Oil

[cottonpicken]

Not a bad read.


By ​​​​F. William Engdahl
October 29, 2014 "ICH" - The details are emerging of a new secret and quite stupid Saudi-US deal on Syria and the so-called IS. It involves oil and gas control of the entire region and the weakening of Russia and Iran by Saudi Arabian flooding the world market with cheap oil. Details were concluded in the September meeting by US Secretary of State John Kerry and the Saudi King. The unintended consequence will be to push Russia even faster to turn east to China and Eurasia.


One of the weirdest anomalies of the recent NATO bombing campaign, allegedly against the ISIS or IS or ISIL or Daash, depending on your preference, is the fact that with major war raging in the world’s richest oil region, the price of crude oil has been dropping, dramatically so. Since June when ISIS suddenly captured the oil-rich region of Iraq around Mosul and Kirkuk, the benchmark Brent price of crude oil dropped some 20% from $112 to about $88. World daily demand for oil has not dropped by 20% however. China oil demand has not fallen 20% nor has US domestic shale oil stock risen by 21%.


What has happened is that the long-time US ally inside OPEC, the kingdom of Saudi Arabia, has been flooding the market with deep discounted oil, triggering a price war within OPEC, with Iran following suit and panic selling short in oil futures markets. The Saudis are targeting sales to Asia for the discounts and in particular, its major Asian customer, China where it is reportedly offering its crude for a mere $50 to $60 a barrel rather than the earlier price of around $100. [1] That Saudi financial discounting operation in turn is by all appearance being coordinated with a US Treasury financial warfare operation, via its Office of Terrorism and Financial Intelligence, in cooperation with a handful of inside players on Wall Street who control oil derivatives trading. The result is a market panic that is gaining momentum daily. China is quite happy to buy the cheap oil, but her close allies, Russia and Iran, are being hit severely.


The deal


According to Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center, the dramatic price collapse is being deliberately caused by the Saudis, OPEC’s largest producer. The public reason claimed is to gain new markets in a global market of weakening oil demand. The real reason, according to Abanmy, is to put pressure on Iran on her nuclear program, and on Russia to end her support for Bashar al-Assad in Syria.[2]


When combined with the financial losses of Russian state natural gas sales to Ukraine and prospects of a US-instigated cutoff of the transit of Russian gas to the huge EU market this winter as EU stockpiles become low, the pressure on oil prices hits Moscow doubly. More than 50% of Russian state revenue comes from its export sales of oil and gas.


The US-Saudi oil price manipulation is aimed at destabilizing several strong opponents of US globalist policies. Targets include Iran and Syria, both allies of Russia in opposing a US sole Superpower. The principal target, however, is Putin’s Russia, the single greatest threat today to that Superpower hegemony. The strategy is similar to what the US did with Saudi Arabia in 1986 when they flooded the world with Saudi oil, collapsing the price to below $10 a barrel and destroying the economy of then-Soviet ally, Saddam Hussein in Iraq and, ultimately, of the Soviet economy, paving the way for the fall of the Soviet Union. Today, the hope is that a collapse of Russian oil revenues, combined with select pin-prick sanctions designed by the US Treasury’s Office of Terrorism and Financial Intelligence will dramatically weaken Putin’s enormous domestic support and create conditions for his ultimate overthrow.

It is doomed to fail for many reasons, not the least, because Putin’s Russia has taken major strategic steps together with China and other nations to lessen its dependence on the West. In fact the oil weapon is accelerating recent Russian moves to focus its economic power on national interests and lessen dependence on the Dollar system. If the dollar ceases being the currency of world trade, especially oil trade, the US Treasury faces financial catastrophe. For this reason, I call the Kerry-Abdullah oil war a very stupid tactic.

The Kerry-Abdullah secret deal


On September 11, US Secretary of State Kerry met Saudi King Abdullah at his palace on the Red Sea. The King invited former head of Saudi intelligence, Prince Bandar to attend. There a deal was hammered out which saw Saudi support for the Syrian airstrikes against ISIS on condition Washington backed the Saudis in toppling Assad, a firm ally of Russia and de facto of Iran and an obstacle to Saudi and UAE plans to control the emerging EU natural gas market and destroy Russia’s lucrative EU trade. A report in the Wall Street Journal noted there had been “months of behind-the-scenes work by the US and Arab leaders, who agreed on the need to cooperate against Islamic State, but not how or when. The process gave the Saudis leverage to extract a fresh US commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority.” [3]


For the Saudis the war is between two competing age-old vectors of Islam. Saudi Arabia, home to the sacred cities of Mecca and Medina, claims de facto supremacy in the Islamic world of Sunni Islam. The Saudi Sunni form is ultra-conservative Wahhabism, named for an 18th Century Bedouin Islamic fundamentalist or Salafist named Muhammad ibn Abd al-Wahha. The Taliban derive from Wahhabism with the aid of Saudi-financed religious instruction. The Gulf Emirates and Kuwait also adhere to the Sunni Wahhabism of the Saudis, as does the Emir of Qatar. Iran on the other hand historically is the heart of the smaller branch of Islam, the Shi’ite. Iraq’s population is some 61% majority Shi’ite. Syria’s President, Bashar al-Assad is a member of a satellite of the Shi’ite branch known as Alawite. Some 23% of Turkey is also Alawite Muslim. To complicate the picture more, across a bridge from Saudi Arabia sits the tiny island country, Bahrain where as many as 75% of the population is Shi’ite but the ruling Al-Khalifa family is Sunni and firmly tied to Saudi Arabia. Moreover, the richest Saudi oil region is dominated by Shi’ite Muslims who work the oil installations of Ras Tanura.


