Europe Becomes Victim Of Russia's Newest Oil Strategy | Zero Hedge
Description: Higher shipments of Russian crude oil to China may saddle European importers with a fatter bill...

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# Europe Becomes Victim Of Russia's Newest Oil Strategy

Authored by Irina Slav via OilPrice.com,

Higher shipments of Russian crude oil to China may saddle European importers with a fatter bill, an industry consultancy warned at the end of last year, noting the latest stage of Russia’s Eastern pivot: the launch of the expanded East Siberia-Pacific Ocean pipeline that would lift Urals crude supply to China twofold, to 30 million tons annually.

FGE said in a note quoted by Bloomberg that Russia will start moving more Urals eastward right after the launch of the pipeline extension, at a rate of 160,000 bpd. The overall increase of Russian crude shipments to China, according to the consultancy, could be around 200,000 bpd.

This means less oil for Europe, which is Russia’s number-one oil client. This only highlights the significance of Moscow’s Asian pivot amid lingering European sanctions following the 2014 annexation of Crimea and Russia’s involvement in separatist conflicts in the Ukraine.

In 2016, Russia exported an average 3.7 million barrels daily to European countries, compared with less than a million bpd to China, according to figures from the Energy Information Administration (EIA). In percentage figures, Europe accounted for 70 percent of Russia’s 2016 crude oil exports, while the share of China was just 18 percent. Yet this is changing fast, as this chart from the EIA shows:

(Click to enlarge)

The rise in Chinese exports has been quite steep since 2014: as of November last year, Russia shipped 1.3 million barrels of oil daily to China. All the latest signs point to further growth. However, exactly how much this would hurt European buyers is unclear.

The Urals is currently trading at a discount of about $4 to Brent crude but WTI’s discount to the international benchmark is $6 a barrel. In other words, Russia’s diverting of crude oil from Europe to China could be an opportunity for U.S. exporters as long as they can keep their transport costs low enough. Europe will probably be grateful for the diversification.

Over the long term, things are even more uncertain. Clearly, Russia has prioritized its relationship with China: In addition to the ESPO expansion, Gazprom is on track to complete the Power of Siberia gas pipeline by 2019. The 2,500-km mammoth of a pipeline will pump 1.3 trillion cu ft of gas to China annually.

The country is already the third-largest consumer of natural gas in the world, behind the U.S. and Russia, and is expected to show the strongest demand growth over the coming decades—propelling it to second place by 2040 as the economy shifts away from coal.

This soaring demand has already created shortages in parts of the country. A recent report by Eurasia Daily suggested the Power of Siberia will be essential in avoiding future gas shortages. Would that take gas away from Europe? It’s unlikely given Gazprom’s 30+-percent market share in Europe, and besides, there’s enough gas for everyone. What might happen is China overtaking Europe as Russia’s biggest gas export market at some point in the future, especially if Russia–EU relations continue to be strained.

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## Comments

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SoDamnMad Jan 8, 2018 3:35 AM

So suddenly you think there is a shortage of oil? Not until the ME blows up. Now if Bennie Netinwahoo launches an attack on Iran this might change suddenly.

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Thraxite Jan 8, 2018 3:35 AM

Crimea was NOT annexed, it seceded lawfully and in full compliance with International law and norms.

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Greed is King Thraxite Jan 8, 2018 6:26 AM

Not to mention the overwhelming vote of the Crimean people to rejoin Russia, 98%.

Two other facts that are ignored, indeed concealed by our Glorious Western Ruling Elite is that, 1, the Crimea has NEVER historically been part of the Ukraine, it has for several centuries been part of Russia and the old Ottoman Empire, it was tagged onto the Ukraine for purely administrative efficiency purposes by Kruschev in the 1950`s during the Soviet Union era, and when the Soviet Union collapsed, the drunkard American puppet President of the Russian Federation Boris Yeltsin agreed to Ukrainian independence but either by accident or design neglected to repatriate the Crimea.

2, The Ukraine itself has never been an independent country until Yeltsin signed its independence treaty, up to then it had always been fought over and been subjugated by Poland, Sweden and Russia. The most it has ever attained pre-Yeltsin was semi-autonomy.

But those facts are not fit for purpose for the West.

