Last week, OPEC called on Russian oil companies to lower production in response to reduced demand from China and a Eurozone bound for recession. They said no.
Just like that, oil took a nosedive, losing 25% of its value on Monday. The price of a barrel of oil closed at $33 dollars, compared to $45 late last week.
For the last decade, America's rise as an oil exporting power thanks to the expensive shale exploiting process has allowed neocons to cripple the economies of Venezuela, Iran and Russia. Cheap gas is a welcome perk that has kept many working families afloat, but it is only a side effect of a broader geopolitical attack on countries Jews that own Washington see as threatening. The impact has indeed been devastating on these countries. The inflation adjusted price of a barrel of crude oil in 2008 was $109.25.
The Russian government has responded to US-led efforts to "deplatform" them from the world market via low oil prices and aggressive interventions to block projects like the Nord Stream 2 by nationalizing key industries, including oil, and setting aside 100s of billions to stabilize the ruble while the country pursues autarky.
While the Russian gambit is counter-intuitive and will lose them money in the short-term, the long-term goal appears to be to hang American capitalism with its own rope. Shale oil production is immensely unprofitable. It is an industry floated by about $1 trillion in Wall Street money -- what it cost to explore it and get things up and running. From 2011 to 2019, the industry has been running at a loss, though the economy as a whole has benefited from the global reduction in gas prices. Nevertheless, some analysts are predicting that up to half of the heavily indebted shale oil companies could go bankrupt, wiping out 10s of thousands of decent paying jobs in the process.
In the immediate term, the US-Israeli puppet state of Saudi Arabia and its corrupt sheiks have found themselves speeding in the desert in one of their Ferraris with the breaks cut. 87% of Saudi budget revenues come from oil production and they don't know what to do. While Russia, Venezuela and Iran have already weathered sudden and unexpected attacks on their economy from Wall Street and the liberal powers, the Saudis are much like American citizens with the corona virus pandemic: assuming Uncle Sam will figure it all out for them.
The only solutions on Trump's table is 1) to nationalize the American oil industry, or 2) use protectionism to try and artificially keep prices stable.
The second option is much more likely than the first, but both may prove unpopular with capital and Trump's Goldman Sachs "economic advisors." Suburban consumers may also like the dirt cheap prices at the pump, even if it means plunging the Dakotas, Appalachia and beyond into a regional depression.
The Russians are banking on capitalist greed, neoliberal orthodoxy, and the individualist nihilism pervasive in our culture. It may be their most profitable endeavor yet.