[LINK] Two Bloomberg links on the geopolitics of falling oil prices

[rfmcdonald]

First is "Oil Diplomacy Takes New Twist as Venezuela Seeks Non-OPEC Help", by Jake Rudnitsky and Jose Orozco.

Venezuela is seeking help from nations outside of OPEC to halt a collapse in global crude prices, adding a new twist to oil-market diplomacy with nine days to go until the group’s next meeting.

Nicolas Maduro, Venezuela’s president, told state television yesterday that he was coordinating with Russia to hold a meeting “very soon” with countries that aren’t members of the Organization of Petroleum Exporting Countries, as well as those within the group, to defend the price of oil.

Venezuela and other Latin American countries have been among the hardest hit by plunging prices in part because the slump has been caused by surging supplies in North America. Combined output from the U.S. and Canada rose last year to the highest since at least 1965 as producers tapped stores locked in shale-rock formations and oil sands, according to BP Plc data.

“I don’t see anyone in non-OPEC volunteering to come to the rescue,” Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said by e-mail. “Venezuela is in a hot spot, as they have to fear the expected increase of Canadian crude oil to the U.S. Gulf.”

Venezuelan Foreign Minister Rafael Ramirez met with energy ministers from six producers this month as prices slumped, including the biggest non-OPEC oil exporter, Russia. Ramirez met Russian Energy Minister Alexander Novak in Moscow yesterday, according to the Venezuelan Foreign Ministry.

The second is "Cheap-Oil Era Tilts Geopolitical Power to U.S.", by Rich Miller.

A new age of abundant and cheap energy supplies is redrawing the world’s geopolitical landscape, weakening and potentially threatening the legitimacy of some governments while enhancing the power of others.

Some changes already are evident. Surging U.S. oil production enabled America and its allies to impose tough sanctions on Iran without having to worry much about the loss of imports from the Middle Eastern nation. Russia, meanwhile, faces what President Vladimir Putin called a possibly “catastrophic” slump in prices for its oil as its economy is battered by U.S. and European sanctions over its role in Ukraine.

“A new era of lower prices is being ushered in” by the U.S. shale oil and gas revolution, Ed Morse, global head of commodities research for Citigroup Inc. in New York, said in an e-mail. “Undoubtedly some of the geopolitical changes will be momentous.”

They certainly were a quarter of a century ago. Plunging oil prices in the latter half of the 1980s helped pave the way for the breakup of the Soviet Union by robbing it of revenue it needed to survive. The depressed market also may have influenced Iraqi leader Saddam Hussein’s decision to invade fellow producer Kuwait in 1990, triggering the first Gulf War.

[. . .]

Russia again looks likely to suffer from the fallout in oil markets, along with Iran and Venezuela, while the U.S. and China come out ahead.