Is Trump playing the Russians?

With President Trump, we've learned not to take him literally.  He says things for his own reasons, and his words are an uncertain guide to his actions.  This is one aspect of his art of the deal: keep your opponent guessing.  For a president, such subterfuge is justified by raison d'état. 

Does he really want the Saudis and the Russians to cut a deal on oil and drive the price back up?  Or would he prefer to keep the price war going, severely punishing the Russians?  He can easily protect the American oil industry with a tariff, which he discussed in his meeting with oil executives on Friday.  This is what his most trusted oil adviser, Harold Hamm, is pushing.

In 2014, Peter Zeihan wrote The Accidental Superpower, which foretold the breakdown of globalism now taking place.  He's always worth reading, and he's now saying we're headed to negative oil prices.  That's regardless of the price war, based only on demand destruction.  For our oil industry to survive, it must have tariffs.

In the big geopolitical picture, American energy dominance is a powerful tool for advancing American interests.  We have a dominant economy, a dominant culture, and a dominant military.  Add energy dominance, and it's America First across the board.  A long price war outside our borders will crush marginal producers around the world, and it would hurt the Russians severely.  When the dust settles, American shale can continue its ascendance to domination in world markets.

The OPEC meeting on Monday, which caused the oil price to jump, has been postponed.  The Russians said some mean things about the Saudis, and that was all it took.  Look for the Saudis to slow-walk this process, while they claim to want a deal.  They are in the catbird's seat, and they have been inflicting pain on other producers for only a month.  They're just getting started.  If they back down now, they lose face.

Mohammed bin Salman has been in ascendance only since 2017, but in that short time, he has seized unchallenged power within the Saudi royal family.  He has arrested hundreds of them and made some powerful enemies.  Those excluded from his circle, and from power, thirst for vengeance.  If he shows weakness in his handling of this price war, it can increase his vulnerability.  He can't afford to let that happen.  Losers in Saudi royal intrigues can pay with their lives.

He has every incentive to continue this war — especially if President Trump is winking at him in encouragement.  The whole world is watching, especially his enemies at home.

Image: www.kremlin.ru via Wikimedia Commons.

With President Trump, we've learned not to take him literally.  He says things for his own reasons, and his words are an uncertain guide to his actions.  This is one aspect of his art of the deal: keep your opponent guessing.  For a president, such subterfuge is justified by raison d'état. 

Does he really want the Saudis and the Russians to cut a deal on oil and drive the price back up?  Or would he prefer to keep the price war going, severely punishing the Russians?  He can easily protect the American oil industry with a tariff, which he discussed in his meeting with oil executives on Friday.  This is what his most trusted oil adviser, Harold Hamm, is pushing.

In 2014, Peter Zeihan wrote The Accidental Superpower, which foretold the breakdown of globalism now taking place.  He's always worth reading, and he's now saying we're headed to negative oil prices.  That's regardless of the price war, based only on demand destruction.  For our oil industry to survive, it must have tariffs.

In the big geopolitical picture, American energy dominance is a powerful tool for advancing American interests.  We have a dominant economy, a dominant culture, and a dominant military.  Add energy dominance, and it's America First across the board.  A long price war outside our borders will crush marginal producers around the world, and it would hurt the Russians severely.  When the dust settles, American shale can continue its ascendance to domination in world markets.

The OPEC meeting on Monday, which caused the oil price to jump, has been postponed.  The Russians said some mean things about the Saudis, and that was all it took.  Look for the Saudis to slow-walk this process, while they claim to want a deal.  They are in the catbird's seat, and they have been inflicting pain on other producers for only a month.  They're just getting started.  If they back down now, they lose face.

Mohammed bin Salman has been in ascendance only since 2017, but in that short time, he has seized unchallenged power within the Saudi royal family.  He has arrested hundreds of them and made some powerful enemies.  Those excluded from his circle, and from power, thirst for vengeance.  If he shows weakness in his handling of this price war, it can increase his vulnerability.  He can't afford to let that happen.  Losers in Saudi royal intrigues can pay with their lives.

He has every incentive to continue this war — especially if President Trump is winking at him in encouragement.  The whole world is watching, especially his enemies at home.

Image: www.kremlin.ru via Wikimedia Commons.