A Trillion-Dollar Gamble

The high-paying US jobs from the shale oil boom are evaporating as the price of petroleum decreases. The boom can’t be sustained without crude around $75-$80/barrel. The Saudis are pumping the stuff like nobody’s business. They’re not going to stop. Major oil companies and US economic growth are going to take a big hit. If anything will reverse that possibility, it will have to come from outside Saudi Arabia.

China won’t help: it’s sliding into recession. Europe is sliding, as well. Global oil demand is not on the rise, or even holding steady. Fixing the price of oil requires addressing the supply side of things.

Saudi Arabia is at the peak of its power so long as its borders and insides remain calm. With ISIS on its north, the Shi’a in Yemen on its south, plenty of pop-eyed nutcases ready to put the ruling family to the sword on the inside, and an ailing monarch with an unclear path of succession. Four different things that could possibly give way and apply substantial pressure on the Saudi kingdom – as well as upward pressure on the price of oil.

Are any worth the risk of provoking? Ask this question from the point of view of someone that cares only for short-term profits, not lives or long-term geopolitical concerns. That’s how corporations run themselves.

Dynastic intrigues would be the easiest to provoke, but would one be able to guarantee an outcome? Not an outcome in which things work out well for the Saudis, but where the price of oil goes back through the roof. There’s a chance that the royal family is of an accord about keeping up their production. The price boost, therefore, would need a different prime mover.

Popular uprising against the royal family? Easy enough to start, provided the rebels get some really good weapons. That’s not likely, unless the Saudi army splits in two. That itself isn’t likely. Move on, then.

The Shi’a threat from Yemen and Iraq would be seen as an extension of Iranian power, and that could provoke an Israeli nuclear strike. We’re looking for a price spike, not a general war that could go global all too easily. Scratch the Shi’a threat.

That leaves ISIS. It’s easy to get them weapons: just make a shipment to “moderate Syrians” and once they defect to ISIS, their gear goes with them. In the months that the USA has been bombing ISIS, they’ve increased the territory under their control. Honestly, it seems to me as if ISIS, for all its beheadings and breathings out of threats against the USA, is nevertheless serving US interests in the region. Israel attacks Assad, not ISIS. Israel is worried about Shi’a expansion, not ISIS. Yes, ISIS was blunted a bit in Iraq, but only after the government there basically begged for US support. Was that the plan, to have ISIS threaten to go all the way, in order to press the Iraqi government closer to the US camp?

If so, then ISIS is at the ready to threaten Saudi Arabia, ready to press them hard enough to get them to see things from a US perspective. They’ll do the work for the oil companies that the US Army can’t do.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.