the key difference with the latest version of the Great American Oil Presidency … it’s that the Saudis — thanks primarily to Jared Kushner’s WhatsApp bro Mohammed bin Salman (MBS) and to the oft-overlooked influence of the UAE’s Sheikh Mohammed bin Zayed (MBZ) — brought Russian President Putin in as a not-so-silent partner in their Trumped-up effort to manipulate and to maintain control over the oil market. And it’s more of a natural fit than you might think. In fact, the UAE’s MBZ-led sovereign investment fund (the Mubadala Development Company) has “invested alongside” the Kremlin’s sovereign investment fund (the Russian Direct Investment Fund) “since as early as 2013,” according to Aljazeera.
This surprisingly close relationship was finally cemented on June 1, 2018, when the UAE and Russia announced their “strategic partnership,” one built on “the rich and fruitful experience of bilateral cooperation,” according to the lengthy English language version of the declaration published by the Kremlin. The UAE has, in turn, been cooperative in Russia’s efforts to preserve Bashar al-Assad’s regime in Syria. The UAE has also become Russia’s biggest arms buyer in the region. And Russia has even pledged to host the UAE’s first ever astronaut on a Soyuz rocket ride to the International Space Station.
Meanwhile, back on Earth (or Htrae) … President Trump desperately wants to unplug US funding for climate monitoring satellites. Perhaps that’s because the data forecasts a troubling time ahead for hydrocarbons. It’s troubling, that is, if you happen to rely on oil and gas revenues like the US oil industry. It’s even more problematic if you run petro-states like Saudi Arabia, Russia and the UAE. Their hydrocarbon-dependent economies all face the synergistic specter of rapidly-emergent, cost-competitive renewables intersecting catastrophically (for them) with a growing sense of dread about ever-more-evident climate change. That synergy could create a tipping point of no return for oil … particularly among previously unconvinced, gas-guzzling American consumers.
Basically, a viable motive for and the potential means of oil’s murder are now palpable things. Peak oil is old news, folks. Instead, the looming problem is peak demand. OPEC oil powers are already planning for it … or were planning for it before deciding to actively deny it is even a thing. Self-serving public denials aside, the world is awash in oil … as Saudi maneuvering repeatedly shows. Not coincidentally, the stark realization they’re facing a prolonged supply glut comes at the same time renewables are finally emerging from an interminably long “proof of concept” phase.
To wit, Scotland is getting the “equivalent of 74.6%” of its electricity from renewables. Renewables are now Germany’s main energy source (40% of its electricity). China is leading the world in solar and wind capacity. Eighty percent of the new energy feeding Texas comes from wind and solar. And, despite Trump’s best efforts, the US has reached a “coal cost crossover” point where electricity generated by wind and solar is cheaper than 74 percent of existing US coal-fired power capacity. Now that’s almost literally a canary in the coal mine … one that major oil producers could also face sooner rather than later if US public opinion continues to be moved by the real-world consequences of anthropogenic climate change.
Even more ominously, energy-hungry US economic growth is showing weakness as a reliable driver of future oil profits. An analysis by Lawrence Livermore National Lab found that the US used more energy than ever in 2018, but the biggest growth was in solar use (up 22 percent) … with wind use (up 7.6 percent), natural gas use (up 10.7 percent) and even biomass use (up 5 percent) all out-pacing good old-fashioned petroleum (up 2 percent).
Previously, the way to counter renewables was to simply open up the spigot and drown out the nascent competition. But opening up the spigot drives up supply, drives down the price and drives down your share of the world’s proven reserves. That “percentage of proven reserves” issue is particularly nettlesome when your competitors’ supplies are being kept in the ground due to sanctions or armed conflict (see Iran & Libya). Even more daunting (for oil producers), it looks like renewables are decoupling from oil and that makes them increasingly immune to the vicissitudes of timely “instability” … or even to direct market manipulation. As a Seeking Alpha analysis pointed out:
Over the past three decades, renewable investments became more resilient to movements in oil prices. Technologies are much more advanced, and rely on plain market forces to find success. Unless they collapse much further, low oil and gas prices are unlikely to delay or kill renewable projects. Nowadays, solar power is competitive, even when oil prices are in the doldrums.
With the cost of renewables like solar rapidly trending downward, the key now for petroleum-dependent petro-states and corporations is to forestall the nascent opportunity that could ultimately kill off their future fortunes. That’s why they need to maximize the resource NOW … while the getting is still good. To do that, they need the traditional Empire of Oil to function properly. That means OPEC setting the market and the petrodollar-dealing Saudis calling the shots … backed, of course, by the full faith and credit of Uncle Sam’s military-industrial complex.
Whether he knows it or not, that’s Trump’s de facto “job” in this bizarre, Kushner-catalyzed circle-jerk we call the “Trump Presidency.” His predictable, transactional approach was tailor-made for influence peddlers seeking oil-friendly outcomes. By leveraging the preternatural force of his narcissism, perhaps along with some shady lucre, the MBS-led Saudis, the MBZ-led Emiratis and the Putin-led Kremlin could easily bank on Trump extending the life and profitability of their main resource in the face of a rapidly-changing energy landscape.
Of course, that’s really-really important to Big Oil in the United States, too, which has reemerged as an oil-producing and exporting power … thanks in no small part to the Obama Era fracking craze. US oil production has only accelerated under the climate-questioning, oil-friendly Trump as he’s torpedoed federal-level climate science, fast-tracked pipeline construction and quite literally turned over the EPA and the Department of Interior to the profit-hungry US Oil & Gas Industry. Trump is essentially an oilman by proxy. He’s primed the pump at home, while also unleashing the Saudis abroad … his coy tweets about OPEC and the price of oil notwithstanding.
Meanwhile, the US oil industry knows that a rising tide of prices lifts ALL tankers. Anything the Saudi-led cartel does to stoke the price is a big win for them. At the same time, being on the outside of OPEC is priceless in terms of plausible deniability. For example, the Saudis usually shoulder the blame for rising gas prices while US companies slip out the back door with their profuse share of the profits. And that’s just one benefit of a close alliance with the petrodollar-dealing Saudis … a closeness that is the hallmark of Trump’s self-interested foreign policy.
In the closed loop that is the Empire of Oil, more money in Saudi hands also means more money cycled back to the defense industry via more arms sales to Uncle Sam’s biggest customer (the UAE is third on the list). Growth in arms sales is another hallmark of Trump’s foreign policy, btw. Obviously, the symbiotic relationship between US arms and Saudi oil predates Trump (as does the ATM also known as the War On Yemen), but he’s certainly turbocharged it and it is reaching a level of nuclear fusion usually associated with the Bush family.
At the same time, Trump’s predictable willingness to appoint Big Oil’s greasy servants to key government positions allows them to exploit America’s untapped reserves and to increase their bottom lines. Oil companies like Chevron, Exxon and BP also banked on Saudi-loving Trump and the oil-fueled GOP throwing roadblocks in the way of renewable energy, scuttling action on climate and challenging settled climate science … which they have. That said, it’s important to note that big US oil corporations were not drifting in the same leaky boat as the petroleum-based Saudis or the hydrocarbon-reliant Russians when Trump was campaigning to demolish every last vestige of Barack Obama’s Presidency. Unlike US-based oil companies, the Saudis and Russians were engaged in an existential-level struggle after President Obama opened the spigot on fracking in the US … which led to a domestic production boom at a time when the world’s petro-states were in danger of going bust.
Amazingly, the price of oil (West Texas Intermediate) dropped to a low of $26.21 during the final year of Obama’s version of the Oil Presidency, before closing out in the mid-$50s. Keep in mind that oil averaged between $79 and $97 from 2010 to 2014, before dipping below $50 over the final two years of Obama’s controversial, all-too-toxic fracking push. That was potently coupled with a market-changing end to a long-standing export ban on US oil. Notably, the Saudis did not respond by cutting production to prop up the price (and their struggling economy). Instead, they opted to keep their spigot open in hopes of breaking the US fracking industry by keeping the price per barrel well below the point at which fracking is profitable. And it almost worked. As energy industry observer Bethany McLean noted last year, “By mid-2016, American oil production had declined by nearly a million barrels a day and some 150 oil and gas companies filed for bankruptcy.”
But although the Saudi play snuffed-out a number of small to medium-sized fracking companies, it didn’t kill fracking. Actually. it just led to a voracious round of oil industry consolidation in 2018 … and set up even more mergers and acquisitions for 2019 (see the Chevron vs. Occidental fight over shale oil company Andarko). Moreover, by 2018 the US was a top oil producer and it kinda-sorta became a net exporter of oil for the first time in 75 years. Despite the fracking “bust,” oil majors like Chevron and Exxon are, perhaps foolishly, bullish on the prospects of profiting off the pieces they’ve picked up from the price wars of the Obama years.
The Saudis, on the other hand, found themselves stuck in the fracking trap … one that saw OPEC’s mastery over the world’s oil market largely curtailed, if not broken. Add to that the destabilizing impact on their bottom line and it’s not hard to understand why the Saudis did not like Obama. President Obama had a famously mixed, tension-marked relationship with Saudi leadership. They even went so far as to snub him on the tarmac during a 2016 visit to Riyadh.
Russia, too, suffered under the new fracking paradigm. The Russian economy depends on oil and gas revenue and those revenues were being challenged by Chevron on Russia’s doorstep and by growing US fracking power in Russia’s bank account. And some believe (particularly oil-adjacent GOP members of Congress) that the first Russian “active measures” campaign was an anti-fracking propaganda effort that included their English-language channel RT … which, of course, RT denies.
Meanwhile, President Obama and then-Secretary of State Hillary Clinton openly confronted the Kremlin in its former Soviet bailiwick, the low point being then-Assistant Secretary of State for European Affairs Victoria Nuland’s machinations in Ukraine. It’s also important to remember that the US was essentially “meddling” with key marketplaces and crucial transmission routes for Russia’s all-important natural gas. Frankly, President Obama wielded fracking like a geopolitical cudgel. It hit the Saudis and Russians hard. It also hammered Venezuela’s oil-dependent economy and helped to drive Iran to the bargaining table. And then he upped the ante by striking his big deal with Iran.
LET’S BREAK A DEAL
The Iran Nuke Deal (Joint Comprehensive Plan of Action) was likely a step too far for two powers struggling in an already glutted market. That deal, and the normalization of Iranian oil and gas exports it portended, must’ve sent a chill down the spines of the Saudis (who, at the time, were struggling to pay civil servants) and the Kremlin (as the Russian economy was contracting by 3.7%). When the price of oil dipped down to a staggeringly low of $26 in 2016, both Saudi Arabia and Russia found themselves trapped by a geopolitical pincer action — on one side, a fracking-palooza spewing from the US heartland; and on the other, a geopolitical powerplay in Geneva that could unleash the world’s fourth largest reserve … which is exactly what it did.
The force multiplier effect of the two together is why I think it’s safe to say that the Iran Nuke Deal posed a specific, almost existential threat to Tehran’s long-time rivals in Riyadh … where the petro-princes desperately want to retain their grip on both the world’s oil market and on the Islamic faith, which they’ve often wielded like their own geopolitical cudgel. And, perhaps surprisingly, the deal also threatened Russia’s long, strategically valuable partnership with Tehran. For Putin, a long-overdue denouement between the US and Iran could lead to a huge loss of power, influence and leverage in a region that holds sway over one of Russia’s main sources of revenue (the price of oil). The region also provides them with access to a strategic Mediterranean port (see Tartus) via Iran’s longtime partners in Syria. Therefore, the trick for Russia was to champion their partner’s “best interests” while also finding ways to preserve the US as Iran’s main antagonist and, therefore, preserve its role as de facto guarantor against aggressive US behavior.
For the Saudis, it wasn’t the first time they faced the price-crushing problem of an export-sanctioned regional competitor being potentially unleashed to pump more oil into a deflated market. And like the imminent problem of Iraq’s troublesome oil reserves before it, Saudi Arabia needed a Deus Ex Machina event to help preserve their grip on the market (see Operation Iraqi Liberation). Only this time it wasn’t 15 of 19 hijackers fortuitously setting the stage for a paradigmatic Oil President’s misdirected attack on Iraq. That is, perhaps, a once in a lifetime “coincidence.” Instead, a more banal coincidence took shape against the backdrop of the 2016 Election as the Saudis, Russia, the UAE and (surprise!) Kushner-family friend Bibi Netanyahu all found common cause in killing the Iran Nuke Deal … and they all found an empty vessel to carry their oil-slicked water.
