World Economy and Sanctions on Russia

Unsurprisingly, it is precisely the [emerging, net commodity-importing] countries that have not joined the sanctions against Russia. Because they are the most exposed to the risk of a crisis in their balance of payments, if Russian exports remain under pressure for an extended period. As a result, the ways around the restrictions, via countries not aligned with Washington, are multiplying, making the objective of hermetically isolating Russia illusory.
For once, the far-right ex-Brazilian president Jair Bolsonaro acted as the people’s advocate at the beginning of October (/…).
During a meeting with his Russian counterpart (already taken as a provocation by Paris), Senegalese President Macky Sall called on Westerners to exclude the food sector from the scope of their sanctions, judging that they create “serious threats to the food security of the continent”, echoing the UN which warns of a “possible hurricane of famines”.
Nearly twenty million Afghans have faced acute food insecurity since the US withdrawal, according to the FAO.
Sanctions may not have saved many Ukrainian lives, but they are already killing people elsewhere.

Hélène Richard in lemondediplomatique.fr – Through Cristina Semblano
Original Text Edited and Translated from French to English Language by Said El Mansour Cherkaoui

Domino Effects and Waves Storming the European Union, United States and the World Economy
A few months ago, European leaders wanted to believe that the “total economic and financial war” launched against Moscow would be a walk in the park (…).
Six months after the first salvo of Western sanctions, the Russian economy takes a hit, but the collapse has not taken place.
The IMF predicted a recession of 8.5% in March. The World Bank is now talking about a 4% drop in GDP. At this rate, the country’s wealth is far from being “halved”, as announced on March 26, 2022 in Warsaw, [Poland] U.S. President Joseph Biden in front of an audience of Poles.
While the European Union faces double-digit inflation, driven by stratospheric energy prices.
At the end of September 2022, France released the equivalent of the national education budget to finance measures to support purchasing power;
Germany has tripled this stake with a plan to safeguard its industry of 200 billion euros.
This is the paradox of “this new art of governing the economy, capable of inflicting damage, which rivals military power”, which Mr. Biden praised in March in Warsaw.
By applying it to Russia, the world’s second largest oil exporter and one of the main suppliers of essential products, such as fertilizers and wheat, Washington and its allies have placed a tourniquet on the world’s blood circulation. But “the more generalized integration of markets has widened the channels through which the shocks caused by these sanctions are passed on to the world economy (…), explains an IMF study.

Domestic food price inflation persists in many countries. Supply disruptions, increasing production costs, and appreciation of the U.S. dollar have exerted upward pressure on domestic food price inflation in most countries. Food price inflation in South Asia averaged 20% in the first three quarters of 2022 (y/y); the average for most other regions was 14%. The exception was the East Asia and the Pacific region where food price inflation averaged just 6%, in part due to stable rice prices, a key staple in the region. More data.

This depression and recession with its inflationary surge was self-inflicted by the most advanced economies of the world and prolonged by the opportunistic drive by the US conglomerate who dominate the production and the distribution of oil and gas around the world not just as producers but as holder of the needed technology for the production and the refining of the all petrol and gas.

The refusal of the U.S. oil producer to increase the production giving the excuse that any heavy investment in the production will be heavy on their finance and will take time, 8 months to be at the peak of production and for them this war with Ukraine will be over and Russia will be back in business again. That was the thinking of the U.S. petrol community. On the other side, the OPEC did not want to be just a watcher on the wild side of the sidewalk, they wanted to cash on such trove that is coming and offered to them on golden plate, so they decided to reduce the production of their black gold period while using the same excuse and justification given the US petrol producers: the cost is tremendous and it is not worth to try it, so let reduce the output and increase their inputs of Petro-Dollars, Euro and Yen.

GLOBAL FINANCE AGAINST GLOBAL ENERGY MARKET !

Karin Kneissl is an #Austrian diplomat and politician. A Middle East expert, she was Minister of Foreign Affairs from 2017 to 2019.

In an excellent article published on the site https://lnkd.in/ecE-Hb8n, Karin Kneissl gives us her opinion on the confrontation between global #finance (led by the #USA) and the global #energy market (dominated by the #China and #OPEC+).

“On October 6, when the European Union (#EU) agreed to impose a cap on the price of #Russian oil as part of a new sanctions package against Moscow, 23 oil ministers from the OPEC + group of producing countries oil companies have declared themselves in favor of a sharp reduction in their joint production quota.

Their collective decision to cut production by around two million barrels of oil per day has provoked strong reactions in the USA in particular, and there have even been talks of “declaring war”. The EU feels cheated as OPEC+ production cuts could drive up fuel prices and ease their eight sanctions plans. OPEC and ten non-OPEC energy producers – including #Russia – have been coordinating their production policy since December 2016.

Unlike the escapades in the oil market between 1973 and 1985, when there was little consensus among OPEC members and many had already written the organization’s obituaries – today, former rivals like Saudi Saudi Arabia and Russia manage to converge their interests.
….
To truly understand the crux of the conflict in #Ukraine – where a proxy war is raging – one must break the confrontation down this way: the US and its European allies, who represent and support the global financial sector, are essentially engaged in a battle against the energy sector.

Over the past 22 years, we have seen how easy it is for governments to print paper money. In 2022 alone, the Fed printed more notes than in its combined history. Energy, on the other hand, cannot be printed. And therein lies a fundamental problem for Washington: the commodities sector can outbid the financial sector.
….
Since the start of the military conflict in #Ukraine in February 2022, we have essentially watched the #Western-led financial sector wage its war against the Eastern-dominated #energy economy. The momentum will always be with the latter, because as stated above, unlike money, energy cannot be imprinted.

The volumes of oil and gas needed to replace Russian energy sources cannot be found on the world market in a year. And no commodity is more globalized than #oil. Any change in the oil market will always influence the global economy. “

Global Finance vs global energy: who will come out on top?

Global Finance against Global Energy Market !

There is more to the current struggle between the oil-consuming west and the oil-producing nations than meets the eye and it runs far deeper than the war in Ukraine …. Read more

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Said Cherkaoui
Tate Yoko Research Institute – TRI

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