- On 19/06/2020
- atom, business in russia, energy, export in russia, export to russia, nuclear
Prices for oil contracts this week reached a negative value, and experts talked about how the current oil crisis could drag on for years. The situation becomes threateningly similar to the crisis of the 80s, which turned into the collapse of the USSR and the war in the Persian Gulf. Is it possible to repeat old scripts today? How Russia back in 2006 proposed the world to get off the oil needle, and is this proposal relevant today? Let’s get it right.
This has already happened
On Monday, the cost of US WTI crude oil for May delivery reached a negative value on the exchanges. Following this, other grades of oil fell in price, and World Bank analysts worsened their annual price forecast. As we warned a month ago, there is too much oil in the world, and speculators are ready to get rid of it even with a big loss. The situation becomes similar to the crisis of overproduction of the 80s when the market was overstocked and prices dramatically collapsed. Later, one of the consequences of this was the collapse of the Soviet Union. And although many Western countries, including the United States, received tremendous benefits from that oil crisis, it could not continue indefinitely, since it was contrary to the interests of American oil-producing corporations. And if the USSR collapsed almost peacefully, then financially drained Iraq decided on the last spurt and began the war in the Persian Gulf. It was a fabulous gift to oil producers, as prices rushed into space, and the subsequent division of the world drove Iraq and Iran into sanction bondage for a long time – America and Saudi Arabia rejoiced. But all good things end sooner or later.
History repeats itself
Having survived the collapse of the USSR, Russia regained its position and became a key player in the oil and gas market. A secret and overt marketing battle began, which led to the current crisis. However, now the United States itself is a major producer of oil, so they are beginning to experience the problems that were typical of the USSR in the 80s. Whether they will cause Washington’s political collapse, we don’t know, but something else is noteworthy. After a collapse in prices on Monday, Trump launched several formidable tweets to the Iranian leadership, threatening to attack his navy. Oil prices immediately went up, playing the part of the fall. Of course, few people believe in Trump’s threats, but the situation is now explosive. The temptation of the US oil lobby is too great today to solve its problems today, as, in the 90s, the temptation of political opponents of Trump is too great to force him to make a mistake on the eve of the election. Let’s leave it all to political analysts, but we want to highlight the main thing – the current order based on exchange speculation will lead the world over and over again to new wars as a method of redistributing the market. This is a bad, painful order. But Russia back in 2006 proposed to change it painlessly. How exactly – you can read after a brief summary of positive news.
The Soyuz-2.1a launch vehicle successfully launched from the Baikonur Cosmodrome and delivered the cargo to the ISS, breaking the speed record.
The Ministry of Defence received two modernised strategic missile carriers Tu-160 “Ivan Yarygin” and “Vasily Reshetnikov”.
The Aurora Robotics company introduced a disinfection robot with a lifting capacity of 50 kg.
The construction of the second of 16 medical hospitals of the Ministry of Defence was completed in the Moscow Region.
Rostech launched the production of new valve systems for ventilators.
The world of oil
Our modern world is, of course, the world of oil. Not only because it is a source of energy, but also because various types of plastic, medicines and other products are made from oil. Speaking of oil, we mean gas, as often they are extracted together, and their prices are interconnected. Oil is the basis of modern civilisation, but there is also an atom.
Apart from the period of collapse in hydrocarbon prices, an atom is a cheaper source of energy, and safer for the environment. Now in the world, there are about fifty thousand nuclear power units, but there could be much more. In this case, the monopoly of oil, gas, and coal would be seriously diluted, which means that the world would not have any global problems due to price hikes. Moreover, unlike most sources of renewable energy, an atom is economically profitable without any subsidies. However, the “atomic world” has not yet come.
Nuclear technologies are expensive and complex. Most countries of the world cannot build nuclear power plants alone, although they want to get cheap energy. And those who can, simply do not give such an opportunity. For example, Iran is permanently under sanctions for trying to independently provide itself with nuclear energy, as it is accused of trying to quietly create a nuclear bomb. Looking at his example, other countries are even afraid to start, as a result, the world is stuck in an oil and gas trap and, it seems, for a long time. But Russia came up with an original way out of it.
In 2006, as a member of the G8, Russia invited the world community to create 5 international uranium enrichment centres on the planet under the control of the IAEA. Access to these centres should have been available to all countries of the world, without exception. This could lead to an explosive development of nuclear energy since now non-nuclear countries would receive fuel for nuclear power plants from these centres and return waste there for reprocessing. This would strengthen control over the non-proliferation of nuclear weapons since the international community itself would guarantee the work of such centres only in the civilian direction. Russia proposed to build one of the centres on its territory in Angarsk and to supply all the others with Russian uranium enrichment technologies. The world got a real chance to change its energy profile and become more stable and predictable. But something went wrong.
And the IAEA, and a number of Western countries, and even Iran supported the Russian proposal. Even US President George W. Bush spoke in favour, however, provided that one of these centres was built in his country. However, then the leverage of secret diplomacy turned on, and the proposal went to the trash, and later Russia was expelled from the G8. There were several reasons for this.
Firstly, the onset of nuclear energy would mean a retreat of hydrocarbon, and oil monsters were not at all happy about this prospect. And secondly, Russia then and now is a leader in uranium enrichment and has unique technologies. This means that the political weight of Russia would inevitably grow due to the project for building nuclear centres based on its technologies. In general, they did not listen to Russia.
As a result, after 14 years, we have what we have – the world continues to be dependent on the oil and gas industry and has entered a new crisis with unclear consequences. The world community, in fact, refused to jointly develop nuclear technology. Russia continued to develop uranium enrichment technologies and is approaching the creation of a closed nuclear cycle, it has increased its activity in the construction of new units and is building nuclear power plants around the world. While Western competitors, mainly the United States, are beginning to degrade the industry and have become dependent on Russia for nuclear fuel supplies.