As with most foreign policy, there are two possibilities: stupid, and clever.
Stupid: The Obama administration has stated its goal of raising oil prices in general and gasoline prices in particular, as part of its efforts to make Americans suffer European/Japanese-level gasoline prices, and switch over to alternative energy sources, which are not-coincidentally owned by administration cronies and subsidized by tax dollars. All the administration efforts to block the production, refining, and distribution of fossil fuels—not fracking on government land, blocking Keystone XL, destroying the coal industry, etc.—were pointed towards that end. The administration, however, finds itself blindsided by the massive fracking occurring on private lands, the workaround of using trains to carry petroleum instead of pipelines, the continuing sluggish economy, and the unwillingness of other countries to cut back on their own oil production. So the price of oil broke support and dropped precipitously, hurting the very people the administration wants to prop up, meaning of course our adversaries.
Clever: The Obama administration has produced a lot of PR concerning its environmentally-friendly policies, knowing that most of it was (no pun intended) smoke and mirrors. It could block Keystone knowing that the train industry would carry the fuel; it could block fracking on Federal land knowing that private land would pick up the slack; it could destroy the coal industry (the rural poor are not equal to the urban poor, but that is an issue for another time) knowing that the Appalachian population is on the government dole anyway.
The administration has been working behind the scenes to get the Saudis to pump as much oil as they can. In the Middle East struggle, the administration wants two results: Israel diminished, and the Sunnis stronger than the Shi’a. Lower oil prices keeps Israel from exporting its natural gas, and also makes it less likely for Iran to be able to fund Shi’ite-related terrorist groups—an also has the added benefit of pressuring Iran to build its nuclear capability sooner rather than later, which (the administration figures) it will use against Israel but not against us.
One result is to trash the ruble, but that is a minor disturbance, since Putin is not going to give up his power, and the Russian people are used to suffering. Ditto Venezuela—and one reason Obama re-established relations with Cuba is in order to provide the Castro regime another source of funding, since Venezuela will not be able to keep up their oil bargain.
Now, having said all this, I think the “clever” option is fascinating, but I opt for “stupid,” since it is more in line with everything else the administration has attempted to handle in the past six years.
Thanks for the great analysis.
Then they failed. Saudi is producing less oil than last year. The price drop is not from Saudi putting more oil on the market. Only the US, and to a smaller amount Canada, have made significant oil production increases. Libya has restored some of their previous lost production in the past have year as well.