As the markets react to declining prices, U.S. President Donald Trump is once again shifting global oil dynamics. His aggressive energy strategy now leaves Saudi Arabia economically exposed and politically vulnerable.
Trump Sets Strategic Oil Price Band
Trump’s approach aims to anchor oil prices between $40 and $80 per barrel. This range protects the U.S. shale industry while stimulating broad economic growth. The lower threshold ensures profitability for domestic producers. The upper limit keeps inflation in check and supports consumer spending.
The strategy reflects more than economic goals. Politically, U.S. presidents who avoid recessions two years before re-elections historically win. Trump knows this. Therefore, he ensures low fuel prices to sustain voter confidence and economic stability.
Saudi Arabia’s Financial Fault Lines
Saudi Arabia faces a growing fiscal crisis. According to the IMF, the Kingdom’s 2025 breakeven oil price stands at $90.9 per barrel. However, Brent crude lingers well below that threshold. As a result, Saudi Arabia has scaled back its mega-projects under Vision 2030. The Neom City plan, initially projected at $1.5 trillion and spanning 106 miles, has shrunk to just 1.6 miles.
Rising debt compounds the issue. Public debt surged 16% to over $324 billion last year. With oil revenues insufficient to plug budget gaps, Riyadh increasingly relies on international bond markets, further entrenching U.S. influence.
From Oil Allies to Strategic Rivals
Trump’s administration made it clear: Saudi Arabia cannot dictate oil markets at America’s expense. In 2020, after Riyadh launched a price war, Trump directly warned Crown Prince Mohammed bin Salman. Unless OPEC cut production, U.S. troops would withdraw, and military cooperation would cease. Riyadh relented, slashing output and boosting prices to safe levels for U.S. shale.
NOPEC as a Threat Multiplier
The No Oil Producing and Exporting Cartels (NOPEC) Bill looms large. Trump instructed lawmakers to ready the bill as a deterrent. If passed, NOPEC would strip sovereign immunity from OPEC members in U.S. courts. Consequently, Saudi Arabia’s estimated $1 trillion in U.S. assets could be frozen. Aramco, the Kingdom’s state-owned oil giant, could face forced breakups under U.S. antitrust laws.
America Tightens Its Grip
With Riyadh boxed in financially and strategically, Washington now wields unmatched leverage. The 1945 U.S.-Saudi oil-for-security pact appears increasingly one-sided. Trump’s tactics have flipped the script—where once the U.S. relied on Saudi oil, today, Riyadh depends on U.S. capital, military protection, and diplomatic restraint.
As oil prices slide and global markets adjust, the balance of power tilts further toward Washington. Trump’s oil strategy has not only shielded U.S. shale but redrawn the geopolitical energy map.
