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Over the course of 2014 the prices the world pays for crude oil have tumbled from over $125 per barrel to around $45 per barrel now, and could easily drop further before heading much higher before collapsing again before spiking again. You get the idea. In the end, the wild whipsawing of the oil market, and the even wilder whipsawing of financial markets, currencies and the rolling bankruptcies of energy companies, then the entities that financed them, then national defaults of the countries that backed these entities, will in due course cause industrial economies to collapse. And without a functioning industrial economy crude oil would be reclassified as toxic waste. But that is still two or three decades off in the future.

An additional problem is the very high depletion rate of “fracked” shale oil wells in the US. Currently, the shale oil producers are pumping flat out and setting new production records, but the drilling rate is collapsing fast. Shale oil wells deplete very fast: flow rates go down by half in just a few months, and are negligible after a couple of years. Production can only be maintained through relentless drilling, and that relentless drilling has now stopped. Thus, we have just a few months of glut left. After that, the whole shale oil revolution, which some bobbleheads thought would refashion the US into a new Saudi Arabia, will be over. It won't help that most of the shale oil producers, who speculated wildly on drilling leases, will be going bankrupt, along with exploration and production companies and oil field service companies. The entire economy that popped up in recent years around the shale oil patch in the US, which was responsible for most of the growth in high-paying jobs, will collapse, causing the unemployment rate to spike.

The game they are playing is basically a game of chicken. If everybody pumps all the oil they can regardless of the price, then at some point one of two things will happen: shale oil production will collapse, or other producers will run out of money, and their production will collapse. The question is, Which one of these will happen first? The US is betting that the low oil prices will destroy the governments of the three major oil producers that are not under their political and/or military control. These are Venezuela, Iran and, of course, Russia. These are long shots, but, having no other cards to play, the US is desperate. Is Venezuela enough of a prize? Previous attempts at regime change in Venezuela failed; why would this one succeed? Iran has learned to survive in spite of western sanctions, and maintains trade links with China, Russia and quite a few other countries to work around them. In the case of Russia, it is as yet unclear what fruit, if any, western policies against it will bear. For example, if Greece decides to opt out of the European Union in order to get around Russia's retaliatory sanctions against the EU, then it will become entirely unclear who has actually sanctioned whom.

2015 has not been good to Russia; the spread between Brent and WTI is gone in anticipation of US exports and both benchmarks have flirted with sub $45 prices. A hostage to such prices, the ruble has yet to begin its turnaround and the state’s finances are in extreme disarray. President Vladimir Putin’s approval ratings remain sky-high, but his country has not faced such difficult times since he took office more than 15 years ago. Since the turn of the new year the ruble has fallen over 13 percent and Russia’s central bank and finance department are running out of options – to date, policy makers have hiked interest rates to their highest level since the 1998 Russian financial crisis and embarked on a 1 trillion-ruble ($15 billion) bank recapitalization plan to little effect. Their latest, and most dramatic, plan is to abandon the dollar – at least somewhat.

In late December, the Kremlin ordered five large state-owned exporters – including oil and gas giants Rosneft and Gazprom – to sell their foreign currency reserves. Specifically, the companies must bring their foreign reserves to October levels by the beginning of March. To comply, the exporters may have to sell a combined $1 billion per day until March. Private companies have not yet been hit by these soft capital controls, but have instead been advised to manage their foreign exchange maneuvers responsibly. More recently, the Kremlin announced it will open its $88 billion sovereign wealth fund and flip it for rubles. The plan will see Russia convert as much as $8 billion to rubles (~500 billion) over a two-month span and place them in deposits for banks. Overall, the move will provide the Russian economy with some much needed liquidity and could speed up the healing if oil were to rebound, but it sends the wrong signals to investors and Economy Minister Alexei Ulyukaev believes the country’s credit rating will soon be marked below investment grade.

