But why are oil prices falling? It is because Saudi Arabia, the world’s largest oil exporter, is committed to pumping oil in large volume instead of shutting back in order to prop up the price.
What gives the Saudis so much leverage is that their production costs are low, and they can make a profit at a lower price than can Russians, Venezuelans or others.
That’s why the U.S. supports Saudi Arabia’s foreign policy, and why President Obama recently reassured King Salman that the U.S. will continue its cold war against Iran despite the agreement with Iran over sanctions and nuclear facilities inspections.
My question is whether it is in the U.S. interest to wage cold war against either Iran or Russia. There is no moral issue here. The Iranian and Russian regimes are bad enough, but everything bad you can truthfully say about them goes double or triple or maybe 10 times for Saudi Arabia.