MildSteel said:
Again, in exchange for the Saudis hurting the Russians by driving down the price of oil, the US is agreeing to engage in Iraq and Syria
The Saudi's don't need to give us anything to join the counter ISIL piece. We aren't joining it because they made us a deal - we are joining it because of domestic political considerations. We don't care about Ukraine because it has no domestic political implications. We are busy giving Putin more "space" because it's "after the election" and we "reset" relations with Russia - those who think that Russia is a problem for us, "the 80s called and they want their foreign policy back", remember?
No, they will continue to be able to buy off their populace because they will continue to be able to sell their oil at the high prices that are the result of a LONG TERM increase in demand for a limited natural resource.
That is incorrect for a variety of reasons. Firstly (see above) the percentage of oil consumed that comes out of the Gulf is continuing to drop as proven reserves continue to expand, and secondly, technology is bringing a lot of power savings online, even as demand from China is likely to flatten in the near future. The Saudi's know full well that foreign exploitation growth - led by the North American continent - can knock the supports out in this house of cards they've built and maintained over the decades.
That's why they say things like "Fracking is a threat to the Kingdom". That's why they are funding the anti-Fracking movement in the U.S., it's why they are willing to
risk breaking up OPEC, and it's the major reason why they are dropping prices now.
Even a non-nuclear Iran is a PERCEIVED threat to the Saudis because of the tension that exists between Sunni and Shia Muslims and as a result of Iran's ability, through it's ability to influence the Shia dominated Iraq, to upset the balance of power in the Middle East.
Yes. That is correct. Also because the Huthi are Shia, and the Bahraini protest movement is Shia, and the Saudi's tend to see Iranian hands wherever they see Shia problems. They are not, however, perceived as an
existential threat
to the ruling family until they have
nukes. At which point, the Saudi's have pretty much already announced they will begin to build their own.
The recent reduction in oil prices is due to the Saudis selling their oil at lower prices.
:doh The recent reduction in oil prices
preceded the Saudi decision to lower their rates.
No they cannot do it for quite a while because although Saudi production costs are quite a bit lower that those of the fracking industry, it is becoming increasingly harder for the Saudis to maintain such high production levels which means their production costs will keep rising, which means that they cannot indefinitely drive down prices in such a manner.
See: size of SWF v size of Annual Budget (above) for an answer to this failed claim.
THE SAUDIS DESIRE IN SEEING THE US ENGAGE IN IRAQ AND SYRIA IS CAUSING THEM TO COOPERATE WITH THE US BY DRIVING DOWN OIL PRICES TO HURT RUSSIA.
That is a just-so statement with no supporting evidence, and quite a lot of evidence that demonstrates it is incorrect. They didn't lower prices when we started intervening against ISIL (that occurred months ago), nor is it something they would have to do to bring the U.S. on board for several reasons: firstly, the current administration would
rather energy prices be high, as that would help meet their environmental goals; secondly, growth in the U.S. over the past couple of years is heavily driven by the energy sector - we would be agreeing to screw over
ourselves; thirdly, the current administration couldn't care less about Saudi stability - but it does care about domestic politics, which is what pushed it back into the Iraq fight against its own preferences; fourthly, the U.S. is not (as near as anyone can tell) all that interested in hurting Russia. We do not perceive that any major U.S. interest was harmed by their seizing the Crimea and, if anything, we seem to be hoping that if we ignore the problem, it will go away.
It is a fact that Iran is not immune from the negative effects due to lower oil prices. Their government is struggling despite having purchasing agreements with China. It is a fact that Iran has called on OPEC to do something to stop the price of oil from falling.
China is Iran's major buyer and those deals are indeed immune. Iran is struggling due to a (somewhat surprisingly) somewhat successful sanctions regime along with still recovering from a bit of a currency crises.