Prince Mohammad Al Saud announced Russia's upcoming withdrawal from the world oil market and Larry Kudlow said that the best way for America to challenge Russia is to become the biggest energy power and push Moscow out of the European energy market. Despite the fact that the Saudi prince and the American official were pursuing different goals, the anti-Russian narrative turned out to be very coherent and consists of two mutually supporting theses — that Russia will run out of oil in the foreseeable future and that its place on the world energy market will soon be taken over by other players, Sputnik contributor Ivan Danilov, the author of the Crimson Alter blog, wrote.
Some people considered these statements to be revelations of "Putin's dark secret," which will lead to the Russian president losing his grip on power and Russia's political course taking a drastic turn.
We will have to disappoint those who dream that Russia will cease being an energy superpower. The most likely scenario for the development of the Russian oil and gas sector can be described using Putin's own words: "ain't gonna happen."
READ MORE: Oil Prices Feared to Spike as Saudi Arabia Runs Low on Popular Crude — Report
If you try to find correlations between the statement of the Saudi prince and figures of Russian production and reserves, you will find a logical explanation for his position. For example, if you take BP data on proven Russian oil reserves as of 2015 and divide them by the current level of production, then you'll get the same 19-20 years that Prince Mohammad spoke about.
Perhaps he came up with this figure some other way, but in any case, this is a very bold and, to put it mildly, extremely unrealistic assumption, because it's based on an idea that from now on, no more oil will be found anywhere else in Russia, that its probable and possible reserves will not be proven, and that Russia will forever remain at its current level of technology, which will not allow accessing the reserves, the development of which is currently either impossible or economically inexpedient.
Needless to say, this apocalyptic scenario can't be considered possible, especially given the prospects for Russian oil and gas projects in the Arctic and Siberia. The active discussions within the American and Canadian expert communities on how to "grab" these regions from Russia is the clear indication of just how much potential these projects really have.
Concerning the alleged motivation of the Saudi statements, it is hard to believe that such a high-ranking official does not realize how controversial such statements are, to put it mildly. Moreover, they nearly coincided with a decision announcing that the Saudi state oil company, Aramco, would be listed on the stock exchange in 2021. This means that Riyadh is extremely interested in maximizing the sale price of its shares.
READ MORE: US Surpasses Russia, Saudi Arabia as World's No.1 Crude Oil Producer — EIA
In this context, it becomes clear that Prince Mohammad Al Saud wasn't actually trying to offer a negative outlook on Russia's prospects, but to simply to advertise Aramco's shares. He tried, in a manner typical of Eastern diplomats and merchants praising their goods, to present the Saudi company as a reliable and promising investment.
The situation regarding the forecast of Trump's adviser is quite different, however. In his speech on Hill TV, Kudlow spoke straightforwardly: "we have to have infrastructure [… to] get this stuff to Europe and challenge Russia's hegemony on natural gas and LNG. […] This is doable. We have to really focus on the energy sector." In the same interview, he stressed that the US is already an energy superpower, that it can pump 15 million barrels of oil per day, which means that the US is already "passing [the] Saudis,[…] passing Russia."
There are two points to be stressed here. First, the US official actually admitted that all American statements about the "energy independence of Europe" and the desire to fight for the interests of Ukraine as a transit state for Russian gas were blatant lies. The US is only interested in replacing Russian gas with its own LNG and nothing else.
Secondly, Kudlow confessed to the same crime that US officials accuse the Kremlin of, namely, using oil and gas supplies as a geopolitical weapon. The Russian Foreign Ministry must be grateful to Trump's advisor for his confession, which will be highly appreciated by Russia's partners in the EU on energy trade.
READ MORE: Germany Can't Give Up on Cooperation With Russia in Oil and Gas — Merkel
In fact, Kudlow's plan has two serious flaws. Despite US pressure on the European Union, Nord Stream 2 is being successfully built and, according to Gazprom, the capital investments required for the gas pipeline project have already been almost 70 percent financed. It will be extremely difficult to stop Nord Stream 2 at this stage, because if necessary, the Russian side could complete it at its own expense.
The attempt at forcing the Europeans into buying expensive American LNG is practically doomed in the context of the extremely complicated US-EU relations and the trade war between European countries and the US. And let's not forget about the move to ditch trade in dollars, which was recently announced by the head of the European Commission, Jean-Claude Juncker.
As for the forecasted growth of US oil production to 15 million barrels per day, it should be noted that even the US Department of Energy speaks about such production levels only in the most optimistic of the three considered scenarios, which could only occur if oil prices skyrocket significantly and a breakthrough in production technologies takes place at the same time. In all other scenarios, including the basic one, US oil production will not reach this level and is set to decline in 12-15 years.
It turns out that according to official US data, Kudlow's words are nothing more than wishful thinking. His ideas to push Russia out of the global gas market contradict the harsh reality in which Russian LNG produced in the Arctic is actually being sold to the US.
The views and opinions expressed are those of the speaker and do not necessarily reflect those of Sputnik.
