Russia forced into high risk investments with deadbeats

NY Times:

Russia Wields Oil Diplomacy, Pushing In on U.S. Interests

  • Moscow, forced by sanctions to find new spheres of investment, is building influence in places where the United States has stumbled.
  • It has been pushing deeply into countries like Cuba, China, Egypt and Vietnam, and has made a flurry of risky loans to help Venezuela stave off debt default.
Cuba and Venezuela are both failed communist/socialist states whose credit is less than stellar.  Russia's investments in Venezuela may wind up netting Moscow the ownership of assets based in the US such as Citgo which has refineries and some gas stations.  That should be a matter of concern because the likelihood of Venezuela being able to repay the loans is remote.  Cuba has been a deadbeat from the time the Castro's took over and began stealing other people's property.

Egypt is a country that would like to be a US ally, but it keeps doing things that make that hard as the recent shipment of arms from North Korea demonstrates.  On the China front, the US is still their largest trading partner and the Russian economy is not likely to change that dynamic during most of our lifetimes.  Russia trails South Korea in GDP. 

China has also been buying coal and oil from the US in recent years and like the US it has benefited from the reduced prices caused by the shale revolution in the US.  That same shale revolution has greatly weakened the Russian economy and the country's ability to build advanced weapon systems it has on the drawing boards.

Russia's current weakness is a result of US petroleum companies ignoring the keep it in the ground left, as well as Obama's "we can't drill our way to lower gas prices" mantra.  Obama and Big Green are OPEC and Russia's best friend when it comes to energy.

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