An oil and gas pipeline war


These historic fault lines inside Islam which lay dormant, were brought into a state of open warfare with the launching of the US State Department and CIA’s Islamic Holy War, otherwise known as the Arab Spring. Washington neo-conservatives embedded inside the Obama Administration in a form of “Deep State” secret network, and their allied media such as the Washington Post, advocated US covert backing of a pet CIA project known as the Muslim Brotherhood. As I detail in my most recent book, Amerikas’ Heiliger Krieg, the CIA had cultivated ties to the terrorist Muslim Brotherhood death cult since the early 1950’s.
Now if we map the resources of known natural gas reserves in the entire Persian Gulf region, the motives of the Saudi-led Qatar and UAE in financing with billions of dollars the opposition to Assad, including the Sunni ISIS, becomes clearer. Natural gas has become the favored “clean energy” source for the 21st Century and the EU is the world’s largest growth market for gas, a major reason Washington wants to break the Gazprom-EU supply dependency to weaken Russia and keep control over the EU via loyal proxies like Qatar.
The world’s largest known natural gas reservoir sits in the middle of the Persian Gulf straddling part in the territorial waters of Qatar and part in Iran. The Iranian part is called North Pars. In 2006 China’s state-owned CNOOC signed an agreement with Iran to develop North Pars and build LNG infrastructure to bring the gas to China.[4]


The Qatar side of the Persian Gulf, called North Field, contains the world’s third largest known natural gas reserves behind Russia and Iran.


In July 2011, the governments of Syria, Iran and Iraq signed an historic gas pipeline energy agreement which went largely unnoticed in the midst of the NATO-Saudi-Qatari war to remove Assad. The pipeline, envisioned to cost $10 billion and take three years to complete, would run from the Iranian Port Assalouyeh near the South Pars gas field in the Persian Gulf, to Damascus in Syria via Iraq territory. The agreement would make Syria the center of assembly and production in conjunction with the reserves of Lebanon. This is a geopolitically strategic space that geographically opens for the first time, extending from Iran to Iraq, Syria and Lebanon.[5] As Asia Times correspondent Pepe Escobar put it, “The Iran-Iraq-Syria pipeline – if it’s ever built – would solidify a predominantly Shi’ite axis through an economic, steel umbilical cord.”[6]


Shortly after signing with Iran and Iraq, on August 16, 2011, Bashar al-Assad’s Syrian Ministry of Oil announced the discovery of a gas well in the Area of Qarah in the Central Region of Syria near Homs. Gazprom, with Assad in power, would be a major investor or operator of the new gas fields in Syria. [7] Iran ultimately plans to extend the pipeline from Damascus to Lebanon’s Mediterranean port where it would be delivered to the huge EU market. Syria would buy Iranian gas along with a current Iraqi agreement to buy Iranian gas from Iran’s part of South Pars field.[8]


Qatar, today the world’s largest exporter of LNG, largely to Asia, wants the same EU market that Iran and Syria eye. For that, they would build pipelines to the Mediterranean. Here is where getting rid of the pro-Iran Assad is essential. In 2009 Qatar approached Bashar al-Assad to propose construction of a gas pipeline from Qatar’s north Field through Syria on to Turkey and to the EU. Assad refused, citing Syria’s long friendly relations with Russia and Gazprom. That refusal combined with the Iran-Iraq-Syria gas pipeline agreement in 2011 ignited the full-scale Saudi and Qatari assault on Assad’s power, financing al Qaeda terrorists, recruits of Jihadist fanatics willing to kill Alawite and Shi’ite “infidels” for $100 a month and a Kalishnikov. The Washington neo-conservative warhawks in and around the Obama White House, along with their allies in the right-wing Netanyahu government, were cheering from the bleachers as Syria went up in flames after spring 2011.


Today the US-backed wars in Ukraine and in Syria are but two fronts in the same strategic war to cripple Russia and China and to rupture any Eurasian counter-pole to a US-controlled New World Order. In each, control of energy pipelines, this time primarily of natural gas pipelines—from Russia to the EU via Ukraine and from Iran and Syria to the EU via Syria—is the strategic goal. The true aim of the US and Israel backed ISIS is to give the pretext for bombing Assad’s vital grain silos and oil refineries to cripple the economy in preparation for a “Ghaddafi-”style elimination of Russia and China and Iran-ally Bashar al-Assad.


