Was a recent visit by Secretary of State, John Kerry to King Abdullah at his summer residence, as was reported as part of Kerry’s campaign to secure Arab support in the fight against the Islamic State, or was it also most likely on the agenda, to do what happened in the late 80’s to the USSR by trying to ruin the Russian economy?
To do this, Secretary asked the Saudis to :
- to raise production and
- to cut its crude price.
Please also keep in mind these important numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.
Shortly after Secretary Kerry’s visit, the Saudis began increasing production, and sure enough — by more than 100,000 barrels daily during the rest of September, with more apparently to come. Last week they dropped the price of Arab Light by 45 cents a barrel, Bloomberg News just reported. This has proven a market mover, sending prices to $78 a barrel.
Is this just conjecture? Well as Winter is on its way and across some the production oil market like Iraq, Libya, Nigeria and Venezuela they are having serious issues in producing oil, plus most OPEC members are crying out for some relief, the biggest oil producers, the Saudis movements have actually ‘dropped’ prices and intend to drop them further with further actions.
Putin is losing his geo-strategic footing and his foreign-policy accomplishments over the last year should not be overestimated, as by annexing Crimea, he lost Ukraine, and by “freezing” Donbas, he has buried his quasi-imperial EEU dream once and for all, and Russia’s economy is going to get a lot worse, but can Putin and the Russian Government survive?