Moon of Alabama Brecht quote
March 07, 2020

Saudi Arabia - As New Budget Problems Arise The Clown Prince Arrests More Family

The Saudi Clown Prince Mohammed bin Salman removed his competition within the royal family:

Saudi Arabia has detained three senior Saudi princes including Prince Ahmed bin Abdulaziz, the younger brother of King Salman, and Prince Mohammed bin Nayef, the king’s nephew, for allegedly planning a coup, sources with knowledge of the matter said.

Four sources told Reuters that Prince Ahmed and Mohammed bin Nayef were detained in the latest operation. Two sources, including a regional source, said Mohammed bin Nayef and his half-brother, Nawaf, were detained while at a private desert camp on Friday.

Crown Prince Mohammed, who is also referred to as MbS, “accused them (the princes) of conducting contacts with foreign powers, including the Americans and others, to carry out a coup d’etat,” the regional source said.

“With these arrests, MbS consolidated his full grip on power. It’s over with this purge,” the source added, indicating that no rivals remain to challenge his succession to the throne.

There are two plausible explanations for this step:

The first is that the two men were leading a rebellion against him within the ruling family, and it was intending to install them as king and crown prince as part of a ‘reordering’ of the House of Saud. This would have been aimed at reinstating its ‘traditional’ mode of rule, based on a more consensual and less confrontational approach to domestic and external affairs. Rumours that such a plan was being hatched surfaced last September after the mysterious killing of the head of royal security Abdelaziz al-Faghm.

The second explanation is that Muhammad Bin-Salman acted to get rid of his two principal opponents within the family – some reports claim a number of other members were also rounded up – as a prelude to shunting aside his father on grounds of ill health and incapacity and having himself declared king. He thereby dealt a pre-emptive blow to his main potential challengers.

The move comes at a time where Saudi Arabia is under financial pressure. The government's 2020 budget was predicted to have a $50 billion deficit or 6.4% of the Saudi GDP. But that was based on an estimated crude oil price of $62-63 per barrel, and assumed a crude production at around 9.8 million barrels per day.

In the first week of January crude oil reached $69/bl but it has since dropped to $45/bl as the coronavirus crisis destroyed the global demand. The Saudis tried to make a deal with Russia, the second largest exporter after Saudi Arabia, to together cut oil production to keep the price up. But Russia rejected a new OPEC cut. It wants to keep its production up and it will use the crisis to further undermine U.S. oil fracking production. As the whole fracking boom in the U.S. is build on fraud the move might well be successful.

Russia does not have a budget deficit and is well positioned to survive lower crude oil prices without much damage. Saudi Arabia is not.

The pandemic also cut the second largest Saudi revenue stream which comes from the 20 million tourists per year who travel to Mecca and Medina. In February, after the Covid-19 outbreak, Saudi Arabia prohibited foreign pilgrims from entering the two cities. This years Hajj, for which 2 million pilgrims were expected, is at the end of July. Should the pandemic still be around by then the Hajj will have to be called off. Several tens of billions of dollars would then be additionally missing from the planned government revenue.

Lastly the war MbS still wages in Yemen has taken a bad turn for him. Not only do the Houthi now have air defense missiles (vid), but they also proved that they can use them effectively when they took down a Saudi fighter jet. Last week the Houthi, also known as Ansar Allah, conquered Hazm, the capital of Jawf governorate and all inhabited parts of the oil rich province fell to them. This will have strategic consequences:

The liberation of Jawf province provided a very suitable condition for attack and dominance on strategic province of Marib. If Ansar Allah also capture the Marib, will cut the Saudi’s main supplies path from north to south of Yemen, and only the path of Al Mahrah province will remain for Saudis; also taking the control of Marib is meaning that Ansar Allah dominance on all of Northern Republic of Yemen geography; and also the most main base of Saudi coalition for Riyadh rulers will be destroyed; and practically will happen a certain failure for Saudi Arabia and after that, Yemeni army will take step for capturing the remained regions of Taiz and Aden provinces, with concentration and complete self-confidence.

Red - Ansar Allah, Blue - Saudi proxy government, Green - al Qaeda and tribes

Saudi Arabia is also occupying the eastern governorate al Mahrah along the border with Oman. It wants to build an oil pipeline to Yemen's coast that would allow Saudi oil exports to avoid the trip through the narrow Hormuz Straits. But local tribes in the al Mahrah are against the occupation and they have recently taken up arms against the Saudi army.

MbS's little adventure has cost Saudi Arabia several billions per month. Despite all the money spent on it the Saudi army and its proxies are on the path to losing the war. The know this well. Recently the Saudis asked the Trump administration to intervene at the UN to stop all aid to Houthi held areas. The UN will likely resist such pressure. The Saudi blockade of Houthi held areas has already cost hundreds of thousands of Yemeni their lives.

Mohammed bin Salman's escapades do not solve any of the many problems his country has. There are  surely many others in the very large royal family who will be willing to make a move against him. One day one of them might get lucky.

Posted by b on March 7, 2020 at 19:22 UTC | Permalink

next page »

Is it possible to not wish ill will on this a**hole MbS?

Posted by: chet380 | Mar 7 2020 19:57 utc | 1

The psychology of the pandemic is interesting.

This years Hajj, for which 2 million pilgrims were expected, is at the end of July. Should the pandemic still be around by then the Hajj will have to be called off.

I'm not being flip when I wonder, if one believes in a version of the Abrahamic God, ought one also have faith that God won't afflict his own most holy pilgrimage? (Unless he sees them all as sinners to be smitten. I don't know if Allah has the same history of doing that as Yahweh.)

Of course I suspect the Saudi elites don't really believe in God any more than US elites do, and have the same purely cynical view of religion. But from that same cynical perspective, why forego the revenue? I'm sure not holding my breath expecting March Madness in the US to be cancelled.

Posted by: Russ | Mar 7 2020 20:09 utc | 2

thanks b.. this mbs power hungry freak is really off the charts nuts... regardless, the end of ksa is coming, sooner then we think.. it won't matter when there is nothing to keep it together, least of all their whacked out insane religious fanaticism - wahabbism, and their mediveal legal system and etc. etc.. ksa is a blight on the planet.. kashoggi whispered that in my ear, and i agree with him..

Posted by: james | Mar 7 2020 20:10 utc | 3

Yes b that's a major shift not so suprising from someone who very well remember how the Saouds did gave a helpng hand (or two) in bringing the collapse of URSS

Posted by: Charles Michael | Mar 7 2020 20:27 utc | 4

Look's like Trump dumped the Bush Crime Family's-cia saudi Nayef for Nutandyahoo's preferred pick:
The future jUSA *Royal Family* are now BFF-Best Friends Forever with the crypto-*Saudi Royal Family*.

Clown Prince Mbs(bs-bullshitter & Damien *666* Kushner love the intelligence sharing game, with Nutandyahoo's support, of course.

Posted by: Veritas X- | Mar 7 2020 20:31 utc | 5

In February, after the Covid-19 outbreak, Saudi Arabia prohibited foreign pilgrims from entering the two cities.

Allah not so sacred and powerful now, isn't it?