In a narrow sense, as Washington neo-conservatives see it, who controls Syria could control the Middle East. And from Syria, gateway to Asia, he will hold the key to Russia House, as well as that of China via the Silk Road.


Religious wars have historically been the most savage of all wars and this one is no exception, especially when trillions of dollars in oil and gas revenues are at stake. Why is the secret Kerry-Abdullah deal on Syria reached on September 11 stupid? Because the brilliant tacticians in Washington and Riyadh and Doha and to an extent in Ankara are unable to look at the interconnectedness of all the dis-order and destruction they foment, to look beyond their visions of control of the oil and gas flows as the basis of their illegitimate power. They are planting the seeds of their own destruction in the end.

[SASKFARMER3]

My god Thats what I was thinking about the recent drop in oil! Canada and Venezuela and Saudi supply usa!
Putins being a asshole with Ukraine and this issis thing with them so what's the easiest way to hurt a baby take away their toys! What I mean is cut off their income to buy toys and you have a situation fixed!
Hm I'm stuck in a field so thinking outside the box! But realistically how did we go from a shortage to below 80 oil!
Makes me wonder!

[furrowtickler]

I said this a long time ago when Errol brought this subject up. The U.S. has been planning this for a long time, pump the oil at home - it is truly the only way to control Putin - his main money supply by a long shot is/was oil over $100. Take the money and he looses absolute power along with Issis or whatever those camel jockeys call themselves as reported by the Cartoon News Networks (CNN)

[cottonpicken]

Sometimes i think it was a curse growing up without tv and becoming forced then addicted to reading,countless hours only to wake up and realize i know nothing.But what the hell i'm an addict.....

Everything seems to be slowly and surely heading back to a bipolar world(cold war era),and away from the unipolar one we are use to.

God i hope no shooting starts.

Minus the killing it should get pretty interesting and opportunities could be endless if-big if- it happens.

If world trade gets restructured around the battle lines who are the winners and losers?

[hedgehog]

Jesus cotton, if the nukes start flying its goodnight to the human race. and the world.

[rockpile]

"I don't know how WWIII will be fought, but WWIV will be fought with sticks and stones". - Albert Einstein

[rkaiser]

The war is already on. And as always it is about money and power. And the only way they will suck us into killing each other is to drive hate and wedges - ie religion/extremists views.

The writer is bang on in the first part of the article saying that this little Kerry tactic will not work. The Chinese are the winners here and are loving the fact that they are filling their tanks with cheap Saudi oil. Filling their tanks all right. I won't post any alternative news talking about the stockpiles the Chinese are building as no one seems to like alternative media on this site. However, the fact that the BRICS union is real and now a new Asian bank has put up 100 billion to "start" a new challenge to the IMF tells a story that more need to pay attention to.

The petro dollar is doomed and America and the banksters are trying every possible desperate act to try to save it including an ever growing number of "blame" events to instill hatred and separation.

Funny how the whole story of shortages of oil seems to disappear when there are bigger perogies to fry.

[cottonpicken]

Nukes are a 70 year old tech,think of what is there now,its so horrible its not worth contemplating.mutually assured distruction for that many years.

But the bipolar world is worth thinking about.

I always thought the cold war was a bunch of bullshit,both sides gained so much why bother going to war.Should have let Patton do what he wanted to in 45.

Its like the coke/pepsi thing,the one exucutive saying "if there was no pepsi we would have to have made it up ourselves"

[hedgehog]

what did patton want to do in 1945?

[rkaiser]

Maybe this will help those of you who do not like the idea of war.

It was mentioned already that the club has new co-organisers this year. They include Russian non-governmental organisations, expert groups and leading universities. The idea was also raised of broadening the discussions to include not just issues related to Russia itself but also global politics and the economy.

n organisation and content will bolster the club’s influence as a leading discussion and expert forum. At the same time, I hope the ‘Valdai spirit’ will remain – this free and open atmosphere and chance to express all manner of very different and frank opinions.

Let me say in this respect that I will also not let you down and will speak directly and frankly. Some of what I say might seem a bit too harsh, but if we do not speak directly and honestly about what we really think, then there is little point in even meeting in this way. It would be better in that case just to keep to diplomatic get-togethers, where no one says anything of real sense and, recalling the words of one famous diplomat, you realise that diplomats have tongues so as not to speak the truth. We get together for other reasons. We get together so as to talk frankly with each other. We need to be direct and blunt today not so as to trade barbs, but so as to attempt to get to the bottom of what is actually happening in the world, try to understand why the world is becoming less safe and more unpredictable, and why the risks are increasing everywhere around us.Today’s discussion took place under the theme: New Rules or a Game without Rules. I think that this formula accurately describes the historic turning point we have reached today and the choice we all face. There is nothing new of course in the idea that the world is changing very fast. I know this is something you have spoken about at the discussions today. It is certainly hard not to notice the dramatic transformations in global politics and the economy, public life, and in industry, information and social technologies.

