Saudi Arabia is in a terrible trap. Even the things that it thinks will help threaten its demise. As I pointed out in this video’s companion video, they want a US war with Iran because it would lead to a spike in oil prices, and more damage to competitors in Kuwait and Iraq than to themselves. But even this strategy comes with risks, whether they are caught up in the war or not.
I don’t have a ton of sympathy for the Saudi royal family, obviously, but it’s a situation worth appreciating. It’s Kafkaesque. They’ve constructed a paradise that no longer works. Every ploy they employ gets them closer to the edge. This video lays out the problem of the war with Iran, and this series lays out the broader problem.
Video Transcript after the jump…
Hey there. Last time I pointed out that the real reason Saudi Arabia wants a war with Iran is to jack up oil prices. It’s kind of their last hope in this new Texas and efficiency driven era of low oil prices. If war breaks out Saudi Arabia will get their oil price spike, but it will not save them. In fact I think a US war with Iran will accelerate the end of Saudi Arabia.
1.Saudi Arabia Could Lose The US-Iran War
2.The Oil Price Spike Will Kill The Oil Market
I think this for two reasons. The first is the war itself. I am honestly not sure how that will go, but it’s very possible that it will go much more poorly for the Saudis than they think.
The second reason Saudi Arabia will lose big in a US Iran War is the oil price spike itself, and I am very confident that that will boomerang on the Saudis quickly.
I have already done a video forecasting how I think the land war will go. The US just doesn’t have the resources necessary to do an invasion of Iran anymore. But there will be plenty of blood and horror to go around as the US loses thousands of soldiers and kills hundreds of Thousands in Iraq and Syria. I will link the full”How the US War With Iran Will Go” video at the end of this one.
What Saudi Arabia is banking on is the mess in another theater, the Persian Gulf and the Strait of Hormuz. The hope is that Kuwaiti,Iraqi and Iranian production will be completely shut down due to fights in the straight, while Saudi Arabia can continue to produce and send oil out through its red sea ports and the Suez canal. This would create a massive spike in oil prices and massive profits for the Saudis.
And that could be exactly what happens. But I think Saudi Arabia may be relying on too many things going right. Iran has a lot of missiles, and in the context of a full on war those missiles will be flying very freely. Also, unlike Saddam Hussein, the Iranians aren’t going to be dumb enough to try to fight tank battles and aerial dog fights. They have had decades to prepare for a very asymmetric conflict, and who knows what surprises could be in store?
This cozy scenario of Saudi profit relies on the US preserving perfect air superiority over a rather large area. The Iranians only have to get lucky once. What if one of the thousands of missiles they send at US ships hits its target? What if they manage to take out a US fighter jet with a swarm of off the shelf walmart drones? The US is going to be very focused on making sure that doesn’t happen, and if it does, the resources dedicated to protecting the Saudi oil bonanza will get pretty slim. Despite what the US government tells You, the Iranians and their Houthi allies have been very restrained. In a real war, a lot of stuff can get broken. Very quickly. And it’s not like those Texas Republicans would be heartbroken if one of those thousands of Iranian missiles blew up a few Saudi pipelines. Also, there is the inconvenient fact that a lot of Saudi production is in areas with a lot of Shia. Especially if a few US fighters or destroyers go down, the line between the Iraqi bloodlands and Saudi Arabia’s oil heartland will get very shaky. It’s only a six hour drive from Southern Iraq to Saudi Arabia’s most important oil installations. Its certain that no Iranian tank will be able to make it that far… but how about Iran affiliated Iraqi militia men in thousands of Toyota pick up trucks?
Now, as I said, I am not very confident about any of that. US air and sea superiority could be just as flawless as the Trump administration seems to think it is. But I read a lot of nasty stuff about those F-35s, and it’s hard not to notice that US naval ships keep running into things. Maybe it will all work out the way Saudi Arabia thinks, but I certainly wouldn’t bet my country on it.
2. The Oil Price Spike Will Kill The Oil Market
If all goes according to plan, and Saudi Arabia gets its oil price spike, it won’t last for long. Maybe a year or two. Because there is another competitor waiting in the wings, and it’s a lot scarier than the Texas oil barons. I talked about it last year in a video called how the oil market dies.
So either way, Saudi Arabia loses. It’s true that War with Iran is Saudi Arabia’s last hope. But it’s also true that War with Iran will kill Saudi Arabia, either quickly or slowly. There is no way out, Because, as I have been saying for over two years now, Saudi Arabia is finished.