IMPERIAL GUNS & BUTTER
Simply put, the existentially important task of killing the Iran Nuke Deal is, from a geopolitical standpoint, perhaps the main reason why Trump is where he is today. Forget squishy notions about sinister plans to torpedo democracy. It’s the oil, stupid. It always has been and, so long as the Empire of Oil reigns, it always will be. It’s the Empire of Oil that truly makes the world go ’round.
Today, the Empire of Oil is all about the interlocking of the defense and oil industries with finance. Until the decline of the auto industry, though, industrialized manufacturing worked synergystically with oil and defense to create an “Iron Triangle” that built the American middle class and the Military-Industrial Complex. Oil fed the auto industry and the whirring manufacturing base, and it fueled the military. The auto industry and largely unionized manufacturing base fed the oil companies through consumption and fed the Pentagon by creating a vibrant, growing tax base that, in turn, fed the defense industry. The defense industry provided the manufacturing jobs and the hardware the Pentagon used to protect the flow of oil thanks to a massive, ongoing taxpayer subsidy also known as the defense budget … and on it spun, with Wall Street placing its bets and shorts along the way.
The Iron Triangle started to break down during the 70s … and the Empire of Oil cut a deal with the Saudis to effectively peg the post-gold standard dollar to oil (a.k.a. the petrodollar) and, in turn, to lock the Saudis into a highly-financialized, boycott-averting relationship. OPEC is the key to this system since non-OPEC nations are not locked into Saudis’ deal with Uncle Sam. In recent years, rebellious nations are increasingly trading oil in other currencies … a phenomenon called “de-dollarization.” But Wall Street and much (but not all) of Washington wants to make sure dollars remain the currency of choice for most oil transactions. And, not coincidentally, the US defense industry also wants to preserve its profit-generating, petroleum-based clientèle wherever oil and instability go hand in hand … which is literally all over the map.
THE TRUMP EFFECT
Keeping that “Empire of Oil dynamic” in mind helps to make sense of the bizarre “Trump Coalition” that supported his candidacy and has reaped the profits from his presidency. It’s an otherwise inexplicable hodge-podge of GOP Establishmentarians, American hydrocarbon mandarins, US arms dealers, Wall Street Wolves, Israel-obsessed Evangelicals, Iran-obsessed Israelis, AIPAC activists, factional Saudis, aloof Gulf Arabs and Putin-linked Russians. It may look like a disparate collection of Mos Eisely also-rans, but they all tracked the same target … the Iran Nuke Deal. And they all had rational reasons — financial, geopolitical, territorial — to make sure it didn’t last past Obama’s Presidency. Luckily for them, Trump had made it clear from nearly the moment he came down the escalator on June 16, 2015 that he was going to turn the Iran Nuke Deal into a remunerative melodrama of market-spiking instability and, once he finally pulled out, into market-sustaining sanctions.
And it worked.
Taken together, the “market psychology” effect of nixing that deal (plus the convenient “Will he/Won’t he” lead-up to its decertification) combined with Trump’s new and renewed sanctions to help buoy the price of oil, to re-invigorate OPEC and empower the new Saudi government of Mohammed bin-Salman. Let’s face it, when it comes to oil markets, drama works almost as well as sanctions. Just think of how often you see or hear catchy phrases about oil market “fears,” or that the market is “worried,” or about price-altering “turmoil” in a country or region, or how predictably “geopolitical problems” are cited when the price of oil goes up. Psychology matters, and Trump’s “crazy like a fox in the henhouse” bloviations create lots of opportunities for oil producers and commodity market traders.
Yes, there is some actual winning going on … for those who play the oil game.
SO MUCH WINNING
To wit, when Secretary of State and Onwardly-Committed Christian Soldier Mike Pompeo announced an end to sanction waivers for five major countries still importing Iranian oil (including an unhappy China), he not only got a round of applause from Israeli Prime Minister Bibi Netanyahu (more on him soon), but he also touted a commitment from Saudi Arabia and the UAE to do the US “a solid” and make up for the loss of Iranian oil by opening up their spigots. Ironically, on the eve of Pompeo’s announcement, Tsvetana Paraskova of OilPrice.com predicted a potential “perfect storm” that could drive oil prices higher if there is a “major disruption on the supply side,” with the three likeliest candidates being “Iran, Venezuela, and Libya.” Notably, all three were dealing with severely diminished output when they were exempted from the Saudi-led, Russian-joined production cuts that helped stoke the price of oil to the tune of “more than 30 percent year to date” (4/21/19).
As if on cue, Secretary Pompeo’s announcement took care of Iran. The US also recently added more sanctions onto struggling Venezuela (which is also locked into an export restricting stalemate between Putin-backed President Maduro and Trump-backed pretender Juan Guaido ). And, as luck would have it, Libya’s already cratered oil industry faces the prospect of a prolonged, production-disrupting conflict thanks to the Saudi-funded, UAE-backed and CIA-trained commander Khalifa Haftar. He even took time out from his military offensive to chat with his brand new fan Donald J. Trump. Apparently, Haftar was on his way to “securing Libya’s oil resources,” according to a White House readout of the call. And it’s a call and a new policy position Trump took after MBS successfully lobbied him on behalf of MBZ and Egyptian President Abdel Fattah al-Sisi.
Even better for the Saudis & Co., Trump is intent on “zeroing out” Iran’s share of the market … which is a boon to the bottom lines and/or the political fortunes of nearly everyone in the “Trump Coalition.” The major oil players in that Trumped-up game can now pump more oil without significantly affecting price through oversupply … and regional instability helps everyone from domestic refiners to foreign oil powers to the profitable proliferators who ply their wares in the Supermarket of American Military Hardware.
So much winning, indeed.
THE TIDE IS HIGHER
The plain fact is that aside from one still-not-catastrophic dip, Trump’s Presidency has been one of not just price stabilization, but of significant growth after a prolonged Obama-era funk. Saudi Arabia, the UAE and Russia not only benefited in spite of a global glut and emergent renewables, but they even came close to overplaying their hand.
That’s according to UAE Energy Minister Suhail Al Mazrouei, who recently remarked that OPEC+ (the “plus” being “new best friend” Russia) “got a bit carried away” by their hope that Trump’s increased sanctions on Iran would allow them to pump more oil without lowering the price. Luckily, the Administration’s new move to zero-out Iran’s oil exports means they can pump more without worrying too much about a precipitous drop in price or a significant loss of control over the market.
Heck, even without the new, production-altering sanctions, the chart below shows the significant “Trump Effect” on the price of oil since April 2016 (in this case Brent, which, along with the West Texas Intermediate referenced above, is one of the two “benchmark” oils). And just look at the price since Trump took office to see why MBS and Putin high-fived at the G20.
For further confirmation of the Trump Effect, look no further than recent headlines touting Saudi Aramco as “the world’s most profitable company” in 2018, with $111 billion in PROFITS … as in NET INCOME, not gross revenues. As CNBC noted, that’s “more money than J.P. Morgan Chase, Google-parent Alphabet, Facebook and Exxon Mobil combined.” It’s also stoked a “building boom” in Saudi Arabia and increased construction spending in the UAE, which also saw a spike in oil-related revenue in 2018.
In fact, the UAE’s economy is, according a recent IMF assessment, finally “turning a corner.” Economic confidence just hit a seven year high, according to Gulf News. And with two years of Trumped-up oil prices under its belt, the UAE expects to “outperform” the region thanks to “higher levels of government spending and increased oil production.”
Russia has also reaped the rewards of higher prices as Rosneft enjoyed a 31.4% jump in revenues to $133.7bn in 2018 and Lukoil’s profits “doubled on higher oil prices.” Seeking Alpha singled-out Lukoil as a good investment for 2019. And with Russian “oil coming off one of its best first-quarter showings on record,” it looks like the decision to join in on OPEC+ has been a very-very good one. It was a decision Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), “predicted” in 2016. As chance would have it, the Putin-connected Dmitriev not only runs the Kremlin’s $10 billion-strong RDIF, but that’s the same fund that invests “alongside” the UAE’s MBZ-led sovereign investment fund. Go figure 2.0.
PROS AT QUID PRO QUO?
Coincidentally, Dmitriev’s prediction of an OPEC + pact came as the Trump campaign was headed for a really big showing in the 2016 election. It was a win that, according to the “Mueller Report” on the Russian “active measures” campaign in that election, was also big win for Dmitriev’s boss in the Kremlin. At least, that’s according to a still-redacted mystery person who apparently told Dmitriev in the wee hours after Trump declared victory:
But that’s not all.
Dmitriev appears on fourteen pages of the “Report On The Investigation Into Russian Interference In The 2016 Presidential Election,” which notes that his overtures to the newly-elected Trump Administration began when …
… the UAE national security advisor introduced Dmitriev to a hedge fund manager and friend of Jared Kushner, Rick Gerson, in late November 2016. In December 2016 and January 2017, Dmitriev and Gerson worked on a proposal for reconciliation between the United States and Russia, which Dmitriev implied he cleared through Putin. Gerson provided that proposal to Kushner before the inauguration, and Kushner later gave copies to [Trump Advisor Steve] Bannon and Secretary of State Rex Tillerson.Vol. 1, Page 147
There’s the UAE again, this time connecting Dmitriev with Kushner via another character named Rick Gerson … who, eight days after Trump was inaugurated, sent a message to Dmitriev after an official phone call between President Trump and Dmitriev’s “boss” (President Putin) that was, according to the Mueller Report, intended in part to float the reconciliation proposal the two had worked on together:
Gerson also wrote to Dmitriev to say that the call had gone well, and Dmitriev replied that the document they had drafted together “played an important role.” Gerson and Dmitriev appeared to stop communicating with one another in approximately March 2017, when the investment deal they had been working on together showed no signs of progressing.Vol. 1, Page 159
So, who is Rick Gerson? According to a report in the New York Times, Jared has been friends with Gerson’s brother Mark “for more than a decade” and Mark was “an early investor” in “a real estate technology company founded by Mr. Kushner and his brother, Josh.” The icing on that filial layer cake is that “Kushner’s family foundation” has “donated tens of thousands of dollars to an Israeli medical aid group led by Mark Gerson.”
And although Gerson “stated he had no formal role in the transition and had no involvement in the Trump Campaign” (Vol. 1, Page 156) … and that he’d only had “occasional casual discussions about the campaign with Kushner” (Vol. 1, Page 157) … for some reason he took on a larger role after the election by “arranging meetings for transition officials with former UK prime minister Tony Blair and a UAE delegation led by Crown Prince Mohammed” (Vol. 1, Page 157).
Wow … former British Prime Minister Tony Blair? Pretty heady stuff for someone who claimed to only be casually connected to the campaign. By the way, that’s the same Tony Blair who covered the left flank of President George W. Bush’s Saudi-friendly attack on Iraq and its massive, Saudi-threatening oil reserves. And that’s the same Tony Blair whose “Tony Blair Institute” reaps donations from the Saudis and who was bankrolled by the UAE while acting as a Middle East envoy. Also note how the UAE just keeps on popping-up in this strangely incestuous scrum of characters, coincidences and collaborations.
But it doesn’t end there … because just over a week before Trump’s inauguration, Dmitriev met with Blackwater founder Erik Prince in a now infamous get-together in the Seychelles … which, based on the Mueller Report, Prince has lied about repeatedly. The unofficial Trump advisor, brother to future education Secretary Betsy DeVos and wannabe Overlord of Afghanistan also met with the UAE’s strangely ubiquitous MBZ in the Seychelles. The meeting was arranged by long-time Middle East fixer and convicted pedophile George Nader, and it was arranged in consultation with Steve Bannon. Prince briefed Bannon after the meeting … a meeting which Prince seems to have bungled.
