William Miller12 said:Not quite.
Your interpretation feels a bit like hindsight bias...
Putin didn't launch an invasion expecting a multi-month grind, nor did he care how oil prices would swing once the guns started firing.
Oil and gas prices in the years leading up to the invasion had a much larger impact—specifically from at least 2014 onwards.
During that window, the Kremlin was busy stockpiling financial reserves for this exact adventure. Sure, about half of that was frozen, which caught the Kremlin off guard, but it still stung.
But before the invasion, high oil (and gas) prices were exactly what filled the Russian treasury and paved the road to war.
Now, if things had gone the way you're describing, Russia, Saudi Arabia, and the rest of OPEC would have cut production to keep prices high. I don't think that would have stopped Putin from invading Ukraine.
As for what happens after... maybe an oil embargo would have hit sooner—instead of December 5, perhaps early September. And while Russia might have made slightly less from speculative trading, I doubt it would have been the deciding factor.
Looking at the comparative charts for Brent/WTI/Urals, the discounts on Urals were highest when speculative pressure was at its peak. When that dropped in early September, the Brent-Urals spread tightened, only to widen again after December 5.
Regardless, it wouldn't have changed the gas market situation, and the Kremlin relied far more on gas revenue than oil.
Timothy Nelson5
And yeah—anyone can reasonably argue that Saudi Arabia should look out for its own interests.
That’s true.
It's just that next time an Iranian terrorist regime attacks Saudi refineries and tankers, they shouldn't expect Uncle Sam and the West to show up to defend a feudal monarchy.
Maybe a new president (unlike this senile Biden) could tell the Saudis: [B says:
when we asked for your cooperation and help, you blew us off and cashed in. [/B]
Because of that, we had to send hundreds of billions in military aid to Ukraine, and we have no desire to keep helping you.
You made your money, so go ahead and buy our expensive, high-quality weaponry—it's already proven its worth in the war in Ukraine!
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Well, the Saudis buy a massive amount of weaponry. They’re actually ranked fourth globally in defense spending, yet they barely produce anything domestically compared to the top three.
The real issue with the Saudi military isn't their gear or their hardware—it's the personnel. It's the exact same story you see with Russia.
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I don't think you quite caught my drift, because you're arguing against something I didn't even say—something most people already take for granted, I suppose.
Oil and gas prices actually had a much bigger impact in the years leading up to the invasion, specifically from 2014 onwards.
During that window, the White House was busy stacking up cash reserves for a war adventure. Sure, about half of that got frozen, which was unexpected and apparently caught the White House off guard.
Actually, the timing is a bit different than that.
High oil prices right before the Russian invasion of Georgia.
High oil prices right before the Russian annexation of Crimea.
After those events, oil prices stayed relatively low and stable, largely thanks to the expansion of American fracking.
That stability was basically nuked by a senile Biden on his very first day in the White House, just signing whatever document his handlers shoved under his nose. He even admitted himself that he 'didn't know what he was signing.'
In a way, he signed off on giving Putin a massive incentive to invade Ukraine.
But prior to the invasion, it was precisely those high oil (and gas) prices that padded the Russian budget and essentially paved the road to war.
Immediately preceding the war, yes.
Putin finally felt emboldened once his slow-motion coup against Trump in the US succeeded.
Trump was against Nord Stream 2, and he used to press NATO members to stop relying on Russian energy and finally hit that 2% defense spending target they all agreed on.
Trump pushed for fracking. If he were still around, I guess US oil production might be at least 0% higher, maybe even 50% more for natural gas, more LNG terminals would have been built, and the Keystone pipeline wouldn't have been halted.
Under those circumstances, Putin wouldn't have even dreamed of invading Ukraine. A core part of his playbook was assuming that after a 'blitz' victory and taking Kyiv, Europe—completely dependent on Russian gas—would react weakly, maybe with some cosmetic sanctions.
By clumsily killing the Keystone pipeline project, Biden gave Putin the green light he needed.
All in the name of the Green New Deal, I suppose.
Biden basically shot the American economy in the foot.
On that same day, gas prices at the American Henry Hub jumped 100% up, and that was effectively the start of the energy price surge before the war in Ukraine.
But if what you're describing were true, Russia, the Saudis, and the whole OPEC group would have cut production to keep prices high.
It seems you clearly don't grasp the point of sanctions.
I don't think anyone honestly expects Putin to just pack up and walk away from the invasion of Ukraine.
The whole motivation behind Putin’s move... I guess it really traces back to those newly discovered hydrocarbon deposits under the sea near Crimea... and also that Solovjansk-Kramatorsk area which the Ukrainians have been fighting so hard to hold onto throughout this entire conflict.
As for what might have happened next... maybe an oil embargo would have hit sooner—like, instead of December 5th, perhaps by early September. Russia might have made a bit less from speculative trading, but I doubt that would have been the deciding factor.
It likely would have started five or six months earlier.
If you look at the comparative charts for Brent, WTI, and Urals, you can see the discounts on Urals were at their peak when speculative pressure was highest. Once that dropped in early September, the Brent-Urals spread narrowed, and it only really widened again after December 5th.
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Speculative pressure is such a subjective thing, isn't it? It doesn't just rely on supply and demand; it's more about how people perceive them.
That's probably why those firm statements from Western leaders right at the start of the embargo helped keep the speculative price swings somewhat in check.
But even then, it wouldn't have changed the gas market situation much; the outcome would be the same, and the White House was clearly banking much more on gas prices than on oil.
True enough... though I suppose that's because the Germans, led by Merkel, kept pushing for even deeper reliance on Russian pipelines instead of diversifying their supply or actually building out LNG terminals.
Well, the Saudis buy a massive amount of weapons... they're fourth in global spending, yet they practically have zero domestic military production compared to the top three.
The real issue with the Saudi military isn't the gear or the hardware, it's the personnel—it's pretty much the same struggle they face in Russia.
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