Media, American leaders remain silent.
Saudi Arabia made a policy decision in 2014: Flood the world with cheap oil in order to undermine U.S. oil producers. A terrorist attack would not have inflicted as much damage on the American oil sector over the past year. U.S. companies are going bankrupt, jobs are forever lost, and everyone knows that the Saudis are guilty. Quite proud of it in fact.
Why have the Washington Post and NY Times remained silent? Why haven’t Donald Trump, Ted Cruz, Marco Rubio or other candidates raised the issue? Why are FOX News and CNN missing in action? Because oil production is perceived as bad for the environment? Therefore, a policy that hurts big (and little) oil should not be attacked? Best to avoid angering the Saudis, regardless of what they do? Could it be that simple or politically correct?
In a rare departure from the silence, Reuters featured an excellent article by Josh Cohen on February 3, 2016, entitled: “Is it time for the United States to dump Saudi Arabia?”
“Despite these long-standing ties, Saudi Arabia now harms American national interests as much as it helps them…To retain market share, the Saudis launched an assault on American shale oil producers, hoping to drive them out of business by flooding the market with Saudi oil. The Saudis hope this leads oil prices to recover, but in the meantime much of the American shale oil industry could face bankruptcy. While cheap oil is good for American consumers, at a certain point the downside for the United States’ economy may outweigh the upsides. Of course, if the United States regains a greater dependence on foreign oil, the Saudis will be the ones to benefit.”
As a result of the Saudi assault, US oil output is plummeting.
“OPEC’s strategy worked, and now U.S. output is tumbling on the back of reduced drilling, with daily production down 500,000 barrels from its high of 9.6 million barrels per day.” http://finance.yahoo.com/news/heres-real-story-why-oil-132308556.html
U.S. bankruptcies and job losses are staggering. OilSlick.com reports that: “Over the last year U.S. energy companies have lost more than $840 billion in market cap.”
“The carnage in the oil patch is reaching a fever pitch. In 2015 42 U.S. energy companies filed bankruptcy with debts in excess of $17 billion. Over the last two weeks S&P cut its ratings on 13 energy companies. Moody’s put 120 energy and mining companies on watch for a negative downgrade. Wolf Research said yesterday that one third of U.S. producers could file bankruptcy over the next 12-18 months. There is more than $60 billion in distressed energy debt owed by U.S. companies. There is another $50 billion in debt that is expected to become distressed this year.”
OPEC controls over 40 percent of global oil, and Saudi Arabia is the top producer in OPEC. They continue to rule OPEC with an iron fist, while reigning havoc on the American oil sector. It’s time to reassess our relationship with the Saudi Arabia.