For the Trump agenda and for the world economy, a weak oil price is critical. And the implications on geopolitics (especially Russia and Iran) are massive.

A low oil price (achieved via over-supply – mainly from the 2 main global producers, the U.S. and Saudi) has the following economic benefits:
– lowers global inflation – which is required to compensate for the US tariff impact and gradual deglobalization
– it helps China and Germany on their terms of trade / to maintain their economic structure and therefore their political stability – both are huge net exporters that will suffer from increase of tariffs – with oil being the main import. If oil price decreases it helps them maintain partially the current positive balance (which will continue to be recycled in dollars, maintaining the stability of the global liquidity flows).

Geopolitically – the impact cannot be overstated:
– for Iran, a reduced oil price coupled with strong enforced sanctions (very likely given Trump agenda) will lead to economic collapse, especially as they face Israel direct and/or indirect attacks. The push will be clear – regime change. Fantastic news for the Saudis, for Israel and for the Iranian population.
– for Russia – who is ALREADY in an impossible economic situation – the effect will be harder than what the Soviets faced after the 1985 oil price drop (which, coupled with their afganistan war, led to their economic collapse and ultimately fragmentation).

So watch the oil price – it’s the most potent geopolitical weapon – much more important than any traditional tools. It’s what the democrats never understood, and the republicans get. And brace for impact.