The Donald and the King

An oil painting of Trump spotted in one of his numerous homes. Image via A Rolling Crone (arollingcrone.blogspot.com).

The 2008 elections saw a GOP ticket that emphasized its “maverick” status–a willingness to defy the party line. Donald Trump’s 2012 campaign seems to be taking maverick one step further–to loose cannon. He has been making many foreign policy statements of late, each seemingly more, ahem, out of the mainstream than the last. His latest remarks, on the relationships between the US and Saudi Arabia, are not merely ridiculous–they are dangerous.

In an interview with ABC’s George Stephanopoulos, Trump stated that he would insist that OPEC, and especially the Saudis, increase production to lower oil prices. When Stephanopoulos asked if he would back up this demand by threatening to remove US protection from the Kingdom, Trump replied:

Oh, absolutely.  Absolutely.  Let’s– let me tell you something.  Oil prices might go down.  Because there’s plenty of oil, all over the world.  Ships at sea.  They don’t know where to dump it.  I saw a report yesterday.  There’s so much oil, all over the world, they don’t know where to dump it.  And Saudi Arabia says, “Oh, there’s too much oil.”  They– they came back yesterday.  Did you see the report?  They want to reduce oil production.  Do you think they’re our friends?  They’re not our friends.

Trump could not be more wrong on what would happen if he, as President, were to make such a threat. Oil prices would not fall–they would rocket upwards overnight. The Saudis, though they indeed could produce more oil than they do, play a stabilizing role in global oil markets. Most recently, they announced they’d make up for any reductions in Libya’s oil output during the conflict there. Their ability to dramatically increase production reassures the world’s investors that instability in any other oil producing state won’t cause a massive reduction in supply and thus seriously harm the global economy. These investors thus closely watch the Arabian Kingdom for signs of instability–for instance, the recent wave of Shia protests in the oil-rich Eastern Province was implicated in a two percent drop in the Dow.

The Saudis have a relatively friendly oil policy because they are seriously dependent on the West, and in particular the US, for security. The Saudi military is a poorly-trained, fragmented institution, and will not likely improve anytime soon, because it must remain weak and uncoordinated to preserve the fragile Saudi political order. The Saudis thus work very hard to cultivate favor in capitals where they might one day need to come, hat in hand, to ask for security assistance–as happened in August of 1990. The withdrawal of protection would thus be a nightmare scenario for the al Saud, but it would risk something far more dangerous–a Shiite uprising in the East. This could cut production and thus instantly jeopardize the stability of the global economy. Without the West’s backing, it could also prompt some form of Iranian intervention–whether covert or overt–to “protect” the Saudi Shia.

Trump’s advisors, were he President, would immediately have to go into damage control mode if he made such a statement. The result would be a rapid retraction, which would create the impression that the President is weak, incompetent, and under the control of his assistants–an impression that could have serious consequences for US interests.

Trump’s statements also showed an ignorance of how OPEC works–he described the body as “These 12 guys [that] sit around a table and they say, ‘Let’s just screw the United States.'” Cutting through the populist pandering, Trump seems to think that OPEC is successfully engaging in a conspiracy to keep production low and prices high. The truth is different–OPEC, like any international grouping, has trouble keeping its members in line, especially since “cheating” OPEC–producing more oil than you should–is easy and offers financial rewards to those that do so. Additionally, large portions of the world’s oil reserves and especially production capacity are not under OPEC control. The result is that OPEC is not some cabal capable of setting oil prices on a whim, and it certainly isn’t some anti-American conspiracy, regardless of the alignments of some of its members’ governments. OPEC knows that driving up oil prices too much will wreck the global economy and thus–as happened after the 2008 crisis–lead to a substantial reduction of oil prices.

Upshot: Trump’s remarks show just how unprepared he is to become President.
Prediction: Trump’s best-case scenario is a respectable performance in the primaries; that would likely be the only “respectable” thing associated with his campaign.

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Filed under Saudi Arabia, The West

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