Saudi Desperation Clarifies the Battle Lines

Saudi Desperation Clarifies the Battle Lines

With as complicated as things have been in the Middle East recently, it’s nice to look at a particular event and see clearly what’s coming next.

Turkey is going to leave NATO, sooner than we ever though. We have the Saudis to thank for this.

The soft-coup engineered by Mohammed bin Salman in Saudi Arabia earlier this week, likely with U.S. backing, solidifies Saudi foreign policy for the next two generations.

They will continue to be satraps of the United States. Trump’s trip there as well as his speech clarified the relationship between us. And the U.S. is the master.

Now, this isn’t to say that the Saudis do not have a say in their fate. They do. It will happen within parameters we define. Bin Salman is brash, too young and overly aggressive.

On the one hand, he understands his country’s problems but lacks the experience and strategic capacity to pull it off. His foray into Syria to oust Bashar al-Assad has failed.

The war in Yemen is a disaster.

But, his crowning achievement so far as Defense Minister is to push Qatar into the arms of the growing alliance between Russia, Iran, China and soon, Turkey.


And Turkey is the key to understanding all of this. For more than 60 years Turkey has been a member of NATO. It’s strategic importance in U.S. foreign policy of Russia containment and central Asian chaos cannot be under-stated.

Turkish President Erdogan is a political cockroach, who, for the past two years, has scurried from any light shined upon his misdeeds until he was finally trapped by Vladimir Putin last summer.

Erdogan had already been exposed as an enabler of Jabhat al-Nusra in Idlib as well as laundering the oil ISIS was shipping out of Syria by convoy. Putin exposed this when the Russians bombed said convoys.

It was Putin’s saving Erdogan from the coup attempt, led by Turkish military officers more loyal to the U.S. than Erdogan, which was this story’s inciting incident.

The U.S. betrayed Erdogan last July. Putin, who he’d wronged not eight months earlier, played the longer game, seized an opportunity and flipped a major U.S. asset by saving Erdogan’s life.

Any misgivings Erdogan may have had about sidling up to the Russians ended when we declared our allegiance in Syria to Kurdish YPG forces and not Turkey. That was this story’s mid-point turn. That moment in a story where there is no going back to the way things were.

But, that story is still just a story. One that may not be true. It’s one interpretation of events. Obviously, it’s one I’m partial to but it fits the facts that we have better than most I’ve seen.

Qatar a-GoGo

So, what does that have to do with Bin Salman, Trump and Qatar? If Turkey was still a staunch NATO ally, would Erdogan’s first phone call after the Saudis cut diplomatic ties with Qatar been to Putin or Trump?

It should have been to Trump. He called Putin.

Within 24 hours the Turkish parliament fast-tracked a bill authorizing Turkish military forces to deploy to Qatar to protect it from a Saudi invasion. Then Iran offered food shipments to replace those lost by closing the Saudi-Qatari border.

Bin Salman thought Qatar would have no friends. It turns out, despicable they may be, they have a lot of them. That happens when you are the biggest exporter of liquefied natural gas in the world.

By pressuring Qatar like they did the Saudis forced out into the open for everyone to see where the new alliances are, even if they haven’t been formalized. Fars News reported that Israel sent F-18 Super Hornets to Saudi Arabia to defend against a coup attempt by ousted Crown Prince Mohammed bin Nayef.

Salt that report to taste, but it fits with the knowledge that Saudi Arabia and Israel are allies in all but name only. Then Iran comes out and says that it has proof the U.S. has been allied with ISIS the whole time.

Narratives are exploding left and right now. And the realignment of the geopolitical chess board is accelerating. It is almost too quick a pace to keep up with.

Withering Saudi Fortunes

Bin Salman’s aggressive foreign policy does not come from strength. It comes from extreme weakness. The Saudis are under existential threat. I wrote about some of this recently at Seeking Alpha as it pertains to the oil markets.

Low oil prices are killing its economy. Its persistent budget deficit is the kingdom’s Achilles’ heel and its reserves are draining quickly. This is why bin Salman has pushed for the Saudi Aramco (Private:ARMCO) IPO at a $2 trillion valuation, which Wall St. is having a hard time selling to investors.

It needs the capital injection to attempt any broadening of its economy. Bin Salman’s Saudi Vision 2030 plan depends on maintaining a high enough oil price to fund it. This is a $373-billion project.

All attempts to prop up the price of oil have failed as the supply and demand mismatch continues unabated. Today’s breakdown below $45 for Brent crude is technically quite bearish.

The Saudis are burning through tens of billions a month maintaining a currency peg to the dollar that will not be broken because that is a major precondition of any U.S. support. They need to break the peg because oil prices are going to stay low for a long time.

But, they need higher oil prices and solidarity within OPEC and the GCC to stop the bleeding. Qatar forging an independent policy further clarifies the new factions while ticking off the Saudis in the process.

It’s definitely the U.S./Saudi Arabia/Israel on one side and Russia/China/Iran/Turkey with Qatar keeping its feet firmly straddling the line for now. Because nothing says ‘trying to stay on Trump’s good side’ like bailing out American Airlines.

In the end, taking a step back and reveals the whole story, regardless of the plot points. China, India and Pakistan are all now members of the same security organization, the Shanghai Cooperation Organization.

Let that sink in for a second. Now, add Iran, because that’s going to happen. Then it becomes easy to see Turkey leaving NATO to join up with the SCO.

Is it any wonder why war with Iran looks closer today than it has in a long time? Clearer battle lines are still battle lines in the end.

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About the Author

Tom Luongo
Tom Luongo is a contributor at Newsmax Media for Financial Intelligence Report. He also writes regularly at Seeking Alpha and Russia Insider. Tom is a professional chemist, amateur dairy goat farmer and outspoken Austrian Economist. You can follow him at: http://Twitter: