Sunday, September 19, 2010
A Saudi Collapse
KSA has no manufacturing base outside of the oil and petrochemical industry and must import most of its food.It makes so little stuff of consequence that it had to use imported box cutters to storm the cockpits of the hapless 9-11aircraft. Despite the fact that the 9-11 terrorists were mostly Saudi citizens, the US government continues to sleep with the devil and the Obama Administration is no different than the equally undistinguished predecessor Bush Administration. KSA supplies the world with about 8.6 million barrels a day of mostly high quality low sulfur oil, just a bit under the current production leader, Russia.We get about 12% of our oil from KSA, behind Canada and Mexico. Saudi Arabia is said to be the only country with spare production capacity but even that boast by Aramco is subject to some doubt. Should a Wahabbist revolution occur in Saudi Arabia with a cessation of oil exports, the shock to the world economy would likely be profound. If a revolution were to occur similar to what happened to its neighbor to the north(Iran) , the implications to the energy import dependent US economy would be obvious. The US has strong military ties to the kingdom as the recent $60 billion arms and aircraft deal indicates, but F15-16 fighter aircraft would have little value quelling internal dissent. Despite the fact that the kingdom has the worlds largest petroleum reserves, power blackouts are a common occurrence in Saudi Arabia and an attack upon the electrical grid and communications infrastructure could quickly disable any response by the Royal Family and the military. I was not able to find any articles about the likelihood of internal dissent leading to revolution probably because of the tight control upon the media by the government but the demographic statistics I have cited point to some worrisome trends.