The shale boom in the US has implications for the Western hemisphere, OPEC, West Asia, Russia and in general, the global energy market. A big time player in the global energy market, Russia is de-dollarising the petrodollar systematically.
Russia’s plan has been to integrate the OPEC into a greater yet free floating flexible institution like OPEC+. Russia wants to leverage the global oil & natural gas demand-supply equilibrium in its favour.
The major countries with the capacity of building large liquefication facilities for transport of LNG, capacity to build pipelines and the capacity to invest in exploration & research happens to be the United States and Russia.
Russia has been the chief supplier of all types of European energy needs. The sanctions and embargo imposed on Russian energy industry is a business opening for the American shale industry into the European markets.
The US is helping European countries to establish regasification plants along its coasts and build pipelines to further carry the gas into Central & Eastern European markets. This help comes in the form of favourable legislation, capital investment & technology transfer to Europe.
The reason why blowing up the Nord Stream pipelines made sense for the Americans was the fact that Europe was addicted to cheap Russian energy which flew ‘at-will’ from Russia. The infrastructure was laid out, Russia was producing enough to meet its contractual obligations and the European economies were consuming enough energy for the market to be stable.
Americans have damaged the laid out infrastructure in a bid to rebuild facilities & pipelines, but not from Russia to Western Europe, but from Western Europe towards hinterland Europe. This effectively achieves two things for the Americans : 1. renewed leadership of US and its allies’ commitment ; 2. capturing the richer per capita economies to fund & further develop the shale industry in the USA.
Russia has categorically specified its position after the Russian energy industry became the target of Western sanctions – Pivot to Asia. ‘The Eurasianism’ worldview of Russia makes it equally interested in fulfilling the ever-so-hungry energy consuming economies of Asia, i.e. China, India, South Korea, Japan etc. Russia is not only working in close cooperation with its West Asian partners and OPEC to steer the global oil prices but also helping interested countries in Asia build pipelines to integrate them into a Bigger Asian Grid.
At the end of the day, the Shale Revolution in the US has been a counter-measure employed by Washington to be a step ahead of energy producers. In the aftermath of 1973 oil embargo, Washington became aware of global attempts being made to de-dollarise the petrodollar system. It is therefore that they have pivoted to a new form of energy and supported its evolution with state support by giving innumerable subsidies from 1980s to 2000s. Shale Revolution is America’s bet on maintaining the Dollar Hegemony.