And, just to pile on yet another “coincidentally” to this heaping pile of crazy coincidences, Erik Prince also arranged an August 2016 meeting between Donald Trump Jr. and Nader, who, along with joining Prince and Dmitriev in the Seychelles, went to that lesser-known Trump Tower meeting on behalf of “two wealthy Arab princes.” And yes, that’s a lot of Princes cavorting with a number of knaves.
According to a largely forgotten report in the New York Times, Nader “told Donald Trump Jr. that the princes who led Saudi Arabia and the United Arab Emirates were eager to help his father win election as president.” Nader introduced Don Jr. to a “social media specialist” named Joel Zamel who “extolled his company’s ability to give an edge to a political campaign.” His now-defunct firm Psy-Group had, according to the report, “already drawn up a multi-million dollar proposal for a social media manipulation effort to help elect Mr. Trump.”
So, much like the incessantly covered story of the Russian active measures campaign run through the St. Petersburg-based Internet Research Agency … and much like the perhaps still underestimated story from whistleblower Christopher Wylie about the Mercer-owned, Steve Bannon/Michael Flynn-employing fun-and-gamesters at Cambridge Analytica … there was yet another proposal to do the same sort of psy-op stuff on Trump’s behalf. This time it was the two most powerful petro-princes on the planet offering to deploy an Israeli company to “meddle” in the election.
Although it is still unclear what, if anything, was done with that offer, a bombshell exposé of Psy-Group in the New Yorker found that the aptly-described “Private Mossad for Hire” had not only pitched its psychological warfare tactics to the Trump campaign, but it repeatedly “used fake websites, social-media posts, and staged interactions as part of an effort to influence the public perception of specific targets” ranging from a local board election in California to an anti-Boycott, Divestment, Sanctions (BDS) campaign that targeted “nine activists, including a lecturer at the University of California, Berkeley.” By the way, those Anti-BDS efforts, dubbed “Project Butterfly,” tracked back to former members of Israeli Prime Minister Bibi Netanyahu’s government.
It is pretty amazing, though, that two Arab princes wanted to use a “Private Mossad” to help elect Trump. Apparently, they knew where to go because that sort of meddling is par for the course in Israel. To wit, “Israeli social media influence company” Archimedes Group recently got bounced from Facebook after running an active measure campaign that use fake accounts to “disrupt elections” in Africa, Asia and Latin America. And Bibi’s since-scuttled election win was cemented in part thanks to PR agency Kaizler Inbar’s intimidating placement of illegal cameras in polling stations that, according to the firm, helped drive down Arab turnout below 50 percent and, they claim, delivered Netanyahu’s tenuous win. They even posed for a post-election picture with Bibi.
Selfies notwithstanding, Netanyahu’s links to Trump are much closer than those between him and the scheming PR bros or the Psy-Group meddlers hired by the petro-princes. That’s because Netanyahu enjoys a direct line into Trump’s family. As detailed by the New York Times, Kushner’s family has a long-standing personal relationship with Israel’s embattled Prime Minister … one that dates back to Jared’s childhood when, the story goes, Bibi came to visit and slept in Jared’s bed, thus relegating Trump’s future Czar of Everything to the basement. Bibi proudly mentioned his long connection to Jared when he came calling at the White House just three weeks after President Trump was inaugurated.
It’s a relationship that no-doubt helps Jared’s business interests in Israel. On the other side, it certainly helps that the Kushners donate money to fund a “controversial” West Bank settlement. And it’s a relationship that paid off later for Bibi as Jared’s Father-in-Law (or, if you prefer, Ivanka’s dad) delivered on a Likudist wish-list that would make Ariel Sharon blush, including relocating the US Embassy to Jerusalem, cutting off aid to the Palestinians and putting an extra-legal stamp of approval on Israel’s de facto annexation of the Golan Heights … where Bibi promises to rechristen a town in Trump’s honor.
Still with me?
Jared’s Father-In-Law is also credited with a big assist in helping the Bibi win a close reelection by naming Iran’s Revolutionary Guard as a “terrorist organization,” among other things. But the centerpiece of the Trumped-up gift registry … the thing that motivated Bibi’s Murdoch-like benefactor Sheldon Adelson to pour over $20 million into Trump’s 2016 campaign and another $100 million into the GOP’s 2018 effort to hold the House and Senate for him … was and still is the end of the Iran Nuke Deal.
For Bibi and Adelson, it wasn’t about cashing-in on the ripple effect from debilitating oil sanctions (although the Golan Heights does sit over a “significant” oil discovery). Instead, Iran is one of the few regional friends the Palestinians still have … and that friendship is often manifested in support for Hamas and Hezbollah, the two-headed target of the increasingly dominant Israel Right. Trump’s election presented Bibi with a golden (or gilded, as the case may be) opportunity to quietly foster his so-called “outside-in” alliance with the Saudis and the UAE. And it’s worked, with Kushner’s WhatsApp Bro MBS reportedly telling Palestinians in a closed-door meeting to “come to the negotiations table or shut up and stop complaining.” And now with Trump’s buddy Egyptian General-cum-President al-Sisi both well in hand and firmly ensconced for the foreseeable future, the next step is to force the increasingly isolated Palestinians into a Kushner-concocted, al-Sisi-driven deal that likely includes some level of annexation.
To get there, Bibi needed Jared’s Father-in-Law to impose more impoverishing sanctions on Iran. The hope is that it will staunch the flow of funding and matériel into Hamas and Hezbollah and, in so doing, further weaken local resistance to Bibi’s dream of an Israeli West Bank. In the process, all the interested parties who are invested in oil — from US oil companies to the Saudis, from the UAE to Russia — reap the rewards from the Trumped-up effort to destabilize Iran’s oil-dependent economy by further restricting the amount of their oil on the OPEC+ dominated market.
Again not coincidentally, that convenient and profitable partnership has been fostered with an often-overlooked assist from the Saudis’ surprisingly close friend Bibi Netanyahu. Netanyahu’s new-found friendship with the Saudis and the Gulf Cooperation Council was based on a “mutual distaste for Barack Obama,” which started when he didn’t buttress Egyptian President Hosni Mubarak during weeks of protest that eventually led to Mubarak’s resignation in February of 2011. That distaste turned bitter after the Iran Nuke Deal. That, in turn, led to unprecedented exchanges and a much-ballyhooed public meeting between the Saudis, the Emiratis and the Israelis. Israel even sold $250-million worth of sensitive “Israeli espionage technologies” to Saudi Arabia in 2018. Newly friendly Netanyahu also went to bat for Jared’s WhatsApp Bro after he had Jamal Khashoggi dismembered in Istanbul … just like Trump’s on-again/off-again friend at the National Enquirer, the aptly-named David Pecker, went to bat for MBS before he came courting US power-players and Hollywood’s heavy-hitters.
Meanwhile, Kushner’s longtime friend Bibi has also heavily courted Putin, who Trump touted as a big “Bibi Fan.” Oddly enough, Putin shares a mutual friend and business associate with both Kushner and Trump, the so-called King of Diamonds Lev Leviev (who, like Bibi, is currently beating back criminal charges in Israel). Coincidentally (yet again), Putin has championed the Leviev-funded and Kushner-funded Chabad Jewish organization.
The strange synchronicity doesn’t end there, either.
That’s because there’s also a cavalcade of coincidences stemming from Putin’s long, Trump-intersected history with Russian oligarchs like Michael Cohen-connected Viktor Vekselberg … and with Russian organized crime figures like FBI Most Wanted-lister Semion Mogilevich and Winter Olympics-fixing Alimzhan Tokhtakhounov. Coincidentally, Tokhtakhounov’s multimillion-dollar, Trump Tower-based gambling operation got busted by NYPD seven months before he was seen walking the red carpet at the infamous Trump-owned Miss Universe Pageant in Moscow back in 2013.
Not surprisingly, there are also the voluminous, often overlooked links between Russian organized crime and Trump’s former fixer, and now convicted felon, Michael Cohen. Cohen, in turn, is a longtime personal friend of the Russian-born, organized crime-linked former Federal informant Felix Sater. Sater partnered with Trump through the perpetually shady Bayrock Group (which was financially backed by a trio of oligarchs) to build the imperfectly-legal, financially-disastrous Trump SoHo project. Sater also worked with Cohen on negotiations for the Trump Tower Moscow project during the 2016 campaign. During the back and forth of trying to get the Moscow deal rolling, Sater wrote to Cohen in a since-disclosed email, “I will get Putin on this program and we will get Donald elected.”
Amazingly enough, Donald J. Trump was elected. Although 4.4 million expected Democratic voters stayed home, we may never know to what extent any of these connections and efforts (plus a half-dozen more not mentioned) affected the election’s outcome or translated into dampened turnout (like the Arab suppression effort in Netanyahu’s reelection). Perhaps that’s the beauty of this brave new world of tech-augmented informational warfare. It is palpable, but ultimately not quantifiable. Perfect plausible deniability. Yet on some level, it’s beside the point. Just by making the effort, these players showed that they were fully invested in Trump’s win. And once he did win, they were the leading contestants in what has been nothing short of a prize-laden gameshow.
REALITY SHOWMANSHIP OF FOOLS
Trump is a master of the reality show cliffhanger. He produced two episodes of “Will he/won’t he attack Syria?” (the second time, oil spiked to a four-year high, btw). He pulled the same cliffhanger shtick with the 90-day re-certification cycle of the Iran Nuke Deal. And he’s directed an ongoing, multi-part series called “Trump’s Trade War” that, given his history as a phony corporate raider who manipulated stock prices with bogus bids, might just be a trumped-up market play for Trump insiders. But there is yet another often-overlooked episode of financially-stained instability … one with even bigger implications for the future. That’s the strange, Jared Kushner-tinged effort by the MBS-led Saudis and the MBZ-led UAE to crush their neighbor Qatar.
Ostensibly, it had to do with the Saudis’ and Emiratis’ objection to Qatar’s financial support for terrorism (irony alert!) and to the broadcasting power of Doha-based Aljazeera, which relentlessly covers the brutal Saudi-Emirati war on hapless Yemen. So, on June 5, 2017, Saudi Arabia, Egypt, Bahrain and the United Arab Emirates announced a quarantine of Qatar … recalling diplomats, suspending flights, banning Qatari-flagged vessels from their ports and generally setting off a huge regional crisis (see Oil Market Psychology).
The next day, Kushner’s Father-in-Law backed the isolation of Qatar … something that lifelong oilman and then-Secretary of State Rex Tillerson opposed. Tillerson said the quarantine was bad for the US and worked to diffuse the crisis. But before the crisis even began, Kushner’s actual father actively sought financial help to bail out Jared’s $1.8 billion boondoggle … the infamous 666 Fifth Avenue. You heard that right … weeks before the blockade, “Jared Kushner’s father Charles, who runs Kushner Companies, and Qatari Finance Minister Ali Sharif Al Emadi discussed financing for the Kushners’ debt-addled 666 Fifth Avenue property in New York City, ” according to a report in The Intercept.
But wait, there more.
With a $1.4 billion balloon payment looming in 2019, Jared also sought out Chinese financiers in an attempt to wiggle out of his costly mistake. Shortly after Trump won (thanks, apparently, to Jared’s much-touted social media strategy) his Son-in-Law met with executives and the chairman of Anbang Insurance at the Waldorf Astoria. They shared a lavish meal and Jared nearly scored a sweetheart deal to rid himself of the property, according to the New York Times.
Now, a cynic might question whether Kushner was leveraging his proximity to power and, more importantly, to his Father-in-Law’s well-known position on trade, to score himself a “get out of debt free” card from Anbang (which was later nationalized by the Chinese government). Perhaps in exchange for future influence on key issues? And maybe that’s kinda like greasing future or current trade negotiations or sanctions relief for patents for Ivanka?
Perish the thought.
Can the same can be said of convicted felon Charles Kushner’s OTHER contact with the Qataris … which the elder Kushner does not deny? Yup, there was yet another report in The Intercept showing that “throughout 2015 and 2016” both Kushners “negotiated directly with a major investor in Qatar, Sheikh Hamad bin Jassim al-Thani, known as HBJ for short, in an effort to refinance the property on Fifth Avenue.”
Alas, yet another coincidence.
