Saudi Arabia

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Why oil is getting cheaper
Saudi Arabia's dirty wars
Articles before 2014


  • (october 2014) Why oil is getting cheaper. When international agencies started noticing that new technologies would soon cause a dramatic shift in the oil market, one country took notice and, well, panicked: Saudi Arabia. Its wealth and relatively new political power are entirely due to the oil that sits under its soil. If that goes away, Saudi Arabia will go back to being the region of poor desert tribes that it was for centuries. Another report probably alarmed the medieval-style sheiks and emirs of the Arabian peninsula: it looks like use of the automobile in the developed world has reached a peak and the number of cars will stop increasing and perhaps start decreasing. Young people demand public transportation, not sport cars.
    Saudi Arabia took action. The enemy is the expensive technology that has given an advantage to shale producers, mostly in the USA. This technology makes sense only if the price of oil is high. If that price falls, then it makes no sense to use an expensive technology to extract oil when you can just import cheap oil from the Middle East. Therefore, Saudi Arabia decided to increase the production of oil to bring down the price of oil. It makes no sense that the price of oil is declining while some of the major producers (Iraq, Libya, Nigeria) are engulfed in civil wars.
    The USA keeps tolerating Saudi Arabia's moves for the usual geopolitical reasons. Look closely and you will notice that it is not only the shale industry that will suffer. The most vulnerable oil producers are Iran, Venezuela and Russia, all countries whose economy is already tilting towards recession. If oil prices keep going down, Iran will be more motivated to accept the terms imposed by the West in the negotiations that started last year, Venezuela's socialist regime may finally lose popular support, and Putin's Russia may stop meddling into Ukraine and Syria.
    TM, ®, Copyright © 2014 Piero Scaruffi All rights reserved.
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  • (january 2014) Saudi Arabia's dirty wars. 2014 opened with the conquest of Falluja, a strategic Iraq city, by Al Qaeda, possibly Al Qaeda's biggest success since the 2001 terrorist attacks on New York and Washington. Meanwhile the Al Qaeda affiliated in Syria have carved out their own mini-states in the Sunni areas of this multi-religious country. The USA and the West in general (and Israel in particular) are usually quick to point out Iran's involvement in Lebanon (Hezbollah) and Palestine (Hamas) but they never openly point out Saudi Arabia's actions in the region (perhaps because Saudi Arabia is tacitly one of Israel's closest allies in the Middle East). Saudi Arabia used to fear Saddam Hussein and that's why the USA, instigated by Saudi Arabia, took him out. Now Saudi Arabia, a Sunni country, fears Iran, the main Shiite power, and the way Iraq goes will affect the outcome of their rivalry. Iraq has a Shiite majority that electes a Shiite prime minister, but Saudi Arabia is not happy about it: Maliki has old and strong ties to Iran. There is a good chance that Iraq would become an Iranian proxy if... its civil war ended. Luckily for Saudi Arabia, Iraq is too busy fighting its own Sunni insurgents to care about geopolitics. It is at least legitimate to suspect that Saudi Arabia is happy about the trouble caused to Maliki by Al Qaeda. Syria has always been a proxy of Iran. In this case Saudi Arabia has not made any mystery of its support for the Sunni insurgents (the Al Qaeda affiliates). Saudi Arabia is so determined to get rid of Syria's president Assad that it is even willing to support Islamic radicals who might turn against Saudi Arabia itself (Osama bin Laden's original target was the Saudi royal family, not the USA). Saudi Arabia got publicly upset when Barack Obama refused to strike Assad, and even more upset when the USA accepted Russia's plan to look for a negotiated solution to the conflict. Saudi Arabia wants Iran to get nothing out of these two civil wars. Now that the Syrian civil war is spilling over into Lebanon, it also becomes obvious that Israel and Saudi Arabia have common enemies: they both want Hezbollah to be defeated, they both want Hamas to be replaced by a less radical movement. Saudi Arabia was also happy that Morsi failed in Egypt. It never made a mystery of being worried about the Arab Spring, in particular when Mubarak, an old friend and trusted ally of the Saudis, was deposted by the Muslim Brotherhood, theoretically a fellow Sunni movement but in practice a dangerous precedent for Saudi Arabia. That's the other thing that the Saudis fear, possibly even more than Iran: democracy. A successful democracy in Iraq would send shock waves throughout the entire region, a region still ruled by kings, sheiks and emirs. Hence Saudi Arabia's tacit support for Al Qaeda's insurgency in Iraq, that weakens a Shiite regime, its Iranian ally, and democracy in general.

    See also: The Coming World Order and the China-Saudi-Pakistan Alliance

    TM, ®, Copyright © 2014 Piero Scaruffi All rights reserved.
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  • Articles on Saudi Arabia before 2014

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