In any case, the move does little for the country’s ailing oil industry. The domestic market is projected to shrink amid the economic slowdown, and competition for market share abroad is increasingly competitive. Production forecasts are no rosier and the EIA predicts Russian crude production growth will be among the worst performers in both 2015 and 2016 – contrasted by continued growth in North America. Russia’s gas industry has fared no better. Gazprom’s 2014 output was historically awful and LNG is ever more a counter to the country’s pipeline politics.

As the price of oil trades at a six-year low, there’s no consensus on what the rest of the year will bring for crude. But there are many different forecasts. Here are three scenarios being considered by commodity strategists.

The oil crash is not over. For a few weeks, oil prices climbed and stabilized, and it looked as if the worst of the oil crash were finally ebbing away. After reaching the lows of the year in mid-March, West Texas Intermediate crude oil gained about 50%, steadily climbing, first back to $60 a barrel. But by the first week of July, oil had started to slide again until it finally crashed into a bear market, defined as 20% decline from recent highs. And now energy companies are saying the same things we heard months ago.

In a story on Sunday, The Wall Street Journal's Lynn Cook reported that with oil prices hitting new lows, US energy companies were planning to cut more jobs and sell more assets — the same tactics they employed to cope with the first wave of the crash.

Morgan Stanley thinks this could be the worst oil crash in 45 years

Saudi Arabia, one of the wealthiest countries in the world, is experiencing serious financial problems. The ongoing plummeting of oil prices is forcing the Saudis to be more careful with money. Tens of billions of dollars invested abroad are making a return to the kingdom. In July 2015, Saudi Arabia’s authorities, for the first time in 8 years, issued governmental bonds worth $4 bn.

Bloomberg reports that Saudi Arabia has already withdrawn $50-70 bn, which it had previously invested worldwide through management companies. It is noteworthy that the country has been withdrawing funds for the past six months. For example, Saudi Arabia’s SAMA Foreign Holdings reached its maximum in August 2014, having amounted to $737 bn. But since then, the fund has been shrinking because oil prices have dropped more than twice in this period. Saudi Arabia’s budget deficit is forecast to reach 20%; however, reduction of expenditures still remains a sensitive topic. In the context of the continuous fall in oil prices, Riyadh has worked out a plan to gradually reduce public spending to cope with a sharp decrease in budget revenues caused by the slumping oil prices. For example, Saudi Arabia’s Ministry of Finance has issued an order prescribing all state companies to temporary stop hiring new employees and launching new projects until the end of the fiscal year. In addition, the government procurement of new cars and furniture has also been put on hold as well as the signing and approval of new lease agreements for state institutions and enterprises. The expropriation of plots of land for the purpose of the subsequent extraction of oil has also been suspended throughout the country. The Ministry of Finance has, at the same time, demanded an acceleration in the collection procedure of oil revenues.

“To prove that the country indeed has a sound fiscal discipline, the government has to take steps to cut expenditures in the 4th quarter. Subsequently Saudi Arabia will be compelled to find new ways to reduce expenditures and boost efficiency in order to assure there will be no budget deficit in 2016,” John Sfakianakis, Director of the Middle East Division of the Ashmore Group, said in his interview to Bloomberg. It should be pointed out in that regard that oil revenues comprise about 90% of Saudi Arabia’s budget, and the landslide of oil prices of over 40% within the last 12 months adversely affected the country’s financial standing. And, although the kingdom’s debt burden remains one of the lowest in the world (less than 2% of the GDP), the kingdom’s international assets have been consistently shrinking for the last nine months and reached a two year minimum. This situation directly influences the policy of OPEC since Saudi Arabia (which extracts almost 30% of the OPEC’s oil, positions itself as an extremely influential raw material supplier, maintains powerful military forces, and has its own global ambitions, immense resources and substantial diplomatic experience) de facto plays the role of the shadow leader of this organization. At times siding with the US, and then pursuing its own interests, the kingdom has assumed such an influential position in the international community that other countries revere its opinion, and as for the last oil crisis, Saudi Arabia is seen as its key player.