Although that deal and the other aforementioned deals fell through, the Independent reported in February of this year that the Qatar Investment Authority (QIA) “unwittingly” helped Kushner when “Brookfield, a global property investor in which the Qatari government has placed investments, struck a deal last year that rescued the Kushner Companies’ 666 Fifth Avenue tower in Manhattan from financial straits.”
They were supposedly not happy about it, either.
The unanswered question is whether Jared was leveraging a geopolitical game being run by his Saudi buddy … for filthy lucre? And what impact did his repeatedly obscured, security clearance-precluding foreign entanglements have on the official diplomatic efforts of the actual Secretary of State? And did Tillerson’s efforts to quell a manufactured crisis cost him his job?
HIT THE GAS
According to a startling report (again) in The Intercept, Tillerson was canned in no small part because he wanted to negotiate an end to the blockade of Qatar, which hosts U.S. Central Command (CENTCOM) and its Combined Air Operations Center (CAOC). Moreover, Tillerson also reportedly scuttled a planned Saudi invasion of the tiny, natural gas-rich nation … which, along with other transgressions, put him on the Saudis’ sometimes deadly shit list.
Predictably, the UAE also applied pressure on Trump to jettison Tillerson, which is an ironic outcome for someone who ran Exxon and who’d been promoted for the job by oil-infused doyens James Baker and Condi Rice, both whom had held the position before him. They’d each worked with the Saudis during key points in the Empire of Oil’s history (Baker during an Iraq War under a Bush, and then Rice during another Iraq War under another Bush). But that was then and this is now. And now the stakes are higher than ever for the petroleum-rich, but natural gas-poor Saudis and Emiratis … too high, in fact, to have allowed Tillerson to find a way out of a crisis they intentional created.
No doubt you’ll be “shocked” (not shocked) to learn that the conflict with Qatar wasn’t about terrorism … although Aljazeera is a perpetual pain in the Saudis’ ass. Nope, the Saudis’ and the Emiratis’ full-court press against Qatar was … wait for it … about Iran. Yes, this time it’s Iran’s natural gas. But it’s also about natural gas generally, and the dire future potentially facing petroleum-dependent states in a rapidly changing energy landscape. As journalist James M. Dorsey keenly wrote in the Fair Observer:
With signatories to the Paris Climate Accord moving toward bans on petrol and diesel-driven vehicles within a matter of decades and renewable energy technology advancing in strides, natural gas takes on added significance. These global energy trends are hastening in an era in which oil will significantly diminish in importance, and natural gas, according to energy scholar Sergei Paltsev, will fill gaps in the provision of renewable energy that await technological advances.
Saudi Arabia’s problem is that Iran and Qatar have the gas reserves it does not. That is one reason why renewables figure prominently in Saudi Crown Prince Mohammed bin Salman‘s Vision 2030 reform program. His aim is to not only prepare Saudi Arabia economically for a post-oil future, but also to secure its continued geopolitical significance.
Prince Mohammed, like his counterpart in the United Arab Emirates, Crown Prince Mohammed bin Zayed, hopes that the kingdom will have an advantage in the generation of solar energy, given that the sun hovers higher over Saudi Arabia than over Europe and other parts of the world, and that it has less interference from clouds.
Add to that the fact that it is likely to be gas supplies from Iran and Turkmenistan, two Caspian Sea states, rather than Saudi oil that will determine which way the future Eurasian energy architecture tilts: China, the world’s third largest LNG importer, or Europe.
You see, what we’ve been watching in real-time during Trump’s version of the Oil Presidency is the backstabbing, double-dealing, influence peddling, geopolitical scrum at the beginning of the end of the Empire of Oil. I’m talking about petroleum … black gold … Texas tea … the good old fashioned crude that turned Uncle Sam’s Saudi partners into petrodollar-sustaining kingmakers and funded their successful effort to turn Wahhabism into a pernicious, but useful, destabilization force around the Islamic (and oil-producing) world.
It’s also crude oil that, for the entirety of the post-WWII era, greased the profitable protection racket that is the Empire of Oil. The United States sold arms, deployed troops, built bases, bombed oil-producing countries, shipped oil, refined oil, sold gasoline and financially processed petrodollars in exchange for spreading a multi-trillion dollar national security blanket over the Saudis and their Gulf Arab partners, among others. On the other hand, obstinate oil powers get left out in the cold … or worse. In the case of the Empire of Oil, war isn’t a just racket … it’s a protection racket.
The problem now is that gas … both natural gas and liquid natural gas … is a plentiful, cost-competitive and supposedly cleaner-burning challenger to the petroleum-based players in this not-so-great game of energy chicken. And that’s where Qatar comes in. It is the world’s biggest exporter of Liquid Natural Gas (LNG) and it sits on the world’s third largest proven gas reserves (25.47 billion cubic meters = 13.5 percent of the world’s total). Qatar also sits directly across the Persian Gulf from Iran, which is home to the second largest gas reserves (30 billion cubic meters = 15.57 percent of proven reserves). So, on top of sitting on the world’s fourth largest oil reserves (the Saudis are second on the list, the UAE is seventh) … oil that the Trump Administration has been working so hard to keep in the ground … it turns out that Iran also has a natural gas trump card up its sleeve.
The monomaniacal fixation on Iran is starting to make a little more sense, no?
But it gets better (or worse if you’re the Saudis and Emiratis) because, in addition to the problem of Iran’s Nuke Deal with the Obama Administration, the Iranians have an agreement with the Qataris to exploit a shared gas field in the Persian Gulf where their territorial waters meet … and it’s the world’s largest such field. The North Dome/South Pars field, the former being Qatar’s side and the latter Iran’s side, is basically a geopolitical bomb. And Qatar lit the fuse shortly after Trump was elected for the expressly stated purpose of nixing the Iran Nuke Deal and, in the process, restoring the Saudis’ grip on the market. That’s when … even as Kushner’s dad was trying to shake down the Qataris for a bailout … Qatar announced “it was boosting output” in the massive, conjoined field in April 2017. The blockade followed in June of that year … after the Kushner deal failed to materialize.
IRAN INTO A BRICK WALL
So, here’s Qatar. It’s far-more Shia-accepting than its neighbors. In fact, the Saudis are known to behead their own “troublesome” Shiites. Juxtapose that with the Qataris, who are extracting gas from a joint field with Shia Iran … which, in turn, is also sitting on the world’s fourth largest oil reserves and who has extended its influence over the last oil-rich neighbor that ran afoul of the Empire of Oil. In fact, the National Iranian Oil Company recently opened an office in Iraq. Additionally, Iran’s natural gas reserves are geographically poised to feed China’s growing appetite for gas … an appetite that Qatar is already set to feed for the next two decades.
It’s easy to see why the petroleum-dependent Saudis and Emiratis organized their sycophants (including Trump and the bailout-hungry Kushners) into a blockade of Qatar. Now just imagine the implications of China’s Belt and Road initiative someday building a pipeline from the North Dome/South Pars field and/or the gas-rich Caspian Sea region … across Afghanistan and into the manufacturing machine of Asia. Even without the looming doom of some future pipeline, the Saudis and Emiratis found themselves staring straight into a dark, gaseous abyss. So they decided to try to break Qatar’s new partnership with Iran.
However, the unbowed Qataris responded by opening the tap on LNG production, quickly reassuring one of its biggest LNG customers in Japan that the crisis would not affect its ability to deliver its much-needed gas. By the way, Japan was one of five nations that had their import waivers for sanctioned Iranian oil pulled by the Trump Administration (which sent the price of oil “surging,” btw).
Then, in August of 2017, Qatar doubled-down by restoring full diplomatic relations with Iran … and has since set its sights on expanded exports in Asia and Europe. Qatar even threatened to quit OPEC and thereby forever free themselves of Saudi-led restrictions. Basically, the Saudis were being trumped by their own Trumped-up game. The striking audacity of the Qatari power-play led OilPrice.com to recently ask: “Can Any Country Dethrone Qatar As Top LNG Exporter?”
Well, guess what? The world’s largest gas reserves are held by Russia (47.57 billion cubic meters = over 25 percent of the world’s natural gas reserves). That’s right, Russia only comes in 8th on top ten list of petroleum reserves (right behind the UAE), but it is undisputed champion of gas. That’s nearly five times US gas reserves. And while Obama made his way to the White House in 2008, Russia formed the Gas Exporting Countries’ Forum (GECF) with Qatar and Iran … thus creating an OPEC-style cartel that controlled 60% of the world’s gas supplies. The gas-poor UAE eventually joined. The US and the Saudis have not. Nor has it had anything like the impact of OPEC. However, given Russia’s massive gas reserves, its current reliance on oil revenues, its relationship with Tehran and its role in Syria, it makes sense that the Saudis and the Emiratis … along with Netanyahu and the Greater Israel lobby … would be motivated to bring Russia into the fold. Or, at the very least, to try to drive a wedge in between the Russians and the gas- and oil-rich Iranians.
In many ways, Russia is in the catbird’s seat. Putin can play both sides of the Iran issue. Frankly, he is artfully threading the needle between his relationship with Iran and his OPEC + partnership, perhaps because they all need him more than he needs them. Mostly, Putin is using Russia’s increasing leverage over Syria to great effect … both with Netanyahu and with the Syria-focused (a.k.a. Iran-obsessed) tag-team of MBS and MBZ. He’s also afforded Trump the chance to vacate Syria after the alleged use of chemical weapons by Bashar al-Assad led to two comically telegraphed, perhaps even choreographed, “outrage attacks” on meaningless targets. Now, if Putin can slowly displace (or simply control) Iran in Syria, that would be a big win for MBS, MBZ and Netanyahu … thanks in no small part to Trump’s tacit hand-off to Russia.
At the same time, the OPEC+ alliance helps the Kremlin’s bottom line. Even better, President Obama’s decidedly unfriendly version of the Oil Presidency has been replaced with a Trumped-up foreign policy that fruitfully destabilizes oil markets (instead of over-supplying it like Obama’s fracking-palooza). Trump has pulled out of the Paris Agreement and isolated climate-focused allies … allies that also happen to comprise Russia’s biggest gas market. Trump’s foreign policy is also agitating the US relationship with China … a nation that just so happens to be slated to become the world’s leading natural gas importer in 2019. And Trump has reinforced Russia’s position in Tehran, where their market-shaping gas reserves remain an important long-term factor in Russia’s energy future. The coup de grâce was Trump’s concession of Syria, which has cemented Russia’s longterm access to the Mediterranean and given Putin valuable leverage with MBS, MBZ and Netanyahu. That’s quite a coup … but Russia certainly isn’t the only, or even the biggest, winner in this gilded gameshow.
A CONSPIRACY OF COINCIDENCES
The Saudis and, in particular, MBS had a lot to celebrate in 2016. Trump’s election gave the young prince exactly what he needed to consolidate power and capture the coveted title of Crown Prince just months after his WhatsApp Bro’s Father-in-Law became president. MBS’s direct line to the Trump Administration was, after eight progressively sour years of Obama, exactly what the Kingdom ordered. Let’s face it, there’s a really good reason why Saudi Arabia was the first place newly-elected President Trump visited after taking office.
When Trump arrived in the Kingdom they feted him like a conquering hero. They splashed his face onto the side of the Ritz-Carlton (where MBS would later shakedown a number of princes for $106 billion in then much-needed cash). He danced with the swords not unlike those the Saudis would use to behead 37 people … with nary a peep from Secretary Pompeo about the politically- and religiously-motivated executions. And on that same trip, Kushner colluded with MBS and Stephen Schwarzman, CEO of The Blackstone Group, (which has loaned the Kushners more than “$400 million to fund an array of deals“) as they plotted to privatize Trump’s long-since forgotten plan to rebuild America’s “carnage-ravaged” infrastructure.
Since then, MBS has worn Trump’s win like safe and secure Snuggie. There were no objections as he took control of the Kingdom and punished his rivals. There were no significant objections (but lots of obfuscatory blather) when he had Washington Post journalist Jamal Khashoggi dismembered in Turkey. He’s had free rein in Yemen, despite bipartisan objections. But most importantly, MBS has jump-started the traditional Empire of Oil, torpedoed Obama’s attempt force Saudi Arabia to share the Middle East with Iran and he’s ridden Trump’s oil-market manipulations all the way to the bank. And in the ultimate twofer, it turns out that the ubiquitous MBZ had long championed MBS’s succession, thus turning the UAE into a de facto kingmaker inside the Kingdom. So, when MBS wins, MBZ wins, too!
