a Saudi move on this scale, with the resulting self-inflicted reduction in their income, makes no sense for the marginal impact it will have on American future production and imports; it is a geopolitical move targeted much closer to home.
Al-Badri’s flimflam, for which there is much precedent in the history of OPEC (essentially, the cartel is a perpetual quarrel among thieves pretending to be price-fixing), naturally seeks to disguise the fact that Saudi Arabia is trying to discourage the use of Iranian and Russian oil revenues to prop up the blood-stained and beleaguered Assad regime in Damascus, to finance Iran’s nuclear military program, and to incite the continuing outrages of Hezbollah and Hamas in Lebanon and the Palestinian Territories against Israel. The exotic community of interest that has suddenly arisen between the historically Jew-baiting Saudis and the Jewish state is because the countries in the area fear, with good reason as far as can be discerned, that the UN Security Council members, plus Germany, may be on the verge of acquiescing in Iran’s arrival as a threshold nuclear military power. The oil-price weapon, in the face of the terminal enfeeblement of the US administration, is the last recourse before the Saudis and Turks, whatever their autocues of racist rhetoric, invite Israel to smash the Iranian nuclear program from the air.
It is perfectly indicative of the scramble that ensues when a mighty power like the United States withdraws, fatigued but undefeated, from much of the world, that Saudi Arabia, a joint venture between the nomadic and medieval House of Saud and the Wahhabi establishment that propagates jihadism with Saudi oil revenues, makes common cause with Israel in a way that inadvertently relieves much of the Russian pressure on Ukraine, which was not an objective in Saudi calculations at all. From the Western standpoint, this is a lucky bounce of the political football. But it is Saudi judgment of its self-interest opposite the contending factions in Syria and the hideous prospect of a nuclear-armed Iran that is discommoding the Saudi leaders, not the ineluctable exploitation by the United States of its own oil resources
It’s commonest for people to see ambiguous things through an internal prism that shapes the picture into something to which their internal, unconscious, self-regard can relate. (In the two examples linked here, for example, the first self-relating was to victimhood, and the second self-relating was the desire to be adored by hundreds of millions; in that regard the stories are not at all contradictory.) Anyway, back on planet earth, E&P CEO’s see the oil price plunge as about shale, and some geopolitical pundits see Iran as the prime target. As for us, we’ve always thought that shale, Iran and Russia were all in the mix, and that it must have seemed elegant to the price plungers that launching the only weapon Saudi Arabia has in its arsenal could produce a trifecta.
Bonus fun: we saw the Decatur plant of Caterpillar on CNBC yesterday, and is that a hoot! Reminds us of our favorite TV series, Industry on Parade, writ very very large. A GMW of 1.4 MM lb? Are you kidding? Man, we’d love to visit that place!