Let me ask you right now to forgive me if I end up repeating what some of the discussion’s participants have already said. It’s practically impossible to avoid. You have already held detailed discussions, but I will set out my point of view. It will coincide with other participants’ views on some points and differ on others.

As we analyse today’s situation, let us not forget history’s lessons. First of all, changes in the world order – and what we are seeing today are events on this scale – have usually been accompanied by if not global war and conflict, then by chains of intensive local-level conflicts. Second, global politics is above all about economic leadership, issues of war and peace, and the humanitarian dimension, including human rights.

The world is full of contradictions today. We need to be frank in asking each other if we have a reliable safety net in place. Sadly, there is no guarantee and no certainty that the current system of global and regional security is able to protect us from upheavals. This system has become seriously weakened, fragmented and deformed. The international and regional political, economic, and cultural cooperation organisations are also going through difficult times.

Yes, many of the mechanisms we have for ensuring the world order were created quite a long time ago now, including and above all in the period immediately following World War II. Let me stress that the solidity of the system created back then rested not only on the balance of power and the rights of the victor countries, but on the fact that this system’s ‘founding fathers’ had respect for each other, did not try to put the squeeze on others, but attempted to reach agreements.

The main thing is that this system needs to develop, and despite its various shortcomings, needs to at least be capable of keeping the world’s current problems within certain limits and regulating the intensity of the natural competition between countries.

It is my conviction that we could not take this mechanism of checks and balances that we built over the last decades, sometimes with such effort and difficulty, and simply tear it apart without building anything in its place. Otherwise we would be left with no instruments other than brute force.

What we needed to do was to carry out a rational reconstruction and adapt it the new realities in the system of international relations.

But the United States, having declared itself the winner of the Cold War, saw no need for this. Instead of establishing a new balance of power, essential for maintaining order and stability, they took steps that threw the system into sharp and deep imbalance.

The Cold War ended, but it did not end with the signing of a peace treaty with clear and transparent agreements on respecting existing rules or creating new rules and standards. This created the impression that the so-called ‘victors’ in the Cold War had decided to pressure events and reshape the world to suit their own needs and interests. If the existing system of international relations, international law and the checks and balances in place got in the way of these aims, this system was declared worthless, outdated and in need of immediate demolition. Pardon the analogy, but this is the way nouveaux riches behave when they suddenly end up with a great fortune, in this case, in the shape of world leadership and domination. Instead of managing their wealth wisely, for their own benefit too of course, I think they have committed many follies.

We have entered a period of differing interpretations and deliberate silences in world politics. International law has been forced to retreat over and over by the onslaught of legal nihilism. Objectivity and justice have been sacrificed on the altar of political expediency. Arbitrary interpretations and biased assessments have replaced legal norms. At the same time, total control of the global mass media has made it possible when desired to portray white as black and black as white.

In a situation where you had domination by one country and its allies, or its satellites rather, the search for global solutions often turned into an attempt to impose their own universal recipes. This group’s ambitions grew so big that they started presenting the policies they put together in their corridors of power as the view of the entire international community. But this is not the case.

The very notion of ‘national sovereignty’ became a relative value for most countries. In essence, what was being proposed was the formula: the greater the loyalty towards the world’s sole power centre, the greater this or that ruling regime’s legitimacy.

We will have a free discussion afterwards and I will be happy to answer your questions and would also like to use my right to ask you questions. Let someone try to disprove the arguments that I just set out during the upcoming discussion.

The measures taken against those who refuse to submit are well-known and have been tried and tested many times. They include use of force, economic and propaganda pressure, meddling in domestic affairs, and appeals to a kind of ‘supra-legal’ legitimacy when they need to justify illegal intervention in this or that conflict or toppling inconvenient regimes. Of late, we have increasing evidence too that outright blackmail has been used with regard to a number of leaders. It is not for nothing that ‘big brother’ is spending billions of dollars on keeping the whole world, including its own closest allies, under surveillance.

Let’s ask ourselves, how comfortable are we with this, how safe are we, how happy living in this world, and how fair and rational has it become? Maybe, we have no real reasons to worry, argue and ask awkward questions? Maybe the United States’ exceptional position and the way they are carrying out their leadership really is a blessing for us all, and their meddling in events all around the world is bringing peace, prosperity, progress, growth and democracy, and we should maybe just relax and enjoy it all?

Let me say that this is not the case, absolutely not the case.

A unilateral diktat and imposing one’s own models produces the opposite result. Instead of settling conflicts it leads to their escalation, instead of sovereign and stable states we see the growing spread of chaos, and instead of democracy there is support for a very dubious public ranging from open neo-fascists to Islamic radicals.

Why do they support such people? They do this because they decide to use them as instruments along the way in achieving their goals but then burn their fingers and recoil. I never cease to be amazed by the way that our partners just keep stepping on the same rake, as we say here in Russia, that is to say, make the same mistake over and over.