Posted by: vk | Mar 7 2020 20:39 utc | 6

Mood music for MbS watchers.


Posted by: Jackrabbit | Mar 7 2020 20:43 utc | 7

Trust Allah, but tie your camel...

Posted by: Uncle $cam | Mar 7 2020 20:47 utc | 8

A few years back soon after Crimea voted to join Russia (2014), the Saudis increased the amount of oil they were pumping to drop the oil price and cause pain to the Russian economy and hence Russian people at the request of Washington. I'm not surprised that Putin is prepared to use the price of oil to damage the already weakened US and Saudi economies.

Posted by: Ghost Ship | Mar 7 2020 20:49 utc | 9

Russia... turning the oil weapon on KSA and USA. Virtually no debt and self sufficient. Change of government and change of constitution. I wonder what the bear is up to.

Posted by: Peter AU1 | Mar 7 2020 20:59 utc | 10

bin Salman is doing a very good job of bankrupting KSA. As his internal shakedowns continue yielding less and less and since he cannot print money out of thin air as the US Federal Reserve does, there will be changes. The customary arrangement of the World's Holly Terrorism Alliance - Israel+US+UK organising and KSA paying the extremists to blow up things and kill people may become rarer. Financially shaky US, parasitic Israel and the former glory UK, no-one has got mullah any more. What will the poor extremists and the Western journalists do when the money coming their way dries up? The terrorists may have to start producing something instead of killing civilians. Simply, death of KSA finances is the death of the terrorism's current business model, unless they can invent a new one.

Posted by: Kiza | Mar 7 2020 21:02 utc | 11

Third explanation: The is dead or very close so:

Posted by: Intempo | Mar 7 2020 21:03 utc | 12

Russia saying NO to the OPEC+ group:UK

This will cut into SA's profits, and thus into MbS's personal fortune, but it goes deeper than that. SA was a key arms supplier and financier to the "terrorist" groups in Syria. Russia, having sent Erdogan back home with virtually nothing, their latest NO confirms that the situation in Syria will certainly change if salaries for terrorists dry up.

SA and the ME also buy vast amounts of arms from the USAxis (US, UK etc.) which may soon have to be cut back. This is happening in sync with both the present financial crisis in the US and the world, and the Coronavirus. Both which will impact the EU and the US harder in a short while. The arms trade is one of the only "exports" that still thrives at the moment - but for how long if the SA and Emirates no longer fork out billions?

The Haj will not happen. Even if pilgrims arrive in Mecca, they will not be welcome if they try to go home afterwards. I doubt that SA will want to be a sort of "health and social security net" for millions of foreign muslims. Fear of contamination may last longer than the virus (although that is not sure).

Ahh well, moneywise "easy come easy go" as the saying goes.

Posted by: Stonebird | Mar 7 2020 21:06 utc | 13

Seems as MBS is getting rid of his father too:

King of Saudi Arabia is In a Coma

Posted by: Samantha | Mar 7 2020 21:10 utc | 14

Posted by: Russ | Mar 7 2020 20:09 utc | 2

But the Abrahamic God was also fond of inflicting plagues on his chosen people for their sins, or to incite them against corrupt rulers. What if MBS does believe (or half-believes) and fears that?

Posted by: moe | Mar 7 2020 21:24 utc | 15

@15 couple of covid cases at the AIPAC conference. Could be Yahweh sending a message.

Posted by: dh | Mar 7 2020 21:39 utc | 16

The Prince made reference to "Americans" assisting with the attempted (or perhaps purported) coup. That to me says CIA as Trump is in his corner. And if the CIA have decided to overthrow him, I doubt Trump can save him, he has his own problems.
And they both have a further big problem with Putin saying no to caps on oil sales. If oil prices fall, weapon sales fall and the Prince is deposed creating a bankrupt destabilized SA, could we see the fall of the oil based dollar?
True that would not end the dollar as THC reserve currency but probably would bring in the beginning of an era of a basket of currencies, the dollar being just one among many.
And that is something the US will not allow to happen, solution?
War probably, a big one, the only question is with whom?

Posted by: frances | Mar 7 2020 21:46 utc | 17

- Saudi Arabia has seen its population grow at a very fast rate and now "the chickens are coming home to roost". Do combine that with a "slowing" chinese economy and it's clear that Saudi Arabia has "some problems".

- With troubles brewing in Lebanon (defaulting on it government bonds) the problems in the Middle East are only beginning.
- I didn't think the socalled "Odet Yinon" plan ("Dealing with crumbling states") would be able to be executed. But now with more and more countries in the Middle East getting into (financial) trouble I have to change my mind in this regard. The Middle East is certainly going have more and more "unrest" in this next few years, if not already this year.

Posted by: Willy2 | Mar 7 2020 21:56 utc | 18

moe 15

I mentioned that and said I don't know offhand if the Koran's Allah has anything like the same reputation for that as Yahweh.

Although if I were an omnipotent God with a moral criterion and deemed it time to smite the worst sinners, I'd certainly perceive some more worthy recipients than Hajj pilgrims.

Posted by: Russ | Mar 7 2020 21:58 utc | 19

dh 17

Yes, that's more like it.

Posted by: Russ | Mar 7 2020 21:59 utc | 20

jr and!

Posted by: james | Mar 7 2020 22:01 utc | 21

"And that(the fall of the oil based dollar?)is something the US will not allow to happen, solution?.." frances@18
Nothing is certain but the end of the dollar as the international reserve currency seems to me to be simply a matter of time: it is bound to happen. And war would not change it, just hasten it.

Posted by: bevin | Mar 7 2020 22:04 utc | 22

@ Rhisiart Gwilym | Mar 7 2020 21:37 utc | 16

Thank you -- it grinds my gears every time I see or hear that self-contradiction being used.

To this old military air traffic controller, it's like "over and out."

Posted by: AntiSpin | Mar 7 2020 22:10 utc | 23

Biblical plagues, like locusts. MbS's situation adds zest to the Big Picture. Slowing petrodollar recycling atop escalating of the hidden QE fuels the massive short attack on Wall Street. What will occur first: Gold topping 2K or NYSE going under 10K?

Posted by: karlof1 | Mar 7 2020 22:24 utc | 24

Most of the oil is traded based on long term contracts that are tied to spot prices but smooth the effect of abrupt price changes due to oil price futures trading at JP Morgans hovel on Wall Street

Saudi Arabia has no aggressive enemies and thus has no need to buy weapons, hence cutting expenditures wont harm much except to limit their mischief in Yemen. Might hurt US arm dealers though, at least in the short term.

I have to imagine they are able to raise revenue via taxes and sell off shares in Aramco if they need to raise money for necessities, they can also tap into credit lines in Wall Street

MBS likely just taking the opportunity to clean house, eliminate dome competition, seize some assets. Don’t worry, he is still able to take care of his Khashoggi pet living in the palace basement.

Putins move is interesting. Going to war on US shale just hurts his pal Trump, or does it. It seems Venezuela and Iran will pay the piper. Thats it in a nutshell. Iran staggering from COVID-19 and sanctions, so one more punch could topple the regime. Venezuela still a target although its been pretty quiet.

