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Saturday, May 06, 2006

By the Numbers: Lighting the "Oil Superpower" on Fire

7
The number of countries with proven oil reserves larger than Russia's
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262
Number of barrels (in billions) in Saudia Arabia's proven reserves
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69
Equivalent number for Russia
(In other words, Saudi oil will last 3.8 times longer than Russian oil)
-
9,270,0000
Russia's average total daily oil production in 2004 (in barrels)
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667,440,000
Value, in U.S. dollars, of one day's Russian oil production in 2004 at current prices ($72/barrel)
(NB: This is how much "hard currency" Russia could get if it sold all the oil it produces abroad)
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145,000,000
Approximate size of Russia's population
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4.60
Value, in U.S. dollars and cents, of one day's Russian oil production to each Russian citizen
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6,670,000
Amount of oil Russia actually exported per day in 2004 (total less Russian consumption)
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480,240,000
Value in dollars of Russia's actual 2004 oil exports at current prices
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3.31
Value* in dollars and cents of one day's Russia's actual oil exports to each Russian citizen

(*Actually, a good amount of the oil Russia exported was not sold at market price but instead was used to bribe countries like Belarus and Ukraine to stay in the Russian sphere of influence, so the value per Russian is even smaller than $3.31; on top of that, the $3.31 is merely the gross revenue generated by the oil sales, one must deduct the cost of drilling and marketing it before any profit could be returned to the Russians; finally, of the puny per capita profits actually available for public benefit, most are actually siphoned off by oiligarchs [sic] and the Kremlin, while virtually none of it was used to improve the lives of ordinary Russians).

Lesson: Oil is actually a terrible curse for Russia. It provides just enough easy money for the Kremlin to keep itself in power, denying any incentive to develop a real, diverse economic base (something the Kremlin doesn't want to do anyway, because it would empower the population and reduce the Kremlin's influence), not nearly enough money to improve the quality of life. When the oil runs out, so will the sands in Russia's hour glass. Ironically, Russia's hostile, anti-Western attitude will actually undermine its economic base since, seeing Russian unreliablity, it will drive the Western countries to develop oil substitutes quicker than they need to, hastening the day when Russia will become wholly irrelevant. In other words, once again, Russia is cutting off its nose to spite its face.

3 comments:

Reith said...

To begin with, Russia’s proven reserves are actually in 8th place (according to infoplease, which La Russophobe only sources when it is convenient), though like all the other data and inferences listed above this is a pretty irrelevant fact. That some countries have more oil than Russia is no great revelation, and only willed chauvinism could deem this noteworthy.
It is interesting to note what other countries are in that famous list. La Russophobe draws up these lists and then huffily protests about the relevance of other countries to her remit as Russia’s antagonist, which is how she will be able to dismiss some of the relations of the United States with them:

Saudi Arabia: A despotic country with no discernible plans to democratise, but is a close American ally.
Iran: Sworn enemy.
Iraq: The less said the better
Venezuela: Worsening relations with the United States.

“A good amount of the oil Russia exported was not sold at market price but instead was used to bribe countries like Belarus and Ukraine to stay in the Russian sphere of influence”

This will be a nice quote for the future. When Russia is providing low-price energy resources to its neighbours, it is keeping them in its sphere of influence. When it puts the price up, it is being aggressive and imperialistic. This sort of topsy-turvy logic makes it clear that the main item on the agenda for Russia-watchers is sharpening the knives.

“Russia's hostile, anti-Western attitude will actually undermine its economic base since, seeing Russian unreliability, it will drive the Western countries to develop oil substitutes quicker than they need to, hastening the day when Russia will become wholly irrelevant.”

Now, this is where drawing on the statistics could have come in useful. Where Russia produces, according to data linked by LR, 9.27 million barrels a day and consumes 2.6 million barrels a day, the United States produces 8.69 million barrels a day and consumes 20.5 million barrels a day.
I don’t see the Unites States reversing that scissor effect any time soon, so it is utterly foolish to posit that eventuality. Provided the United States has not alienated the entire world by midway through the century, they may still find someone to sell them oil to run their oversized vehicles, which are the only ones that physically accommodate their humungous behinds.
The only thing that LR speaks about which is correct is the problem of the famous Dutch Disease. This is a mainstay of discussion on economic affairs in many quarters of the Russia media, contrary to what LR believes and says. Perhaps it might be better to read credible Russian media sources, instead of the Pravda online edition.
LR has been citing "Pravda" website extensively, in spite of the fact that it is not the same thing as the actual newspaper and is not widely read. Arguing, therefore, that is represents the voice of mainstream Russian media is completely ridiculous.

La Russophobe said...

REITH: Thanks for the correction! The blog has been duly updated to show that seven countries, not eight, have more proven oil reserves than Russia. La Russophobe regrets the error.

La Russophobe continues to believe that it is poorly understood among Russophiles and Russian nationlists that Russian oil has virtually no economic value at all to the individual Russian people and marginal value at best to the Russian state. Oil certaily won't solve any problems for Russia, and may well cause some.

With this in mind, it is plainly insane for Russia to imagine it is some sort of "energy superpower" able to challenge the United States in Iran and Iraq. The numbers clearly show that Russia is firing blanks in this regard and will suffer dearly if it continues to pursue these crazed policies.

Once Russian oil is seen in its proper perspective, Russia is revealed as the dire basket case of political and economic quagmires that it is.

Anonymous said...

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