Putin’s War Economy Suffers as Saudis CRATER Oil Prices!

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October 4, 2024

Video Summary

Russia’s reliance on oil revenue to fund its war machine has created an unusual alliance between Saudi Arabia, the West, and Ukraine. The Saudi plan to increase its crude oil production in the coming months is aimed at dropping the price of oil, allowing them to gain a greater share of the global market. This move is not just about Saudi Arabia’s interests, but also a response to the US and the global economy.

The price cap on Russian oil, introduced in 2020, has been effective in curtailing Russia’s earnings, but there’s a loophole that allows Russia to sell oil through pipelines at market prices. This has been a problem for the US, as it has limited the effectiveness of the price cap. The recent decline in oil prices is a significant issue for Russia, which has seen its oil prices drop from $81 a barrel to $68 since July.

The Saudi move is also seen as a way to punish Iran, a regional rival. Iran’s recent actions, including the plot to escalate tensions in the Middle East, have disrupted Saudi plans for a deal with Israel. The Saudi-US alliance is aimed at keeping oil prices low and hitting Iran’s oil revenues hard. This, in turn, is expected to force Iran to raise prices, which would affect its economy.

The US is also ramping up its own oil production, which will lead to cheaper gas prices and help control inflation. This, combined with the Saudi move, will put pressure on Russia’s massive defense spending, which accounts for 41% of its government revenues. This could lead to inflation or recession in Russia, or both.

The unusual alliance between Saudi Arabia, the West, and Ukraine aims to limit Russia’s ability to fund its war machine. The strategy is designed to reduce the oil price, hitting Russia’s revenues and forcing it to raise taxes or cut back on defense spending. This will have a ripple effect on the global economy, but for now, it’s a victory for the US and its allies.