That’s a lot of winning.
No doubt it’s just a coincidence that Trump has made a ton of money from Saudi customers. Or that the Saudis REALLY like to stay at his new DC hotel … a hotel that, in another amazing coincidence, opened just in time to profit from the fact that he was heading for the Oval Office right down the street. Or that Trump’s shady inaugural committee spent more than $1.5 million at that hotel. Or that the chair of the shady committee was billionaire and long-time Saudi fixer Thomas Barrack … a man who advocated building nuclear plants in Saudi Arabia. Or that Trump okay’d secret nuclear tech transfers to the Saudi in spite of Congressional objections and oversight.
And perhaps it’s also just a coincidence that he vetoed a bipartisan resolution to end US support for the Yemen war. And that Saudi Arabia wired the US $100 million for “Syria stabilization” after Trump “cleared” MBS in the Khashoggi dismemberment. And that Trump touts his role as salesman for the Supermarket of American Military Hardware, thus linking his Saudi policy to the Empire of Oil’s deepest predicate.
But wait, there’s more…
Maybe it’s a coincidence that MBS’s buddy Kushner has an exclusionary Israeli-Palestinian peace plan that is likely to rest on support from the Saudis, the UAE and Egyptian President al-Sisi. Or that a Saudi newspaper urged the Palestinians to “look at” the plan. Or that the Saudis’ Bahraini partners are hosting Kushner’s piece-by-piece process launch party. Or that the defiant Qataris pledged $480 million to the Palestinians after Trump cut off their aid and Netanyahu again bombed Gaza. Or that Netanyahu is connected to Kushner and all of them are courting Putin.
And it must be dumb luck that none of these Middle Eastern players (save Qatar) are interested in “sharing” the Middle East with Iran … and that all of them want to topple, or at least hobble, the Iranian regime. And in another bit of coincidental kismet, Trump’s lawyer Rudy Giuliani has been a well-paid champion of the Iranian exile-led, regime change-seeking terrorist group Mujahidin e-Khalq (MEK). Rudy also recently happened to score a “security consulting contract” with Bahrain … the Saudis’ and Emiratis’ Gulf Cooperation Council junior partner, host of Uncle Sam’s Fifth Fleet and host of Jared’s piece-by-piece process launch party.
Is this is a good time for yet another “go figure”?
On the other hand, maybe it’s not a coincidence that, after Trump was forced to fire Iranophobic conspiracy theorist and felonious National Security Advisor Michael Flynn, he eventually slipped prototypical Neocon National Security Advisor John Bolton right into the middle (or should I say “meddle”?) of his oil-driven, Iran-centered (a.k.a. oil-driven), Saudi-loving (a.k.a oil-driven) Middle East policy. Or that Bolton, too, was a paid enthusiast of the MEK. Or that Trump also tapped notorious Neocon hardliner Elliott Abrams to “oversee” US policy towards oil-rich Venezuela.
Frankly, it’s old hat, or should I say “old pith helmet,” for guys like Bolton and Abrams. And it fits them all-too well. The Neocons have been little more than ideological henchmen for the Empire of Oil since then-CIA Director George H. W. Bush (himself an oilman) deployed Richard Perle and Paul Wolfowitz to gin-up an anti-Soviet intelligence estimate in 1976 (see Team B). It set the table for the Reagan military build-up four years later … a military that has increasingly become little more than a taxpayer-fueled subsidy to the oil industry ever since FDR first met with King Saud.
It’s also NOT coincidental that Trump has spiked defense spending to Reagan era levels. Or that he’s acted like a salesperson for Marillyn Lockheed’s “Invisible” jet, the boondoggled F-35. Or that he cut out the middleman and just went ahead and put a senior executive from Boeing in charge of the Pentagon. Or that he turned the White House into a Trumped-up, militarized version of QVC when MBS returned the favor and dropped by Washington. Or that he’s helped to keep Americans among the world’s leaders in climate denialism, second only to Saudi Arabia and Indonesia (which, btw, has also been an oil-reliant nation).
And it’s certainly no coincidence that he’s given the aforementioned Bolton free rein to make oil-market mischief in the Persian Gulf. Bolton, who looks like he’s playing Colonel Mustard Gas in a militarized re-boot of the B-movie based on the game Clue, has been busy meeting surreptitiously with the CIA and ordering the Pentagon to come up with missile strike and invasion plans for Iran. And he’s got eager accomplices in MBS, MBZ and Netanyahu. Basically, Bolton is Trump’s version of a “geopolitical cudgel.”
That Trump actually deluded antiwar-types into thinking he was one of them and that “America First” would somehow mean the end of the Empire of Oil is a testament to Trump’s baffling endurance as a crassly transparent conman. His attack on the folly of the Iraq War during the 2016 Campaign was merely a tactical move against Jeb Bush and Hillary Clinton. His true, chickenhawkish character was reflected in his claim to be “militaristic,” his promise of a bloated defense budget and his calls to “take the oil” from Iraq and to “bomb the shit out of” ISIS … the latter being exactly what he’s done to Somalia, Syria, Iraq and Afghanistan since he became president (a president, btw, who ended Obama’s policy on reporting on civilian casualties). He’s even begun pardoning the Empire’s war criminals.
SHOCKING NOT SHOCKING
All of which is why it should come as no surprise that Trump is taking anti-Iran “intelligence” cues from Kushner’s family friend and notorious ginner-upper of specious intelligence, Bibi Netanyahu. Remember Bibi’s bluster on Saddam’s nuclear program right before the Iraq War? This time, Bibi has the Saudis and the UAE on his side. There’s a motley crew of toxic avengers assembled around Trump and they seem bent on creating a Persian Gulf of Tonkin incident.
Yet, most experts think war is unthinkable. That’s because unlike Iraq, Iran is NOT an ethnically and religiously divided nation that had been used as a de facto bombing range for over a decade. On the other hand, war enthusiasts like Sen. Tom Cotton (R-AK) are under the illusion that a few cruise missiles will cause the Iranian regime to collapse like a badly made flan.
Despite all of these daunting developments and Trump’s “deliberatively provocative” sanctions, it’s still hard to imagine a war with Iran. America’s allies are unconvinced and uncooperative. The Ayatollah Khamenei has thus far refused to take the bait and “ruled out” a war with the US. At the same time, Trump is sending his usual mixed, oil market-stoking signals … vacillating between telling Boeing’s man in the Pentagon he doesn’t want war and issuing a market-manipulating tweet about the “official end” Iran if they “threaten” the US. Perhaps he knows that he doesn’t really need a full-blown war to accomplish the Empire’s mission.
The real rub is that although Iran may be economically weak, it is poised to shut down the Strait of Hormuz, to use Houthi allies to disrupt the evermore important Bab el-Mandeb Strait and to launch debilitating counter-attacks through proxies located around the region. Israel, in particular, would face a major problem in Lebanon. The “upside” for the petro-princes is that price of oil would spike to epic proportions. But there is every chance that the Saudis, the Emiratis and their Gulf partners would struggle to get that oil out of Gulf. And when push comes to shove, this is still about the oil.
So, while Bolton was marshaling more military power into the Persian Gulf, Pompeo made a surprise visit to Iraq because, as the Telegraph reported, he wanted to “to assure them that we stood ready to continue to ensure that Iraq is a sovereign, independent nation.” That means “independent of Iran,” of course. But what Pompeo was saying between the lines was that the Empire of Oil wants to make sure that as Iraq finally recovers from being wantonly destroyed under false pretenses by the still-unrepentant US, that it continues to “play ball” with its oil reserves, currently the world’s fifth largest. Essentially, Pompeo’s message was … don’t get too cozy or, more precisely, cozier with Iran. Instead, we ask that you remain committed to OPEC’s Saudi-led, market-shaping production regime.
It wasn’t quite an offer they couldn’t refuse.
Of course, the irony is that Iran’s influence was a gift given to them by a lawless and indefensible US invasion pushed by Neocons like Bolton and warmongers like Netanyahu … after an unrelated terrorist attack in America by a bunch of Saudis. An attack that, in a moment truly befitting the Bizarro world of Htrae, led to a lawsuit against the Iranians in a US court. They actually “lost” that case and were directed to pay $6 billion in compensatory damages to the victims of the Saudi-infused 9/11 attack.
Really, folks … you can’t make this stuff up.
You also cannot avoid the simple fact that a Saudi-dominated 9/11 attack spurred the invasion of yet another nation not involved in 9/11 and that the invasion and subsequent demolition of said bystander nation did a great job of keeping much of that nation’s fulsome oil reserves stuck in the ground for a long time … i.e. “mission accomplished.”
But that’s not true anymore.
As Vanand Meliksetian observed on OilPrice.com:
Iraq’s production has become large enough to swing markets which gives it a voice in debates. The country has, among others, joined the committee that monitors compliance and has shown an eagerness to increase influence within the organization.
Sure, the Empire of Oil accomplished its mission and kept Iraq’s reserves largely off the market … for a while. But now that medium-term gain is giving way to potentially longer-term pain for the Saudi-led OPEC cartel. After years of crawling out of their US-generated rubble, Iraq and its Shia-dominated, oil-rich south now have a significant card to play.
The issue of Iraq’s significant reserves also highlights the reason why many of the Empire’s most vocal minions attacked (and still attack) Obama for “retreating” from Iraq. As far as they’re concerned, he unnecessarily ceded leverage over those reserves to the arch-enemy of the Saudis and, therefore, of the Empire. Even more importantly, Iraq’s reserves were starting to come on-line at the same time the Iran Nuke Deal threatened to open up Iran’s reserves. That’s why Obama’s Nuke Deal with Iran absolutely had to be truncated. Add that to the impending problem of Shia-dominated oil and Iran’s natural gas advantage, it is perhaps understandable that the Saudis despised Obama.
In fact, The Atlantic’s Jeffrey Goldberg reported that the Saudis “never trusted” him. And, as Goldberg wrote in his fascinating exit interview piece, the feeling was mutual. Obama had “referred to them as a ‘so-called ally’ of the U.S.” long before he’d run for president. Despite his willingness to sell them weapons and let them run amok in Yemen, the Saudis rightly viewed him as an outlier after decades of enjoying an unquestioned Oil Imperium. Obama was, according to Goldberg, “clearly irritated that foreign-policy orthodoxy compels him to treat Saudi Arabia as an ally” and he “decided early on, in the face of great criticism, that he wanted to reach out to America’s most ardent Middle Eastern foe, Iran.” That led Saudi ambassador Adel bin Ahmed Al-Jubeir to declare that “Iran is the new great power of the Middle East, and the U.S. is the old.”
The Empire of Oil was not happy with Obama.
Given this emerging reality, it is easy to see why then-candidate Trump was so attractive to key players in the Empire of Oil. And it wasn’t just about Iran. He hamfistedly (and repeatedly) signaled his allegiance by imperiously claiming that if he’d run the Iraq War, he’d have “taken the oil.” Spoken like a truly callow minion of the Empire. He even “floated” the idea of taking some oil to Iraq’s then-Prime Minister Haider al-Abadi in a March 2017 meeting.
Shorted-lived National Security Advisor H.R. McMaster reportedly chided his boss for the fanciful notion that the US could just take some of Iraq’s oil, which of course angered the petulant president. Apparently, Trump the “successful” dealmaker with the “very, very large brain” doesn’t quite understand how the Empire of Oil really works … that it’s often not about taking the oil, it’s about keeping it in the ground. What he has understood ever since he launched his political career on the back of the “Birtherism” is that opposition to Obama and his legacy was a political winner for key players who saw their fortunes fading under Obama’s complicated version of the Oil Presidency.
CHECK YOUR MATES
President Obama’s attempt to create a strategic balance in the Middle East and to force the Saudis to “share the neighborhood” was a game-changer … for Riyadh, for Doha, for Jerusalem and for the Kremlin. But it also challenged the central organizing principle of the Oil-Defense-Wall Street Axis at the heart of the Empire of Oil. And by “central,” I literally mean central … since the Pentagon’s command structure for the Middle East is called “Central Command” or CENTCOM.
