[ashtonkem]

I do not believe this to be true.

The best argument for low oil prices crashing the US economy would be in any changes to US debt interest rates. While this would certainly change a lot about US politics and finances, one could not count on continuing to borrow indefinitely at sub-inflation levels, America could almost certainly pay it off if it found the will to do so. The fact that America has a large and diverse non-oil economy that would be strengthened by dropping energy prices is certainly a factor.

KSA meanwhile is a rentier state, with 67% of the budget coming from oil sales. Their non-oil economy is badly underdeveloped, and they depend almost entirely on oil money to keep their population fed, occupied, and suppressed. You’ll notice that I said “occupied”, since at a first glance the Saudi economy doesn’t actually include Saudis; 2/3rds of those employed in KSA aren’t Saudi (90% if you exclude oil), and only 30-40% of working age Saudi’s in KSA either have or want a job.

If the oil money were cut off from KSA, the lifetime of that regime would be measured in hours.

[sand_castles]

> If the oil money were cut off from KSA, the lifetime of that regime would be measured in hours.

Are you sure about that ? both Putin and Xi would jump to make a deal for future oil exports in exchange for meeting Saudi social / security needs.

> America has a large and diverse non-oil economy

So does India, China <-- not superpower or depend heavily of foreign borrowing.

Pulling the plug on the dollar would materially make Americans poorer, independent analysts have put 50% of the value of the dollar arising from WRC status.

Americans can't handle that level of lifestyle change, without it being turned into a revolution.

[brnt]

Russia is an exporter themselves, suffering greatly right now due to the low oil price. They are no less dependent on oil for their economy, and some say regime change is closer now than it has been in a long time.

Xi is different, but its a big question whether the Saudis would agree to their usually awful terms.

[ashtonkem]

Russia’s also not that rich. Rich oil importers like Germany would be much better positioned to help KSA out than Russia.

[imtringued]

Why would Americans turn against their own state instead of just fighting a war with Saudi Arabia? If a leadership change is all it takes then Americans can just voice their opinion in the next election.

[ashtonkem]

> Are you sure about that ? both Putin and Xi would jump to make a deal for future oil exports in exchange for meeting Saudi social / security needs

Xi maybe, but that would be a lot of money for future benefits; I doubt China can afford it.

Putin is aligned with Iran, Saudi’s enemy, and would also be in a lot of trouble in a hypothetical collapse in oil prices. He’d be in no place to help.

Also, the Russian economy is actually kind of small; Italy would actually be better positioned financially to bail out KSA than Russia.

> Americans can’t handle that level of lifestyle change without it being turned into a revolution.

Debatable. But between “My lifetime earnings have been halved” and “I can’t get food tomorrow”, I’ll tell you which one will trigger a revolution faster.

[unexpected]

our "revolution" would just involve voting in Bernie Sanders at the ballot box. In Saudi, it would literally be an Arab Spring type event. It's no coincidence that the Arab Spring corresponded with low energy prices.

Another interesting tidbit: when Saudi allowed women to drive, oil was in another mini-"bust" cycle. A half-measure to stave off larger social change.