Oil Producers and Their Governments

TriangleofDoomgc2reddit-logoOff the keyboard of Steve Ludlum

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on the Economic Undertow on June 2, 2018

Discuss this article at the Geopolitics Table inside the Diner

Being a top oil producing country is not conducive to good government.

Looking at the top fifteen oil producing states, nine are autocracies, seven of which are of long standing. Only three are democratic republics. Two other producer states are transitioning to single-party status or decaying to warlordism. While the US is officially a democratic, multi-party republic, it is a de-facto corporate autocracy. The policy impulse for the US establishment as it is for other single party states is enrichment of elites: waste-based, finance-driven ‘growth’ regardless of the cost, ‘out of the barrel of a gun’ as necessary; (from Wikipedia):

 

  Country Oil Production, Bbls/day Political System
World Production 80,622,000 Indicates OPEC membership
1 Russia 10,551,497 Single-party police state
2 Saudi Arabia 10,460,710 Monarchy/Single-party police state
3 United States 8,875,817 Corporate autocracy
4 Iraq 4,451,516 Iranian protectorate.
5 Iran 3,990,956 Single-party police state
6 China 3,980,650 Single-party police state
7 Canada 3,662,694 Multi-party republic
8 United Arab Emirates 3,106,077 Monarchy – effective single-party state
9 Kuwait 2,923,825 Monarchy – effective single-party state
10 Brazil 2,515,459 Transitional*
11 Venezuela 2,276,967 Single-party police state
12 Mexico 2,186,877 Transitional**
13 Nigeria 1,999,885 Multi-party republic
14 Angola 1,769,615 Effective single-party state
15 Norway 1,647,975 Multi-party republic

* Brazil is in the process of transitioning to military rule or single party status.
** Mexico is in the process of transitioning to warlord (failed) state or control by criminal gangs.

Petroleum resources offer enormous leverage for those able to gain control over them; at the same time control over the resources offers political advantages that are both obvious and difficult to overcome. Because of its dependence on integrated refining, processing and distribution infrastructure, petroleum is a resource that lends itself to ‘cartelization’. A government has only to create a monopoly to access resources at hand or take over control of existing businesses and combine them together.

Because of the absence of public input or a ‘negative feedback channel’ to restrain leadership, single-party states tend to be militaristic. Control over large petroleum resources offers managers the appearance of the means to dominion, to overrun or undermine neighbors, to expand control over resources or to destroy consumption in target countries so that it can be exported elsewhere:

  Country Military Expenditures (in US dollars) Current Wars – Potential Wars
1 Russia $63 billion Ukraine, Syria – Poland, Baltic states, Balkan states
2 Saudi Arabia $69.5 billion Yemen, Syria – Qatar, Egypt, Lebanon, Iran
3 United States $610 billion Afghanistan, Iraq, Syria, Pakistan, Somalia, western Africa – China/North Korea, Iran, Venezuela, Mexico
4 Iraq $19.4 billion Turkey, Syria, Islamic militants
5 Iran $14 billion Iraq, Yemen, Syria, Turkey – US, Saudi Arabia
6 China $228 billion Low intensity war in Xinjiang – US, Vietnam, S. Korea, Japan
7 Canada $20.6 billion Various support efforts for US and Nato
8 United Arab Emirates $21.8 billion Yemen
9 Kuwait $7 billion Iran
10 Brazil $29.3 billion Civil war
11 Venezuela $4.5 billion Civil war, US
12 Mexico $6 billion Civil war
13 Nigeria $1.8 billion Civil war vs Islamic militants and others
14 Angola $2.3 billion South Africa, civil war
15 Norway $6.3 billion Russia

The US gets away with its belligerence because the dollar is the world reserve currency; Wall Street simply produces dollar credit on demand, borrowers both domestic and abroad wind up indirectly funding the US war machine. Because Wall Street cannot lend resources into existence, credit creation runs ahead of available resources as they are depleted. At the same time, the US must hunt everywhere for new resources to cannibalize … or rivals to destabilize. In a way, the US has given itself no other choice, wasting fuel and other resources is what makes up our precious lifestyle.

Primary credit providers such as Great Britain during its imperial heyday are aggressive in preserving their credit monopoly, exorbitant privilege. The US’ role as primary credit provider suggests conflict with China is likely, perhaps between the two countries’ proxies on- or near the Korean peninsula or in the South China Sea. It is probable none of the autocrats in either country understand credit provision and the necessary infrastructure, these being a native currency, a treasury, a lender of last resort, strong commercial banks (able to distribute their own losses into the general economy); also private property, equitable regulation, enforceable contracts, the rule of law and a body of jurisprudence. All of these marshaled over time equal ‘creditworthiness’; the last three — enforceable contracts, rule of law and body of jurisprudence — are absent in China. Without fundamental changes, it will rely on external (dollar) credit. As it is, of the fifteen top oil producers, only the US is a credit provider, a status that required over 100 years and the exhaustion of Great Britain in two world wars to achieve.