Western politicians and pundits should be more careful with their predictions for the Russian economy: Reports of its demise may prove to be premature. Bashing the Russian economy has lately become a popular pastime. In his state of the nation address last month, U.S. President Barack Obama said it was "in tatters." And yesterday, Anders Aslund of the Peterson Institute for International Economics published an article predicting a 10 percent drop in gross domestic product this year -- more or less in line with the apocalyptic predictions that prevailed when the oil price reached its nadir late last year and the ruble was in free fall. Aslund's forecast focuses on Russia's shrinking currency reserves, some of which have been earmarked for supporting government spending in difficult times. At $364.6 billion, they are down 26 percent from a year ago and $21.6 billion from the beginning of this year. Aslund expects $166 billion to be spent on infrastructure investments and bailing out companies, and another $100 billion to exit via capital flight and other currency outflows. As a result, given foreign debts of almost $600 billion, "Russia's reserve situation is approaching a critical limit," he says.

What this argument ignores is that Russia's foreign debts are declining along with its reserves -- that's what happens when the money is used to pay down state companies' obligations. Last year, for example, the combined foreign liabilities of the Russian government and companies dropped by $129.4 billion, compared with a $124.3 billion decline in foreign reserves. Beyond that, a large portion of Russian companies' remaining foreign debt is really part of a tax-evasion scheme: By lending themselves money from abroad, the companies transfer profits to lower-tax jurisdictions. Such loans can easily be extended if sanctions prevent the Russian side from paying. The declining price of oil is also less of a threat than many have warned. True, the Russian government's revenues from energy exports will fall in dollar terms. But because Russia's central bank has allowed the ruble's value against the dollar to decline, the ruble value of the revenues will be higher than they otherwise would be. As a result, Russia no longer requires $100 oil to balance its budget -- and the effect of lower oil prices on the broader economy will be muted.

Economists at the respected Gaidar Institute, for example, expect the floating of the ruble to roughly halve the negative GDP impact of the decline in oil prices. They estimate that Russian GDP will shrink by a moderate 2.7 percent this year, even if Brent oil trades at $40 (it traded at $61 today). That's just a bit more optimistic than the consensus among 39 economists polled by Bloomberg between Feb. 20 and Feb. 25: On average, they see a decline of 4 percent. Economic sanctions, which most forecasts assume will continue this year, are having less impact that many in the West would like to believe. Sergei Tsukhlo of the Gaidar Institute estimates that the sanctions have affected only 6 percent of Russian industrial enterprises. "Their effect remains quite insignificant despite all that's being said about them," he wrote, noting that trade disruptions with Ukraine have been more important.

Schedule of falling oil prices, adjusted in relation to the current fluctuations, has essentially been a straight line since last September, when prices fell from $ 50 per barrel to the current $ 29. What was so momentous that happened in the world market in September? In September, “Goldman Sachs” lowered expectations for the average oil price for 2016, assuming that it will drop to $ 20 a barrel. “Expectations” of “Goldman Sachs” were “whole-heartedly” supported by “Merrill Lynch”, “Bank of America” and others. There you have it – $ 20, quoted by “Goldman Sachs”, was not a forecast. It was the target. Only our own Ministry of Economy is the one that makes forecasts, “Goldman Sachs” , on the other hand, makes the markets. The oil market – is not the market of raw materials. Supply contracts for actual oil makes only 2% percent of the market, the rest – speculative securities, futures and other derivatives. Prices for futures are not determined by supply and demand, but by “expectations”. The futures market is completely controlled by the largest US banks. This is the market of expectations, which creates a real “Industry of expectations” using the notorious rating agencies, “independent” experts and the media.