They once sponsored Islamic extremist movements to fight the Soviet Union. Those groups got their battle experience in Afghanistan and later gave birth to the Taliban and Al-Qaeda. The West if not supported, at least closed its eyes, and, I would say, gave information, political and financial support to international terrorists’ invasion of Russia (we have not forgotten this) and the Central Asian region’s countries. Only after horrific terrorist attacks were committed on US soil itself did the United States wake up to the common threat of terrorism. Let me remind you that we were the first country to support the American people back then, the first to react as friends and partners to the terrible tragedy of September 11.

During my conversations with American and European leaders, I always spoke of the need to fight terrorism together, as a challenge on a global scale. We cannot resign ourselves to and accept this threat, cannot cut it into separate pieces using double standards. Our partners expressed agreement, but a little time passed and we ended up back where we started. First there was the military operation in Iraq, then in Libya, which got pushed to the brink of falling apart. Why was Libya pushed into this situation? Today it is a country in danger of breaking apart and has become a training ground for terrorists.

Only the current Egyptian leadership’s determination and wisdom saved this key Arab country from chaos and having extremists run rampant. In Syria, as in the past, the United States and its allies started directly financing and arming rebels and allowing them to fill their ranks with mercenaries from various countries. Let me ask where do these rebels get their money, arms and military specialists? Where does all this come from? How did the notorious ISIL manage to become such a powerful group, essentially a real armed force? As for financing sources, today, the money is coming not just from drugs, production of which has increased not just by a few percentage points but many-fold, since the international coalition forces have been present in Afghanistan. You are aware of this. The terrorists are getting money from selling oil too. Oil is produced in territory controlled by the terrorists, who sell it at dumping prices, produce it and transport it. But someone buys this oil, resells it, and makes a profit from it, not thinking about the fact that they are thus financing terrorists who could come sooner or later to their own soil and sow destruction in their own countries.

Where do they get new recruits? In Iraq, after Saddam Hussein was toppled, the state’s institutions, including the army, were left in ruins. We said back then, be very, very careful. You are driving people out into the street, and what will they do there? Don’t forget (rightfully or not) that they were in the leadership of a large regional power, and what are you now turning them into?

What was the result? Tens of thousands of soldiers, officers and former Baath Party activists were turned out into the streets and today have joined the rebels’ ranks. Perhaps this is what explains why the Islamic State group has turned out so effective? In military terms, it is acting very effectively and has some very professional people. Russia warned repeatedly about the dangers of unilateral military actions, intervening in sovereign states’ affairs, and flirting with extremists and radicals. We insisted on having the groups fighting the central Syrian government, above all the Islamic State, included on the lists of terrorist organisations. But did we see any results? We appealed in vain.

We sometimes get the impression that our colleagues and friends are constantly fighting the consequences of their own policies, throw all their effort into addressing the risks they themselves have created, and pay an ever-greater price.

Colleagues, this period of unipolar domination has convincingly demonstrated that having only one power centre does not make global processes more manageable. On the contrary, this kind of unstable construction has shown its inability to fight the real threats such as regional conflicts, terrorism, drug trafficking, religious fanaticism, chauvinism and neo-Nazism. At the same time, it has opened the road wide for inflated national pride, manipulating public opinion and letting the strong bully and suppress the weak.

Essentially, the unipolar world is simply a means of justifying dictatorship over people and countries. The unipolar world turned out too uncomfortable, heavy and unmanageable a burden even for the self-proclaimed leader. Comments along this line were made here just before and I fully agree with this. This is why we see attempts at this new historic stage to recreate a semblance of a quasi-bipolar world as a convenient model for perpetuating American leadership. It does not matter who takes the place of the centre of evil in American propaganda, the USSR’s old place as the main adversary. It could be Iran, as a country seeking to acquire nuclear technology, China, as the world’s biggest economy, or Russia, as a nuclear superpower.

Today, we are seeing new efforts to fragment the world, draw new dividing lines, put together coalitions not built for something but directed against someone, anyone, create the image of an enemy as was the case during the Cold War years, and obtain the right to this leadership, or diktat if you wish. The situation was presented this way during the Cold War. We all understand this and know this. The United States always told its allies: “We have a common enemy, a terrible foe, the centre of evil, and we are defending you, our allies, from this foe, and so we have the right to order you around, force you to sacrifice your political and economic interests and pay your share of the costs for this collective defence, but we will be the ones in charge of it all of course.” In short, we see today attempts in a new and changing world to reproduce the familiar models of global management, and all this so as to guarantee their [the US’] exceptional position and reap political and economic dividends.

But these attempts are increasingly divorced from reality and are in contradiction with the world’s diversity. Steps of this kind inevitably create confrontation and countermeasures and have the opposite effect to the hoped-for goals. We see what happens when politics rashly starts meddling in the economy and the logic of rational decisions gives way to the logic of confrontation that only hurt one’s own economic positions and interests, including national business interests.

