The West should target a crucial vulnerability of Russia today: its general economic weakness and its heavy dependency on oil revenue, writes leading security and risk analyst, Neil Barnett, in Deploying the Saudi oil weapon against Russia.
Today the West appears powerless in its reaction to President Putin’s intervention in the Ukraine; and possibly in the wider region.
Yet this need not be so: it has been estimated that, if the oil price fell below $90/barrel, “Russia would suffer serious economic pain” (the current oil price is about $103/barrel).
Any collapse in oil prices could only be achieved by encouraging Saudi Arabia to increase oil production substantially, thereby deploying the “Saudi oil weapon”. This has been successfully used on at least two previous occasions: once against the West following the Yom Kippur war (when supply was restricted to increase prices); and once against the USSR following its invasion of Afghanistan.
The Saudis would have two reasons why they might do this:
- it would give Saudi Arabia a rod with which to punish Russia over Syria;
- it would enable close relations to be re-established between the US and Saudi Arabia following their dispute over US-Iranian rapprochement.
In addition, Saudi’s huge financial reserves (at least eight times greater than Russia’s) and its substantial foreign investments would enable it to weather a lower oil price without too much pain.
A lower oil price, and a reduced security risk, would also give a shot in the arm to global economic demand (itself a further benefit for Saudi Arabia).
Barnett thus concludes that the Saudi oil weapon – or at least the threat of its deployment – could therefore encourage Russia to realise that further intervention is not in its self-interest.