Your morning
briefing...yesterday Saudi Arabia did something very courageous. They cut oil
prices 30%. Saudi Arabia has massive amounts of crude oil in the ground. It is
also is the lowest cost producer of oil in the world.
I emphasize to people that one needs to
always think in three dimensions. When you take a bold and controversial
action, you have to carefully consider how those hurt by your action will
react. In this case two countries that will be deeply hurt by the Saudi action
are Iran and Russia. These two countries are allies.
Some months ago, Iranian-backed militias
attacked a Saudi oil production facility and put it out of action for several
weeks. The US and Saudi Arabia took no military action against Iran. This has
made the Iranians bold. They could launch a major attack on the Saudi oilfields
and knock them out. They would not fear a military response from the Saudi
Arabia or the US.
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