The nomenclature reflects, however unintentionally, the fact that the oil-producing Middle East is “central” to everything they do. It is the center of the Empire of Oil. And for CENTCOM, Iran has long been at the center of the center, particularly since they lost it as a leading client in the region when Shah Mohammad Reza Pahlavi was toppled by the Islamic Revolution in 1979.
Since the Shah fell, the strategically-situated nation has been the focal point of the oil-based imperial order CENTCOM is charged with (and Americans are charged for!) protecting. It justifies basing the Fifth Fleet in Bahrain and 379th Air Expeditionary Wing in Qatar. It justifies US warships patrolling the Persian Gulf to keep the Strait of Hormuz open for business. And, as we’ve seen recently, Iran is an evergreen bogeyman that can be repeatedly used to create and/or blamed for causing oil market-stoking “instability.”
What’s more, Iran is often accused of doing the very things the Saudis have done for decades, but without the imperial hall pass the Saudis wield with impunity. Iran, in turn, keeps the Saudis and the Gulf Arabs — along with many other “allies” around the world where oil and instability go-hand-in-hand — shopping like drunken sailors in the Supermarket of American Military Hardware.
Often overlooked, though, is the fact that the Iran Nuke deal portended a shift in that profitable ecosystem. Even more challenging to the Empire of Oil, the deal came after President Obama famously, or infamously, refused to follow through on the “red line” regarding alleged chemical weapons use in Syria by Bashar al-Assad. Although he greenlighted a deadly, convoluted policy of bombing and of “support” for a motley crew of rebels and dangerous double-dealers … he also refused to launch the massive, regime-changing military campaign sought by the Empire’s usual suspects.
Perhaps he was chastened by his brutal misadventure in Libya. He certainly wasn’t shy about dropping bombs. Or maybe he was giving an inch so he wouldn’t have to go a mile. Whatever the reason, his “retreat” on Syria was a significant break with the oil-centric groupthink of the foreign policy “Blob,” as his much-maligned National Security Advisor Ben Rhodes disdainfully calls it. The still-unhappy Blob wanted full-scale intervention.
Mostly, the Blob wanted to exploit Syria’s unrest to forever knock it out of Iran’s orbit. But it is also notable that the unrest that led to the Syrian civil war began in March of 2011. In July of that year, Iran, Iraq and Syria signed a $10 billion gas deal to deliver natural gas via a pipeline from the aforementioned South Pars field. The question is whether or not this was the “real reason” why Syria’s Arab Spring-like uprising metastasized into a proxy-filled meat-grinder that spawned the insane, Sunni-led Islamic State.
There are arguments on both sides of the so-called “Pipelineistan conspiracy.” Critics point out that at the time, Iran was struggling to develop the South Pars field, let alone fully supply a Russia-backed pipeline that had supplanted a competing US-backed pipeline running “from Qatar through Saudi Arabia and Jordan to Syria.” They also point out that the US had long fostered anti-Assad forces inside Syria, dating back to the Bush Administration. In other words, regime change was a policy waiting just for an opportunity, the pipeline be damned.
On the other side, there are those who remain understandably cynical and simply follow the money (or the pipeline, as the case may be). They point to the logical implication of Assad choosing a Russia-backed Iranian pipeline over the US-Qatari pipeline (Qatar was still in steadfastly in the fold). And it fits with Russia’s desire to lead its own OPEC-style gas consortium to leverage its gas reserves a la the petroleum power of the Saudis.
Keeping the gas majors together could allow Russia to maximize the influence and profit of Gazprom, which feeds Europe and, thereby, feeds the Russian economy … particularly with natural gas facing the same type of glut pressures currently looming over petroleum. It is also why Russia is racing to exploit the untapped LNG reserves in the melting Arctic. They want to exercise control of the “if, how and when” those reserves come to market. It’s how you run a cartel.
Whether or not the Pipelineistan conspiracy is true and, therefore, the pipeline was a catalyst of the Syrian Civil War, the essential logic of the question reflects a well-worn pattern of hydrocarbons overlapping with instability, armed conflict and civil unrest. It’s almost as certain as the sun rising in the East … and gas prices rising in the Summer.
Oil overlaps the constant chafing between the Chinese and the US in the South China Sea. It overlaps the ethnic cleansing of the Rohingya in Myanmar. It overlaps the role of the Pentagon’s AFRICOM operations on the Horn of Africa, in Niger and Lake Chad. It’s going to dominate the scramble for the thawing Arctic. And it is still central to the US-Saudi relationship, which the fracking-friendly Obama did so much to sour … but which Kushner’s Father-in-Law has done so much to sweeten.
And that’s perhaps the most vexing aspect of the whole Trump phenomenon. For someone who was unquestioningly considered an “outsider” and “anti-Establishment” and a “shock to the system,” it sure is interesting how many of the Empire of Oil’s “usual suspects” won along with him in 2016. Most interestingly of all, though, is the way the old fashioned Deep State has thrived under Trump.
DEEP STATE OF DENIAL
Donald J. Trump – the debt-finagling conman, reality gameshow host and World Wrestling Entertainment Hall of Famer — is the furthest thing from a typical president. He is an outlier, a disruptor and wholly unique in the annals of presidential history. It’s the one thing Trump’s friends and foes both agree on.
But they are wrong.
While these two sides have fought an endless array of rhetorical battles in the tedious trenches Trump digs with his mendacious mouth, Trump has quietly established himself as a champion of the Establishment. He’s plied the Military-Industrial Complex with huge budgets, revolving door appointees and a remunerative policy of expanded overseas arms deals. He’s completely turned over energy, environmental and land use policies to Big Oil. And he’s dutifully serviced Wall Street with a massive, buyback-buoying tax gift and ceded control of the Treasury Department to a Goldman Sachs alumnus.
This cocktail of cronyism underscores the biggest irony of his presidency … or perhaps even any Presidency in US history. The truth is that the “Deep State-targeted” Trump is nothing if not a dutiful servant of the Deep State. Not the bogus “Bureaucratic Deep State” that Trump and his sycophants incessantly yammer-on about in histrionic tweets and clickbaited podcasts. That phony-baloney Deep State is little more than a profitable misdirection that keeps a legion of rubes from noticing that the REAL Deep State is living high on the hog while they stumble over themselves to follow Qanon-style shepherds down suspiciously-placed rabbit holes. And, just to mix up the animal metaphors a bit more, the whole “Enemy of the Deep State” shtick is little more than a red herring.
It also points to a great way to decode Trump.
You can take nearly any accusation he spouts into the gaping maw of the Trumped-up newscycle and simply assume that he is guilty of it himself. It’s all just facile projection. But in many ways it is the true source of his rhetorical power … his perplexing ability to repeatedly employ the classic “I’m Rubber, You’re Glue. Whatever You Say Bounces Off Me And Sticks To You” defense … and actually get away with it. Meanwhile, the Deep State must be laughing all the way to the bank.
I’m not talking about Trump’s mythical Deep State of cubicle-dwellers who populate Executive Branch agencies … just waiting for the opportunity to sink swamp-draining political saviors. Rather, I’m talking about the REAL Deep State … as in, the post-WWII Deep State that built the Empire of Oil on the profitable pilings they themselves sunk into a political swamp overflowing with tax dollars and teeming with piranha-like influence peddlers and national security sharks. The REAL Deep State is the Blob-like mass that congealed inside the Beltway at the same time the CIA became an ad hoc goon squad for the ever-spinning axis of Oil-Defense-Wall Street.
The REAL Deep State resides where those three industrial complexes overlap in the Venn Diagram of US power. In the center of that diagram you’ll find the corporate boardrooms and exclusive golf courses and tony country clubs and private security contractors and white shoe law firms and bipartisan lobbying shops and industry-funded think tanks where the “real” decisions get made before they pass through the public-private membrane into the Pentagon, the State Department, the Department of Homeland Security, the Treasury Department, the Energy Department and, of course, into the halls of Congress.
That’s the Deep State an all-too-prescient President Dwight D. Eisenhower warned of in his televised farewell address. It’s the Whack-a-Mole Deep State that kept popping-up throughout a half-century of political assassinations, overseas interventions and domestic scandals … including the now strangely relevant mega-mess of Iran-Contra (see Trump’s Attorney General William Barr and Neocon henchman Elliott Abrams). It’s the Deep State that has repeatedly deployed the US military to protect oil interests around the world and used the defense budget as a de facto subsidy to the oil industry. And it’s same oilman-driven Deep State that turned a Saudi-led attack in 9/11 into the misdirected, but aptly-named Operation Iraqi Liberation.
America’s oil-slicked Empire has thrived under Trump. In fact, Big Oil, Big Defense and Wall Street are by far the biggest winners of Trump’s Presidency … and that means the REAL Deep State is prospering under Trump’s leadership. In fact, I would argue that they’ve won far more than even the Saudis and the Emiratis because the REAL Deep State doesn’t just win when they win, but they also win when the Saudis and Emiratis win because everybody who participates in Uncle Sam’s game wins when the Empire of Oil wins.
Here’s a case in point:
President Trump recently bypassed the Congress (see Cheney’s dream of the Unitary Executive) to “unblock” a massive arms deal to Saudi Arabia and the UAE. Congress wanted to send a signal about the carnage in Yemen, but Trump dutifully serviced his Saudi and Emirati clients. But they were not the only clients being serviced. That’s because, as the indispensable OpenSecrets.org noted, the “blocked sales attracted the interest of lobbyists seeking to reopen the flow of weapons to the Persian Gulf countries.”
The chum was in the water.
So, while Trump was doing his Unitary Executive on steroids thing, a “U.S. Air Force veteran” named Todd Harmer (nomenclature is destiny) quickly “registered as a foreign agent to represent the United Arab Emirates (UAE), according to OpenSecrets.org. He works for a “government relations” firm called American Defense International (ADI). They’ve “represented the UAE since 2018,” but now that he’s registered under the Foreign Agents Registration Act, Mr. Harmer is officially locked on target.
And he’s a good gun to hire for this job because “Harmer is a veteran of the Air Force where he served in several high-ranking positions including as Commander of the 63rd Fighter Squadron, Chief of the Commander’s Action Group for United States Forces in Iraq and as the Air Force Legislative Liaison for the House of Representatives.” Additionally, “Harmer currently lobbies for a number of weapons contractors,” including General Dynamics, Raytheon and “notable gun manufacturer SIG Sauer, among several others.” As such, Mr. Harmer is a true denizen of the Deep State. He profits from positioning himself at the intersection of oil and guns, and of policy and profit. And speaking of guns, Sig Sauer is winning bigly under Trump since he lowered the export standards for small arms.
But wait, there’s more…
Predictably, the entire defense industry is basking in the glow of a rosy scenario thanks to rising tensions with Iran … tensions Trump purposefully created and is purposefully exacerbating with his Good Cop/Bad Cop routine with Col. Mustard Gas himself, John Bolton. And while Bolton was making wild, tension-stoking accusations about Iran during a sojourn in the UAE (coincidences galore!) … a group of defense industry execs got together in the high-rise digs of Goldman Sachs to ponder the profitable prospects stemming from the Trumped-up tensions with Iran.
As Lee Fang reported in the Intercept, big beneficiaries of bellicosity like Raytheon CEO Thomas Kennedy and Lockheed Martin CEO Marillyn Hewson came together to congratulate themselves and their investors (see the Venn Diagram) on the coming “shift in the military budget away from asymmetrical fighting toward nation-state warfare.” Fang pointed out that “Large arms manufacturers from across the industry have similarly told investors that escalating conflict with Iran could be good for business.”
It’s kinda perfect, actually … with Big Defense being hosted by Wall Street to collectively pop the cork over the money they’ll both make from protecting the investments of Big Oil and from selling weapons to a Big Oil-linked petro-state. And that, my friends, is the REAL Deep State at the heart of the Empire of Oil. It is pumping away right now because Trump has not only NOT stopped the Deep State, but in many ways he’s supercharged it. And what’s good for the REAL Deep State is good for US oil companies and Saudi Arabia and the UAE and even for Netanyahu’s Likudist version of Israel.
