If you read between the lines, the outcome is clear. The Saudi policy of dumping their way to supremacy is over.
Since Saudi Arabia and OPEC decided to cut production last November, American shale companies have taken advantage of the resulting higher prices to launch a comeback, adding 412,000 barrels a day of new output, according to the U.S. Energy Information Administration. While some of that oil has gone to satisfy the U.S. market, American crude exports have surged to more than 1 million barrels a day this year.
In an interview, Saudi energy minister Khalid al-Falih said the return of U.S. production was “good”—as long as it doesn’t throw global supply and demand out of balance. “Extremes are not good,” Mr. Falih said. “Saudi Arabia is for balance.”
Its new strategy is for balance. Its old strategy certainly hurt some oil producing rivals. But it couldn't be sustained.
Saudi Arabia—which throttled output to record levels to compete with a flood of U.S. oil two years ago—is now pulling back amid the renewed onslaught. The kingdom has cut its production by nearly 800,000 barrels a day since October. That is 60% more than it promised as part of the OPEC deal and signals its seriousness about stabilizing the oil market.
“This stabilization has meant sacrificing market share,” said Alan Gelder, vice president of refining, chemicals and oil markets at Wood Mackenzie, an energy consulting firm.
The cuts in exports to the U.S. are the latest in a long series of pullbacks in what was once the kingdom’s most lucrative market. In the 1990s, Saudi Arabia accounted for almost a third of all American crude imports, but it represented only 12% in November, according to the EIA.
Now this has a whole range of other implications. One basic implication is that Saudi energy policy is entangled with its Islamic soft power strategy. The Saudis control so much of our country because of their "partnership" with parts of our energy industry and other businesses. There are extensive Saudi investments. The entanglement of Saudi oil exports and domestic power is one reason why so much of the dialogue about Islam has been stifled. The left has made its own dirty pact with Islam. But in Republican circles, the Saudis have influence through their business connections. It's one reason why our foreign policy people still keep talking about Islam as a religion of peace while those who told the truth, e.g. Flynn, Gorka, have been aggressively targeted.
But the erosion of Saudi economic influence also means an erosion of Saudi political influence. The Saudis have planted a sizable colony of Islamic settlers in this country, but it's not nearly as large as the Islamic colonization of Europe. If immigration corrections occur, then it won't have anywhere near the influence of its European counterparts. And if the Saudis continue to lose economic dominance, then fracking might have ended up saving America from the invasion.