Thursday, January 19, 2017

Why Oil Is the Glue That Bonds Trump and Putin @alternet

Why Oil Is the Glue That Bonds Trump and Putin @alternet:

"They include the U.S. corporate giant, ExxonMobil, and Russia’s mega-methane firm, Gazprom. Almost everyone, except for much of the media, acknowledges that Russia behaves like a classic petro state. Lindsey Graham, the Republican senator from South Carolina, once described the Russian Federation as “an oil and gas company masquerading as a country.” Putin’s government, for example, gets half its revenue from oil and gas sales to Europe, Asia and the Middle East. Oil accounts for almost 60 per cent of Russia’s exports and a third of its capital investments. The global 2014 oil price crash severely undermined the country’s economy and lowered living standards for ordinary Russians. As a consequence Putin’s oil locomotive is now stagnating and needs foreign investment and higher oil prices. Unlike most Canadian politicians, Putin has studied the politics of oil. He can even talk about theDutch disease and other resource curses. As a young intelligence officer he watched a global oil price collapse in the early 1990s unhinge the Soviet Union and does not want to see that experience repeated. Beginning more than a decade ago, Putin removed the country’s most powerful oligarchs from Russia’s oil and gas companies and nationalized the industry to consolidate his power. He then let in a few western players such as ExxonMobil to help revitalize Russia’s oil patch."

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