Posted on 03/26/2020 7:05:14 PM PDT by artichokegrower
(AP Photo/Pavel Golovkin) On 18 March, U.S. crude oil prices fell to their lowest level in 18 years. The following day, momentarily distracted from their hype of the coronavirus pandemic, pundits and analysts reminded us again that low oil prices are the result of Saudi Arabia instigating a price war with Russia. And again, the culprit named was Mohammed bin Salman, Crown Prince of Saudi Arabia. Among his motives, they claimed, is hobbling the fracking industry that has ended American dependence on Middle East oil. Now, let’s examine the real backstory.
(Excerpt) Read more at realcleardefense.com ...
Trump is using Saudi Arabia as a proxy to fight an economic war with Russia. Just like Reagan who bankrupted the Soviet Union to defeat them rather than nuclear war Trump will bankrupt Russia and Iran.
This article is straight out of the bowels of the deep state.
The difference is that Russia doesn’t have twice the US defence expenditure anymore and do not support the second and half of the third world on top of it.
And it is not particularly hostile towards US to justify ‘waging was’ on it.
The Moose limbs want more market share. They feel that they have carried our water for so many years that they are owed it. They can’t survive with $22 oil. They think by bankrupting a few fracers in the Permian that they will succeed. The only problem is that the companies that ride the storm out will just buy up the assets. Barring a world wide collapse, this will be short-lived. IMHO.
Bankrupt China would be best.
Saudis need higher oil price than US, Russia or Nigeria because there are thousands of nobles who love their golden toilets and diamond-plated Lambos. And they have no sources of income besides oil, no matter how much more affordable the actual extraction is.
Interesting in that the deep state stated that Trump was in collusion with Russia but the article states that he broke their economy.
The problem with killing frackers is the low cost of conserving the source and bringing it back online. You might very well bankrupt the current owner with $22 oil but once it back to $60 another one would be pumping off the same site in no time.
Oil Tarriffs.
I'm not sure it's only a "bonus". Russia will weather this thing just fine although not without some of those budget adjustments the article referred to. Iran may not.
With just a sliver of oil sales income remaining, domestic unrest, inflation and disease are turning the Islamic Republic into a failing state.
The strategic benefit to Saudi Arabia of having Iran hamstrung over this is considerable. Iran has shown the world how easy it is to obstruct oil through the Straits of Hormuz with thinly-veiled special operations tanker terror attacks and how easy it is to attack major shipment facilities with drones. Saudi Arabia does not have the naval resources to perform the escort services itself and greater oil independence promises to reduce the willingness of its customers to perform that function. This moves the arena from the military to the economic, where Iran is far more vulnerable.
It could, as a "bonus", make things difficult for U.S. shale/fracking operations if the Saudis could hold prices at this low for enough time, but that may turn out to be more expensive than it's worth. We'll see.
I find little admirable with Saudi Arabia but the old saying is that the enemy of my enemy is my friend. If they break Russia and Iran economically with $25 a barrel oil then so be it. I would rather have the US fracking industry suffer a short term economic hardship than loose any more US soldiers in Iraq or Syria. We broke the Soviet Union this way without resorting to nuclear war. I think Trump’s strategy is bearing fruit and American soldiers are not dying.
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