More than anything else in Saudi Arabia, that thing you smell is fear. Everything is coming unglued for the royal family there all at once. If we all weren’t so distracted by the Coronapocalypse these things would all be front page news.
In the past week there have been three major stories concerning Saudi Arabia, none of the bullish.
First, there was the news that UAE-backed forces in Yemen broke with the Saudis-led coalition there to declare the Southern Transitional Council the new administrators over southern Yemen which includes the capital and major port at Aden.
This led to major clashes over the next week between forces which less than two weeks ago were supposedly on the same side.
In addition, Saudi mercenaries were routed in Northern Yemen. The UAE pulled its troops out of Yemen ending its fight with the Houthis after the attack on the Ab Qaiq oil processing facility last summer.
Finally, the Saudis accepted a UN-brokered ceasefire with the Houthis. This is a two-week provisional ceasefire, but considering how badly their mercs and pet head-chopping animals have been faring this should be considered a mercy gesture by the Houthis.
The war against Yemen has reached its terminal stage and it only took the impending financial collapse of the entire world to get it done.
Next up we have two news items from Thursday which underscore just how irrelevant the Wahabist government in Riyadh has become.
They accepted the reality that they can’t win an oil price war with the Russians by raising the tender prices for Saudi Aramco grades across the board. They had no choice since China told them they liked more expensive Russian oil better.
Buying from the Salman family is like buying from Donald Trump and under the current set of geopolitical imperatives China’s leaderships would be colossal fools to do so just to save a few dollars.
But the big news is that President Trump is removing the Patriot Missile systems he put in last year. From Zerohedge:
The Wall Street Journal reports that The U.S. is removing Patriot anti-missile systems from Saudi Arabia and is considering reductions to other military capabilities – marking the end, for now, of a large-scale military buildup to counter Iran, according to U.S. officials.
Trump’s been vocal about how vulnerable the regime in Riyadh is without his support. But the bigger reason for this, I think, has nothing to do with punishing Crown Prince Mohammed bin Salman for starting an oil price war which created a mess in U.S. oil markets.
This is about Trump realizing that oil should no longer be central to foreign policy objectives. In a world of $20-25 per barrel oil, why are we basing our entire foreign policy, which costs trillions we now truly cannot afford, on controlling the physical commodity markets which we are more than capable of producing?
Energy Dominance was the strategy of this administration, but that was predicated on the U.S. becoming the supplier of the marginal barrel of oil. That is clearly not the case with the May contract settling for $-40.
Trump will never apologize for making a mistake. He will just change course and end one policy and begin the next. Telling the Saudis he’s pulling the Patriots is a clear sign that policy is changing.
There’s no profit or purpose for continuing the operation in Yemen. That war of attrition is over.
This is also about the beginning of Trump’s re-election campaign in the wake of this historic economic collapse. It becomes a down payment to his anti-war, anti-imperial voting block which he has thoroughly alienated with his disastrous critical decisions culminating in the assassination of Iranian General Qassem Soleimani.
He has to do something to get these people (like me) back on his side. Now with the New Great Depression he has an excellent milieu for pulling back the empire… but he actually has to do it. So, is he?
Look at where we are today. Trump previously removed our support for the war in Yemen. He did not escalate in March after Kataib Hezbollah sent a second round of missiles into a U.S. base in Iraq, when he was being lobbied hard by the State Dept. and the Pentagon to do so.
Iran was able to deliver a major cargo of oil to Syria which previously had been under sincere U.S. embargo which lead to the seizure of the Iranian oil tanker last summer. Trump, apparently, berates his National Security staff daily to get us out of Afghanistan.
Sure, we’re still trying to pull strings in Iraq to install a government that will allow our troops to stay, but this policy has all the earmarks of State Dept. and Pentagon policy which Trump could pull the plug on if it looks grim.
Iraq is a mess of our devising, fighting China, Russia and Iran there will only make things worse for everyone. No matter what happens there now, the tired cry by Secretary of State Mike Pompeo about evil Iran will fall on very deaf ears when Americans are truly suffering at home.
I still think Trump has the political instincts to realize this in an election year during a depression and a country bitterly divided on nearly every issue.
So, in the end, tThe collapse in oil prices after Crown Prince Mohammed bin Salman threw a hissy fit back in March probably didn’t help U.S./Saudi relations any but given what’s happened and what’s on the horizon I don’t think it would have mattered.
Trump can blame MbS all he wants but we’d likely end up right here anyway.
Because his real enemies are not in the Kremlin or in Tehran. Trump’s real enemies are in his own White House, on Capitol Hill and across the various think tanks, NGOs and gentlemen’s clubs around the world that want him gone from power and a much poorer, desperate world than the one we had before the fear of COVID-19.
And in the grand scheme of the emerging post-COVID world is our support of the vicious Saudis all that important when we are swimming in oil we can’t find room to store?
So, MbS, like Trump and like nearly everyone else is looking closer to home to solve their problems rather than getting caught up in silly power games supporting outdated theories about who controls what part of the world.
With oil this low the petrodollar simply isn’t that important anymore and neither is the survival of what we currently know as Saudi Arabia.
By Tom Luongo
Source: Gold Goats ‘n Guns