Six months ago, the price of oil—the lifeblood of the Russian economy—began to crater, and U.S.-led sanctions, implemented in the wake of Russia’s annexation of Crimea in Ukraine, were biting. Russia’s currency, the ruble, buckled, and capital flight began to accelerate as rich but nervous Russians moved more and more money out of the country. It seemed plausible then to wonder: Could Vladimir Putin be losing his grip? Might economic pressure be enough to rein him in, or even lead to his downfall?Today, the answer is becoming clear—and it’s not the one the West was hoping for. Not only is Putin still standing, but the Russian economy, against most expectations, is recovering. Its stock market is one of the best performing globally this year; the ruble, after losing nearly half its value against the dollar over the course of a year, is rebounding; interest rates have come down from their post-sanctions peak; the government is taking in more revenue than its own forecast expected; and foreign exchange reserves have risen nearly $10 billion from their post-crisis low.

The lower price of oil still hurts. Citicorp economists estimate that every $10 decline in the price of Brent crude shaves 2 percent from Russia’s gross domestic product (GDP). Further declines—not out of the question, given that Saudi Arabia, the world’s largest and lowest-cost producer, is still pumping record amounts of crude—will crimp growth even more. But those same Citicorp economists forecast that GDP, after contracting for the past 18 months, could now begin to grow at up to 3.5 percent per year, even without a recovery in crude prices.

Though better run than many Russian firms, Severstal is not an outlier. According to data from Bloomberg, some 78 percent of Russian companies on the MICEX index showed greater revenue growth in the most recent quarter than their global peers did. And Russian companies on the whole are now more profitable than their peers on the MSCI Emerging Markets index.What’s bailing out Moscow? For the second time in two decades, Russia is showing that while a sharp drop in its currency’s value does bring financial pain—it raises prices for imports and makes any foreign debt Russia or its companies have taken on that much more expensive in ruble terms—it also eventually produces textbook economic benefits. Since a devaluation raises import prices, it also paves the way for what economists call “import substitution,” a clunky way to say that consumers switch to buying less pricey products produced at home instead of imported goods.

A disturbing trend in the water sector is accelerating worldwide. The new “water barons” --- the Wall Street banks and elitist multibillionaires --- are buying up water all over the world at unprecedented pace. Familiar mega-banks and investing powerhouses such as Goldman Sachs, JP Morgan Chase, Citigroup, UBS, Deutsche Bank, Credit Suisse, Macquarie Bank, Barclays Bank, the Blackstone Group, Allianz, and HSBC Bank, among others, are consolidating their control over water. Wealthy tycoons such as T. Boone Pickens, former President George H.W. Bush and his family, Hong Kong’s Li Ka-shing, Philippines’ Manuel V. Pangilinan and other Filipino billionaires, and others are also buying thousands of acres of land with aquifers, lakes, water rights, water utilities, and shares in water engineering and technology companies all over the world. The second disturbing trend is that while the new water barons are buying up water all over the world, governments are moving fast to limit citizens’ ability to become water self-sufficient (as evidenced by the well-publicized Gary Harrington’s case in Oregon, in which the state criminalized the collection of rainwater in three ponds located on his private land, by convicting him on nine counts and sentencing him for 30 days in jail). Let’s put this criminalization in perspective:

Billionaire T. Boone Pickens owned more water rights than any other individuals in America, with rights over enough of the Ogallala Aquifer to drain approximately 200,000 acre-feet (or 65 billion gallons of water) a year. But ordinary citizen Gary Harrington cannot collect rainwater runoff on 170 acres of his private land. It’s a strange New World Order in which multibillionaires and elitist banks can own aquifers and lakes, but ordinary citizens cannot even collect rainwater and snow runoff in their own backyards and private lands.

