Globe, Latin America, United Kingdom

Oil, inflation and war

Just as in almost every country, the price of fuel in Mexico is determined by the exchange rate, international prices and hydrocarbon distribution costs. Because of this, an increase in fuel subsidies was expected.

 

Luis Manuel Arce Isaa

 

Now, with global inflation at 7.28% of GDP, petrol with no subsidy would be very damaging to the national economy and disastrous for household finances.

Mexico anticipates a large, global disaster in the hydrocarbon sector, which most resembles the events of 1973, when an energy crisis struck and pushed crude oil above 150 dollars per barrel. It launched the era of expensive petrol, which resulted in atrocious stagflation, an excess of petrodollars and, in 1982, the foreign debt crisis that broke out here in Miguel de la Madrid’s government.

Europe’s border walls are already starting to smoulder with the limitations of the Russian petrol and gas supply, and Germany is pouring their own fuel on the flames by deciding to get rid of Russian petrol last week (which, according to some figures, represents 40% of their consumption).

The German government, it seems, has not yet considered how it is going to make up the shortfall. Meanwhile, the global market is not going to be able to rely on the support of the United States’ reserves, which cannot be weakened.

Within this situation, Venezuela registered its interest in increasing its supply, which is a contradiction: to continue supporting and giving legal aggression to Nicolas Maduro’s political opposition.

Ecological groups put a lot of pressure on Biden to not use the war in Ukraine as a reason to intensify the practice of fracking, which is very dangerous in terms of seismology and poisoning of the water table.

Nevertheless, this was what allowed them to be a great global producer again after having reached their peak and starting to decline which turned them into a net importer.

Vice President Kamala Harris’ claims that American consumers must pay for expensive gas to punish Russia, were not pleasant either. In fact, she admitted that inflation would continue and they cannot control it.

It was the prospect of running out of oil, according to historians, that led the White House and the Pentagon to the military recapture of wells in the world; starting with Iraq and Afghanistan, until today, including the case of Ukraine, and previously Africa, Venezuela, and Mexico in a more moderate and covert way, through underground opposition to energy reform.

The German minister of ecology, Robert Habeck, said that the idea is to shut out fuel from the Slavic nation by the end of this year. However, many voices inside and outside the German borders are warning of the big mistake that this could turn into.

Germany, close to the neo-Nazi groups in Ukraine that dominate gas and petrol and control Vladimir Zelensky’s government, seems to be basing their calculations on a favourable evolution of the war in their interests and not a negotiated political exit that inevitably leads to a Ukrainian neutrality. In the current conditions of the energy market, and the battle for territorial reorganisation in Europe and the world, which is the underlying reason for the Ukrainian conflict, it is very difficult to believe that Habeck is telling the truth which he stated to the Frankfurter Allgemeine Zeitung newspaper, that they will be independent from Russian coal in autumn and from their petrol by the end of the year.

Germany, according to their own official figures, do not have the capacity for this, any more than they do to substitute Russian gas.

Biden reacted to this situation more explosively and announced to the world that the United States will avoid “a direct confrontation” at all costs between Russia and countries in the North Atlantic Treaty Organisation (NATO) because this would be the trigger for a “third world war”.

However, he immediately ratified Washington’s promise to “defend” every inch of NATO territory with all their combined power and unity. (PL)

 

(Translated by Donna Davison – Email: donna_davison@hotmail.com) – Photos: Pixabay

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