Chances are you or someone in your family drive a car. Chances are that your car uses gasoline that is made from oil.
Oil is relatively easy to produce – once you have found it – you dig a hole and up it comes. Yes, it is more sophisticated than that, but not an issue for engineers that were able to produce nuclear weapons. Even if it is an issue for certain countries the expertise can easily be hired and brought in, after all the stuff sells for a $100 a barrel or so and a country like Russia produces over 8 million barrels a day.
8 million times $100 a barrel is $800,000,000 a day or almost $300 BILLION a year.
Sure there are operating costs, discovery costs and ownership issues but do you think regimes like Russia really care?
Some other top exporters include Iran, Saudi Arabia, The Gulf states, Iraq, Nigeria, Libya, and Venezuela…do you see a trend?
Countries that can produce this type of wealth by watching the pumps pump oil are not motivated to care about many things, like trading, human rights, and social welfare. Some use the wealth to placate their supporters. Some use the wealth to pilfer their countries and some use it to justify invading their neighbors.
Russia has been able to shrug off European and world opinion, because it can. It can because Russian oil is needed in the world marketplace. This oil, while traded, is not a true free market. The players – be it OPEC, Norway or Alberta – all benefit from the upward price obtained by the controls in the market.
Russia smirks and laughs as its troops rolled into Crimea.
The West watched and wangled its fingers.
Want to do something about it?
Stop driving oil fueled cars. There is a reason why a top producer like the USA is still a big importer…it drives big cars.
Reduce other taxes.
People will move to other forms of transport.
Russia (and other big exporters) will have to produce more to keep their lifestyle, so prices will go down.
The price decrease will offset some of the tax increase…to consider increasing taxes again, setting this cycle again and you know what?
Maybe Russia will sit down and discuss respecting its international treaties without the snarl or smirk on its face.
And it will be good for the environment and the economy too…that my friend is WIN-WIN-WIN!