As economic activity continues or increases, so does resource depletion. It is not depletion per-se that is causing problems within individual countries but the larger dynamics, energy deflation and dollar preference. The peripheral countries are affected first.

Single party states = poor economic management; inflation in Iran, (Prof. Steve Hanke):

Figure 1: Annual inflation in Iran is now running 78%. Iranians are ‘voting with their wallets’ and using the local currency to buy whatever dollars they can get their hands on.

Figure 2: Inflation in Venezuela is accelerating, now an amazing 30,000%+. Venezuela has the world’s largest reserves of oil but it does not matter: the country lacks the funds to access them, even as Venezuelans must either flee their country or face starvation.

There is inflation elsewhere: official figures tend to understate actual rates of inflation because they discount black-market rates; Angola, 30%; Nigeria, 16%; Russia, 4%, etc.

The question for Americans and the West becomes how much erosion of rights and privileges will people accept, how many wars, how much ruin; how far down the rat hole to we travel before questioning the energy-wasting status quo? How much are we prepared to give up for illusions?

Knarf plays the Doomer Blues

https://image.freepik.com/free-icon/musical-notes-symbols_318-29778.jpg

Support the Diner
Search the Diner
Surveys & Podcasts

NEW SURVEY

Renewable Energy

VISIT AND FOLLOW US ON DINER SOUNDCLOUD

" As a daily reader of all of the doomsday blogs, e.g. the Diner, Nature Bats Last, Zerohedge, Scribbler, etc… I must say that I most look forward to your “off the microphone” rants. Your analysis, insights, and conclusions are always logical, well supported, and clearly articulated – a trifecta not frequently achieved."- Joe D
Archives
Global Diners

View Full Diner Stats

Global Population Stats

Enter a Country Name for full Population & Demographic Statistics

Lake Mead Watch

http://si.wsj.net/public/resources/images/NA-BX686_LakeMe_G_20130816175615.jpg

loading

Inside the Diner

Tree of the week:Eucalyptus leucoxylon ‘Euky Dwarf’Already have one similar I planted nearly 20 years ago on the property I will post a few pictures of shortly.Do well in this area. Should be fairly drought tolerant. Not looking forward to heat wav...

I made it!  I got to Tacoma on the  public Bus system!  $1 each way including the Cripple Cart.  I'm currently eating an early dinner at the Pacific Grill, right next to the Convention Center.  Free WiFi.  I'm also recharging the Cripple Cart Batts and...

An aerial photo shows what's left of the Okjökull glacier.The demise of Okjökull, the first Icelandic glacier lost to climate change, will be me...

According to a new report from the U.S. Border Patrol, over 1,100 people from 19 different African countries have been arrested illegally crossing the border into the United States since May 30.“The apprehension of people from African countries illega...

Construction of the Thirty Meter Telescope was supposed to start on July 15Hundreds...

Diner Twitter feed

Knarf’s Knewz

According to a new report from the U.S. Border Pat [...]

Construction of the Thirty Meter Telescope was sup [...]

(Reuters) - The Trump administration said on Monda [...]

Diner Newz Feeds
  • Surly
  • Agelbert
  • Knarf
  • Golden Oxen
  • Frostbite Falls

Doomstead Diner Daily July 22The Diner Daily is av [...]

Alan Dershowitz Cannot Stop Talking Accused of a s [...]

Hundreds of Astronomers Denounce Arrest of Native [...]

Quote from: UnhingedBecauseLucid on March 18, 2019 [...]

CleanTechnicaSupport CleanTechnica’s work via dona [...]

QuoteThe FACT that the current incredibly STUPID e [...]

According to a new report from the U.S. Border Pat [...]

Construction of the Thirty Meter Telescope was sup [...]

(Reuters) - The Trump administration said on Monda [...]

26 Jun, 2019Whether it was the Big Bang, Midas or [...]

In November 2018, a 66-year-old man named Tommy Th [...]

Dear Readers, Things in Venezuela are getting mess [...]

Quote from: Golden Oxen on April 27, 2019, 01:49:4 [...]

I made it!  I got to Tacoma on the  public Bus sys [...]

Good Newz!  My beloved Folding Cane turned up!  Al [...]

Quote from: RE on July 19, 2019, 08:16:00 AMI made [...]

