Rising Gas Prices: What’s Going on With Saudi Arabia and Oil?

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What’s going on with Saudi Arabia these days? If you live in America, a related question might be — what’s going on with oil these days? Let’s answer both questions in turn. But first, let’s see if we can demystify some of Saudi Arabia’s very recent history.

A “Slow-Motion” Coup

If you’ve only paid attention to Buzzfeed-worthy headlines over the last few months, you’re probably content with Saudi Arabia’s delayed but applause-worthy meting-out of minor civil victories, such as allowing women to drive for the first time and opening movie theaters for the first time. And to be sure, Saudi Arabia’s lawmaking caste is right to celebrate these baby steps toward a more conventional definition of civility.

But more objective eyes, looking in from the outside, identify these two “milestones” for what they are — smokescreens to hide a “slow-motion coup” in Saudi Arabia.

The man ruling Saudi Arabia right now is not its king, but instead a young crown prince — one Mohammed bin Salman, hereafter referred to as “MbS.” Right now, MbS is paving the way to his ascension to the throne — breaking with very old traditions concerning the passing of power — by jailing a great many of his political rivals, including other princes, business magnates and political dignitaries.

MbS is a good friend of Donald Trump’s, too. The two have exchanged compliments on Twitter — possibly because they favor a similar page from the autocrat’s playbook: to promise the longsuffering “people” custody of their destiny once again while jamming their own pockets full of the spoils of political war. MbS is fond of silencing his political opponents, whereas Trump and his sycophants merely whine impotently that the entire canon of American law prevents him from doing the same.

And like our own American-grown autocrats, Saudi Arabia’s MbS wraps everything he does in the veneer of “anti-corruption.” Remember “drain the swamp?” That particular Trump charade resulted in one of the most ethically compromised American presidencies and administrations in history. MbS is literally in charge of his country’s “anti-corruption committee.” And yet, most of the arrests he’s made as point-man for this committee appear entirely self-serving, politically motivated and entirely apologetic toward forms of corruption which benefit him personally.

When the dust settles and tradition and governmental checks (such as they are) lay in tatters, Saudi Arabia and the United States will resemble each other in several uncomfortable and uncanny ways that will be very difficult to roll back for a very long time. Additionally, this shift of power will likely result in higher oil prices across the world.

What This Means for Gas Prices (And Americans)

So where does this leave the average American and their pocketbook? Buying gasoline for our automobiles maintains its outsized share of most American budgets.

To put it lightly, pundits have been stymied by Saudi Arabia’s recent shakeup — not for the content but for the context. 2016 and 2017 saw a series of oil-related and tangential “black swan” events that have kept oil prices low and certainly unpredictable. Now that Saudi Arabia’s soft coup is all but assured, there are several ways this could play out.

Whereas most experts — even with recent global turmoil factored in — had been comfortable with the idea that oil prices would stay at their current low for a while, we’re now looking at a possible rally for the price of oil. Saudi Arabia is now effectively doubling-down on the importance of oil as a strategic resource in the region rather than attempting to divest from it — even lobbying in the U.S. for a listing for a key Saudi oil company — and is expected to abide by OPEC policies to help get prices up again.

The other way this could play out is far less straightforward and basically reads as “more uncertainty and chaos.” The young crown prince MbS has promised — and is already making strides — to make Saudi foreign policy even more assertive in the Middle East, even after it’s already resulted in failure and famine in Yemen, Qatar and elsewhere. This more “muscular” Saudi Arabia, in sowing the seeds of more tension across the Middle East — up to and including undermining the Obama-era nuclear “deal” with Iran (one of Saudi Arabia’s chief rivals) — could also cause fluctuations in the price of oil rather than a more straightforward rise.

The point is, “black swan” political events seem to be all that happens these days. And since oil — including the supply and the price of it — is so closely tied together with politics on the global stage, it’s clear these behind-closed-doors machinations are going to have repercussions that citizens across the entire globe will feel.

And yes, that probably means you and I will feel it at the gas pump, too. The last few years of political turmoil and the increasing affordability of electric cars has done nothing to staunch our appetite for beefy and wasteful vehicles. If the paroxysms of a huge industry like oil — and the resulting political shake-ups in countries as significant as America and Saudi Arabia — aren’t enough to make us reevaluate some of our habits, one wonders what the “real” wake-up call might turn out to be.

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