In reply to Crimea was NOT annexed, it… by Thraxite

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pc_babe Greed is King Jan 8, 2018 6:42 AM

All hail Palestine

In reply to Not to mention the… by Greed is King

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peddling-fiction pc_babe Jan 8, 2018 9:39 AM

And it's not February yet.

The cold reality is that you will have to pay.

In reply to All hail Palestine by pc_babe

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new game Greed is King Jan 8, 2018 7:09 AM

AND not to mention, the yuan is backed by GOLD, and the petro dolla is backed by the MIC/VIOLENCE that is creating most of the havoc worldwide.

jeez,

simple shit maynard...

In reply to Not to mention the… by Greed is King

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not-me---it-wa… new game Jan 8, 2018 8:04 AM

"the yuan is backed by GOLD"

no, it is not. the yuan is backed by, well, ......full faith and credit.

even less full faith and credit than the dollar. the rmb is absotively

not backed by a fixed amount of gold.

china is creating a new oil futures exchange. not the same as the

gold exchange. so yes, virginia, you may sell oil in rmb (value

manipulated by china), and you may take those rmb's and buy gold

on the gold exchange, at whatever rate the chinese government

sets. two separate, unrelated transactions.

nothing is backed by gold.

In reply to AND not to mention, the yuan… by new game

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east of eden not-me---it-wa… Jan 8, 2018 8:14 AM

'nothing is backed by gold'

Well, no, as you have just pointed out, oil sales are 'backed by gold'. The issues surrounding the value of the Yuan and the price for gold are entirely separate and would be no different than what you and your own people would do to 'buyers'.

Everybody gets a cut, you know that.

In reply to "the yuan is backed by GOLD"… by not-me---it-wa…

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not-me---it-wa… east of eden Jan 8, 2018 8:20 AM

how is it "backed by gold"? cause you can buy

gold with the proceeds?

in that case you could just as well argue the

rmb is backed by cardboard-filled dumplings,

seeing as you can buy them, too.

In reply to 'nothing is backed by gold'… by east of eden

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Winston Churchill not-me---it-wa… Jan 8, 2018 10:31 AM

Are you really that stupid ?

Back to back futures oil and gold means oil is backed by gold or gold by oil.

This will be how the reset will happen, with a huge arbitary change in that ratio.The IMF and World bank

are promoting exactly that.

In reply to how is it "backed by gold"? … by not-me---it-wa…

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not-me---it-wa… Winston Churchill Jan 8, 2018 10:54 AM

https://www.zerohedge.com/news/2017-10-16/gold-backed-oil-yuan-futures-…

In reply to Are you really that stupid ?… by Winston Churchill

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Arrest Hillary Greed is King Jan 8, 2018 7:16 AM

Raul Castro won by 99% ?

In reply to Not to mention the… by Greed is King

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Volkodav Greed is King Jan 8, 2018 8:42 AM

Ukraine has never been a Sovereign Nation

In reply to Not to mention the… by Greed is King

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CatInTheHat Volkodav Jan 8, 2018 12:06 PM

A NEOnazi nation it appears.

In reply to Ukraine has never been… by Volkodav

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tsuki Greed is King Jan 8, 2018 9:46 AM

Another fact never mentioned:

The 2014 referendum was the third time that Crimea voted to return to Russia, 1991, after the fall of the Soviet Union, and 1994, after the UN declared that the people of an area had the right of self-determination (Kosovo separation). The percentages were in the high 80's for rejoining with Mother Russia.

In reply to Not to mention the… by Greed is King

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any_mouse Greed is King Jan 8, 2018 9:48 AM

Consider this blowback for allowing ZioNATO to park along the Russian border.

In reply to Not to mention the… by Greed is King

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Beans Thraxite Jan 8, 2018 6:40 AM

So many sad souls in the West who are intellectually incapable of understanding the difference between the words 'accession' and 'annexation'. The (((watchers))) are successful in their educational brainwashing processes.

In reply to Crimea was NOT annexed, it… by Thraxite

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Joiningupthedots Thraxite Jan 8, 2018 8:41 AM

Never let the truth get in the way of a good yarn though :)

In reply to Crimea was NOT annexed, it… by Thraxite

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Ink Pusher Thraxite Jan 8, 2018 8:53 AM

What really happened?

