How long can Saudi Arabia still hold out with low oil prices?

Earlier this year, Saudi Arabia decided to put all their chips on the table for a gambit that they believed would crush foreign oil producers, and allow them to remain at the top of the global oil scheme despite their dwindling supply problems.  However, even with the U.S. fracking industry being decimated by declines in prices, the Saudi’s have not been able to crack Russia’s hold on production and distribution.  And in what is soon to be a nightmare scenario for the OPEC giant, Iran is within weeks of adding another 500,000 barrels of oil into the markets, creating even greater pressures on prices as the world sinks into a new recession.

Now several months later, Saudi’s gambit may have put themselves on the verge of decimation as the Arab Kingdom is experiencing massive budgetary problems that is finding the government unable to pay its debt obligations, and are forcing them to delay payments to contractors.

Saudi Arabia is delaying payments to government contractors as the slump in oil prices pushes the country into a deficit for the first time since 2009, according to three people with knowledge of the matter.

Companies working on infrastructure projects have been waiting six months or more for payments as the government seeks to preserve cash, the people said, asking not to be identified as the information is private. Delays have increased this year and the government has also been seeking to cut prices on contracts, the people said.

Saudi Arabia is tackling the slump in crude, which accounts for about 80 percent of revenue, by tapping foreign reserves, cutting spending and selling bonds. Net foreign assets fell by about $82 billion at the end of August after reaching an all-time high last year. The country has raised 55 billion riyals ($15 billion) from debt issuance this year.

The government is also seeking to cut capital spending and delay projects.

“It’s hard to hold back from boosting spending when oil is on the rise, but very hard to cut when oil prices fall,” Simon Williams, chief economist for central and eastern Europe, the Middle East and North Africa at HSBC Holdings Plc, said in e-mailed comments. “Cuts are coming — the budget deficit is too large to ignore and pretend it’s business as usual.” – Bloomberg

The short and medium term expectations for a rebound in oil prices is very unlikely given the financial uncertainty in most global economies.  But what is really at stake for the House of Saud is the fact that rumors of an internal coup between Saudi Princes are surfacing, and poorer citizens within the Muslim population are showing signs of demanding religious reforms and sharing of the nation’s oil wealth.

nuclear-populism

The war against Yemen appears now to be a ploy to both push Saudi’s domestic problems onto a foreign bogeyman, and to perhaps get access to oil reserves that may be located off the coast the Arabian Sea.  But as financial problems begin to mount, and revenues no longer can sustain the Saudi Kingdom’s control over its people and oil price determination, we may soon see a shift in the balance of power as both Russia and Iran use the Saudi’s own gambit against them, and force them to give up their decades long control over OPEC.

Kenneth Schortgen Jr is a writer for Secretsofthefed.comExaminer.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.

HERE IS A LIST OF EVERY SINGLE TIME OBAMA COMMITTED AN IMPEACHABLE OFFENSE THAT DEMS & MEDIA COVERED UP “Impeach!” It’s been more than eight years since Democrats uttered that word – long enough for anyone to wonder if it was still in their vocabulary, considering the deafening silence through the dozens of serious scandals during President Obama’s administration – but now that President Trump is the man in the White House, it’s back with a vengeance. . . Democrats everywhere are wildly slinging the “I” word, hoping to nail Trump for high crimes and misdemeanors after the New York Times claimed a memo written by former FBI Director James Comey said the president urged him to end the federal investigation into former national security adviser Michael Flynn. . . Some members of Congress are getting in on the action. They include Reps. Maxine Water, D-Calif., and Al Green, D-Texas. Even a Republican, Rep. Justin Amash, claimed Wednesday there are grounds to impeach President Trump. House Oversign Committee Chair Rep. Jason Chaffetz, R-Utah, asked for the alleged Comey memo and other documents. Chaffetz tweeted that he is prepared to subpoena the information. And Sen. John McCain, R-Ariz., invoked “Watergate.” . . Now the Democratic Party is reportedly poll testing impeachment as a 2018 election issue. More than 1 million people signed a petition calling on Congress to impeach Trump. . . Wasting no time Wednesday, the mainstream media sprang into action, enthusiastically echoing the left’s impeachment calls. MSNBC launched a Watergate ad implying Trump is America’s new Richard Nixon. . . “Watergate. We know its name because there were reporters who never stopped asking questions,” says MSNBC host Chris Hayes, who hinted that Trump is next on the impeachment chopping block. “Now, who knows where the questions will take us. But I know this: I’m not going to stop asking them.” . . Meanwhile, some overzealous members of the left plastered fliers around Washington, D.C., demanding all White House staffers resign Wednesday. . . The posters read: “If you work for this White House you are complicit in hate-mongering, lies, corrupt taking of Americans’ tax money via self-dealing and emoluments, and quite possibly federal crimes and treason. Also, any wars will be on your soul. … Resign now.” . . But constitutional scholar Jonathan Turley, who voted for President Obama, warned “impeachment” enthusiasts not to get ahead of themselves with President Trump. Why? . . At this time, there’s no evidence Trump actually committed a crime. . . “The criminal code demands more than what Comey reportedly describes in his memo,” Turley wrote in a May 17 opinion piece posted at the Hill. Turley explained: . . For the first time, the Comey memo pushes the litany of controversies surrounding Trump into the scope of the United States criminal code. . . However, if this is food for obstruction of justice, it is still an awfully thin soup. Some commentators seem to be alleging criminal conduct in office or calling for impeachment before Trump completed the words of his inaugural oath of office. Not surprising, within minutes of the New York Times report, the response was a chorus of breathless “gotcha” announcements. But this memo is neither the Pentagon Papers nor the Watergate tapes. Indeed, it raises as many questions for Comey as it does Trump in terms of the alleged underlying conduct. . . A good place to start would be with the federal law, specifically 18 U.S.C. 1503. The criminal code demands more than what Comey reportedly describes in his memo. There are dozens of different variations of obstruction charges ranging from threatening witnesses to influencing jurors. None would fit this case. That leaves the omnibus provision on attempts to interfere with the “due administration of justice.” . . However, that still leaves the need to show that the effort was to influence “corruptly” when Trump could say that he did little but express concern for a longtime associate. The term “corruptly” is actually defined differently under the various obstruction provisions, but it often involves a showing that someone acted “with the intent to secure an unlawful benefit for oneself or another.” Encouraging leniency or advocating for an associate is improper but not necessarily seeking an unlawful benefit for him. . . -Obama’s Iran nuke deal -Obama knew about Hillary’s private email server -Obama IRS targets conservatives -Obama’s DOJ spies on AP reporters -Obamacare & Obama’s false promises -Illegal-alien amnesty by executive order -Benghazi-gate -Operation Fast & Furious -5 Taliban leaders for Bergdahl -Extortion 17 -‘Recess ‘ appointments – when Senate was in session -Appointment of ‘czars’ without Senate approval -Suing Arizona for enforcing federal law -Refusal to defend Defense of Marriage Act -Illegally conducting war against Libya -NSA: Spying on Americans -Muslim Brotherhood ties -Miriam Carey -Birth certificate -Executive orders -Solyndra and the lost $535 million -Egypt -Cap & Trade: When in doubt, bypass Congress -Refusal to prosecute New Black Panthers -Obama’s U.S. citizen ‘hit list’