Joint economic projects and mutual investment objectively bring countries closer together and help to smooth out current problems in relations between states. But today, the global business community faces unprecedented pressure from Western governments. What business, economic expediency and pragmatism can we speak of when we hear slogans such as “the homeland is in danger”, “the free world is under threat”, and “democracy is in jeopardy”? And so everyone needs to mobilise. That is what a real mobilisation policy looks like.

Sanctions are already undermining the foundations of world trade, the WTO rules and the principle of inviolability of private property. They are dealing a blow to liberal model of globalisation based on markets, freedom and competition, which, let me note, is a model that has primarily benefited precisely the Western countries. And now they risk losing trust as the leaders of globalisation. We have to ask ourselves, why was this necessary? After all, the United States’ prosperity rests in large part on the trust of investors and foreign holders of dollars and US securities. This trust is clearly being undermined and signs of disappointment in the fruits of globalisation are visible now in many countries. The well-known Cyprus precedent and the politically motivated sanctions have only strengthened the trend towards seeking to bolster economic and financial sovereignty and countries’ or their regional groups’ desire to find ways of protecting themselves from the risks of outside pressure. We already see that more and more countries are looking for ways to become less dependent on the dollar and are setting up alternative financial and payments systems and reserve currencies. I think that our American friends are quite simply cutting the branch they are sitting on. You cannot mix politics and the economy, but this is what is happening now. I have always thought and still think today that politically motivated sanctions were a mistake that will harm everyone, but I am sure that we will come back to this subject later.

We know how these decisions were taken and who was applying the pressure. But let me stress that Russia is not going to get all worked up, get offended or come begging at anyone’s door. Russia is a self-sufficient country. We will work within the foreign economic environment that has taken shape, develop domestic production and technology and act more decisively to carry out transformation. Pressure from outside, as has been the case on past occasions, will only consolidate our society, keep us alert and make us concentrate on our main development goals.

Of course the sanctions are a hindrance. They are trying to hurt us through these sanctions, block our development and push us into political, economic and cultural isolation, force us into backwardness in other words. But let me say yet again that the world is a very different place today. We have no intention of shutting ourselves off from anyone and choosing some kind of closed development road, trying to live in autarky. We are always open to dialogue, including on normalising our economic and political relations. We are counting here on the pragmatic approach and position of business communities in the leading countries.

Some are saying today that Russia is supposedly turning its back on Europe – such words were probably spoken already here too during the discussions – and is looking for new business partners, above all in Asia. Let me say that this is absolutely not the case. Our active policy in the Asian-Pacific region began not just yesterday and not in response to sanctions, but is a policy that we have been following for a good many years now. Like many other countries, including Western countries, we saw that Asia is playing an ever greater role in the world, in the economy and in politics, and there is simply no way we can afford to overlook these developments.

Let me say again that everyone is doing this, and we will do so to, all the more so as a large part of our country is geographically in Asia. Why should we not make use of our competitive advantages in this area? It would be extremely shortsighted not to do so.

Developing economic ties with these countries and carrying out joint integration projects also creates big incentives for our domestic development. Today’s demographic, economic and cultural trends all suggest that dependence on a sole superpower will objectively decrease. This is something that European and American experts have been talking and writing about too.Perhaps developments in global politics will mirror the developments we are seeing in the global economy, namely, intensive competition for specific niches and frequent change of leaders in specific areas. This is entirely possible.

There is no doubt that humanitarian factors such as education, science, healthcare and culture are playing a greater role in global competition. This also has a big impact on international relations, including because this ‘soft power’ resource will depend to a great extent on real achievements in developing human capital rather than on sophisticated propaganda tricks.At the same time, the formation of a so-called polycentric world (I would also like to draw attention to this, colleagues) in and of itself does not improve stability; in fact, it is more likely to be the opposite. The goal of reaching global equilibrium is turning into a fairly difficult puzzle, an equation with many unknowns.

So, what is in store for us if we choose not to live by the rules – even if they may be strict and inconvenient – but rather live without any rules at all? And that scenario is entirely possible; we cannot rule it out, given the tensions in the global situation. Many predictions can already be made, taking into account current trends, and unfortunately, they are not optimistic. If we do not create a clear system of mutual commitments and agreements, if we do not build the mechanisms for managing and resolving crisis situations, the symptoms of global anarchy will inevitably grow.Today, we already see a sharp increase in the likelihood of a whole set of violent conflicts with either direct or indirect participation by the world’s major powers. And the risk factors include not just traditional multinational conflicts, but also the internal instability in separate states, especially when we talk about nations located at the intersections of major states’ geopolitical interests, or on the border of cultural, historical, and economic civilizational continents.

Ukraine, which I’m sure was discussed at length and which we will discuss some more, is one of the example of such sorts of conflicts that affect international power balance, and I think it will certainly not be the last. From here emanates the next real threat of destroying the current system of arms control agreements. And this dangerous process was launched by the United States of America when it unilaterally withdrew from the Anti-Ballistic Missile Treaty in 2002, and then set about and continues today to actively pursue the creation of its global missile defence system.

