Saudi royal family unlikely to last long amid economic hardships: Analyst

Press TV has conducted an interview with Mike Harris, an analyst, about the intention of Saudi Arabia to attempt to lower the price of oil in global markets.

The following is a rough transcription of the interview.

Press TV: So, on the one hand, Russia is accusing Saudi Arabia of destabilizing the oil markets; on the other hand, we have news about this major deficit that Saudi Arabia is facing. So, if you agree with the Russian premise that they are destabilizing the market, why wouldn’t the Saudis for their own sake, let’s say, for their own benefit, lessen the amount of production so that the price of oil could go up and actually help themselves more than anyone else?

Harris: Well, the Saudis have three targets that they’re trying to damage financially by lowering the oil prices. One of them is Russia, the other is Iran and the third is the USA and the fracking industry.

The Saudis want to stop fracking in the US, because it brings all this additional unavailable oil onto the world market. And the Saudis are afraid to ratchet back their production, because they know that Iran and Russia will make up the deficits that are there.

So, Saudi Arabia has really put themselves in a pickle by beginning this price war essentially – it’s a race to the bottom at this point in time. And the Saudis are going to continue to have to borrow money. They’re going to have to continue to increase production. They will be making less per barrel; so, they’re going to have to pump more barrels.

What they weren’t counting on was the boon that fracking has proved to be for the global oil markets and they were not counting on the Iran deal actually going through bringing that oil onto the global market. And they weren’t counting on all of the new Russian reserves that have been discovered up there.

So, the Russians and the Iranians and the fracking industry are going to bring the Saudi pumping to… Everyone is going to have to lower the price of oil, including Nigeria, Venezuela, every oil producing country is going to lower the price to compete.

Now, this is good news for consumers around the world. The trap here is that demand is going to go up, and when demand goes up, that’s when… production off and that’s when prices will rise, but that’s probably 12 to 18 months away from now at the minimum.

Press TV: How do you see it overall effecting Saudi Arabia itself, because very much their economy is based on oil?

Harris: Well, the Saudis are in trouble. The royal family has been one of the most egregious regimes; they have no respect for human rights; their own population despises them, their neighbors despise them. They’ve been the one who’ve been spreading this Wahhabist blasphemy that they call Islam; the Saudis are not popular; they’re in a desperate situation; they’ve had turnover within the kingdom with the death of the monarch; and they’re fighting amongst themselves.

And Saudi Arabia… I don’t anticipate them lasting long as a ruling family. I expect them to be deposed here shortly as this as an economy continues to deteriorate.

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