The only new wrinkle is that Russia wins, too.
There’s no doubt Russia won when Hillary Clinton lost. And yes, they supported Trump’s campaign. The doubters need only look at the reasons why they despise the Hillary Clinton’s Neoliberal Interventionism to find the reasons why it was obviously in Putin’s interest to “assist” Trump’s campaign. But far too little attention is paid to the role of the REAL Deep State in Trump’s Presidency. Nor has enough attention been paid to the cadre of usual suspects who quickly swarmed around Trump after he was elected … the oily henchmen and Congressional cronies and corporate shills who keep the Oil-Defense-Wall Street axis spinning like a perpetual machine.
BUFFET LINES IN THE SAND
Luckily for all of them — everyone from Deutschebank’d oligarchs to Iran-obsessed petro-princes to Kushner-connected Likudists to the unrelenting denizens of the Deep State — Trump markets himself as a 24/7, all-you-can-grift buffet. He’ll serve anyone interested in buying a plateful of favors with a handful of compliments … and some cold hard cash. His customers are both foreign and domestic. And he’s got Jared Kushner serving as the quintessential maître d’ … quietly directing people to the line where they can dish-up heaping servings of self-interested policy while the Boy Plunder picks up tips along the way. Not surprisingly, the Empire’s centurions have feasted for over two years like twenty year-old stoner-bros at a smarmier version of Golden Corral (the Gilded Corral?). Trump’s transactional approach is perfectly suited for the swamp he pretends to drain.
Ultimately, Trump’s demonstrated fealty to the REAL Deep State and, more specifically, to the Empire of Oil the Deep State built over the course of the so-called American Century, may account for his amazing, Teflon-like persistence and for the inexplicable support he’s enjoyed from a blockade of Republicans in Congress. He’s served the Empire’s interests in Venezuela and Libya. He’s served the Empire’s interests by pulling out of the Paris Accord and by throwing roadblocks in front of any climate-related action. But it was his all-consuming focus on killing the Iran Nuke Deal and his profitable, oil market-sustaining brinkmanship that cemented his position as a bulwark of the Empire. Bulwarking the Empire has long been a cornerstone of Republican orthodoxy and the Empire has long put Iran at the center of CENTCOM’s mission.
That’s why the Iran Nuke Deal was a game changer. If you look back at the road map of characters and coincidences, it shows the depth of the impact that deal made on what became the Trump coalition. Obama’s big deal made big enemies … enemies who were bound and determined to make sure it didn’t last beyond his presidency. It’s also worth noting that the Iran Nuke Deal really wasn’t that big of deal. Iran’s nuclear program had been peaceful since they abandoned their weapons program in 2003. Essentially, they gave up something they’d already given up to get something (money) that was theirs in the first place. They only reason they hadn’t gotten it already is because the US was punishing them for having the audacity to challenge a brutal, US-installed puppet regime.
What’s more, the big deal wasn’t really that big of a “break” with the Saudis or the Israelis, both of whom were sold tons of weapons and, the case of Israel, given loads of aid by President Obama. Nor did he really do that much to truly transgress Empire of Oil. Then again, maybe the fact that the Iran Nuke Deal inspired such a backlash is telling in and of itself. Perhaps Iran’s oil and gas reserves are a Leviathan the OPEC-led market simply cannot unleash. Perhaps even the inklings of a maybe-it-could-happen-far-down-the-road dénouement with Iran presented far too big a risk to let the deal survive. Perhaps the Empire of Oil is in a far more tenuous position than it appears to the casual gas guzzler. And perhaps this all reflects growing fears of a coming endgame for the Empire of Oil.
THE CLIMATE ENDGAME
Obama’s Presidency was essentially an Oil Presidency. But it wasn’t quite a typical Empire of Oil Presidency. Rather, there was an important long-term recalibration inherent in Obama’s “fracking pitch.” He attempted to simultaneous position America’s booming natural gas reserves as a so-called “bridge fuel” to a renewable future, while also hammering the Russians and locking the problematic Saudis into a fracking trap. The problem is that fracking may be little more than a bridge over troubled, toxic water.
Natural gas does technically burn cleaner (without the plumes of CO2 or the nasty, illness-causing particulates from burning petroleum), but given the vexing issue of methane leaks (which is also a powerful greenhouse gas), it may not be the quite climate-friendly bridge it’s being sold as by the industry. The other issue is that fracking doesn’t just produce natural gas. It’s also used to release shale oil, which cannot even pretend to be a cleaner-burning alternative.
On the other hand, Obama’s fracking push did significantly alter the ground underneath the feet of the OPEC+ countries of Saudi Arabia, the UAE and Russia. For the Saudis and Emiratis, natural gas presents a real problem because it does produce less carbon and it can be used to power fleets of electric cars and reduce or maybe even eliminate reliance on petroleum. Russia relies on petroleum, too, but, as we’ve seen, it has a natural gas card up its sleeve. That’s why Putin is the one player here who can afford to play both sides of many issues … because he sits on both oil and on gas and because he has the one thing that trumps the Empire of Oil’s meddling—nuclear weapons. That unique combo of oil, gas and nukes (sorry, Iran) makes Russia uniquely challenging for the Empire of Oil. Putin’s main goal, though, is to make sure Russian gas keeps flowing into Europe so the money keeps flowing into Moscow … sometimes by way of criminal skimming schemes run by crooked-nosed characters like Semion Mogilevich in places like Ukraine (see Putin’s animosity toward Hillary Clinton).
Putin does, though, have new leverage over the Saudis and their Gulf Arab partners. Now, Russia can even go so far as to threaten to blow up the OPEC+ deal and, in so doing, keep Tehran on board at the same time they are working with the Saudis … which is exactly what they are doing in advance of an upcoming June OPEC meeting in Vienna. It’s perfectly timed, too, because Trump’s Trade War with China is depressing the price of oil.
Luckily for nearly everyone in the oil game, the Trumped-up tensions with Iran and the OPEC+ production restrictions are helping to keep the price around $60. But Russia could easily break with OPEC, open up the spigot and even turn the cudgel around to hammer US frackers, who desperately need the price to stay above $50 per barrel.
That fact shows how Obama’s fracking play has, whether intentionally or not, also trapped the US Oil Industry. It’s a sticky wicket epitomized by the growing impact of the Permian Basin. The West Texas-centered oil and gas basin is ground zero for the US production boom and, as reported by Jen Wieczner in Fortune, it’s the place where the boom could blow up:
The “fracking” boom, as it’s known, is responsible for pushing U.S. crude production to a record of roughly 11 million barrels a day in 2018, surpassing Saudi Arabia and Russia for the first time since the end of the Cold War. As of the latest monthly data, the Permian alone produces more crude per day than the United Arab Emirates, Canada, or Iran; by next year, some expect it could also outpace Iraq, which would make the southwestern region the fourth-largest oil producer in the world, if it were its own country. “The Permian is the absolute 800-pound gorilla for shale,” says Mike Morey, CIO of Integrity Viking Funds, who runs a top-performing energy stock fund.
The Permian is also one of the cheapest places to drill for oil, not only in the U.S., but in the world. Unlike costly deepwater and offshore rigs, drillers can make money on Permian oil as long as it trades for at least $50 a barrel. That’s made the region an oasis for energy companies that have struggled ever since 2014, when West Texas crude prices collapsed from a peak of $107. In the years since, prices have never come close to reaching triple digits and have dipped as low as $26 a barrel.
So far this year, prices have generally been on the upswing, and are up some 35% in 2019—to around $62 per barrel—despite concerns that a continuing trade war with China will slow demand. Still, it’s hard to find a bull who thinks that oil has reason to rise much more. “Short of a real sustained geopolitical event—not the periodic flashes that have been impacting the markets—I don’t know that anybody thinks that there’s an upside for commodity prices themselves,” says longtime energy economist Michelle Michot Foss, a fellow at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy.
Indeed, even with production disruptions resulting from the reactivation of Iran sanctions in May—as well as turmoil in other OPEC exporters like Libya and Venezuela—the Permian has created such an abundance of supply that it can quickly make up for lost inventory. In the years between 2009, when the Great Recession ended, and 2014, there’s been a paradigm shift in the industry, says Devin McDermott, an equity analyst at Morgan Stanley: “We’ve gone from a decade of resource scarcity, and the focus on peak oil supply—‘when do we run out of oil?’—to more oil than we need.” What’s more, there’s enough still in the Permian ground to last at least the next 20 years.
“More oil than we need?”
Welcome to the oil-soaked world of oversupply, folks. Not only has fracking crushed peak oil, but it’s also left an oversupplied world awash in hyrdocarbons at the very time renewables are not just competitive, but declining precipitously in cost.
As Forbes reported, every renewable source of energy is “now able to compete with the cost of developing new power plants based on fossil fuels such as oil and gas, which typically range from $0.05/kWh to over $0.15/kWh.” And the “most attractive renewable energy sources, from a cost perspective, are onshore wind and solar PV,” with “onshore wind costs of $0.03-0.04/kWh” now “now possible in places with good natural resources and the right regulatory and institutional frameworks.” Finally, “new solar PV projects in countries such as Chile, Mexico, Peru, Saudi Arabia and the UAE have seen a levelized cost of electricity of as low as $0.03/kWh.”
That’s right … the Saudis and the Emiratis are basking in their sunny investments in solar while their man in Washington treats renewable energy like it’s a Commie-loving atheist who wants to burn the flag while desecrating mom, apple pie and Chevrolet (a Chevy truck, of course … not the recently discontinued Volt) with Chinese-made spray paint.
Instead of joining the double-dealing petro-princes on the renewable bandwagon, Trump’s Energy Department is rebranding exported liquid natural gas (LNG) as “freedom gas” and touting the spread of American “molecules of freedom” around the hydrocarbon-consuming world. Although it’s a perfect expression of a Trump Steaks-style American Exceptionalism, it’s also exactly the kind of self-serving hot air that’s going to put us all deeper in hotter water.
Meanwhile, China remains the world’s leading producer of solar panels … in spite of Trump’s efforts to target their thriving industry. China’s solar advantage is an often-overlooked factor in Trump’s Trade War. His tariffs may have been designed in part to target the ever-cheaper alternatives to oil and natural gas, but he cannot stop China’s solar juggernaut. Bloomberg reported that China’s “LONGi Green Energy Technology Co.I is the” best performer among 15 of the world’s top solar energy companies” and it has “surged 187% since Trump was inaugurated January 2017.”
China’s solar panel production is not just strong, but it might be too strong for its own good. According to East By Southeast, “China has led the world in new solar installations in each of the past five years. But the cost of subsidies has been growing unsustainably, and as manufacturers have expanded rapidly to meet demand the risk of overcapacity has grown.”
That means China’s problem isn’t oversupply of oil … it is overcapacity in solar panels! The Chinese government even went so far as to curtail subsidies to modulate unsustainable growth helped by guaranteed electricity prices. They are also shipping out capacity by extending their Belt and Road initiative to fund solar installations around South America.
Take that, Monroe Doctrine.
All of this is not to say that renewables have displaced hydrocarbons. Oil is still king. Renewable sources do account for a third of global energy capacity, according to the International Renewable Energy Agency. But although it has grown quite a bit over the last decade, the renewable industry is also experiencing something of a “Trump Effect. As Grist reported …
… an annual report the International Energy Agency released on Tuesday. Worldwide investment in renewable energy fell slightly last year, and the proportion of money budgeted to low-carbon energy has stagnated at 35 percent. The report shows that, despite all the rousing pledges to embrace clean power, governments around the world are still spending most of their investment money on new ways to burn fossil fuels.
So, fossil fuels have held fast since Trump pulled out of the Paris Accord and used his Presidency to push the Empire’s priorities. But despite that lull, there are plenty of examples of the growing movement away from oil:
- The “LEGO group now says it is running entirely on renewable energy after reaching its 100 per cent target three years ahead of schedule” and it just finished building a “258 megawatt offshore wind farm in the Irish Sea,” according to the Independent.
- Facebook is developing “a huge piece of land in West Texas about five and a half times larger than Central Park” into one of the largest solar farms in the US. The project will cost “hundreds of millions” of dollars, according to Fact Company, and it is a step toward Facebook’s “goal of powering its global operations with 100% renewable electricity by the end of next year.”