Crimea didn't pay their energy bill and got seized .

In reply to Crimea was NOT annexed, it… by Thraxite

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kochevnik Thraxite Jan 8, 2018 8:57 AM

Oil heads behind USA warmongering as they hoped to replace Russian LNG with USA LNG, even at two times price. Author nothing but spokesman for greedy USA energy pigs

In reply to Crimea was NOT annexed, it… by Thraxite

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Grumbleduke Jan 8, 2018 3:38 AM

what the Russian miscalculate is, not only has Europe brand new solar panels and wind turbines everywhere, it has politicians!

We could easily use the steam european bureaucrats are producing to not only power the whole planet. That energy will someday soon make interdimensional travel a cakewalk. In fact, it seems they already are in some alternative dimension.

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researchfix Grumbleduke Jan 8, 2018 3:49 AM

Resumee seems to me that there will be nothing to send through Ukraine. As planned for 2019.

In reply to what the Russian… by Grumbleduke

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williambanzai7 researchfix Jan 8, 2018 3:57 AM

Surely the Ukraine must be eager to solve Europe’s refugee problem. Undoubtedly eager to take all the refugees that Poland, CR and Hungary are rejecting. For this they should be rewarded with 1 million cubic meters of Merkel Methane.

In reply to Resumee seems to me that… by researchfix

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Fireman williambanzai7 Jan 8, 2018 4:04 AM

Once Nudelaman's Kiev NAZIS crank up their terror on Donbass with Trump's latest war toys, Mr. Bear will kick so much ass that 20 million Ukrop "r€fug€€$ will be heading to Welfare Camp Germany on their cobbled together stolen tractors.

In reply to Surely the Ukraine must be… by williambanzai7

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OverTheHedge Fireman Jan 8, 2018 6:31 AM

But that's OK, because Ukraine can repopulate with ISIS. We could have a proper population swap, rather than just an unbalanced, one-sided immigration policy as per Merkel's current system.

I don't suppose the Ukrainian ultra-right-wing loonies will have a problem? Theoretically, they will all be in Germany, along with all the chat-room girls.

In reply to Once Nudelaman's Kiev NAZIS… by Fireman

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peddling-fiction OverTheHedge Jan 8, 2018 9:42 AM

Maybe the Khazars want the Ukraine back.

Nudelman's husband has Khazar royalty in his last name.

Kagan = King (Kaganate)

https://en.m.wikipedia.org/wiki/Khazars

Khazar armies were led by the Qağan Bek (pronounced as Kagan Bek) and commanded by subordinate officers known as tarkhans. When the bek sent out a body of troops, they would not retreat under any circumstances. If they were defeated, every one who returned was killed.[83]Sounds like the (((soviet))) days with the (((cheka))) manning the machine guns, to kill retreating soldiers.

In reply to But that's OK, because… by OverTheHedge

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BobEore Grumbleduke Jan 8, 2018 4:03 AM

As the very first (visible) signs of the forthcoming Srael o/o Eurasian Energy Crime Cartel break thru the mediaz embargo...

tardnationals already rocked back on their heels by an incessant tsunami of

bad news... and BOBEE'S dreaded nettle tea maker...

the shock n awe takes its toll on the herd of zheeple being run this way and that - from pillar to post - with ever increasing speed.

What to make of it all?

> " the momentous outbreak of renewed resistance to the neo-medieval THEOCRATIC TERROR STATE in south central Asia which bills itself by the oxymoronic title of THE "REVOLUTIONARY ISLAMIC REPUBLIC OF IRAN." Events for which the timing of this opening post could not be better! Nor could I have ever hoped to have found a more conclusive way of tying together the twin strands of my researches than the story which follows. It's a story which stretches over millennia, with a connecting theme of talmudic machinations of the kind which "THE JEWISH REVOLUTIONARY SPIRIT" will remain the underlying agent behind!"

> Geopolitics Behind the Mask

> Understanding kabbalism's influence on modern medias -
> and the geopolitical consequences

Help arrives for 'HELMS DEEP' ... and a stream of trolls, orcs, half-wit halfbreeds and other detritus of the failed alt-right talmudist psyop begin to move towards the exits... knowing their time

has come.

