OPEC+, BRICS: End of History for the West?

Historic changes in world politics happen very slowly. However, this was not the case when the United States entered the world stage. It happened quite suddenly in 1898, with the invasion of Cuba: old Europe watched with palpable anxiety… The Manchester Guardian at the time reported that nearly all Americans had come to join this new expansionist spirit. The rare critics are “simply mocked for their trouble”. the Frankfurter Zeitung warned of “the disastrous consequences of their exuberance” but realized that Americans would not listen.

Source : Strategic Culture, Alastair Crooke
Translated by the readers of the Les-Crises website

In 1845, an unsigned article had already given rise to the slogan “Manifest Destiny”, according to which America was destined to expand and occupy the lands of others. Sheldon Richman, in America’s Counter Revolution, wrote that this latest vision clearly had “the Empire in mind. »

This philosophy of “destiny” marked a turning point from the old dynamic of decentralization, and the beginning of the American impulse towards totalizing imperial influence which succeeded it. (Of course, not everyone was on board – America’s early conservatives were Burkean-leaning, that is, wary of foreign interference).

Today, the picture couldn’t be more different. Doubts and reservations are everywhere; the momentum and confidence of “the Empire” faded. The United States is more like the exhausted Austro-Hungarian Empire of the pre-World War I era, dragging a series of allied nations into a conflict that, at the time, escalated into World War I.

Then, as now, all states disastrously underestimated the duration and gravity of the conflict – and misinterpreted the nature and significance of events.

Today, the only childish and moral question is whether the good and the righteous can muster the determination to defeat this evil ambition.

Nevertheless, behind this simplistic caricature hides the end of a major political cycle, precisely at the moment when the hyper-financialized Western “business-model” is cracking. In short, the narrative obfuscation (“We are winning”) hides risks (both political and economic) whose gravity Western leaders seem unable (or unwilling) to grasp.

The United States – like pre-war Austria-Hungary – is slowly collapsing. We can no longer hide from it. Washington loses control of events and makes strategic mistakes. A certain class of the Western ruling elite, however, seems stuck in a reading of history.

The Western ruling classes do not understand – that is, they do not want to understand – the “straws in the wind”, which blow in another direction – for example, the recent SCO summit in Samarkand . In short: the current of Leviathan has run its course; that’s all. History is moving in another direction, and Western leaders pretend not to notice.

India’s foreign minister recently summed up this key change succinctly. Arrested by a European who wanted to know whether or not he supported Ukraine – that is, confronted with the standard Western binary: the “With us or against us” meme – the Indian diplomat simply retorted that he was high time that Europeans stopped thinking that “their wars” were the wars of the world: “We have no side: we are our own side”, he replied.

In other words, Western “interests” do not necessarily “translate” into the mandated interests of the non-Western world. The non-Western world has its own side. These states insist on living within a framework drawn from their own historical experience, on creating political structures shaped according to their own civilization and their own interests, and economies adjusted to the grain of their own social framework.

This is the meaning of Samarkand: multipolarism. It refutes the Western presumption of an exceptional “right”: to expect others to put their interests behind those of the West. Above all, it is a current that emphasizes sovereignty and self-determination.

It is obvious that such sentiments cannot be called anti-Western. Yet the West’s binary predisposition is so deeply ingrained that few people “get it” (and those who do don’t like it).

It is for this main reason that the scope of today’s European crisis is politically misunderstood: the long historical cycle is reversed, moving from centralization to decentralization (states being their own camp) . On the other side is the United States – divided from within, beset by crisis, implying that it is weak and, therefore, lashing out at everything around it in order to s cling to their original expansionist roots.

A glaring misunderstanding and neglect, however, concerns the nature of politics and the role played by fossil fuels. Modernity is dependent on fossil fuels. A smooth transition to green energy over time is therefore also largely dependent on the continued availability of cheap and abundant fossil fuels. Without adequate energy, jobs disappear and the total amount of goods and services produced drops sharply.