- And in a nod to market forces, Bloomberg New Energy Finance found that “corporations bought a record amount of clean energy through power purchase agreements, or PPAs, in 2018, shattering the previous record set in 2017.”
At the same time, Trump petulantly peddles specious tripe … telling his devotees that if the “wind doesn’t blow you don’t watch television that night” and making the bizarre claim that windmills cause cancer. But that’s his job … to sow doubt and make it okay to deny the reality of the speeding train bearing down not just on his supporters, but on every person in every ecosystem on the planet. That’s why he’s moved to manipulate the science after the “fourth National Climate Assessment report made clear that unabated climate change is going to substantially damage America’s communities and economy and environment,” as Pacific Standard pointed out in a story on the Trump’s Administration’s drive to curtail the scope of future assessments.
It’s certainly no coincidence that Trump’s Administration is brimming with appointees who are committed to throwing roadblocks in the way of climate science. As the New York Times reported, the shill Trump installed at the U.S. Geological Survey (USGS) directed staff to stop modeling out climate projections past 2040 … effectively blotting out the time when most scientists agree we’ll see the greatest impact of climate change. It should come as no surprise that his man James Reilly was a petroleum geologist before Trump put him in charge of the USGS.
Also not coincidentally, Trump’s EPA Administrator and former coal industry lobbyist Andrew Wheeler opined that climate change’s impacts don’t really concern him because they are “50 to 75 years out” into the future … a future that the USGS is (coincidentally) no longer investigating. And Trump’s head of the Department of Interior and former oil industry lobbyist David Bernhardt recently said he hadn’t “lost any sleep over” the record-breaking level of 415 parts per million (ppm) of atmospheric CO2 measured by the National Oceanic and Atmospheric Administration’s Mauna Loa Observatory in Hawaii.
It doesn’t end there, either. For Trump’s coup de grace, he nominated a non-scientist named Barry Lee Myers to run the aforementioned National Oceanic and Atmospheric Administration (NOAA). Myers’ claim to fame is that he’s made millions by repackaging NOAA’s government-funded weather information and selling it for a price through his family-owned AccuWeather weather forecasting business. That’s why he’s spent years trying to shut down NOAA’s services, which “compete” with AccuWeather’s “privatize publicly-funded information” business model.
Barry Lee Myers’s dream of fully privatizing the NOAA’s functions would take valuable, public interest data out of the public sphere and put it into the hands of the highest bidder … which, as we have seen, is the modus operandi of Trump’s smorgasbord approach to cronyism and to the Empire of Oil he serves with uncharacteristic alacrity.
The real-world impact of Trump’s enthrallment to the Empire of Oil was first felt on June 1, 2019 when he went to the White House Rose Garden to announce the US was joining Syria and Nicaragua in rejecting participation in the Paris Accord. Trump, using his usual “say the opposite of reality” shtick, said the 195 country-strong agreement “fails to live up to our environmental ideals” for cleaner air and water.
That Bizarro World claim left a leadership gap China’s President Xi is filling, thus positioning pollution-ravaged, coal-burning China as the world’s climate leader by default. Amazingly enough, Axios reported that “China and India are poised to meet their targets with currently implemented policies.”
Trump’s America, on the other hand, is not.
And for those who say the Paris Accord’s non-binding targets were meaningless anyway, it turns out that since leaving the agreement US carbon dioxide emissions “surged” by “3.4 percent in 2018,” which was the “biggest increase in eight years.” That spike presents no problem for Trump’s CO2-loving climate advisor William Happer. He thinks the planet needs MORE carbon dioxide, not less … saying in 2018 that the planet is in the midst of a “CO2 famine.” One-time Cyrus Fogg Brackett Professor of Physics at Princeton is so in love with CO2 that in 2014 he told CNBC that the “demonization of carbon dioxide is just like the demonization of the poor Jews under Hitler.” Happer has certainly found his benighted champion in gold-plated armor. And so did the Empire of Oil, which found itself with in the White House at exactly the moment it needed it the most.
TIME IS MONEY
Both the Bank of England and the Bank of Canada (itself a nation addicted to oil and gas revenue) have issued reports warning about a coming inflection point when oil and gas will become worthless “stranded assets” when the combination of climatic disruptions from extreme weather intersects with human beings scrambling to preserve the only available life-sustaining planet in this part of the universe. Basically, people will drop oil like a bad habit and switch to other, non-carbon producing forms of energy, thus rendering trillions of dollars in oil-related investments and infrastructure and subsidies totally worthless. That will make them “stranded assets” — assets carrying heavy investment loads, but declining in value to the point where they are no longer economically viable.
This is not as fanciful a scenario as it might seem. Climate is becoming a potent issue for the first time as a literal flood of anecdotal data washes over Americans who once thought they were being manipulated by a grand globalist conspiracy to keep them from driving Humvees. But now a relentless barrage of flooding, wildfires and superstorms is quickly disabusing them of that fanciful, narcissistic fairy tale. Every day the reality of climate disruptions becomes clearer thanks to the newscycle’s daily onslaught of starving animals, spreading diseases and balmy Arctic temperatures.
The latest European Union elections saw the climate-focused Greens breaking through in an election that was supposed to be the coming of right-wing nationalism. Norway has moved to willingly keep billions of barrels of their oil in the ground, which is good in the short term for OPEC and oil prices … but emblematic of the coming shift away from oil. In fact, British MP’s recently floated the idea of “dropping oil, gas and other fossil fuel stocks” from Parliament’s pension fund.
Divestment could become another problem and, oddly enough, some level of divestment is exactly what the Banks of both England and Canada are recommending to avoid a massive financial crash if and when there is a stock market “fire sale” of the corporations that turn hydrocarbons into profits. Responsible, climate-sensitive investment and risk mitigation is the Bank of England’s and the Bank of Canada’s answer to that conundrum.
As noted climate change-evangelist Bill Nye recently noted, the threat is “not 50 to 75 years away — it’s 10 or 15.” That impending doom scenario, which is echoed throughout the scientific community, means there is less and less time for the component parts of the Empire of Oil to squeeze out as much money as they can before the forces they themselves unleashed start to overtake their decrepit business model.
Whether by design or by strange coincidence, it seems everything Trump does — whether it is deeply stated policy or just a sophomoric hijacking of the newscycle — extends the life and profitability of oil. Time is money in the oil game and that’s ultimately what Trump’s Oil Presidency is about … buying time for the Empire of Oil and for the OPEC+ petrostates who know their business model is becoming increasingly untenable.
It turns out that Trump’s nearly superhuman ability to produce a relentless stream of conscious misdirections is his most valuable commodity. It’s buying time for everyone associated with the Empire of Oil. It’s buying time for the US Oil & Gas Industry and for the hydrocarbon mandarins who support the GOP Establishment that has, in turn, closed ranks around Trump. It’s buying time for the petrodollar and for the main players in the REAL Deep State who suck on the teat of oil. It’s buying time for the Military-Industrial Complex and for a US economy that is all-too fully invested in Military Keynesianism. He’s buying time for Wall Street’s financial Jenga tower … before the Empire’s stranded assets leave them high and dry.
His presidency is also buying time for petroleum producers who fear the crushing power of natural gas … like the Saudis and the UAE. They need time and revenue from petroleum so they can stabilize their economies, to fund their emerging military machines and use the additional, oil-funded runway to transition to financialized economies before the world ditches the black gold standard. Ironically, it’s also buying time for them to build up their solar capacity while their imperial benefactor follows canard-carrying canaries down collapsing coalmines.
Trump’s Presidency has certainly bought time for Putin. He now has room to milk Russia’s titantic oil and gas reserves and to sail into the oil-rich Arctic as the warming climate clears away the ice. And, until his election win turned into a messy cul-de-sac, Trump and Kushner bought valuable time for Bibi Netanyahu because every day that passes, the peace process becomes more of a piece-by-piece process until annexation of the West Bank becomes a fait accompli.
STICK A FORK IN THE ROAD
The fact that the Saudis, the Emiratis, Putin, Netanyahu and the Trumped-Up, oil-fueled GOP all despised Obama so deeply shows the extent to which the Empire of Oil’s hold on power has remained unquestioned and how deeply ingrained its policies remained for 70-plus years. Obama’s was the first real challenge, however small, since President Jimmy Carter put solar panels on the roof of the White House. Or more ominously, perhaps since the REAL Deep State risked its legitimacy by stealing an election in broad daylight when they wrested control of the White House from Vice President Al Gore. It’s an underestimated fork in the road … one that in hindsight requires far closer examination. Just think of the stark difference between the author of “Earth in the Balance” in 1992 and “An Inconvenient Truth” in 2006 (the height of the Iraq War and Bush’s presidency) … and the ultimate Empire of Oil Presidency of George W. Bush and Dick “Halliburton” Cheney.
It certainly looks now like those who reside at the center of the Venn Diagram of US Power felt it absolutely necessary to make sure Gore did not become president. Maybe they knew then what we know now … that the Empire of Oil’s future is not nearly as rosy as it appears. The Empire needed a supercharged Oil Presidency to protect the profitable, global military imperium that came with oil. That probably meant keeping Saddam’s reserves in the ground a while longer. And it no doubt meant ensuring that the etrodollar-dealing Saudis to retained their control of OPEC in perpetuity.
As we’ve seen, Saudi Arabia is the linchpin helping to hold the imperial system togetherl. As Tim Daiss of OilPrice.com wrote on May 28, 2019, “Without a strong Saudi Arabia, or even worse if there was regime change in the kingdom, the prospect for peace in the Middle East and the impact on global oil markets would be unprecedented in its damage.” That’s important because with all of these converging forces, the Empire of Oil is left with chaos, conflict and manipulation as it’s only real sources of power.
Trump is the avatar of those forces … a perfectly misguided missile launched into the capital of the Empire of Oil at just the right moment. I refer you back to the excerpt from Jen Wieczner’s story on the Permian Basin. She talked to Michelle Michot Foss, a fellow at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy … as in former Secretary of State and Elder Oil Statesman extraordinaire James Baker. Michelle Michot Foss said:
Short of a real sustained geopolitical event—not the periodic flashes that have been impacting the markets—I don’t know that anybody thinks that there’s an upside for commodity prices themselves.
And that’s the real danger of late stage oil empire … the only real tool left in their toolbox is instability, tension and conflict. The only real guarantor of the system is US military might. The world-dwarfing US military and gas-guzzling American consumers are all the US really has to offer.
This is the Empire of Oil that looms over everything. It’s America’s Frankenstein monster, created by the REAL Deep State … lumbering through history like a mindless brute, terrorizing the landscape and tearing through the environment. Trump has given it renewed life at the exact moment it needs to be driven from the global village by torch-wielding peasants. But his version of the oil presidency is actively forestalling action on climate change, deploying military power in key oil hot spots, selling weapons like a three-day gun show in Waco, and dropping bombs at an alarming clip.
If we ever hope to stop our Frankenstein monster from terrorizing villagers at home and abroad. If we want the Fifth Fleet to come home from the Persian Gulf and CENTCOM to not be the center of US foreign policy. If we want to render the South China Sea irrelevant and to stop competing with Russian arms dealers and stop competing with Chinese arms sales in the Middle East. If any of this is going to happen … the world’s greatest consumer engine will have to stop burning oil. That the real trick to ending US Empire and to ending the endless wars and staunching the flow of money into the hands of Lockheed, Boeing Raytheon and a dozen other top 100 government contractors. It all depends on the unquestioned persistence of the Empire of Oil.
So, who are the biggest winners of Trump’s Presidency? The Saudis and the Emiratis, Putin’s Russia and Bibi’s Israel have all certainly scored key big ticket items thanks to Trump. Although we may never be able to ultimately find a direct, 1-to-1 quid pro quo that gives by smoking gun certainty the bottom line is that this insane scrum of coincidences and power players, there is no doubt that the election of a former reality game-show host produced big prizes for the leading contestants in what has become a mind-numbing melodrama … a melodrama that is misdirecting most from seeing the not-so-great game being played behind Trump’s plush, gold-hued velvet curtain.Tweet