Don't you find it interesting how politicians on both sides of the aisle are relatively reserved in seeking direct response? We've become far more dependent upon that backwards little monarchy than we should have allowed ourselves to ever become. Saudi Arabia is still king of oil. And the US dollar is indirectly backed by oil. Saudi Arabia and most other major oil producers, thanks to prescient agreements from the 70s, only settle oil contracts in the dollar. This does phenomenal things for our economy. Oil is the most in demand resource in the world, and the USD is not only a guarantee to access to oil but practically required for said access.
Imagine we do some silly things like 'print' (not how money is made, but that's another topic) countless billions to trillions of dollars to pay for things we can't afford, such as pointless wars (not really pointless - Iraq/Libya/Iran all moved to of settle their oil for currencies outside the dollar, as Syria and Venezuela have now also done) or to inflate the stock market by injecting money into it resulting in inflation and calling that 'growth'. Or imagine we grew so deeply in debt that our only ever chance of possibly paying off old debt was by taking on ever more new debt in a cycle that seems to have no possible happy ending. These things might normally have an effect on an economy or currency's value or stability. But with the petrodollar if the value of the dollar goes down, this incentivizes other nations to further increase their holdings of USD to ensure a stable access to a certain amount of oil. And, like magic, the massive quantities of money start being removed from the market and tucked under the national bed's of a variety of different governments. The petro dollar means we can basically do whatever we want economically, and the rest of the world has to take it, while smiling.
This is why Saudi Arabia is able to flaunt their position. Do you remember Majed Abdulaziz Al-Saud? Neighbors saw a bleeding crying woman fleeing his mansion in Beverley Hills. He'd engaged in rape, assault, various forms of drug use, and all other sorts of fun stuff. Our response? He was released on bail and then, lo and behold, simply flew back to Saudi Arabia, and then it just disappeared from the news. It's the same story here. This is really big news, and this is something that the media and politicians could completely cripple Trump with. Yet, for the first time in his two years in office, they're remaining relatively reserved. The reason is that we need to make a big deal of this, and ho and hum about what should be done. But in the end, I think the chances of us doing anything, beyond token gestures, are basically 0. If we became enemies with Saudi Arabia, it would be a a potentially fatal blow to our economy, as it would mean the immediate and utter end of the petro dollar. Granted that dollar is already dying, but it's dying a long, slow, and protracted death. This would be self decapitation by contrast.
Even the good old 'regime change' or 'bringing democracy' isn't the same with Saudi Arabia as with the rest of the world. From a PR perspective Saudi Arabia has Medina and Mecca. They would be able to successfully spin the invasion as an attack on Islam. And Saudi Arabia also has extensive military forces. In spite of being a relatively small nation they are the third largest spender in the world on their military, and spend some 10% of their GDP exclusively on military - we only spend about 3% by contrast. We can't invade them and we can't really turn against them. We're the most dominant nation in the world, but Saudi Arabia is our Achilles' heel, and they know it.
US total oil consumption: 19,690,000 barrels/month.
The US is now the world's largest oil producer. OPEC is scared.[1] For the US, oil is a sideline. For Saudi Arabia, it's all they've got. The US is headed for energy independence, just because of market forces.
This entire issue is about non-US nations being dependent upon Saudi (and more generally - OPEC) oil and thus being directly dependent upon the dollar. Reducing our direct reliance on oil benefits the petrodollar by increasing the ratio of foreign players removing USD from circulation for us, but I don't think it's a big player in either case. The numbers you reference are per day, not per month. The scale of these things is quite remarkable isn't it? Now compare our consumption to our estimated entire reserves of oil. The US may well become energy independent in the longrun, but it won't be on oil.
But to a degree this is also the same for the entire world. Global oil consumption is expected to peak in the late 2030s. As demand for oil declines prices will go up to try to sustain the standard of living that OPEC nations have grown accustomed to. But as this happens it will make non-oil alternatives even more economically justified leading to even less oil demand in the longrun which leads to higher prices which ... This is what I meant when I said that the petrodollar is dying, but it's still going to be a long slow death which gives us hope of finding ways to stabilize things before then.
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You can even see direct analogs of this entire scenario with China. China seems to be investing based on the presumption of an electric/renewable heavy future and are working to corner some important resources there. Outside of simply becoming world leaders in the tech themselves, the world's cobalt supply, for instance, is now being heavily controlled by China. They aren't even operating through proxy, as we did with oil. What this will mean is that, if China's 'bet' turns out to be true, is that the get access to cobalt you'll need to play by China's terms which could, for instance, involve trades being settled only in yuan. And suddenly we have the 'cobalt dollar'. Everything from solar cells to lithium ion batteries are all dependent upon cobalt. It's quite a prescient move. The big difference is that oil was irreplaceable, cobalt is perhaps less so.
The US also has a good chunk of rare earths. It was a shortsighted move to allow the mining equipment to be sold off to China for a quick buck. But there's still time to fix this.
Imagine we do some silly things like 'print' (not how money is made, but that's another topic) countless billions to trillions of dollars to pay for things we can't afford, such as pointless wars (not really pointless - Iraq/Libya/Iran all moved to of settle their oil for currencies outside the dollar, as Syria and Venezuela have now also done) or to inflate the stock market by injecting money into it resulting in inflation and calling that 'growth'. Or imagine we grew so deeply in debt that our only ever chance of possibly paying off old debt was by taking on ever more new debt in a cycle that seems to have no possible happy ending. These things might normally have an effect on an economy or currency's value or stability. But with the petrodollar if the value of the dollar goes down, this incentivizes other nations to further increase their holdings of USD to ensure a stable access to a certain amount of oil. And, like magic, the massive quantities of money start being removed from the market and tucked under the national bed's of a variety of different governments. The petro dollar means we can basically do whatever we want economically, and the rest of the world has to take it, while smiling.
This is why Saudi Arabia is able to flaunt their position. Do you remember Majed Abdulaziz Al-Saud? Neighbors saw a bleeding crying woman fleeing his mansion in Beverley Hills. He'd engaged in rape, assault, various forms of drug use, and all other sorts of fun stuff. Our response? He was released on bail and then, lo and behold, simply flew back to Saudi Arabia, and then it just disappeared from the news. It's the same story here. This is really big news, and this is something that the media and politicians could completely cripple Trump with. Yet, for the first time in his two years in office, they're remaining relatively reserved. The reason is that we need to make a big deal of this, and ho and hum about what should be done. But in the end, I think the chances of us doing anything, beyond token gestures, are basically 0. If we became enemies with Saudi Arabia, it would be a a potentially fatal blow to our economy, as it would mean the immediate and utter end of the petro dollar. Granted that dollar is already dying, but it's dying a long, slow, and protracted death. This would be self decapitation by contrast.
Even the good old 'regime change' or 'bringing democracy' isn't the same with Saudi Arabia as with the rest of the world. From a PR perspective Saudi Arabia has Medina and Mecca. They would be able to successfully spin the invasion as an attack on Islam. And Saudi Arabia also has extensive military forces. In spite of being a relatively small nation they are the third largest spender in the world on their military, and spend some 10% of their GDP exclusively on military - we only spend about 3% by contrast. We can't invade them and we can't really turn against them. We're the most dominant nation in the world, but Saudi Arabia is our Achilles' heel, and they know it.