In 2008, Goldman Sachs called water “the petroleum for the next century” and those investors who know how to play the infrastructure boom will reap huge rewards, during its annual “Top Five Risks” conference. Water is a U.S.$425 billion industry, and a calamitous water shortage could be a more serious threat to humanity in the 21st century than food and energy shortages, according to Goldman Sachs’s conference panel. Goldman Sachs has convened numerous conferences and also published lengthy, insightful analyses of water and other critical sectors (food, energy). Goldman Sachs is positioning itself to gobble up water utilities, water engineering companies, and water resources worldwide. Since 2006, Goldman Sachs has become one of the largest infrastructure investment fund managers and has amassed a $10 billion capital for infrastructure, including water.

Outside Syria there have been repeated media and diplomatic forecasts of imminent victory for the rebels and defeat for Bashar al-Assad. Ignored in this speculation is the important point that Assad's forces still hold, wholly or in large part, all the main cities and towns of Syria. The difference in perceptions inside and outside Damascus is explained partly by the way the international and regional media describes the war. There are few foreign journalists in the Syrian capital because it is difficult to get visas. By way of contrast, the rebels have a highly sophisticated media operation – often also foreign-based – proffering immediate details of every incident, often backed up by compelling, if selective, YouTube footage. Understandably, the rebel version of events is heavily biased towards their own side and demonises the Syrian government. More surprising is the willingness of the international media, based often in Beirut but also in London and New York, to regurgitate with so little scepticism what is essentially good-quality propaganda. It is as if, prior to the US presidential election in November, foreign journalists had been unable to obtain visas to enter the US and had instead decided to rely on Republican Party militants for their information on the campaign – moreover, Republican activists based in Mexico and Canada.

The revolution has turned into a civil war. The uprising of Syrians against a cruel police state that started in March 2011 increasingly looks to Alawites, Christians, Druze and other minorities like a sectarian campaign aimed at their elimination. They watch YouTube pictures of Alawite officers being ritually decapitated and wonder what fate awaits them if Assad is defeated.

The policy of the US and its allies is increasingly bizarre: on the one hand, they recognise the opposition National Coalition as the legitimate government of Syria but, on the other, they label its most effective fighting force, the al-Nusra Front, as "a terrorist organisation" linked to al-Qa'ida. Just as in Iraq after 2003, Syria has become a magnet for jihadi fighters across the Muslim world. Washington is showing ever-decreasing enthusiasm for an outright rebel military victory that would strengthen jihadi militants and dissolve the governing machinery of the Syrian state.

I thought about that March night as the election results rolled in, as the New York Times forecast showed Hillary Clinton’s chances of winning the presidency plummet from about 80% to less than 5%, while Trump’s fortunes skyrocketed by the minute. As Clinton’s future in the Oval Office evaporated, leaving only a whiff of her stale dreams, I saw all the foreign-policy certainties, all the hawkish policies and military interventions, all the would-be bin Laden raids and drone strikes she’d preside over as commander-in-chief similarly vanish into the ether. With her failed candidacy went the no-fly escalation in Syria that she was sure to pursue as president with the vigor she had applied to the disastrous Libyan intervention of 2011 while secretary of state.  So, too, went her continued pursuit of the now-nameless war on terror, the attendant “gray-zone” conflicts — marked by small contingents of U.S. troops, drone strikes, and bombing campaigns — and all those munitions she would ship to Saudi Arabia for its war in Yemen. As the life drained from Clinton’s candidacy, I saw her rabid pursuit of a new Cold War start to wither and Russo-phobic comparisons of Putin’s rickety Russian petro-state to Stalin’s Soviet Union begin to die.  I saw the end, too, of her Iron Curtain-clouded vision of NATO, of her blind faith in an alliance more in line with 1957 than 2017. As Clinton’s political fortunes collapsed, so did her Israel-Palestine policy — rooted in the fiction that American and Israeli security interests overlap — and her commitment to what was clearly an unworkable “peace process.”  Just as, for domestic considerations, she would blindly support that Middle Eastern nuclear power, so was she likely to follow President Obama’s trillion-dollarpath to modernizing America’s nuclear arsenal.  All that, along with her sure-to-be-gargantuan military budget requests, were scattered to the winds by her ringing defeat.