Yes indeed, Putin is a strategic partner with the West and China. Each acts out their fake wrestling script to serve chaos and allow the elites more control over populations and countries, but don't be fooled, they are ONE Worlders at the top of the pyramid.

Posted by: Pft | Mar 7 2020 22:30 utc | 25

'one of the only' is neither meaning free not contradictory. The word only does not always refer to the singular. Example: Only persons with a ticket can enter. This doesn't restrict entry to a single person, although it does restrict to a single type of person. Likewise the phrases 'Only a few' or 'We were the only ones there's clearly do not refer to the singular, and are the virtual equivalent of the usage from the original poster

Posted by: tspoon | Mar 7 2020 22:42 utc | 26

@ Posted by: Russ | Mar 7 2020 21:58 utc | 20

Jews, Christians and Islamics all worship the same god. Allah literally translates to God in Arabic. The only difference between the three religions is about the prophet: the Jews believe the Messiah didn't arrive yet (i.e. both Jesus Christ and Muhammad are false prophets), the Christians believe Jesus Christ is the Messiah, and the Islamics believe Jesus Christ was some kind of intermediary prophet (i.e. still valid, but not the real deal), Muhammad being the ultimate prophet.

The gospel of Marcion stated there are two Gods: the Jewish one, which he called the Demiurge (the "cruel God") and the Christian one, which he called the Heavenly Father (the "merciful God"). His argument is actually pretty good in theological terms - so good that he was immediately censured and deconstructed by the opposition.

Nowadays there's no debate among Christians: there's only one God.

Posted by: vk | Mar 7 2020 23:09 utc | 27

vk @28--

Yeah, but it has three parts, what's known as the Trinity. And that isn't universally accepted.

Posted by: karlof1 | Mar 7 2020 23:27 utc | 28

Posted by: Stonebird | Mar 7 2020 21:06 utc | 13

Alexander Mercouris (The Duran) believes that after a few months Russia will agree to a production cut ... but there will be a price. What? Cutting funding of terrorists in Syria? Buying some Russian Arms (they could buy the S-400 ... and say 'everyone else is!'.

Posted by: SteveK9 | Mar 7 2020 23:33 utc | 29

There's only NO god.

Posted by: Anarchaos | Mar 7 2020 23:44 utc | 30

I've said it before. I'll say it again. It's high time to take the Saudi out of Saudi Arabia. What was Allah thinking when he let this inbred Bedouin gang of desert bandits pitch their tents on top of the world's largest sea of oil and become the tour operators of the annual multi-million-footed Allah-required pilgrimage to Islam's hallowed ground zero, Mecca & Medina??? It's not too late to correct this cosmic mistake. But it's gettin' there...

Posted by: mrtmbrnmn | Mar 7 2020 23:44 utc | 31

People are posting hatred toward MBS or Erdogan are just like delusional neocon exceptionalism crowd who drunk on propaganda and insult venezuelan leader or NK leader..

dial down the insults toward mbs or erdogan , as it clouded the real analysis of both leader. Both are ambitious and capable to do extreme violence , but which world leader can survive by playing goodie two shoes ? vassal states in EU and 5 eyes have no leader , they got caretakers..

Look at china’s leader in their handling of outbreak , great competence supported by their people. Look at russia’s leader who with his team neuter western sanctions and make russia stronger..

personal insult like crazy , fat , sadist to any world leader is just juvenile.. Bring the best of yourself when commenting in MoA , dont stoop to the level of exceptionalism crowd.

Posted by: milomilo | Mar 8 2020 0:10 utc | 32

Russ @ 2

I'm not being flip when I wonder, if one believes in a version of the Abrahamic God, ought one also have faith that God won't afflict his own most holy pilgrimage?

Apparently you have never read the Old Testament. Their God let the Assyrians destroy Samaria and sent the ten tribes into oblivion because their leadership rejected him and the people ran after other gods and idols according to their Prophets. That included human sacrifice of their children to Molech. In addition their rulers were fleecing the people. Justice and mercy were thrown out the window. This displeased their God greatly.

That left Judea and their king who repented at the last minute as the Assyrians where about to destroy Judea and Jerusalem. The Assyrian king Sennacherib even wrote about the loss of his military force which was very unusual for that era. A plague hit his force killing a good portion of them. Judea suffered loss but lived.

Later king Nebuchadnezzar of Babylon demolished Jerusalem and overran Judea taking captives and leaving only the very poor in the land displacing the rest. All for the same reasons Samaria was destroyed according to the Prophets of that era. 70 years later the city was rebuilt by order of Medo-Persian King Cyrus.

The Romans came along and again demolished Jerusalem in 70AD. A few more revolts later the Romans came back into Palestine to send the Jewish religious people off to Alexandria where they were put on ships and sold off as slaves across their empire.

All that was aptly described in the Torah by Moses as part of the blessing and curses of following and not following God. Justice and mercy is desired more than fake religious observance. Their God is a jealous God and not beyond sending the besom of destruction into the shallow lives of the people and the leadership.

Posted by: dltravers | Mar 8 2020 0:17 utc | 33

Antispin #24

I always assumed Over is like the "stop" in a telegram signifying the end of a sentence whereas 'Over and Out' is like saying end of conversation, turning off radio.

Posted by: Carciofi | Mar 8 2020 0:32 utc | 34

The Saudis respond with a price war, 30 dollar a barrel oil coming... Aramco Slashes Crude Pricing, Starting Oil War as OPEC Flops

Posted by: dltravers | Mar 8 2020 0:49 utc | 35

Paybacks are hell-comments quoted by bloomberg press of Russian non-govt official that this is putin working on the us shale industry as payback for us attacks on nord stream 2 and sanctions on rosneft.

Zerohedge has somewhat hyper article on this issue but will not link here to keep the discussion on track.

Posted by: Thomas Minnehan | Mar 8 2020 1:03 utc | 36

I think the whole royal family is going to come crashing down. Nice job by the Russians to say no on the production cuts to help speed the process up

Posted by: DannyC | Mar 8 2020 1:34 utc | 37

@ Carciofi | Mar 8 2020 0:32 utc | 35

Yes, far too many people have come to think that these days.

"Over and out" is a self-contradiction. "Over" means one thing, "Out" means the opposite.

"Over" means "I have completed my transmission and am awaiting your reply." Sort of like saying "over to you" in a casual conversation.

(Way, way back in the days of more primitive radio, "over" started out meaning "I am switching [my antenna] from transmit to receive.")

"Out" means "I have completed my transmission and am not awaiting a reply -- conversation is completed."

It's one or the other.

"Over and out" would mean "I have completed my transmission and I am waiting for your reply and I am not waiting for a reply."

You will never find any military communicators using "over and out." Doing so will get one sent back for additional training. No civilian air traffic controllers would use it either.

Only uninformed movie writers and/or actors use the phrase because they think that it makes them sound cool, when to persons who really use radios it just makes them sound silly.