Dig it.

In reply to what the Russian… by Grumbleduke

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OverTheHedge BobEore Jan 8, 2018 6:35 AM

I've tried, but I can't actually be bothered to read your turgid nonsense any more. Sorry.

If you have anything useful to say, perhaps you might have a go at writing in some semblance of English?

Or are you just a not so clever bot? The constant use of Tolkein would suggest that you are a sad little geek, at the very least. We've all read it, but not all of us need to quote from it constantly to show our literary prowess. Perhaps you could try something from the Silmarillion, just to show you're not a mouth-breather who can only watch Hollywood nonsense.

In reply to As the very first (visible)… by BobEore

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BobEore OverTheHedge Jan 8, 2018 7:47 AM

I appreciate your best effort at a snide dismissal...

as it signals the kind of capitulation I've been anticipating from the part of the audience whose role is to block real dialogue. But I'm honestly amazed at the degree of denseness it takes to continue - after all this time - for thee to believe that your opinions have any merit to me,

that the covert admission of a failure of comprehension - disguised as the usual attempt to blame the writer for the readers' lackings,

or the last ditch attempts to 'get under the skin' of someone who has very clearly gotten under yours,

could be seen by both the watching audience and myself...as anything other than the pathetic appeal of another

he he heh... mouthbreather... of the entitled american exceptionalist sort... for relief from the torture of being party to a discussion for which they haven't even a conceptual entry point.

Best of luck... AND

next contestant pls!

In reply to I've tried, but I can't… by OverTheHedge

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Moe-Monay BobEore Jan 8, 2018 7:54 AM

I had to agree completely with his appraisal of turgid nonsense. Don't splat down on paper words that require 3x normal reading effort to take in. I will auto vote it down.

In reply to I appreciate your best… by BobEore

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BobEore Moe-Monay Jan 8, 2018 8:35 AM

Still not getting it huh Moe?

The astonishing resilience of your dependency pon the illusory power of a 'vote button' micro-democracy (most particularly one 'managed' by behind scenes gnomes with a mission to 'guide' their captives towards 'correct' opinions)

in the face of all the evidence of its irrelevance to authentic debate or any kind of real 'fight club' ethos...

evokes images of the report Darwin gave of his meeting with the natives of Patagonia... who...

> could not see the main ship, "conceptually or even optically, since no large ships had hitherto been a part of their experience. Only the shaman of the tribe could see the ship. When the shaman began to describe the ship with the aid of objects known to the Patagonians, the ship became visible to all. They had a consensus reality, which applied to small boats, but lacked a similar conception of large ships." https://storify.com/SuaveBel/science-in-service-to-the-satanic-chemical…

and as I point out in that same essay

"the modern denizen of the western world.. with or without their vast panoply of tools and technologies with which to describe and modify the world around them... is really no different than the Patagonian of the timeless past. What they can 'see' is bounded and determined by what they already 'know.' What is unknown... therefore... remains invisible to them!"

The [post-western] world has simply left you and yours behind Bro MO... and tho I will continue to do my very utmost to bring you news of what lies beyond both your reckoning and your imagination...

expecting/demanding me to do so by repackaging that message in a format legible only to mental pygmies would defeat the purpose of the exercise. Best of luck AND... back to your buttons.

next contestant Pls!

In reply to I had to agree completely… by Moe-Monay

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Greed is King Grumbleduke Jan 8, 2018 6:32 AM

Watching PM`s question time on the Beeb convinces me you`re right, it`s amazing how many megatons of hot air and bullshit can be produced by some 600 MP`s; enough to power the entire Continent of Europe I`m sure.

In reply to what the Russian… by Grumbleduke

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Fireman Jan 8, 2018 4:00 AM

So Brussels Natostan's Pedophile Politburo is content being USSA's bitch...then Russia has other options. The EUSSR will go down the toilet with the Saudi Mercan IOU petrodollah and the sooner the better for the once sovereign nations of Urupp.

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css1971 Jan 8, 2018 4:06 AM

European sanctions against Russia....... Oops...

I swear to god that we have the dumbest representatives on the planet.

Europe has turned into Moron Central.

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new game css1971 Jan 8, 2018 7:15 AM

puppets of london/fedNY. nato to enforce.

calling noodle brain, what cha gonna do?

