Saudi regime is headed for disaster

The soon-to-be demise of the Saudi monarchy has come about from two stupid wars of choice that they intentionally started.
It couldn't have happened to a more deserving group of criminals.

The Oil Price War

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When Saudi Arabia announced that it was once again going to produce oil to the maximum to crash oil prices in a full-scale oil price war, some thought it "was an early April Fool’s Day joke."
Others had a more colorful imagination.

Russian President Vladimir Putin probably fell off the horse he was riding bare-chested somewhere in Siberia because he was laughing so much. There is a phrase in Russian intelligence circles for clueless people that are ruthlessly used without their knowledge in covert operations, which is ‘a useful idiot’, and it is hard to think of anyone more ‘useful’ in this context to the Russians than whoever came up with Saudi’s latest ‘plan’.

Why?
The Saudis can produce oil cheaper than anyone else in the world, but that's not the problem.
Russia, besides oil and gas, also export huge amounts of food and weapons.
The Saudis, besides oil and gas, also export huge amounts of...um, terrorists?

In purely basic oil economics terms, Russia has a budget breakeven price of US$40 per barrel of Brent this year: Saudi’s is US$84. Russia can produce over 11 million barrels per day (mbpd) of oil without figuratively breaking sweat; Saudi’s average from 1973 to right now is just over 8 mbpd. Russia’s major oil producer, Rosneft, has been begging President Putin to allow it to produce and sell more oil since the OPEC+ arrangement was first agreed in December 2016; Saudi’s major oil producer, Aramco, only suffers value-destruction in such a scenario. This includes for those people who were sufficiently trusting of MbS to buy shares in Aramco’s recent IPO. Russia can cope with oil prices as low as US$25 per barrel from a budget and foreign asset reserves perspective for up to 10 years; Saudi can manage 2 years at most.
.. As Saudi Arabia’s own deputy economic minister, Mohamed Al Tuwaijri, stated unequivocally in October 2016 last time that the Saudis tried this exact same ‘strategy’ from 2014 to 2016: “If we [Saudi Arabia] don’t take any reform measures, and if the global economy stays the same, then we’re doomed to bankruptcy in three to four years.”

That was in 2016. Russia is stronger financially, and Saudi Arabis is weaker now.
The reason Saudi Arabis is weaker has to do with a stupid decision in 2015.

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Exactly five years ago, the US-backed, Saudi-led Arab coalition carried out its first air strikes on Yemen in an effort to reinstate the disgraced, exiled President Abdrabbuh Mansur Hadi. He is a statesman in name only who I have argued previously has neither power, authority nor legitimacy. The strikes targeted the Houthi movement, which is supported by the Yemeni armed forces, and the war, claimed the Saudis, was supposed to be over in a matter of weeks.

The war’s devastating effects have claimed over 112,000 lives and created the world’s worst humanitarian crisis. The steadfast and resilient Yemeni people have prevented the coalition from toppling the Houthi-aligned government in the capital, Sanaa.

After five years, in fact, it is fair to say that the Saudis and their mercenaries are on the verge of defeat. The Yemeni armed forces and “popular committees” which include Houthi forces are continuing their advances with their sights set firmly on the stronghold of Marib and the pro-Hadi, Islah militia which makes up the coalition-backed force on the ground.

The Houthis have been on the offensive in recent weeks, while the Saudis are looking for an exit. Making it even more of a mess is open conflict with the proxy forces of its UAE-ally.

The latest round of violence erupted after Hadi’s forces tried to advance along the highway from Marib to the rebel-held capital, Sana’a, but the attempt backfired spectacularly after the Houthis responded with counterattacks on several fronts, advancing to seize al-Hazm, the capital of al-Jawf province, earlier this month...
The United Arab Emirates and Saudi Arabia are already in competition for the upper hand in Yemen’s south, where the UAE supports a separatist movement which says it wants renewed independence for South Yemen.

The Saudis, struggling with their limited military capabilities and the financial strain of the conflict, have engaged with the Houthis in backchannel talks facilitated by Oman over the last few months, an apparent recognition of the fact that after five years of war, the rebels are not going anywhere.