Posted by: AntiSpin | Mar 8 2020 2:54 utc | 38

Beware a rich man about to become poor

Posted by: Jezabeel | Mar 8 2020 3:06 utc | 39

Posted by: Russ | Mar 7 2020 20:09 utc | 2

For what it's worth, states:

"The Qurʾan mentions the word Torah eighteen times, and confirms that it was the word of God."

So we're not talking about what a normal person thinks; but MBS, who is demonstrably insane.

Posted by: moe | Mar 8 2020 3:12 utc | 40

Mood music for MbS watchers.


Posted by: Jackrabbit | Mar 7 2020 20:43 utc | 7

Lyrics are important, so this is a version for those who do not know Latin:

Posted by: Piotr Berman | Mar 8 2020 3:36 utc | 41

Russ @ 2:

The Hajj has never been completely without tragic incidents. In the last 30 years, due in part to plane travel becoming more affordable for Muslims (and Muslims themselves living in more countries around the world), the Hajj has become more crowded every year and this has led to stampedes or other incidents where something happens and a domino effect occurs in which people end up falling on top of other people, and those fall on top of others, and the unfortunates at the bottom of the heap are crushed.

The worst of these stampede incidents occurred in 2015 when over 2,200 (and possibly as many as 2,400) pilgrims died.

An annual pilgrimage in which stampedes are possible due to overcrowding (because the Saudi authorities have failed to introduce crowd control measures, fixtures and even regulations that would help to mitigate the flow of people), and the overcrowding itself creating perfect conditions for the transmission of airborne diseases, is hardly an institution that is protected by God.

Posted by: Jen | Mar 8 2020 4:12 utc | 42

Wouldn't a third explanation which has not considered for the Klown Prince's arrest of his relatives is that they refused to cough up millions (or tens of millions, or hundreds of millions) from their bank accounts?

Looks like it's off to the Ritz Carlton in Riyadh for them to be tenderly massaged and persuaded by US mercenaries from Academi, or whatever Blackwater calls itself these days, to part with as much zakat as willed by God's self-styled caliph, the Saudi Crown Prince.

Posted by: Jen | Mar 8 2020 4:34 utc | 43

vk @ 28

The gospel of Marcion is new to me but seems very similar to Gnosticism, a philosophy I first encountered (like so many others) in the work of sci-fi legend Philip K Dick. It's no surprise that interest in Gnosticism increased with the emergence of the 'Society of the Spectacle' in the 2nd half of the C20th. I guess it's a comforting thought that a benign intelligence may be out there, beaming down information to help us pierce the veil of BS.

Did Engels look into class basis of such beliefs in his studies of early Christianity? To return to the topic at hand, I know he thought quite highly of Ibn Khaldun's theory of the cycle of Islamic dynasties, mentioned in Daniel Lazare's article 'Is Saudi Arabia the Middle East’s Next Failed State?' at consortiumnews (I won't risk screwing up the thread with a link).

Posted by: Paora | Mar 8 2020 4:38 utc | 44

A very good article by Luongo on Russia saying NO to Erdogan and MBS.

Posted by: lgfocus | Mar 8 2020 4:50 utc | 45

is hardly an institution that is protected by God.

Posted by: Jen | Mar 8 2020 4:12 utc | 43

Allah, bless his Name, can secure Paradise for worthy pilgrims, but it borders on blasphemy to expect Him to fix security, hygiene etc. This is human duty.

Posted by: Piotr Berman | Mar 8 2020 5:02 utc | 46

[In Torah/Old Testament] In addition their rulers were fleecing the people. <-- dltravers | Mar 8 2020 0:17 utc

Verily, Bibi is the King of Israel! Leads armies, fleeces the people, he is a bit lacking in wife stealing, Mrs. Netanyahu runs a tight shop.

Posted by: Piotr Berman | Mar 8 2020 5:09 utc | 47

dltravers | Mar 8 2020 0:17 utc | 34

Russ @ 2

"I'm not being flip when I wonder, if one believes in a version of the Abrahamic God, ought one also have faith that God won't afflict his own most holy pilgrimage?"

Apparently you have never read the Old Testament.

Apparently you can't read a short comment. My very next sentence after the one you quoted:

"(Unless he sees them all as sinners to be smitten. I don't know if Allah has the same history of doing that as Yahweh.)"

Posted by: vk | Mar 7 2020 23:09 utc | 28

Jews, Christians and Islamics all worship the same god.

Yeah, that's what I said.

Posted by: Russ | Mar 8 2020 5:35 utc | 48

Gotta love those Russians. They have weathered the storm of US sanctions, Saudi intrigue and Turkish infidelity to be in a position to stick it to all of them. They were always the only adults in the room anyway.
Kia Kaha Russia.

Posted by: Ike | Mar 8 2020 5:36 utc | 49

Posted by: Jen | Mar 8 2020 4:12 utc | 43

"The Hajj has never been completely without tragic incidents..."

Yes I know about those. It seems to me, if I put myself in the shoes of a theodicy-monotheism believer, that those are more like regular accidents than a plague which is more like the wrath of God.

"An annual pilgrimage in which stampedes are possible due to hardly an institution that is protected by God."

It would be if this omnipotent and "good" god existed, which is a big part of why I'm an atheist as far as any such concept of God.

Posted by: Russ | Mar 8 2020 5:41 utc | 50

@39, out is also only used by the higher rank

Posted by: Joe | Mar 8 2020 5:43 utc | 51

VK 28
In most of Christianity, the Demiurge role seems to be taken by the fallen angel, Satan. It is not quite a God, but is convenient for giving God a pass on some of the evil stuff It apparently oversees.

These Abrahamic religions have long been very convenient for the ruling classes and their rulers, as they promise that all good things will come to the oppressed wretched of the earth after death. Very convenient for the tyrants of the world. Dead men can't revolt.

Posted by: Blue Dotterel | Mar 8 2020 6:06 utc | 52

@ Posted by: Blue Dotterel | Mar 8 2020 6:06 utc | 53 with the slight digression about Abrahamic religions and relationship with rulers in the West.

I agree and want to take the opportunity to repeat how this type of faith extends to the global private finance Hand, The Invisible/God of Mammon type of religion.

To me this is the extension of not taking personal responsibility for ones life spiritually by linking to an Abrahamic religion and not taking personal responsibility in the societal sense is manifest in private finance instead of public finance at the core of the social contract like in China currently.

MbS is acting as dysfunctional in the East as Trump is in the West because the mechanism of the world playing table are being challenged by the China/Russia axis. I wouldn't be surprised to see the US take over SA and install a puppet government while looting their remaining oil to make up for the US shale bust volumes.

Posted by: psychohistorian | Mar 8 2020 6:29 utc | 53

Looks like the old Saudi dude is going to get a 'deadly' (for the aged) virus some time soon ...

[Wouldn't mind betting that other tax-payer funded palace in London has a tad of 'sad' news sometime this flue season... a useful distraction when needed, see ya Phil!]

Posted by: imo | Mar 8 2020 7:31 utc | 54

MbS wants to "ramp up oil production". Given volatility of internal situation in KSA and around (Yemen, Iran), and highly flammable nature of the product, one can expect some explosions.