Clinton’s foreign policy future had been a certainty.  Trump’s was another story entirely.  He had, for instance, called for a raft of military spending: growing the Army and Marines to a ridiculous size, building a Navy to reach a seemingly arbitrary and budget-busting number of ships, creating a mammoth air armada of fighter jets, pouring money into a missile defense boondoggle, and recruiting a legion of (presumably overweight) hackers to wage cyber war.  All of it to be paid for by cutting unnamed waste, ending unspecified “federal programs,” or somehow conjuring up dollars from hither and yon.  But was any of it serious?  Was any of it true?  Would President Trump actually make good on the promises of candidate Trump?  Or would he simply bark “Wrong!” when somebody accused him of pledging to field an army of 540,000 active duty soldiers or build a Navy of 350 ships. Would Trump actually attempt to implement his plan to defeat ISIS — that is, “bomb the shit out of them” and then “take the oil” of Iraq?  Or was that just the bellicose bluster of the campaign trail?  Would he be the reckless hawk Clinton promised to be, waging wars like the Libyan intervention?  Or would he follow the dictum of candidate Trump who said, “The current strategy of toppling regimes, with no plan for what to do the day after, only produces power vacuums that are filled by terrorists.” Outgoing representative Randy Forbes of Virginia, a contender to be secretary of the Navy in the new administration, recently said that the president elect would employ “an international defense strategy that is driven by the Pentagon and not by the political National Security Council… Because if you look around the globe, over the last eight years, the National Security Council has been writing that. And find one country anywhere that we are better off than we were eight years [ago], you cannot find it.”

Such a plan might actually blunt armed adventurism, since it was war-weary military officials who reportedly pushed back against President Obama’s plans to escalate Iraq War 3.0.  According to some Pentagon-watchers, a potentially hostile bureaucracy might also put the brakes on even fielding a national security team in a timely fashion. While Wall Street investors seemed convinced that the president elect would be good for defense industry giants like Lockheed Martin and General Dynamics, whose stocks surged in the wake of Trump’s win, it’s unclear whether that indicates a belief in more armed conflicts or simply more bloated military spending. Under President Obama, the U.S. has waged war in or carried out attacks on at least eight nations — Afghanistan, Iran, Iraq, Pakistan, Somalia, Yemen, Libya, and Syria.  A Clinton presidency promised more, perhaps markedly more, of the same — an attitude summed up in her infamous comment about the late Libyan autocrat Muammar Gaddafi: “We came, we saw, he died.”  Trump advisor Senator Jeff Sessions said, “Trump does not believe in war. He sees war as bad, destructive, death and a wealth destruction.”  Of course, Trump himself said he favors committing war crimes like torture and murder.  He’s also suggested that he would risk war over the sort of naval provocations — like Iranian ships sailing close to U.S. vessels — that are currently met with nothing graver than warning shots. So there’s good reason to assume Trump will be a Clintonesque hawk or even worse, but some reason to believe — due to his propensity for lies, bluster, and backing down — that he could also turn out to be less bellicose.

The US, for its part, penalized a dozen leading Russian conglomerates, including oil giant Rosneft, natural gas producer Novatek, Gazprombank and the weapons manufacturer Kalashnikov. From now on, they are forbidden from borrowing money from American monetary institutions and from issuing medium- and long-term debt to investors with ties to the US.

Even prior to the sanctions, the Russian economy had been struggling. Now, though, the Ukraine crisis is beginning to make itself felt in Germany as well. German industry's Committee on Eastern European Economic Relations believes that the crisis could endanger up to 25,000 jobs in Germany. Were a broad recession to befall Russia, German growth could sink by 0.5 percent, according to a Deutsche Bank study.

The most recent US sanctions, warns Eckhard Cordes, head of the Committee on Eastern European Economic Relations, have placed an additional strain "on the general investment climate." Particularly, he adds, because European companies have to conform to the American penalties.