How behind-the-scenes global power politics works. From Tyler Durden at zerohedge.com:
The full story of President Trump’s intervening in the Russia-Saudi price war which sent oil prices plunging to historic lows has been revealed in a new explosive report. Trump’s pressure resulted in the surprise April 12 unprecedented OPEC+ production cut by 9.7 million barrels per day (bpd), which saw the Saudis and Russians begrudgingly agree to cut 2.5 bpd each.
Ourselves and others strongly suggested at the time that no doubt there were strong quid pro quo type ultimatums being delivered behind the scenes — consistent with Trump’s prior eyebrow raising boasts about Riyadh ponying up $1 billion in ‘protection money’ in return for defense against Iran — but new Reuters confirmation is out Thursday morning, and the details are more delicious than could have been expected, complete with the report actually describing of Saudi leaders that they genuinely panicked and fast began “bending the knee” when confronted by Trump’s slash output or else threat.
It began with an April 2nd phone call, Reuters details, wherein Trump pressed Saudi Crown Prince Mohammed bin Salman with the following ultimatum: OPEC must immediately begin cutting production or see all American troops withdrawn from the kingdom.
Who wants to put US shale oil drillers out of business more, Russia or Saudi Arabia? From Tyler Durden at zerohedge.com:
While it appears an expected emergency virtual OPEC+ meeting planned for Monday has been postponed, pushed back to later in the week to allow more time for negotiations, it’s likely that we’ll actually see the heated blame-game for the collapse in oil prices ratchet up — and oh,in the meantimeoil is set to crater come Monday as the feud is only expected to get uglier.
Indeed the aggressive war of words has started, with Putin offering a biting Russian narrative aimed at the Saudis in remarks Friday: “It was the pullout by our partners from Saudi Arabia from the OPEC+ deal, their increase in production and their announcement that they were even ready to give discounts on oil” that drove the crash alongside the double-whammy of the coronavirus-driven drop in demand, Putin said according to Bloomberg.
“This was apparently linked to efforts by our partners from Saudi Arabia to eliminate competitors who produce so-called shale oil,” Putin continued. “To do that, the price needs to be below $40 a barrel. And they succeeded in that. But we don’t need that, we never set such a goal.”
MBS is playing tiddlywinks; Vladimir Putin is playing nine-dimensional chess. From Simon Watkins at oilprice.com:
One might reasonably posit that when Crown Prince Mohammed bin Salman (MbS) signalled that Saudi Arabia was once again going to produce oil to the maximum to crash oil prices in a full-scale oil price war, 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’. Whichever way the oil price war pans out, Russia wins.
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.
People have been predicting the end of Saudi Arabia as we know it for quite some time. Clown prince Muhammad bin Salman may be the man to make that happen.From Daniel Lazare at antiwar.com:
As Crown Prince Muhammad bin Salman arrests his nearest relatives on treason charges, Saudi Arabia is bracing itself for a new reign of terror. But rest assured, it’s only temporary. At the end of the line lies something even worse: full-scale collapse.
Yeah, yeah, we’ve heard it all before from Chicken Littles who have long predicted a fiery Saudi denouement. But just because it hasn’t happened doesn’t mean they’re wrong. All it means, rather, is that while they’re on the right track, they’re taking longer than expected to reach their final destination. But they’ll get there soon enough.
Any one of the problems Saudi Arabia faces would be crippling in itself, but in combination they’re nothing short of devastating. One is a grim and oppressive religious establishment that is down for the moment but far from out. Another is over-reliance on a commodity whose price was trending downward even before the coronavirus sent it crashing through the floor. The third is a political structure that gives new meaning to the term “dysfunctional.”
Muhammad bin Salman’s remedy for the first has been simple: repression. Any mullah who dares speak up against royal liberalization in the form of Hollywood movies or US-style sporting events is fully aware that MBS, as he’s widely known, will swat him down quicker than he can say “Mullah Muhammad ibn Abd al-Wahhab,” the name of the eighteenth-century founder of the ultra-intolerant form of Sunni Islam that is the official Saudi faith.
If you want to know the official intelligence community (both American and British) line, the Financial Times ranks right up there with the Washington Post, New York Times, and Wall Street Journal. From Tyler Durden at zerohedge.com:
A fascinating FT article suggests Western intelligence agencies have now dumped Saudi crown prince Mohammed bin Salman after he’s been personally accused by world leaders — foremost among them Turkey’s President Erdogan and US President Trump — for ordering the brutal murder and dismemberment of journalist Jamal Khashoggi. Implicit in the article, rich with quotes from current and former US and Western intelligence officials, is the further suggestion that these very intel operatives appear to now be actively seeking MbS’ ouster.
But the other fascinating aspect to FT’s commentary is what it reveals about both the mainstream media and intelligence ‘deep state’ perspective on the kingdom and Middle East politics in general: a head of state is deemed good or bad insofar they are amenable to the goals of Western intelligence agencies. While this might be obvious to any student of the history of covert action in the 20th century, it is rare to see it acknowledged so out in the open in a mainstream publication. The FT article reads like a “bragging rights” competition over which crown prince could be better formed by US intelligence: MbS or his recently ousted cousin Mohammed bin Nayef (MbN)?