In the same time, Russia had some problems because of budget surplus. For example, because of "historical reason" Russia has very low retirement age with the perspective of labor shortage and misallocation of state revenue. This is never a popular type of reform, and hard to explain when you have a surplus. A period of deficit can be useful, especially if some reserves were prepared. A bout of low prices will be followed by bankruptcies and consolidation in shale sector, and consolidation means "paring down the excess capacity". In 3-6 months the virus will be abating, shale own pared down to some degree and prices will rebound. But unpredictability of oil and gas prices will be included more realistically in calculations of financial companies, so shale sector will not rebound fully.

KSA relies on oil much more than Russia. They can reduce the population because they have so many foreigners on short term visas, but that leads to riots etc. And the citizens will see their income down too. If this is credited to price war and Yemen war both initiated by MbS, the chance of him reaching old age decreases.

Posted by: Piotr Berman | Mar 8 2020 8:27 utc | 55

@Peter AU1 #10

I wonder what the bear is up to

Putin juggles appeasements both at home in Russia and Internationally. This OPEC deal is another ball in play.

Most Russians focus on the up coming referendum and the removal of a certain clause. The result for same is now not guaranteed. They also wonder at being told to again tighten belts. ;-)

Posted by: 07564111 | Mar 8 2020 8:29 utc | 56

@Joe 52

no it doesn't, the "Out" proword is not only used by higher rank, there's no such thing.

It should be used by the original transmitter, i.e. the party that started the conversation should be the one that ends it.

However, due to bad radio discipline you'll see either party issue the "out" message these days. thanks Hollywood!

Posted by: A.L. | Mar 8 2020 9:01 utc | 57

Some ESL but english language TV news station I peaked at thru sleep stuck together eyelids on saturday morning made the point that Russia will never agree to align with OPEC cutbacks as long as amerika is allowed to increase its shale oil output as part of a separate opec-amerika deal.

Apparently last time when Russia signed up to production cutbacks as part of an earlier whine from OPEC (IE KSA who run that monopoly cartel) amerika's shale oil was similarly unrestricted as they are now and later on the Russians were forced to buyback all the customers amerika had gazzumped, so now they quite rightly decine the joint partnership ksaUS scam.
Although both Iran & Venezuela have been unjustly sanctioned outta the global oil market, it is a dead-set certainty that if opec attempt to keep Iran & Venezuela down while they rort an illegal (under WTA rules) monopoly to force prices up, that both Iran & Venezuala will drop their prices below us production cost to grab as much share as poss. Russia will back that play to the hilt - the petrodollar can no longer work in an iron lung.

Posted by: A User | Mar 8 2020 9:41 utc | 58

tspoon | Mar 7 2020 22:42 utc | 27
Thanks for clarifying the issue !

SteveK9 | Mar 7 2020 23:33 utc | 30
I had actually overlooked that the Russians are also arms sellers. However, their total sales do not reach the scale of the USAxis, but your idea is worth following in the future. (only caveat is that by then we may be in a shooting war as well as a financial one, and "sales" will be restricted to survivors on the "same" side)

Posted by: Stonebird | Mar 8 2020 10:28 utc | 59

This move by MbS on his family, if the US were aware in advance, might put a whole new light of the recent moves of large numbers of US military into Saudi.

Rather than protecting the oil or projecting an aura of potential force at the Iranians the hidden objective was actually about putting a large enough force in there to protect MbS on this move of his to be King.

Interesting timing as the moves against his family predated Russia's decision on OPEC+ so they wouldn't have been aware of the oil price about to hit the fan. Down to $25 anyone?

Posted by: JohninMK | Mar 8 2020 11:04 utc | 60

There is an excellent report @ Zerohedge *Saudi Arabia Starts All-Out Oil War: MbS Destroys OPEC By Flooding Market, Slashing Oil Prices* explaining the fundamental political/economic dynamics regarding the current Clown Prince's strategy, and their potential consequences.

One thing I do know is...
When I was working in KSA over 40 yrs ago, the population was ca. 4 million saudis & ca. 4 million foreigners, if I remember correctly. The 1st national census was done also at that time btw. The 4 million saudis-figure is correct.
At the time, saudis didn't do really any type of real work. It was a welfare state then.
Nowadays there are ca 34 million saudis. I'm sure they never learned how to work or do anything 'manual'.

All of this reminds me of the talamudic hebrews and their sanhedrin-dictates.
"Birds of a feather"?
Well, KSA abolished slavery in 1963:
"SERVING JEWS Midrasch Talpioth 225 “The Non-Jews have been created to serve the Jews as slaves” [2] "
Their cousins in Occupied Palestine all non-tribal members are considered...goyim:
"GOYIM Kerithuth 6b page 78, Jebhammoth 61a “ Only the Jews are humans, the Non-Jews are not humans, but cattle” (goyim = human cattle) [1] "
You'all might find the following, Quotes from the “Holy” Talmud…Why the Hell would Anyone want to Expel these People? quite interesting.

I'd like to point out that, since Trump took office, Bibi N. & other top isn'treali military/intelligence now openly(!) travel to KSA & Gulf States.

I've mentioned earlier the *Dönmeh* but few if any here relied.
Time to break the cognitive dissonance- confirmation bias loop:
The Dönmeh: The Middle East’s Most Whispered Secret (Part I)
The Dönmeh: The Middle East’s Most Whispered Secret (Part II)

Please take the time to look at these, as starters.
Adam Green does great work at trying to...connect-the-dots.
Time to start doin' my chores here.
Spring is soon here.
"Time to the garden now" - *Candide* last pages.

Posted by: Veritas X- | Mar 8 2020 11:06 utc | 61

Stonebird 60

Not only do the Russians military sales reach the scale of the West's but their pricing is not like it either i.e. no rip off R&D and profits included. This could improve Russia's position in that market.

It will almost certainly hit US, France and the UK military export sales to the ME in particular pretty hard. It may even impact the US defence market as well. If the later it will hit lobbying funds for politicians as collateral damage with bitter infighting for what's left.

Posted by: JohninMK | Mar 8 2020 11:10 utc | 62

#39 AntiSpin,

thank you,nice one your post.I'm very fond of this tracing back a phrase expression or proverb to its origins,because it brings forth a part of history,factual,personal.It helps to understand language as a phenomenon.Myself I was thinking "over" meant the speaker making clear that he finished his message,his sentence,and signalling his changing from sending to receiving.But indeed it is more to the point it refers to actually turning over the two-way switch,the physical object instead of the vocals.

Posted by: willie | Mar 8 2020 11:35 utc | 63

Piotr @ 47, Russ @ 51:

The other thing I probably should have mentioned @ 43 is that in Sunni Islam at least, and very likely in its Wahhabi extremist variant, the concept of predestination is important. One does not thwart the will of God if God intends that some people live short lives and die before their time. At the same time, if you sin (even if that sin might have been fixed in your fate before you were born) you're still held responsible and must be punished.

Therefore if it is the will of God that some people should die by being crushed under a stampede while circling the Kaaba, or that others should sicken and die from a contagious mystery virus that spreads through packed crowds of pilgrims during the Hajj, then that excuses the Saudi government authorities in their negligence to provide proper crowd control measures and fixtures that regulate the flows of people and prevent tragedies.