The KSA is about to feel 1) an economic crisis, 2) a military defeat, and 3) a political defeat.
Someone in the KSA is about to lose their head.

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Comments

CB's picture

Couldn't happen to a more deserving fellow. I'm looking forward to the day his brothers, cousins and uncles take him camel riding in the desert to play polo with it.

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19 users have voted.

@CB
But that just means that Russia got what it wanted.

And it won't stop the Houthis from winning

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CB's picture

@gjohnsit
But not fast enough.

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thanatokephaloides's picture

@gjohnsit

U.S. frackers will go under first

They already are, essentially. If they can't get $100/barrel, they're fucked.

And they can't get it.

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20 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

snoopydawg's picture

@gjohnsit

About a week ago I read that he is going to do that because of the banks that own him them and for the workers?

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12 users have voted.

"I will be the best, the best, you know, you know the thing!”
- Joe Biden

Grope and Hope

thanatokephaloides's picture

@snoopydawg

Isn't Trump bailing them out still?

Bailouts only benefit Big Capital, snoop. You know that.

No $100 barrels, no nice easy jobs, workers get fucked as usual.

Bad

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9 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

The Liberal Moonbat's picture

@gjohnsit

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3 users have voted.

In the Land of the Blind, the one-eyed man is declared insane when he speaks of colors.

Today Trump announced massive sanctions on Saudi Arabia for war crimes, terrorism, murder and recruiting, arming, training and financing terrorists throughout the Middle East. In a speech today President Trump called the Saudi kingdom the "Axle of Evil". "There is no greater violator of basic human rights, democracy and the right to life and justice of her own people." "There is no greater danger to peace and stability of the nations of the Middle East." Saudi Arabia has committed a criminal war of aggression against her neighbor. Until Saudi Arabia decides that it will join the world of civilized nations we will impose strong sanctions and ask that the rest of the civilized world joins us. As part of those sanctions we will halt all trade with the KSA and sever all financial relationships, including but not limited to dollar transactions.

Yeah, Right!!!!!
(snark)

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9 users have voted.

Capitalism has always been the rule of the people by the oligarchs. You only have two choices, eliminate them or restrict their power.

thanatokephaloides's picture

@The Wizard

Today Trump announced massive sanctions on Saudi Arabia for war crimes, terrorism, murder and recruiting, arming, training and financing terrorists throughout the Middle East. In a speech today President Trump called the Saudi kingdom the "Axle of Evil".

Wouldn't "Axle grease of Evil" be appropriate here? Biggrin

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7 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

The Liberal Moonbat's picture

@The Wizard ...I would vote for him.

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6 users have voted.

In the Land of the Blind, the one-eyed man is declared insane when he speaks of colors.

The Liberal Moonbat's picture

Also, it's a VERY interesting point about their rivalry with Russia...gives a whole new level of backdrop to RussiaGate etc.

In fact, the rabbit hole just gets wider the longer you look at it. How long has the KSA been secretly controlling American foreign policy???

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8 users have voted.

In the Land of the Blind, the one-eyed man is declared insane when he speaks of colors.

Raggedy Ann's picture

@The Liberal Moonbat

How long has the KSA been secretly controlling American foreign policy???

Pleasantry

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"The secret of change is to focus all your energy, not on fighting the old, but on building the new." Socrates (469-399 BC)

enhydra lutris's picture

@The Liberal Moonbat
Standrd Oil of California (SoCal, later to become Chevron) was in a partnership with the Saudis to explore for oil and hit it big time. The partnership's company name was changed from California-Arabian Standard Oil Co. to Arabian American Oil Co. (or Aramco) Standard Oil of New Jersey (Exxon) purchased 30% and Socony Vacuum (Mobil) purchased 10% of the company, with SoCal and Texaco retaining 30% each. (Texaco also ran operations in Kuwait, when Albright told Saddam that the US didn't care what he did, she left out the fact that the US very much cared what Texaco wanted.) This goes back to the late forties, they controlled foreign policy, trade policy and tax policy. Also, of course, petrodollars.

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That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

Steven D's picture

at long last.

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"You can't just leave those who created the problem in charge of the solution."---Tyree Scott