The US may never get a better excuse to cut Saudi Arabia loose. From Gareth Porter at antiwar.com:
The murder of Saudi journalist Jamal Khashoggi now seems very likely to prompt Congress to impose some sanctions on the Saudi government, and it may finally act to end the active US role in the Saudi-UAE war on Yemen.
Perhaps more significantly, some senior Democratic Party figures in Congress have called for the first serious reconsideration of the whole US-Saudi “special relationship”, citing the need for fundamental changes in the relationship.
A political cover
Such a critical reappraisal is long overdue. For decades the United States has been providing political-diplomatic cover for Saudi policies that have caused far more disastrous consequences for the United States and for the entire Middle East than any of the countries that Washington has designated as “adversaries”.
More than any other American ally, the way Saudi Arabia operates is completely at odds with the values the US professes to champion and embody. The Saudi ruling elite is not only proudly anti-democratic but upholds an extreme interpretation of Islam that has made it the primary source of violence and instability in the Middle East over the past decade.
Jamal Kashoggi’s murder may ultimately wreak a lot of havoc on the Middle East. Saudi Arabia has enough problems as it is, the last thing it needs is a maniac at the helm. From Daniel Lazare at consortiumnews.com:
If the Saudi power structure were to crumble in the wake of the Khashoggi scandal there would be chaos at home and a shift in power around the Gulf, says Daniel Lazare
If Donald Trump seems at a loss about how to respond to the Jamal Khashoggi murder, it may not be because he’s worried about his Saudi business investments or any of the other things that Democrats like to bring up to avoid talking about more serious topics. Rather, it’s likely because Trump may be facing one of the biggest U.S. foreign-policy crises since the overthrow of the shah in 1979.
At that time the U.S. counted on support from Arab Gulf states no less frightened by the Iranian revolution. That included Saddam Hussein’s Iraq, oil emirates Kuwait and Qatar, plus the Saudis themselves.
But if the Saudi power structure were ever to crumble in the wake of the Khashoggi scandal, there would likely be chaos because there is no alternative to replace it. The impact on the region would be significant. With its 55-percent Shi‘ite majority, Iraq is already in the Iranian orbit after the U.S. overthrow of Saddam; Qatar and Oman are on businesslike terms with Tehran, while Kuwait and the UAE could possibly reach an accommodation with Teheran as well. The upshot would be an immense power shift in which the Persian Gulf could revert to being an Iranian lake. That’s probably why the United States and Israel will do everything in its power to prevent the House of Saud from falling.
Whether or not the furor over Jamal Khashoggi’s murder recedes probably depends on if media coverage continues or if it moves on to the next sensation. From Moon of Alabama at moonofalabama.org:
A preliminary deal has been made between the Turkish president Erdogan and the al-Saud clan in Saudi Arabia. The case of Jamal Khashoggi, killed in Istanbul by bodyguards of the Saudi clown prince Mohammad bin Salman, will be closed for now.
Over the last 36 hours, since Erdogan’s speech proved Saudi culpability, there have been no more damaging leaks about the case from the usual Turkish sources.
During a podium discussion at yesterday’s investor conference in Riyadh Mohammad bin Salman denounced the “heinous crime” committed against Jamal Khashoggi. He praised the “unbreakable relations” with Turkey and lauded Qatar’s economic durability.
The Khashoggi murder is nothing new for Saudi Arabia. What’s new is that western governments and media are paying attention. From Craig Murray at antiwar.com:
The Turkish account of the murder of Khashoggi given by President Erdogan is true, in every detail. Audio and video evidence exists and has been widely shared with world intelligence agencies, including the US, UK, Russia and Germany, and others which have a relationship with Turkey or are seen as influential. That is why, despite their desperate desire to do so, no Western country has been able to maintain support for Crown Prince Mohammed Bin Salman. I have not seen the video from inside the consulate, but have been shown stills which may be from a video. The most important thing to say is that they are not from a fixed position camera and appear at first sight consistent with the idea they are taken by a device brought in by the victim. I was only shown them briefly. I have not heard the audio recording.
There are many things to learn from the gruesome murder other than the justified outrage at the event itself. It opens a window on the truly horrible world of the extremely powerful and wealthy.
The Jamal Khashoggi murder is helping Turkey in its rivalry with Saudi Arabia. From Burak Bekdil at gatestoneinstitute.org:
Turkey, pursuing its own Islamist agenda and trying to rival Saudi influence in the Sunni world, is just too happy to have discredited the Wahhabi royals.
Turkey’s message to the Western world was: See the difference between our peaceful Islamism and rogue-state Islamism? Stop discrediting us for our democratic deficit — also, presumably, for “only” imprisoning more than 100 journalists there.
Turkey, pursuing its own Islamist agenda and trying to rival Saudi influence in the Sunni world, is just too happy to have discredited the Wahhabi royals in the wake of the Jamal Khashoggi killing. Pictured: Turkish President Recep Tayyip Erdoğan (left) greets Saudi Arabia’s King Salman bin Abdulaziz on November 15, 2015 in Antalya, Turkey. (Photo by Chris McGrath/Getty Images)
It looked like a first-class spy thriller: A prominent writer enters the Saudi consulate in Istanbul but never leaves the building. Saudi officials said he left the building but could not offer footage from security cameras. When they did, the image was of a dark-haired body-double dressed in the writer’s clothes.
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