SSM

In reply to European sanctions against… by css1971

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Lore Jan 8, 2018 4:10 AM

European nations really ought to re-think participation in those sanctions. They hurt their own people and undermine their own sovereignty.

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Joe A Jan 8, 2018 4:16 AM

Even during the hardest times of the Cold War, Russia supplied Europe with gas. But Europe falls victim of it own energy insecurity and of it dependence of the US for its protection. It is time for Europe to deal with both issues.

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squid Jan 8, 2018 4:48 AM

"And again, the paste function is not working Tyler. Any estimate on when the current Web site downgrade will be complete?"

Squid

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BiggestLoser squid Jan 8, 2018 5:29 AM

Whiner

In reply to "And again, the paste… by squid

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OverTheHedge squid Jan 8, 2018 7:13 AM

Click on the little button on the right of the comments header, labelled "Source". Then paste to your heart's content, and when you are done, click on "Source" again.

I think it is more of a "workaround" than a design feature, but Tyler is probably working on it.

Well, Paramjeet is working on it - Tyler is just paying the bill. If Tyler actually IS working on it, perhaps we need to send him a Paramjeet?

In reply to "And again, the paste… by squid

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Davidduke2000 Jan 8, 2018 5:23 AM

It is russia's oil and it can sell it to the highest bidder, the EU put so many roadblocks in the construction of Russian pipelines going through some European countries and will pay the price for it. Obama had promised the EU oil and natural gas & propane shipments that never materialized because the us has none, it was only an illusion.

Now they would have to buy through Turkey.

Maybe this time they won't delay new pipelines because Putin is selling his oil and gas elsewhere and running pipelines including through NK.

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Neochrome Davidduke2000 Jan 8, 2018 6:04 AM

Well Ukrainians got their cookies and Europeans got their LNG from US, no idea why are they making choking sounds now...

In reply to It is russia's oil and it… by Davidduke2000

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beijing expat Jan 8, 2018 5:25 AM

Europe are the authors of their own misfortunes. If they had called Obama out on his Ukrainian coup they wouldn't be seeing Russia in bed with China instead of them.

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Neochrome beijing expat Jan 8, 2018 6:19 AM

Like Europe has a say who is in it's "bed" LOL...

In reply to Europe are the authors of… by beijing expat

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AgLand Jan 8, 2018 6:03 AM

The enemy is not Russia, it’s China. Instead of ‘friending’ the white boys with the nukes on the Chinese border we’ve created a shotgun marriage between the two that impacts the whole global petro neighborhood, including the future of the petrodollar.

this new and latest “Red Scare” is going to pay us back in spades one day.

all those who believe renewables will be powering the planet before the ‘shale revolution’ is done have their heads up their asses. In 20 years that will mostly have all played out.

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Islamaphobe AgLand Jan 8, 2018 6:36 AM

If, and I say "if", the ITER Tokomak is a success, it will change the whole energy game. Obviously it will face very stiff oposition from the vested interests. Andrey Sakharov's genius lives on!

In reply to The enemy is not Russia, it… by AgLand

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OverTheHedge Islamaphobe Jan 8, 2018 7:16 AM

As I am in predicting mode today, I believe that the fusion reactor will work, but not produce power economically enough to be used as a system. The figures will be very, very carefully manipulated to make sure that this is the case.

In reply to If, and I say "if", the ITER… by Islamaphobe

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Moe-Monay OverTheHedge Jan 8, 2018 8:00 AM

ITER is not going to change anything much if it works for a very very long time. Thing is HUGE. It will take quite a while to be made workable even if it works.

In reply to As I am in predicting mode… by OverTheHedge

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east of eden Moe-Monay Jan 8, 2018 8:20 AM

Yes, and 60 years ago a mainframe computer took up an entire football field.

In reply to ITER is not going to change… by Moe-Monay

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Beans AgLand Jan 8, 2018 6:49 AM

The enemy is neither Russia nor China, it is the Israel loyal International ZIONISTS amongst us. The same people who did 9/11, the USS Liberty, the bombing of the Marine barracks in Lebanon and so on and so on and so on and so on....

In reply to The enemy is not Russia, it… by AgLand

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