One could probably find similar equivalences among US politicians since predestination is not unknown in Protestant sects. The same deliberate obfuscations about free will and personal responsibility for sin, in the context of events being fixed by God in advance, and to what extent people can or should "defy" God's will, can be found too.

Posted by: Jen | Mar 8 2020 11:35 utc | 64

If COVID19 is indeed a product of the labs of "the West", it is the penultimate self-own in a long list of recent self-owns. 2020 is going to be corker, one can see that already. Even though I do not think it is a particularly bad 'flu', the hype surrounding it will do the job anyway.

Luongo has a new piece up about Putin telling MbS to go fuck himself:

And I will add Craig Murray's take on COVID19 which is pretty much mine too, we are all going to die, freaking out will not improve your outcome:

Craig Murray

Posted by: Bemildred | Mar 8 2020 12:08 utc | 65

lgfocus@46.  I agree.  I think Tom Luongo is often right on the mark.

"" markets are finally calling the bluff of central bankers who have been propping up asset prices for years.

And all it took to push a correction into a full-scale panic was the Russians saying, “No.”

The 2008 financial crisis was never dealt with, just papered over.  

The repo crisis of last September never ended, it’s still there.

A majority of their (Russian) oil is now sold in non-dollar currencies – rubles, yuan, euros, etc. – to lessen their exposure to capital outflows

There is a cascade lurking beneath this market. There is a lot of bank and pension fund exposure in the U.S. to what is now soon-to-be non-performing fracking debt.  

The dollar has been its greatest weapon and it is still king.  And it is a weapon with a great deal of power but wielded only against the U.S.’s allies, not Russia.  ""

I highlighted a few points from the article above.

The main point is our artificial economy that has been propped up since 2007-2008.  This eventually had to come to terms with reality.

The dollar was very powerful but lost touch with reality to preserve profits over the real economy.

And of course even worse it was used as a weapon (sanctions etc) to which Russia now also has the power to say no.

Posted by: financial matters | Mar 8 2020 12:34 utc | 66

I believe this is the second coup attempt that MBS has faced. It does not look like he has long to go as the ruling autocrat in Saudi Arabia. At some point a growing number of people in the royal family will simply decide to take him out...

What a sick, psychopath...

Posted by: Steve Naidamast | Mar 8 2020 13:09 utc | 67

Posted by: Steve Naidamast | Mar 8 2020 13:09 utc | 68

I think he needs more money. Rich people are needy people, and he pisses away vast foretunes. But yes, he's already well past his expires by date. I can't decide between MbS and Modi which is more incompetent.

Posted by: Bemildred | Mar 8 2020 13:40 utc | 68

It's been reported that KSA have begun Dumping Crude at Reduced Of on a Massive Scale:

Posted by: IronForge | Mar 8 2020 13:47 utc | 69

Saudi Arabia releases images of King Salman after purge of royals..

Posted by: ARN | Mar 8 2020 13:48 utc | 70

to beMildred: thanks for the laugh. To Veritas X - thanks as well, and may we take your nom de plume to mean Fuck Harvard? to JohninMK - interesting thought. To excellent B - thank you,

Posted by: Miss Lacy | Mar 8 2020 13:57 utc | 71

I agree with most commenters here: the Russians are refusing to lower their oil output because they want to revenge over the 2014-2016 recession Saudi Arabia caused to them when decided to spike production in agreement with the USA.

But there are other reasons: Russia doesn't want to lose its market share and it also doesn't want to lose the geopolitical grip being a major oil exporter gives you.

There's also the cultural factor: most (if not all) of the Russian ruling class today is actually Soviet. They were born and raised in the USSR, not in Yeltsin's Russian Federation. Yes, they know they are capitalist now, and that they have to do the neoliberal stuff and all that - but they have a much more distanced relation with it than their counterparts in the West, who believe capitalism (neoliberalism) are the salvation of humanity. Hence, they don't really care if Gazprom has to live at a flatline profits for a decade if that means keeping Russia together and on top of the geopolitical game; well, at least they can understand the concept (even if some of them don't like it on a personal level).

I remember when Russia - to the shock of the IMF and the rest of the Western financial community - suddenly defaulted on its IMF debt. Later, the only explanation Scotish economist Peter Gowan found for that was that the Russian elite still hasn't got rid of its old Soviet habits.


@ Posted by: Paora | Mar 8 2020 4:38 utc | 45

Of course you don't know about the gospel of Marcion - it is not Canon.

The only source for the Marcion is the reconstruction archaeologists and historians made from the people who attacked his interpretation. His gospel was so attacked that we can reconstruct it almost in its entirety with the quotations from its opposition.

There are also many other gospels which are not Canon (including now famous Judas Gospel). This is not surprising, since what we know today as the Canon (from the Greek, meaning literally "measuring stick") was built slowly over the course of centuries, with modifications observed in the early Middle Ages.

But those non-Canon gospels you can only get in the academic circles, as they evidently are censored in the religious ones.

What is most interesting thing one must pay attention when understanding Christianism is the historical landscape it was born: the Pax Romana. It was a time when the Roman Empire was at its apex. Therefore, it was a time when Judaism was facing a huge existential dilemma: if we're the Chosen People, then why are the Romans, and not us, ruling the world? If you take the time frame of the three Jewish revolts, it fits perfectly: the first one was at the end of the Nero's reign and lasted until the beginning of the Vespasian's reign; the third happened during Hadrian's reign. Jesus Christ was probably born at 4 B.C. and died at circa 26 A.D. That means he was born during the apex of Augustus' reign, and died during the middle of Tiberius' reign. That means Christianism was born in a world where the Roman Empire in its splendor was a given, a fact of nature.

No wonder, then, why Christianism succeeded where Judaism failed: they opted for a strategy of opening the Jewish faith to the "gentiles" (i.e. Roman citizens, most of them probably Greek at the time in that region). There are a lot of examples in the New Testament where the writer clearly states that, if you're a gentile, you don't have to follow the (Jewish) rules strictly (e.g. you don't need to get cirucumcised if you don't want to). They slowly gathered Roman followers - which later spreaded it into the rest of the Empire (Paul) - while the Jewish opted for the bellicose route of trying to topple the Empire from the outside.

Posted by: vk | Mar 8 2020 14:16 utc | 72

Posted by: Miss Lacy | Mar 8 2020 13:57 utc | 72

My pleasure Miss, the feeling is mutual.

Posted by: Bemildred | Mar 8 2020 14:33 utc | 73

@ ARN | Mar 8 2020 13:48 utc | 71

Saudi Arabia releases images of King Salman after purge of royals..

An 84-year old reading casually without reading glasses? Does this make sense to anyone?

Show me King Salman in the same photograph with the newly accredited ambassadors and it might preliminarily count as evidence. The one that the grauniad published is plain worthless.

