Recently, Russian fighter planes and even bombers were spotted over the Baltics, Norway, the Netherlands, the Turkish part of the Black Sea and as far as the Atlantic Ocean.
Russia more than doubled its defense expenditure between 2007 and 2013, and plans to increase it again by 44 per cent in the 2014-2016 period.
It is always unwise to fight a war on two fronts, especially after defense cuts have undermined one’s military. But that seems to be where the West is heading. The Western allies are fighting ISIS in Syria and Iraq, while at the same time tensions are rising between NATO and Russia. The question is whether NATO can afford both after the cuts in its defense budgets of the past two decades.
Strange things are happening on the international oil markets. In the past three months, the oil price dropped 25 per cent. The political situation in many oil-producing countries, such as Syria, Iraq, Libya and Nigeria, is deteriorating. In normal circumstances, this would lead to rising oil prices. Exactly the opposite is happening. Economic growth in Europe, Japan and China is stagnating, while the United States is becoming one of the major oil producers while its oil demand is in decline. These trends would normally be corrected by a reduction in oil production. That is not happening, either.
Last month, the Saudis were pumping up 9.5 million barrels a day — a break from their normal practice of reducing oil production by 1.5 per cent whenever the price drops by 10 per cent. The situation resembles what happened in 1985, when the Saudis raised oil production from 2 to 10 million barrels a day. As a result, oil prices dropped by two-thirds, forcing the Soviet Union out of the oil market. This change was one of the factors that lead to the collapse of the Soviet empire.
The Saudis’ ability to influence the price of oil makes them into one of America’s most valued strategic allies, despite their being untrustworthy and despising Western values of tolerance and freedom. U.S. Vice President Joe Biden recently apologized for saying that Saudi Arabia had funneled weapons and other aid to terrorist groups in Syria that the U.S. is fighting. Nevertheless, it appears that, despite his apologies, what Biden had said was the truth.
It is possible that the Saudis are driving down the price of oil at the request of the American government, which hopes that a shortage of oil revenue would bring Russia to the negotiating table to sort out a deal on Ukraine. Russia’s national budget is largely dependent on oil revenue. If the price falls below 85 dollars per barrel, Russia will feel the squeeze, especially as the price of Russia’s gas deliveries to Europe is linked to that of oil. As this author wrote here earlier, “Europe, having made itself almost totally dependent on Russian gas and oil during the past decade, now wants America to come and save it from self-inflicted disaster.”