Economic Warfare

Dr. Paul Kengor has a great article in Townhall today about Reagan's economic war against the soviets; particularly U.S. collusion with Saudi Arabia to drive down the price of oil, a critical source of revenue for the U.S.S.R.

In his pursuit of Cold War victory over Soviet communism, Ronald Reagan enlisted several fascinating covert efforts as part of a bold campaign of economic warfare, an assault so sensitive and so damaging that Reagan advisers denied it publicly, only acknowledging it decades later. “Certainly it was economic warfare,” said Reagan defense official Richard Perle, “although we had to deny it at the time.” Secretary of Defense Caspar Weinberger explained that the effort had to be “a silent campaign.”

In 1985-86, the Reagan team enlisted the secret support of King Fahd of Saudi Arabia to help destroy the Soviet economy by drastically reducing Soviet income from oil exports—a commodity that provided the Kremlin with the vast majority of its hard currency revenues. Reagan officials privately worked with the Saudis to manipulate the world’s oil market, encouraging them to increase production, thereby lowering the global price of oil. In the six months that followed, the price of oil dropped from $30 a barrel to $10 a barrel, sending catastrophic shock waves through the Soviet economy.

Definitely worth a read, and for the administration - some thought regarding Iran