With President Trump, we’ve learned not to take him literally. He says things for his own reasons, and his words are an uncertain guide to his actions. This is one aspect of his art of the deal: keep your opponent guessing.
Does he really want the Saudis and the Russians to cut a deal on oil, and drive the price back up? Or would he prefer to keep the price war going, severely punishing the Russians? He can easily protect the American oil industry with a tariff, which he discussed with the oil executives on Friday, and which his most trusted oil adviser, Harold Hamm, is pushing.
In the big geopolitical picture, American energy dominance is a powerful tool for advancing American interests. We have a dominant economy, a dominant culture, and a dominant military. Add energy dominance, and it’s America First across the board. A long price war outside our borders will crush marginal producers around the world, and it would hurt the Russians severely. When the dust settles, American shale can continue its ascendance to domination in world markets.
The OPEC meeting on Monday, which caused the oil price to jump, has been postponed. The Russians said some mean things about the Saudis, and that was all it took. Look for the Saudis to slow walk this process, while they claim to want a deal. They are in the catbird’s seat, and they have been inflicting pain on other producers for only a month. They’re just getting started. If they back down now, they lose face.
Muhammad bin Salman has been in power only since 2017, but in that short time he has seized unchallenged power within the Saudi royal family. He has arrested hundreds of them, and made some very powerful enemies. Those excluded from his cirlce, and from power, thirst for vengenace. If he shows weakness in his handling of this price war, it can increase his vulnerability. He can’t afford to let that happen. Losers in Saudi royal intrigues can pay with their life.
He has every incentive to continue this war. Especially if President Trump is winking at him in encouragement.