George Bush’S Great America [EN]: Chapter 222

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The modern oil business is a perfect zero-sum game, reminiscent of wealth accumulation in ancient or medieval times. Back then, wealth was measured in ‘grain,’ signifying fertile farmland capable of consistent output. Acquiring more farmland involved small-scale reclamation through slash-and-burn agriculture or large-scale plunder and occupation, which later evolved into colonialism.

Today, industrial and weapons development have made such plunder and occupation self-destructive. Wars have largely become civil conflicts rather than total wars between nations. However, ‘oil’ remains an exception, a resource that, like in ancient times, can only be secured through conquest.

Until recently, crude oil was traded globally, its value determined by agreements among oil-producing countries. However, scientists warned that continued consumption at the current rate would deplete oil reserves, plunging humanity into a dark age. Consequently, oil prices soared, raising the specter of a return to the Stone Age if alternatives weren’t found.

Hollywood capitalized on these scientific predictions, producing apocalyptic movies depicting a fourth world war triggered by oil depletion, creating a sense of crisis. The United States and the EU desperately sought to secure oil, with the EU taking decisive action.

With most of the Middle East, excluding Saudi Arabia, under its influence, the EU reaped significant political benefits. OPEC [Organization of the Petroleum Exporting Countries] lost its power against the EU’s military might, and the EU seemed awash in oil. Member states grew closer, reinforcing their commitment to peace, supported by an increasingly sophisticated system. Everything appeared promising.

That was until a few days ago. The development of shale gas changed everything. However, the real shock to oil prices came from Saudi Arabia’s determination to survive. Unlike other nations, the EU couldn’t directly pressure Saudi Arabia militarily.

The EU’s strategy for influencing other Middle Eastern oil producers involved several steps. First, they cited the need to eradicate terrorist organizations, claiming to have suffered major attacks. They then threatened to consider any country that didn’t open its borders as harboring or colluding with Al-Qaeda. Most countries complied, though a few resisted.

Second, the EU military drove out and annihilated Al-Qaeda and other internal opponents. This established a symbiotic relationship: the EU peacekeeping forces maintained order, while the host government developed its industry in a secure environment, enriching the leadership and solidifying the system, regardless of its form (dictatorship, democracy, or theocracy).

Third, they intervened in the oil business, emphasizing that their gains merely compensated for the costs of stationing troops. Politicians understood the reality but publicly promoted the idea to maintain their system and showcase achievements. By claiming they had invited the EU, they solidified their power. Once this symbiotic relationship was established, the cycle, whether vicious or virtuous, began.

Saudi Arabia was one of the few Middle Eastern countries to resist this. Now, it made a decision that would determine its fate: a plunge in oil prices. Specifically, they drastically increased production and released stockpiled reserves into the market.

This oil war seemed foolish, as Saudi Arabia, despite being a leading producer, was ultimately hurting itself. However, they were driven to the brink. Surrounded by EU-influenced territories and facing pressure from the United States, they felt they had no choice but to risk everything in a ‘Let’s see if you die or I die’ scenario.

This tactic was reminiscent of the American Seven Sisters [seven major oil companies that dominated the global industry in the mid-20th century], including Standard Oil New York and Texaco, which controlled world oil prices before 1970 through the posted price system. The current situation of the US shale industry could be seen as a consequence of those past actions.

“You’re good, but your introduction is too long,” the Chief of Staff said, looking dissatisfied. He still had ten minutes of explanations to give. Explaining this to someone with an oil company background seemed absurd, but he did his best at the President’s request.

“To summarize, Saudi Arabia is releasing its strategic oil reserves and drastically increasing production, even if it means issuing national bonds?”

“As I said, it will end with our victory. The industry will suffer, but our government will minimize the damage.”

“Is there no way to avoid damage entirely?”

“With our allocated budget, we theoretically might avoid impact for about three years.”

‘Theoretically’ was a fleeting concept, often a euphemism for ‘impossible.’ It was a word used when explaining astronomically improbable scenarios, a taboo in state affairs. While some occasionally disregarded this, it usually represented a partisan opinion.

The Chief of Staff implied that avoiding damage entirely was a fantasy, politely suggesting the President wake up.

And now, another person had to awaken from a dream due to this oil war: Russian President Vladimir Putin. Putin was exceptionally capable. Reaching his position required immense effort, even for a politician with ordinary insight. Imagine the difficulty of rising from an intelligence officer to president in a world where even becoming a manager is a struggle.

Because of his capabilities, Putin understood the dangers of a country overly reliant on natural resources, the ‘Resource Curse.’ Russia was in this predicament. Frustratingly, he had foreseen this and tried to prepare, but his efforts proved futile. He couldn’t help but lament.

Still, some preparations had been made.

“Shut it all down. Shut it all down completely.”

As soon as Saudi Arabia declared the oil war, Russia temporarily suspended natural resource exports, minimizing oil and gas exports. European countries dependent on Russian gas pipelines protested and scrambled to find alternative suppliers or appease Russia.

“Argh! Do something! Do something!”

This was a negotiation for Russia to receive its due value. Politicians, aware of the difficulty of securing stable gas pipelines and the consequences of supply disruptions, tried to accommodate Russia. A gas pipeline from the Middle East to Europe was planned, but still distant, leaving Europe reliant on Russia.

Shutting down the gas pipeline would collapse some countries within months. Gas tankers were a temporary solution, but their reliability was questionable. Even Saudi Arabia faced frequent attacks on gas pipelines and drilling facilities by Al-Qaeda, and EU-guarded oil refining facilities were subject to terrorism. Importing large quantities of gas was risky.

If Saudi Arabia was betting on its fate, Russia was betting on its life or death. It was remarkable that Russia hadn’t already collapsed, a testament to Putin’s years of preparation. However, success depended on favorable negotiations with European countries. Failure could lead to internal strife and disintegration.

China had been uncharacteristically quiet, partly due to a recession and partly due to the Super SARS epidemic. Extreme isolation prevented the disease’s spread but cast a shadow over the economy and industry.

The situation was so dire that China couldn’t even comment on North Korea, a country it had always heavily influenced. China had virtually treated North Korea as a vassal state, interfering in its affairs. This influence had waned since the United States’ military intervention but continued steadily.

Now, China couldn’t even do that and was seriously considering the South Korean government’s potential re-purchase of Mount Baekdu [a historically significant mountain on the border between North Korea and China].

The story returns to Pyongyang, North Korea, where they were recreating the historical fact that there is no reform without blood. In the South Korean government, discussions were underway about deploying troops, while in the North Korean government, discussions centered on whether to use South Korea to suppress the people’s march or issue a general mobilization order.

The world was once again fiercely turbulent after the Cold War.