Yet Western leaders have tossed aside this basic understanding. What were they thinking when they advocated that Europe sanction cheap Russian energy and instead rely on expensive US LNG? To reassert a “rules-based” hegemony? To “European values”? Have we thought about all of this?

And, in another act of energy-related madness, the Biden administration has now alienated Saudi Arabia and OPEC producers. OPEC is a cartel that tries to manage production and demand by fixing the price of oil. Has the Biden team forgotten that oil and gas is, in fact, the very essence of geopolitics? The price, flow and routing of energy is, in essence, the main “currency” of world politics.

However, the G7 decided to withdraw this role from Saudi Arabia. Instead, he proposed a “Western States Buyers Cartel” that would fix the price of oil (and, at Mario Draghi’s suggestion, extend a cap to gas as well). In short: it was about dealing a hammer blow to Saudi Arabia’s “economic model” and bringing down the main function of OPEC – now reinforced as OPEC+.

Not content with doing this, the Biden administration has begun pouring off a million barrels a day of its strategic reserves, further undermining the Saudi economic model, while seeking to drive down crude prices by manipulating the market.

Should Saudi Arabia cede OPEC’s hard-earned price-setting role to the G7? Why should she do it? Is it justified by the fact that Biden’s party faces a tough midterm election in November?

This is exactly what states rose up against at the Samarkand summit: the Western feeling of being in the right. Of course, Mohammad bin Salman has to defer to Biden’s electoral prospects and smile as his geopolitical asset is shattered.

Instead, she aroused outright defiance. A former Indian ambassador, MK Bhadrakumar, writes:

“…OPEC is proactively defending itself. Its decision to cut oil production by 2 million barrels a day and keep the price of oil above $90 a barrel ridicules the G7’s decision [d’imposer un plafond sur les prix]. OPEC believes that Washington’s options to counter OPEC+ are limited. Unlike past energy history, the United States does not have a single ally today, within the OPEC+ group.

Due to rising domestic demand for oil and gas, it is entirely conceivable that US exports of these two products will be reduced. If this happens, Europe will be the most affected. In an interview with the FT [Financial Times, NdT] last week, Belgian Prime Minister Alexander De Croo warned that as winter approaches, if energy prices do not fall, “we risk a massive deindustrialisation of the European continent and the long-term consequences of this situation could be very serious. »

He added these chilling words: “Our populations are receiving bills that are completely crazy. At some point, it will crack. I understand that people are angry… People can’t afford to pay”. De Croo warned of the likelihood of social unrest and political unrest in European countries. »

Increasingly, American threats inspire not deference, but defiance. The problem is that the weave of the binary “Us and Them” war narratives has become increasingly contrived and implausible – and as a result, it is nearly impossible for the West to keep it stitched together.

This global trend of defiance may ultimately prove to be the decisive turning point – far exceeding any outcome of the war in Ukraine – towards a changed world order. Especially since Biden picked an awkward time to wage war on oil producers.

A bursting bubble is that of the “economic model” of Europe. Much of European industry is simply no longer competitive, having ‘lost’ cheap Russian gas and oil. In other words, the cost of energy is bankrupting European industry.

Another element is the most important of all: it is the bubble of zero inflation, zero interest rates and quantitative easing that has started to burst. She is huge. And from a strategic perspective, the Gulf represents the last pool of real “cash” that historically has been reliable buyers and holders of US Treasuries.

More importantly, this decades-long hyper-financialization has begun to unwind, with interest rates soaring. What we see in the UK is just a ‘canary in a mine shaft’: many funds are again heavily leveraged (as before 2008) and exposed to derivatives using dazzling mathematics to claim that Above-reality returns can be created risk-free from scratch (just like before 2008). It always ends badly. All of this high-risk, unhedged leverage will have to be unwound at some point.

And right now, Biden is choosing to go to war with the energy-producing Gulf states that almost exclusively hold the credibility of US Treasury bonds in the palm of their hands. Washington does not seem to be aware of the gravity of the combined events, nor of the need to exercise caution.

Source : Cultural Strategy, Alastair Crooke17-10-2022

Translated by the readers of the Les-Crises website

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OPEC+, BRICS: End of History for the West?