I know that COVID-19 news has swamped almost everything else (and what scraps of attention might be left beyond the corona virus is being soaked up by the closing acts of the Democratic primary), but I am really fascinated by the Russia-Saudi Arabia economic murder-suicide that is playing out right now.
The economic well being of both Russia and KSA depend almost entirely on the price of oil. (People widely understand this fact about the Saudis, but Russia is a petrostate like Saudi Arabia pretending to be a diversified economy like France, so pretense aside, it is basically in the same situation as the KSA). Based on little more than Russian nationalism coupled with a Putin-MBS dick measuring contest, the Saudis have decided to destroy their own economy betting that it will hurt Russia more, while Russia has decided to participate in the destruction betting that it will put its North American shale-oil competitors out of business. Neither of those bets are likely to pay off.
This comes as both MBS and Putin are trying to entrench themselves as ruler of their respective countries. It seems pretty dumb for both of them to introduce more economic instability into the equation just at the moment they are trying to consolidate power. But hey, what do I know? Maybe they both see a crashing economy coming and so they realize they need to secure their position now before it all gets worse.
Meanwhile, the Russio-Saudi pissing contest is going to have all kinds of side effects, from crashing the budgets of other oil-dependent countries like Venezuela, Kazakhstan, and Iran, to draining resources from the Russian budget that might otherwise go into interference in the American election, to cheaper gas for would-be travelers who probably should stay home during a pandemic, to increased unemployment in places like North Dakota and Alberta, etc. In other words, this is a very big deal, with far-ranging consequences all over the planet but it is just getting buried by other pressing stories.
The economic well being of both Russia and KSA depend almost entirely on the price of oil. (People widely understand this fact about the Saudis, but Russia is a petrostate like Saudi Arabia pretending to be a diversified economy like France, so pretense aside, it is basically in the same situation as the KSA). Based on little more than Russian nationalism coupled with a Putin-MBS dick measuring contest, the Saudis have decided to destroy their own economy betting that it will hurt Russia more, while Russia has decided to participate in the destruction betting that it will put its North American shale-oil competitors out of business. Neither of those bets are likely to pay off.
This comes as both MBS and Putin are trying to entrench themselves as ruler of their respective countries. It seems pretty dumb for both of them to introduce more economic instability into the equation just at the moment they are trying to consolidate power. But hey, what do I know? Maybe they both see a crashing economy coming and so they realize they need to secure their position now before it all gets worse.
Meanwhile, the Russio-Saudi pissing contest is going to have all kinds of side effects, from crashing the budgets of other oil-dependent countries like Venezuela, Kazakhstan, and Iran, to draining resources from the Russian budget that might otherwise go into interference in the American election, to cheaper gas for would-be travelers who probably should stay home during a pandemic, to increased unemployment in places like North Dakota and Alberta, etc. In other words, this is a very big deal, with far-ranging consequences all over the planet but it is just getting buried by other pressing stories.