Posted by: Lurk | Mar 8 2020 14:35 utc | 74


Posted by: Lurk | Mar 8 2020 14:36 utc | 75

@58, that comment was simply based on my own experiences. Perhaps what I really meant was that if I said "out" over the radio to someone higher rank than me, under any circumstances, I would hear about it quite quickly.

Posted by: Joe | Mar 8 2020 15:06 utc | 76

Saudi Arabia releases images of King Salman after purge of royals..
Posted by: ARN | Mar 8 2020 13:48 utc | 71

The king is shown reading a document. I wonder if White House will be releasing such documents during Biden presidency (see! he can still read!).

BTW, heads of state may have texts properly magnified on the printouts, so reading from a little distance is fine without glasses. Most importantly, don't let common people hear those people talk. For example, Caitlin Johnson collected a number of quotes and videos of one and only Joe Biden. In one of them he talks with voters, and a young cheeky woman asks him how can see himself electable after results in Iowa (and New Hampshire? I would need to check. Joe answered relatively normally, but interjected "you dog faced lying pony soldiers", to me it suggests that the interjection was from his inner train of thought, and in his better years he would probably not say it loud. Video of him forgetting the name of his "[long pause "my boss" awkward gesture) shows that some information streams that should reach his mouth just don't get there, so different things happen with frayed neurons. I think the campaign should his dignified picture, like reading documents while reclining in a pool with children touching his hair.

Posted by: Piotr Berman | Mar 8 2020 15:38 utc | 77

Well I guess we should soon excpect a movie king Salman playing football created by Israel DeepFake industry

Posted by: ARN | Mar 8 2020 15:53 utc | 78

vk: the interpretation of early Christianity that I found more convincing is based on normal treatment of the earliest Christian sources, meaning, like any other source. There are "fingerprints" in the text showing a stage of oral and imperfect tradition, and compilation made after important events after the presumed life of Christ took place.

It is known that matches of the sources with events and dates in the history of Judea and Rome are approximate, and "slaughter of innocents" was a distorted version of the killing of royal children (from disfavored wife? I am lazy to check) and some actual Herodian repressions. Prophecy of the destruction of the Temple indicates compilation based on oral tradition after that event. Until that time, the Jewish cult was centered around Temple with prescribed rituals etc., so it had to be restructured. On the wider scene of Roman empire, numerous cults were forming, and reports of miracles were pretty normal. Christianity absorbed other cultural trends of the time too, like reverence of chastity and frugality from Stoic philosophy.

That most interpreters of "sacred text" are excessively literal is clear if we compare it with the interpretation of less sacred texts, say Iliad, life of St. Nicholas the Miracle Maker (who got elf helpers etc. quite recently), life of King Arthur etc.

Posted by: Piotr Berman | Mar 8 2020 16:05 utc | 79

Lurk@75 - "An 84-year old reading casually without reading glasses? Does this make sense to anyone?"

Not sure what good glasses would do since his eyes are shut! He's either asleep or in a coma. Probably stapled his sleeves to the armrests to prop him up. That's abusive...

Posted by: PavewayIV | Mar 8 2020 20:46 utc | 80

You bet there's no health system in the US! Ever heard of cataract surgery? It is common to find old ppl who can read without glasses, AFTER cataract surgery.

Posted by: Mina | Mar 8 2020 21:10 utc | 81

INtressting here blaming Pompeo, Trump...

Posted by: ARN | Mar 8 2020 21:13 utc | 82

Do you think OPEC has a real future?

Posted by: Dogon Priest | Mar 8 2020 22:12 utc | 83

- For the PetroDollar system to function the US MUST have a well functioning banking system. If that banking system goes belly up then the PetroDollar system will collapse as well.

Posted by: willy2 | Mar 8 2020 23:26 utc | 84

- It's a pity one Osama Bin Laden isn't alive anymore. He would have loved to see what's going on in Saudi Arabia. After all, he wanted to depose the (corrupt) current government and take control of the saudi government.

Posted by: Willy2 | Mar 8 2020 23:39 utc | 85

- Oil dropped on Friday to ~ $ 22 a barrel. Ouch & OMG.

Posted by: Willy2 | Mar 9 2020 1:31 utc | 86

- With oil at ~ $ 21 to $ 22 means that MbS and his government are in deep, deep trouble. I knew that Saudi Arabia was in deep trouble but I didn't think that the country would get into trouble this soon.

- Remember the chinese curse: "May you live in interesting times" !!

Posted by: Willy2 | Mar 9 2020 1:41 utc | 87

Peter AU1 @ 10

Re: change of constitution

Nikolai Starikov: Anatomy of Elite Betrayal and Putin's Plan


As a result of external pressure, today the economic elite is starting to fluctuate. She is vulnerable, all of her SPP depends to a much greater extent on her loyalty not to the Kremlin, but to the West! Moreover, in the political stratum, which is always more subtle, but more influential, the loyalty of power is preserved.

To summarize: the current situation is characterized by duality. The economic elite hesitates and is ready to betray (as in 1917 and 1991), if it is shown the path of guaranteed Preservation and Transfer of assets. The political elite is stable and faithful. It turns out that the overall situation has become unstable.

How to rectify the situation?

1. Obviously, it is necessary to reduce the influence and role of the Economic Elite in the political system. Many deputies, politicians come from the economy, rich and super-rich people. So, their personal Preservation and Asset Transfer depend on the West, which is actively calling for treason to the state!

2. Conclusion - we must remove from the political elite natives of the economic elite. After all, having come into politics, they can easily exchange the sovereignty of the country for solving the problems of their Conservation and Transfer, as happened in 1991. Moreover, the Multiplication depends entirely on the favor of the West.

3. This can be done easily and quickly in only one way - by putting an UNBEATABLE barrier in their way into politics. Amendments to the Constitution are such a barrier.

4. If the Constitution prohibits dual citizenship, this will cut off some of the potentially unreliable elites. If a ban on assets abroad is introduced there, this will cut off the path to politics for almost all people from the Economic Elite.

5. At the same time, to give stability to the entire system as a whole, it is necessary to “thicken” the layer of the political elite, which is not a native of the economic elite. Rotate. This must be done quickly so that when the smoke of the information curtain is cleared, the danger of exchanging economic preferences for political sovereignty is already stopped.

6. New politicians who are not hooked on property abroad, who do not have a second or third passport, must be quickly brought into a “working state”. We need new forces, new faces. The system, the state - they need them vitally. Those who have nothing to Transfer, nothing to Save, nothing to Multiply.

That’s what Putin’s plan is. That's where the constitutional amendments come from. That's where the rush comes from.

P.S. Putin has actually openly said this already. You just need to hear.

Speaking in the third part of “20 Questions for Putin,” the president said the following. About Ukraine and its elite.

“... Those who headed Ukraine or got to power in Ukraine, they pursued personal interests. What are they? Even no more to earn money due to the robbery of the Ukrainian people, and to preserve what has been stolen until now. That is the main task. Grannies, where, excuse me for the bad manners? Where is the money? In foreign banks. What needs to be done for this? Show that they serve those who have the money. This is where the only thing they are selling from now is Russophobia. ”

Posted by: pogohere | Mar 9 2020 7:10 utc | 88

- Correction:

- Oil dropped some 20% to about $ 36 (for Brent oil) and $ 32 (for WTI oil).

