Amilcar Orfali/Getty ImagesOver the weekend of March 7-8, Saudi Arabia declared economic war on Russia’s oil industry. This price shock threatens serious damage to the overleveraged U.S. oil and gas sector already weakened by depressed demand and prices. Although they failed to destroy the industry, the episode did result in a 15 percent drop in U.S. oil production and some 150 bankruptcies. But Saudi Aramco—which until very recently was listed publicly—is actually damaged by the price war; Saudi Arabia needs prices of well over $80 to support their welfare state and diversify their economy. The Saudi-engineered geoeconomic assault on other oil producing nations demonstrates what a fickle ally it is for the United States.

Source: Forbes March 13, 2020 21:33 UTC