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Geopolitics of falling oil prices

by Denny Freidenrich - 02/02/15 7:40 PM ET

Besides the obvious benefit here at home of cheaper gas at the pump, falling oil prices are having a geopolitical impact as well. Just ask Saudi Arabia’s neighbors like Iran, Iraq and Syria. The same is true for Russia, too.

Plenty has been said about how low the price of crude can go before panic sets in among investors. In the United States, that price point probably will be around $40 to $42 a barrel. With crude hovering around $45 a barrel now, it’s no wonder domestic producers have begun cutting the number of drilling rigs around the country.

Even with the recent death of King Abdullah, Saudi Arabia’s modern-day oil barons won’t blink at $25 a barrel. In fact, the Saudis might be willing to let the price drop even further. Why? Because they know how dependent their neighbors are on high oil prices, and how fragile their economies are becoming as the price of crude sinks faster than a brick in a punchbowl.

In the eyes of Saudi Arabia, America’s war on the Islamic State in Iraq and Syria and al Qaeda — or its longstanding differences with Russia — are but a prelude of things that easily could go wrong for them. That said, the Saudi solution of starving its adversaries of ill-gotten oil fortunes might prove to be the smartest way to fight terrorism or Vladimir Putin yet.

Interesting how you can fight a war these days without firing a shot.

Laguna Beach, Calif.

Vote to withhold recognition of Russia’s annexation of Crimea

From Ayse Soyer

I would like to express my support for H.R. 93, the Crimea Annexation Non-recognition Act, recently introduced in the House by Rep. Gerry Connolly (D-Va.).

The H.R. 93 makes a statement of policy that the United States not recognize the de jure or de facto sovereignty of the Russian Federation over Crimea, its airspace or its territorial waters. Additionally, H.R. 93 states a prohibition: No federal department or agency may take any action or extend any assistance that recognizes or implies recognition of such sovereignty.

My only strong advice is to add other Russia-inspired conflicts to the list, and not limit H.R. 93 to only Crimea. It all started with the Russian-backed aggression by Armenia against Azerbaijan in the Nagorno-Karabakh region, continued with Russian-backed separatism in the Abkhazia and South Ossetia regions of Georgia and the Transnistria region of Moldova. These all happened long before Crimea.

The striking similarity of these puppet regimes and the so-called “Nagorno-Karabakh republic” that Armenia sustains with Russian help on the territory of Azerbaijan comes as little surprise. In essence, the script of Russian-sponsored separatism has been the same over the past two decades: tactics and operations change, but overarching strategy is that of permanent chaos and dependence on Russia.

The bill has a long way ahead of it. It is not too late to expand H.R. 93, which would strengthen it and garner more support and enthusiasm from many more stakeholders.

Chevy Chase, Md.

Tags Gerry Connolly