Posted by: Willy2 | Mar 9 2020 17:23 utc | 89

Posted by: pogohere | Mar 9 2020 7:10 utc | 89

Once you read it it becomes so obvious why it is that way in places like Ukraine or Russia in the 1990's. Once Boris Abramovich Berezovsky had his money in London he was hooked and dependent on the Anglo-Zionist Mafia. One false move and the accounts could be blocked, he could be sanctioned, or simply killed.

Posted by: Tom_LX | Mar 9 2020 17:43 utc | 90

Based on the numbers posted in b's article: $50B deficit at $63/barrel @ 9.8M bpd - I constructed a 3 dimensional model on Saudi Arabia's finances based on both oil price and production increases.
It isn't pretty.
Production increase of
Oil price__Budget situation
All dollar figures in billions

Basically, if oil prices drop to $20 - even a 50% increase in Saudi oil production yields a budget deficit 75% worse than at $50/barrel. If $20/barrel happens for any significant period of time, a whole bunch of oil producing countries are going to bite the dust - possibly including Saudi Arabia.

Of course, the strategy could be either to bring the Americans and/or Russians to the table or to push OPEC into making greater cuts.

I don't see an all out price war really helping the Saudi budget situation.

Posted by: c1ue | Mar 9 2020 19:05 utc | 91

night of the long knives

Posted by: brian | Mar 9 2020 21:35 utc | 92

Any updates?

Posted by: Lozion | Mar 9 2020 22:53 utc | 93

Rumors from the oil patch, i.e. discussion threads on Oil Price.

Stitching various opinions together, Russia and KSA do not have much problem with each other in terms of price setting attitude. They are low cost producers that in the long term depend on oil and gas. The opponent is high cost producers in USA, "shale oil" (and Canadian "tar oil" etc) who thrive because of quantitative easing that makes it easy to borrow money for problematic projects.

The special feature of American shale oil is a large number of small actors, some of them do what farmers do in lean years: work hard for little money to avoid loosing their investment (the farm/oil patch with equipment).

What will happen to them? Vulture will wait, and buy the better pieces once it is clear which pieces are worthless and which are worth something. Hard to tell from data, but after watching little guys struggle you can figure it out.

And what will happen to vultures? it will end up in the hands of Exxon, Chevron and perhaps Occidental.

What next? Consolidation is followed by "pairing down excess capacity". Happens regularly in one industry or another.

And then? Exxon has huge interests and contacts in KSA. Love and harmony will return to the world, oil up to 80 (sheer guess, but intelligent one). Цар Никалашка царил на Руси, было что выпить, было закусить.

Posted by: Piotr Berman | Mar 10 2020 7:23 utc | 94

Posted by: pogohere | Mar 9 2020 7:10 utc | 89

Thanks for that. Assuming it is something like true, it indicates Putin thinks he is finally ready to go after the Money Power, the thing that FDR failed to do before they got him - perhaps because he was one of them, perhaps because like the recent set of stooges inflicted on us, they were not able to do anything, because Congress. The Chinese never did seem to have a problem holding their 'capitalists" to account for public harms.

The oil war too seems to indicate something like that ...

I like the way Putin is going with it, let them choose greed or public service, not both. Despite what they say about Bernie, he has clearly not exploited his position to get filthy rich, unlike Biden for example, or Trump, or most of the current crop of stooges.

Government by Grift has consequences. It cannot compete with honesty, good governance, and tending to your own business.

Posted by: Bemildred | Mar 10 2020 9:38 utc | 95

pogohere 89

Thanks. One other thing mentioned by Putin, though Im not sure if it was during the twenty questions interview. The change of government. Putin's reply when asked about it was that those who had put everything into place to tade, set up the current structures and so forth Were being moved up to what I took to be in or under the presidents office to implement more plans, and that younger people with more modern education would take over the running of the government and the structures that had been put in place.
The government or Duma I take it is responsible for domestic policy or implementing domestic policy but the new bodies and positions Putin is creating, I think would have to do with international concerns.

Posted by: Peter AU1 | Mar 10 2020 10:13 utc | 96

@Piotr Berman #94
I think you are underestimating the extent of Saudi Arabia's troubles.
Don't forget, MbS brought in McKinsey - after oil fell from its $100 point - to figure out how to solve their huge deficit/oil dependence issue.
The result was a bunch of money thrown around on Saudi Arabia 2.0 or whatever management consultant bullshit term was coined - which clearly failed miserably.
Saudi Arabia's population was under 6 million in 1970 - it is approaching 35 million now. They have to import food and a significant amount of everything else.
There's other data points:
1) Saudi Arabia sold bonds not too long ago - first item evah. Hardly the sign of a strong, cash rich country.
2) Aramco - there was a huge push to IPO it. Eventually, it happened but it is very unclear how much non-Saudi money actually bought in. The original goal was to raise $2 trillion - I wonder if even $500B was raised.

In other words, unlike Russia, Saudi Arabia is quite unprepared for low oil prices. The model I posted above shows that even a 50% increase in Saudi oil production won't reverse the budget deficits if oil falls to only $40, much less lower.

Posted by: c1ue | Mar 10 2020 16:17 utc | 97

Don't forget, MbS brought in McKinsey - after oil fell from its $100 point - to figure out how to solve their huge deficit/oil dependence issue.

Posted by: c1ue | Mar 10 2020 16:17 utc | 97

It reminds me a comment in on-line newspaper about the item that Ukraine hired Balcerowicz, architect of "shock therapy" during Polish transition to capitalism. "On one hand, Banderowcy may get what they deserve, but sometimes we have to think, isn't it too cruel? Shouldn't there be some limits?" Greece was an idyllic Mediterranean country, they got some problems, Goldman Sachs helped them. Sometimes I thinks that sanctions on Iran etc. are not as effective as designed because they are spared expert advise, financial alchemy etc.

Posted by: Piotr Berman | Mar 10 2020 17:59 utc | 98

Actually, Aramco IPO could be very clever. It amounts to selling paper tied to oil price, then you engineer a huge drop, then you orchestrate buy-back, and then you engineer a rebound in oil price. Some idiots loose few hundred billions. That could be to big to be possible, but without buy-back (it could be prohibit by the condition promised to buyers, and the scale is a bit too large to hide) it amounts to very cheep credit.

Posted by: Piotr Berman | Mar 10 2020 18:09 utc | 99

Actually, about Aramco IPO, they got ca. 25 billion, this is not a large amount for KSA. Moreover, they manipulate the market to keep the price high, now it dropped a bit even they will loose a lot of revenue.


Saudi would increase supply in April to 300,000 bpd.

Russia to boost output by 500,000 bpd,

US Treasury Secretary Steven Mnuchin told Russia that energy markets needed to stay “orderly”


USA sense of "orderly" is truly unique. Freedom of navigation, often mentioned, includes maritime blockade of Yemen. Orderly oil markets are ordered by imposing embargoes on oil import and exports.

Posted by: Piotr Berman | Mar 10 2020 22:23 utc | 100

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