Brent crude oil rose above US$110 per barrel on Tuesday, pulling its premium above U.S. light crude to the widest in six months, after news of a deterioration in relations between the United States and key OPEC oil producer Saudi Arabia.
A source close to Saudi policy said Riyadh would make a “major shift” in dealings with the United States in protest at Washington’s perceived inaction over the Syria war and its overtures to Iran.
The source suggested the planned change in ties between the energy superpower and its traditional U.S. ally would have wide-ranging consequences, including on arms purchases and oil sales.
Well, let’s see. Obama is playing footsie with the Mad Mullahs of Iran, in hopes that they won’t go ahead and build nuclear weapons, while any intelligent observer understands this is just more of the North Korean strategy – negotiate but keep right on building – that brought nukes to Dear Leader.
At the same time, Obama has done everything in his power to keep energy prices high here in the United States, while suppressing efforts to develop domestic energy resources.
Which means that with Saudi Arabia flexing its oil weapon (among other things) we are in a singularly bad position to protect our own financial system, which is as vulnerable to an oil shock as it has been in the past fifty years.
The American Low Information Dumbass probably won’t notice anything amiss here, though, until Goober and the Kids see gas prices at the pump surge over six bucks a gallon, and winter heating bills jump by fifty percent overnight.
And then they’ll probably blame Republicans for it.