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A piece of footage sometimes tells you all you need to know. I ask Swampians to watch this 30 second clip of Saudi Crown Prince Mohammed bin Salman and Russia’s president Vladimir Putin at the G20 summit in Buenos Aires in 2018. Context is everything. Their long-lost brotherly delight in greeting each other took place just a few weeks after the horrific murder of Jamal Khashoggi, the Saudi dissident and Washington Post columnist, which was carried out by a team under Prince Mohammed’s authority.
I challenge Swampians to find footage that shows such undisguised glee on either of their faces when meeting with any other leader at any venue. You could save time by taking my word that you will fail. The two men are birds of a feather — birds of prey that is. The thing about autocrats is that they can do what they want. We should not be in the slightest bit surprised that Saudi Arabia is now overtly helping Russia in its war on Ukraine with the latest 2mn barrel a day cut announced on Wednesday by Opec+.
The move is a twin salvo aimed at Joe Biden’s administration. One salvo will boost US petrol prices less than a month before the US midterm elections — an inflationary hit that will weaken Democratic chances of retaining control of Congress. The other will help Russia’s coffers in its illegal and brutal war on Ukraine. None of this should come as a shock. As I wrote in a column two weeks ago, Prince Mohammed is an autocrat’s autocrat with no respect for Biden. Like Putin, he makes no secret of his preference for Donald Trump.
I cannot forecast the precise impact the Opec+ move will have on oil prices, though they are expected to go above $100 a barrel again. It is conceivable that the world’s almost unanimous shift towards monetary tightening will rob Russia, the Saudis and the rest of the cartel of the higher revenues they want. China’s slowdown in particular may more than counteract a 2mn barrels a day cut. I have a far better idea of what this means in terms of geopolitics. As I write in my column this week, America’s relative decline has gone into reverse in the past couple of years — partly because of China’s slowdown and growing totalitarian bent under Xi Jinping, but also because of Putin’s catastrophic blunder in Ukraine, which rivals Napoleon’s winter invasion of Russia. But that does not mean that America is in good shape. The country is more rigidly and bitterly divided than anyone can recall.
For better or for worse, Biden has proclaimed democracy-versus-autocracy as his chief foreign policy principle. This leads to easily predictable self-harm, such as his humiliating visit to Saudi Arabia in July to plead with Prince Mohammed to raise oil production. This is a regime that carries out mass executions — the most recent one, of 81 men, took place in March. Half of those executed were from the Shia minority and did not receive due process of law, according to human rights groups. But Biden’s real motive in elevating democracy-versus-autocracy was to highlight his domestic opponent’s indifference to such niceties. Trump, as we all know, cannot hide his envy and admiration of men such as Putin and Prince Mohammed.
The other side of Biden’s foreign policy coin is that enemies of America’s liberal democracy — men such as Putin and now, I think it is safe to say, Prince Mohammed — will respond by reaching into US domestic politics to back their ideological horse. We saw this before with Putin’s interference in the 2016 US election. Saudi Arabia is now an increasingly overt backer of the Republican party too. This is not a drill. Every 10 cents increase to the petrol pump price will create another few hundred thousand disgruntled US voters and fund another production line of artillery shells to fire on Ukrainians.
St Augustine famously said: “Please Lord make me virtuous but not yet.” I feel the same way about oil prices. I want them to go up to incentivise a far more rapid shift to renewable energy everywhere. But not until Russia has lost. Since the Lord looks unlikely to answer my immediate prayer, perhaps he can schedule a short-to-medium-term lightning strike for the Saudis and other petro-autocracies. Their strengths derive mostly from the luck of nature’s bounty. We should take this week’s Opec+ move as a reminder of the urgent need to reduce its jugular grip over the world’s economy, and our warming climate. Here endeth the lesson. Rana, if you haven’t nodded off, do you find anything to dispute in my sermon? The pulpit is yours.
Do read my colleague, Martin Wolf, on Liz Truss’s magic potion economics. Though he wrote it before Truss’s U-turn on the abolition of the UK’s top rate of income tax, his column remains just as relevant. Even by Martin’s standards, the pay-off is stark: “These people are mad, bad and dangerous,” he writes. “They have to go.” Yup.
I also recommend this characteristically sharp New York Times column by Adam Tooze, the Columbia University professor, on the consequences of what he deems to be the coming global deflation. “We now find ourselves in the midst of the most comprehensive tightening of global policy the world has seen,” Tooze writes.
Rana Foroohar responds
Ed, I was as horrified as you by the Saudi moves. The regimes of petro-autocrats always rise and fall on prices (see a piece I did years ago on this subject in the wake of the 2008 price jump and decline). So it’s no surprise they’ll stop at nothing to keep prices high. That’s extremely worrisome given the inflation dynamics of the moment and what they could mean for global stability. But the good news is that significant energy transitions always happen with an extended period of higher prices in an old fuel (see this really smart piece that Ruchir Sharma did for Newsweek a number of years back, looking at why energy prices have fallen in a 200-year trend line for this reason). I’m hopeful that this is our global come to Jesus moment on investing in renewables and making that green shift, in part because there is little reason to hope that prices will come down anytime soon. And I take hope from the climate piece of the Inflation Reduction Act as part of that.
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