Colleagues, friends, I want to point out that we did not start this. Once again, we are sliding into the times when, instead of the balance of interests and mutual guarantees, it is fear and the balance of mutual destruction that prevent nations from engaging in direct conflict. In absence of legal and political instruments, arms are once again becoming the focal point of the global agenda; they are used wherever and however, without any UN Security Council sanctions. And if the Security Council refuses to produce such decisions, then it is immediately declared to be an outdated and ineffective instrument.

Many states do not see any other ways of ensuring their sovereignty but to obtain their own bombs. This is extremely dangerous. We insist on continuing talks; we are not only in favour of talks, but insist on continuing talks to reduce nuclear arsenals. The less nuclear weapons we have in the world, the better. And we are ready for the most serious, concrete discussions on nuclear disarmament – but only serious discussions without any double standards.

What do I mean? Today, many types of high-precision weaponry are already close to mass-destruction weapons in terms of their capabilities, and in the event of full renunciation of nuclear weapons or radical reduction of nuclear potential, nations that are leaders in creating and producing high-precision systems will have a clear military advantage. Strategic parity will be disrupted, and this is likely to bring destabilization. The use of a so-called first global pre-emptive strike may become tempting. In short, the risks do not decrease, but intensify.

The next obvious threat is the further escalation of ethnic, religious, and social conflicts. Such conflicts are dangerous not only as such, but also because they create zones of anarchy, lawlessness, and chaos around them, places that are comfortable for terrorists and criminals, where piracy, human trafficking, and drug trafficking flourish.

Incidentally, at the time, our colleagues tried to somehow manage these processes, use regional conflicts and design ‘colour revolutions’ to suit their interests, but the genie escaped the bottle. It looks like the controlled chaos theory fathers themselves do not know what to do with it; there is disarray in their ranks.

We closely follow the discussions by both the ruling elite and the expert community. It is enough to look at the headlines of the Western press over the last year. The same people are called fighters for democracy, and then Islamists; first they write about revolutions and then call them riots and upheavals. The result is obvious: the further expansion of global chaos.

Colleagues, given the global situation, it is time to start agreeing on fundamental things. This is incredibly important and necessary; this is much better than going back to our own corners. The more we all face common problems, the more we find ourselves in the same boat, so to speak. And the logical way out is in cooperation between nations, societies, in finding collective answers to increasing challenges, and in joint risk management. Granted, some of our partners, for some reason, remember this only when it suits their interests.

Practical experience shows that joint answers to challenges are not always a panacea; and we need to understand this. Moreover, in most cases, they are hard to reach; it is not easy to overcome the differences in national interests, the subjectivity of different approaches, particularly when it comes to nations with different cultural and historical traditions. But nevertheless, we have examples when, having common goals and acting based on the same criteria, together we achieved real success.

Let me remind you about solving the problem of chemical weapons in Syria, and the substantive dialogue on the Iranian nuclear programme, as well as our work on North Korean issues, which also has some positive results. Why can’t we use this experience in the future to solve local and global challenges?

What could be the legal, political, and economic basis for a new world order that would allow for stability and security, while encouraging healthy competition, not allowing the formation of new monopolies that hinder development? It is unlikely that someone could provide absolutely exhaustive, ready-made solutions right now. We will need extensive work with participation by a wide range of governments, global businesses, civil society, and such expert platforms as ours.

However, it is obvious that success and real results are only possible if key participants in international affairs can agree on harmonising basic interests, on reasonable self-restraint, and set the example of positive and responsible leadership. We must clearly identify where unilateral actions end and we need to apply multilateral mechanisms, and as part of improving the effectiveness of international law, we must resolve the dilemma between the actions by international community to ensure security and human rights and the principle of national sovereignty and non-interference in the internal affairs of any state.

Those very collisions increasingly lead to arbitrary external interference in complex internal processes, and time and again, they provoke dangerous conflicts between leading global players. The issue of maintaining sovereignty becomes almost paramount in maintaining and strengthening global stability.

Clearly, discussing the criteria for the use of external force is extremely difficult; it is practically impossible to separate it from the interests of particular nations. However, it is far more dangerous when there are no agreements that are clear to everyone, when no clear conditions are set for necessary and legal interference.

I will add that international relations must be based on international law, which itself should rest on moral principles such as justice, equality and truth. Perhaps most important is respect for one’s partners and their interests. This is an obvious formula, but simply following it could radically change the global situation.

I am certain that if there is a will, we can restore the effectiveness of the international and regional institutions system. We do not even need to build anything anew, from the scratch; this is not a “greenfield,” especially since the institutions created after World War II are quite universal and can be given modern substance, adequate to manage the current situation.

