The New York Times has a fascinating article about how the Saudis are using oil prices to put pressure on Russia to pull back on their support for Syrian strongman Bashar Assad. It’s been obvious that they’re pushing prices down to hurt the Russians, but it hasn’t been clear what they expected to gain by it.
Saudi Arabia has been trying to pressure President Vladimir V. Putin of Russia to abandon his support for President Bashar al-Assad of Syria, using its dominance of the global oil markets at a time when the Russian government is reeling from the effects of plummeting oil prices.
Saudi Arabia and Russia have had numerous discussions over the past several months that have yet to produce a significant breakthrough, according to American and Saudi officials. It is unclear how explicitly Saudi officials have linked oil to the issue of Syria during the talks, but Saudi officials say — and they have told the United States — that they think they have some leverage over Mr. Putin because of their ability to reduce the supply of oil and possibly drive up prices.
“If oil can serve to bring peace in Syria, I don’t see how Saudi Arabia would back away from trying to reach a deal,” a Saudi diplomat said. An array of diplomatic, intelligence and political officials from the United States and the Middle East spoke on the condition of anonymity to adhere to protocols of diplomacy.
Any weakening of Russian support for Mr. Assad could be one of the first signs that the recent tumult in the oil market is having an impact on global statecraft. Saudi officials have said publicly that the price of oil reflects only global supply and demand, and they have insisted that Saudi Arabia will not let geopolitics drive its economic agenda. But they believe that there could be ancillary diplomatic benefits to the country’s current strategy of allowing oil prices to stay low — including a chance to negotiate an exit for Mr. Assad.
Mr. Putin, however, has frequently demonstrated that he would rather accept economic hardship than buckle to outside pressures to change his policies. Sanctions imposed by the United States and European countries have not prompted Moscow to end its military involvement in Ukraine, and Mr. Putin has remained steadfast in his support for Mr. Assad, whom he sees as a bulwark in a region made increasingly volatile by Islamic extremism.
This is really fascinating and it will be interesting to see how it plays out. Iran is another target of this strategy of bottoming out oil (Syria and Iran are Shiite, Saudi Arabia is Sunni and Iran is the biggest threat to Saudi power in the region). Having oil at $50 a barrel is hurting Saudi Arabia too, of course, to the tune of about $35 billion a year in revenue, but they have huge reserves — almost $800 billion — that neither Russia nor Iran have to let this go for a year or two. The Russian and Iranian economies are crashing because of this, giving Saudi Arabia a good deal of leverage. How that leverage is used and what kind of reaction it prompts will have a huge effect on American interests in the region.