When this last happened at the height of the cold war in 1985, it followed a visit by then Vice President George H. W. Bush to Saudi Arabia. Bush convinced the Saudi royal family it was in their best interest to reduce the price of crude oil to regain market share. As a beneficial side effect, Russia would lose a major source of foreign exchange. This followed a major investment by Russia in radar capability, which was largely negated by the publicity of the US then recently developed stealth technology. With reduced foreign exchange, Russia was unable to replicate the stealth technology and the Soviet Union failed. Unfortunately, the economies of the oil producing states, Texas among the most extreme example, were crippled.
This time around, Obama has visited Saudi Arabia twice this year, Bidden has called the Saudi royal family once and the UAE twice. This time it appears the primary objective is to cripple the oil producing states economies, principally Texas, which have been a thorn in Obama’s side. The beneficial side effects of reducing Russia’s foreign exchange, increasing Saudi market share, and reducing the foreign exchange of Iran, along with the positive effect on the economies of states more aligned with Obama, are perhaps just that, side effects.
By the way, crude prices dropped from a intra day high of about $32 in 1985 to a intra day low of $8 in 1986. That is a 75% drop. Prices did not return to $32 on a sustained basis until 2003.
But the fracking states are booming.
Texas is going to flip blue in the next few elections anyway, so Obama has a vested interest in keeping them happy.
The real play is against Russia and the house of Saud. However, Russia is not acting like the old Soviet’s. Cut off their source of petrodollars, and they will probably move to reclaim the Ukraine and maybe Finland.
They (the house of Saud and the Russians) view the increase of US oil production as an act of economic war against them. They may decide to retaliate in a more direct manner. For that matter, the drop in oil prices will probably bring an end to the house of Saud.