This is true of improving the work of the UN, whose central role is irreplaceable, as well as the OSCE, which, over the course of 40 years, has proven to be a necessary mechanism for ensuring security and cooperation in the Euro-Atlantic region. I must say that even now, in trying to resolve the crisis in southeast Ukraine, the OSCE is playing a very positive role.

In light of the fundamental changes in the international environment, the increase in uncontrollability and various threats, we need a new global consensus of responsible forces. It’s not about some local deals or a division of spheres of influence in the spirit of classic diplomacy, or somebody’s complete global domination. I think that we need a new version of interdependence. We should not be afraid of it. On the contrary, this is a good instrument for harmonising positions.

This is particularly relevant given the strengthening and growth of certain regions on the planet, which process objectively requires institutionalisation of such new poles, creating powerful regional organisations and developing rules for their interaction. Cooperation between these centres would seriously add to the stability of global security, policy and economy. But in order to establish such a dialogue, we need to proceed from the assumption that all regional centres and integration projects forming around them need to have equal rights to development, so that they can complement each other and nobody can force them into conflict or opposition artificially. Such destructive actions would break down ties between states, and the states themselves would be subjected to extreme hardship, or perhaps even total destruction.

I would like to remind you of the last year’s events. We have told our American and European partners that hasty backstage decisions, for example, on Ukraine’s association with the EU, are fraught with serious risks to the economy. We didn’t even say anything about politics; we spoke only about the economy, saying that such steps, made without any prior arrangements, touch on the interests of many other nations, including Russia as Ukraine’s main trade partner, and that a wide discussion of the issues is necessary. Incidentally, in this regard, I will remind you that, for example, the talks on Russia’s accession to the WTO lasted 19 years. This was very difficult work, and a certain consensus was reached.

Why am I bringing this up? Because in implementing Ukraine’s association project, our partners would come to us with their goods and services through the back gate, so to speak, and we did not agree to this, nobody asked us about this. We had discussions on all topics related to Ukraine’s association with the EU, persistent discussions, but I want to stress that this was done in an entirely civilised manner, indicating possible problems, showing the obvious reasoning and arguments. Nobody wanted to listen to us and nobody wanted to talk. They simply told us: this is none of your business, point, end of discussion. Instead of a comprehensive but – I stress – civilised dialogue, it all came down to a government overthrow; they plunged the country into chaos, into economic and social collapse, into a civil war with enormous casualties.

Why? When I ask my colleagues why, they no longer have an answer; nobody says anything. That’s it. Everyone’s at a loss, saying it just turned out that way. Those actions should not have been encouraged – it wouldn’t have worked. After all (I already spoke about this), former Ukrainian President Yanukovych signed everything, agreed with everything. Why do it? What was the point? What is this, a civilised way of solving problems? Apparently, those who constantly throw together new ‘colour revolutions’ consider themselves ‘brilliant artists’ and simply cannot stop.

I am certain that the work of integrated associations, the cooperation of regional structures, should be built on a transparent, clear basis; the Eurasian Economic Union’s formation process is a good example of such transparency. The states that are parties to this project informed their partners of their plans in advance, specifying the parameters of our association, the principles of its work, which fully correspond with the World Trade Organisation rules.

I will add that we would also have welcomed the start of a concrete dialogue between the Eurasian and European Union. Incidentally, they have almost completely refused us this as well, and it is also unclear why – what is so scary about it?

And, of course, with such joint work, we would think that we need to engage in dialogue (I spoke about this many times and heard agreement from many of our western partners, at least in Europe) on the need to create a common space for economic and humanitarian cooperation stretching all the way from the Atlantic to the Pacific Ocean.

Colleagues, Russia made its choice. Our priorities are further improving our democratic and open economy institutions, accelerated internal development, taking into account all the positive modern trends in the world, and consolidating society based on traditional values and patriotism.

We have an integration-oriented, positive, peaceful agenda; we are working actively with our colleagues in the Eurasian Economic Union, the Shanghai Cooperation Organisation, BRICS and other partners. This agenda is aimed at developing ties between governments, not dissociating. We are not planning to cobble together any blocs or get involved in an exchange of blows.

The allegations and statements that Russia is trying to establish some sort of empire, encroaching on the sovereignty of its neighbours, are groundless. Russia does not need any kind of special, exclusive place in the world – I want to emphasise this. While respecting the interests of others, we simply want for our own interests to be taken into account and for our position to be respected.We are well aware that the world has entered an era of changes and global transformations, when we all need a particular degree of caution, the ability to avoid thoughtless steps. In the years after the Cold War, participants in global politics lost these qualities somewhat. Now, we need to remember them. Otherwise, hopes for a peaceful, stable development will be a dangerous illusion, while today’s turmoil will simply serve as a prelude to the collapse of world order.

Yes, of course, I have already said that building a more stable world order is a difficult task. We are talking about long and hard work. We were able to develop rules for interaction after World War II, and we were able to reach an agreement in Helsinki in the 1970s. Our common duty is to resolve this fundamental challenge at this new stage of development.

Thank you very much for your attention.