uwot wrote:Nah! ISIL are currently making about $3 million a day on the Black Market, selling oil they have seized. Everyone's just trying to squeeze their profits.
That is one of many reasons.
The second reason is to control Russia as its half of the earnings comes from selling oil and gas to other countries.
The third reason is to put pressure on Iran and put it under economic constrains in order to compell it do discard its atomic plans.
But, there is some more interesting politics is being played behind the curtain at the huge level.
Behind the close door, it is US and Saudi Arabia, who are calling shots against each other. The oil prices are not fallen because OPEC countries decided not to cut the production. It is actually the US
Shale Oil companies, who decided to pump more and more oil in the market.
Some time back, it was estimated that Shale oil production would not profitable below 70$, but now Shale companies are claiming that their cost of production is now as less at 40$. So, do not get surprised if Oil would touch that level in 2015.
There is some sort of psychological war is going on between Saudi Arabia and US, which have been traditionally allies in the past since long. But, the US mindset is changing slowly. There may be two reasons for that.
First reason maybe that US is either brink of some breakthrough discovery in any cheaper alternative discovery or has done that. It has been told to the oil companies, and now they are exploiting their reserves as much as they can.
The second reason, which seems more possible to me, that US realized the correlation of oil prizes and Islamic terrorism. The root cause of the Islamic Terrorism is not Islam, but oil only.
Islamic terrorism has always been nourished by Petro dollars of the Gulf countries. Had there been no oil in the Gulf, there would have been no Islamic terrorism either.
It is no other than Saudi Arabia that helped ISIS initially by giving them money, so they can revolt against Syria, and as the result, its oil production would come in some sort of indirect control of Saudia and US. But, the devil became out of control very soon, as happened with Osama.
Many people may not aware of the fact that Saudi's and Kuwait's cost of oil production is as low as 2$ even now. But, the problem with these countries is that it is only source of income they have. Unlike US, they do not have much tax collection and they have to spend a lot of money to maintain their royal living standard now.
According to some estimates, rich gulf countries need the rate of oil around 100$ to maintain their present luxury. So, if the rates would maintain below that for long times, they would have to stop financial support to fringe groups, sooner or later.
with love,
sanjay
