Tag Archives: cartels

Netherlands, China and Mexico: Lethal Narco-States

The setup—Mexican cooks using Dutch equipment to process chemicals from China—offered a window into the new global drug economy…Mexican cartels, which dominate drug trafficking in North America, are drawn to the Netherlands because it is a global trade nexus with sea and rail links to Asia that has long been Europe’s top manufacturer of synthetic drugs.

Piggybacking legitimate commercial channels, Mexican cartels are combining sophistication with ruthlessness to expand their reach world-wide. Their multinational drive is enabled by the advent over recent decades of highly potent synthetic drugs that don’t rely on crops or farmers and can be manufactured in compact facilities almost anywhere. Production experts instant-message instructions to overseas workers and hop the globe like factory troubleshooters in any industry.

With the U.S. drug market saturated and methamphetamine labs in Mexico already supersize, cartels that murder for market share see Europe as a new hub. The cartels are “like global corporations,” said DEA Regional Director for Europe Daniel Dodds. “If they can expand and broaden their customer base, they will.”

Mexican cartels first connected with Dutch drug smugglers in the 1990s, bringing cocaine through Rotterdam, Europe’s largest port. Cocaine remains Europe’s top illicit stimulant, but Dutch police say over the past two years surging quantities of Mexican meth have hit the Netherlands, Mexican “cooks” have arrived to teach local chemists, and Dutch technicians are honing production methods.

The Netherlands offers Mexican cartels an ideal production base because of its experienced chemists, unrivaled cargo networks and liberal attitude to drugs. Connections to labs in China supply chemicals that constantly adapt to remain legal. Dutch traffickers cultivated those links over decades as they perfected ecstasy manufacturing for party scenes in London, Berlin and New York…

Dutch officials are awakening to the impact of tolerating drug use for a long time and “allowing for too long a parallel economy to grow and become more influential,” Mr. Struijs said. “We have the characteristics of a narco-state.”

Excerpts from Valentina Pop, Cartels Are Now Cooking Chinese Chemicals in Dutch Meth Labs, WSJ, Dec. 8, 2020

The OPEC Cartel and the US

The OPEC often described as a cartel, it is better seen as an anti-glut group. When demand is weak, its members can curb production to prevent the price plummeting. But when demand is healthy, its ability to curb new producers is limited. And new producers abound.

America’s domestic production of crude (and gas, which displaces some oil) is rocketing. The IEA says the country will produce 14m barrels a day (b/d) next year, on a par with Saudi Arabia . That has reduced America’s imports, as well as boosting exports of fuels (exports of crude oil are mostly banned). That frees crude from other places, such as West Africa, to go to Europe instead. Similarly, Latin American and Middle Eastern oil that once would have gone to America now goes to Asian customers.

For the oil-rich, even worse is in store. Other factors that have propped up the price over the past decade are likely to wane in importance. Even the slightest easing of sanctions helps Iran, potentially a huge producer….The Economist Intelligence Unit…forecasts a “significant boost” in 2014 from 2.4m b/d last year. This assumes new investment pays off, and a deal with the semi-autonomous Kurdish region. Libya could be another source of production: its exports have collapsed to only a few hundred thousand barrels a day, against 1.6m in June last year…

An alternative for Saudi Arabia would be to increase production sharply. That would send the price down: painful for the kingdom, but even more painful for higher-cost producers (not least America, where the “tight oil” now coming on stream requires prices of $50 and above to be profitable).  OPEC’s best hope is continued American protectionism. Any easing of the restrictions on the export of liquefied natural gas (LNG) or crude will exert more downward pressure on the oil price. That might be good for the world economy, but it is not a priority for American consumers, who would like cheaper petrol for cars and propane for heating…

OPEC and oil prices: Leaky barrels, Economist, Feb. 22, 2014, at 63