Alternate Perspectives
  • Two Ice Floes
  • Jumping Jack Flash
  • From Filmers to Farmers

Meanderings By Cognitive Dissonance     Tis the Season Silly season is upon us. And I, for one, welc [...]

The Brainwashing of a Nation by Daniel Greenfield via Sultan Knish blog Image by ElisaRiva from Pixa [...]

A Window Into Our World By Cognitive Dissonance   Every year during the early spring awakening I qui [...]

Deaf, Dumb and Blind Who Is Better at Conceding They Are Wrong - Conservative or Liberal Extremists? [...]

The Apology: From baby boomers to the handicapped generations. by David Holmgren Re-posted from Holm [...]

Event Update For 2019-07-20http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2019-07-19http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2019-07-18http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2019-07-17http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2019-07-16http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

With fusion energy perpetually 20 years away we now also perpetually have [fill in the blank] years [...]

My mea culpa for having inadvertently neglected FF2F for so long, and an update on the upcoming post [...]

NYC plans to undertake the swindle of the civilisation by suing the companies that have enabled it t [...]

MbS, the personification of the age-old pre-revolutionary scenario in which an expiring regime attem [...]

Daily Doom Photo

man-watching-tv

Sustainability
  • Peak Surfer
  • SUN
  • Transition Voice

How the gourd killed the whale"It was a dried gourd that brought whales to the edge of extinction in the 19th Century. " [...]

Good Times Traveled"Water may stain the frescos, earthquakes may close the tunnels, but the temples will survive. [...]

Clash of the Negative Emissions Titans: Cannabis, Meet Biochar"These signs and portents point to a coming Anthropocene that will not be your daddy’s World Wa [...]

The Real Climate Debate"That lump in your throat you feel listening to someone laying down hard truth in a poetic way [...]

Riding the Whale’s Tail"Our biological and cultural blinders are equal in every way to those worn by Material Evangeli [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☼ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

The success of Apollo 11 flipped the American public from skeptics to fans. The climate movement nee [...]

Today's movement to abolish fossil fuels can learn from two different paths that the British an [...]

Why has it taken so long for the climate movement to accomplish so little? And how can we do better [...]

To fight climate change, you need to get the world off of fossil fuels. And to do that, you need to [...]

Americans are good on the "thoughts and prayers" thing. Also not so bad about digging in f [...]

Top Commentariats
  • Our Finite World
  • Economic Undertow

It's interesting the Saudis are going for wind when they are blessed with so much sunshine. Ara [...]

We've always been at war with Eurasia, or was it Eastasia? As an explanation for the current US [...]

Can someone help me out here. The world is awash in ballooning debt. The question is, who is advanci [...]

The degenerated language is used to make things sound complicated and to impress the punters, but mo [...]

Maybe shale drillers won't have as difficult deal getting additional financing as we thought, i [...]

Hi Steve. I recently found what I believe is a little gem, and I'm quite confident you'd a [...]

The Federal Reserve is thinking about capping yields? I don't know how long TPTB can keep this [...]

As some one who has spent years trying to figure out what the limits to growth are. let me say that [...]

Peak oil definitely happened for gods sake. Just because it isn't mad max right now is no indic [...]

@Volvo - KMO says he made some life choices he regrets. Not sure what they were. And I don't th [...]

RE Economics

Going Cashless

Off the keyboard of RE Follow us on Twitter @doomstead666...

Simplifying the Final Countdown

Off the keyboard of RE Follow us on Twitter @doomstead666...

Bond Market Collapse and the Banning of Cash

Off the microphone of RE Follow us on Twitter @doomstead666...

Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

Off the Keyboard of RE Follow us on Twitter @doomstead666...

Kurrency Kollapse: To Print or Not To Print?

Off the microphone of RE Follow us on Twitter @doomstead666...

SWISSIE CAPITULATION!

Off the microphone of RE Follow us on Twitter @doomstead666...

Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

Off the keyboard of RE Follow us on Twitter @doomstead666...

Merry Doomy Christmas

Off the keyboard of RE Follow us on Twitter @doomstead666...

Peak Customers: The Final Liquidation Sale

Off the keyboard of RE Follow us on Twitter @doomstead666...

Collapse Fiction
Useful Links
Technical Journals

The monthly averaged data time series of temperatures and rainfall without interruption of Conakry A [...]

The Himalayas are highly susceptible to the impacts of climate change, as it consequently increases [...]

Spatial hydroclimatic variability of Eastern North America’s Allegheny Mountain System (AMS) i [...]

Climate change mitigation targets have put pressure to reduce the carbon footprint of cultural herit [...]

Follow on our http://www.doomsteaddiner.net/forum/