41–50 of 221 posts
They used to predict doom and gloom due to an oil shortage, but what we got instead was doom and gloom and an oil glut. Where are they now?
Earlier quoted context omitted.
From my understanding, over the last decade, shale has become a force to be reckoned with in North America (US, Canada). This is seen as a competitive threat to other global energy producers. Saudi Arabia and Russia both have sufficient cash reserves to be able to just dump a glut of crude oil on the market at "fair market value" and exist with the depressed prices and are ok with making no money to basically complet…
I think that is possible but.... what is the end game? The oil is still there, they ability to extract it exists... so company A goes out of business, but once the countries tire of shooting themselves in the foot and prices rise, Company B will just extract it. At best they spite company A, but didn't change much.... maybe they make a few bucks while company B ramps up. And that all assumes other nations play along.…
Earlier quoted context omitted.
From my understanding, over the last decade, shale has become a force to be reckoned with in North America (US, Canada). This is seen as a competitive threat to other global energy producers. Saudi Arabia and Russia both have sufficient cash reserves to be able to just dump a glut of crude oil on the market at "fair market value" and exist with the depressed prices and are ok with making no money to basically complet…
that's true but the oil is still there and the extraction tech perfected. Maybe the existing players go bankrupt today but when prices come back up someone else will get a loan and turn the wells right back on. Fracking and the other technological breakthroughs have put a price ceiling on oil below which OPEC can afford.
I found this part really interesting: "For dozens of oil producers, the plunge in oil prices is devastating. No major oil producer can balance its budget at prices below $40; according to the International Monetary Fund, with the exception of Qatar, every country in the Middle East requires at least $60, with Algeria at $157 and Iran at a whopping $390. The average Brent price of oil over the past month has been a ha…
Iran's oil is not expensive to extract. These aren't marginal break-even prices on each barrel of oil...rather they're how much their current oil production would have to be sold for in order to balance their national budget, which includes defense and healthcare and whatnot. 79% of Iran's exports are unrefined crude oil: https://commons.wikimedia.org/wiki/File:Islamic_Republic_of_... (edited to 2017) Countries typic…
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You know the expression let the chips fall where they may? Well this is just stating "here are the chips." i.e the author is knowledgeable in the field and either is offering expert opinion or expert manipulation.
Not sure why you are being modded. A third option, which I consider most likely, is that this piece is doing both. The author most likely believes in what they are saying and are trying to manipulate things in a certain direction. There is noting wrong with this, and I think understanding the bias is merely a more effective way to gain more from reading this.
I found this part really interesting: "For dozens of oil producers, the plunge in oil prices is devastating. No major oil producer can balance its budget at prices below $40; according to the International Monetary Fund, with the exception of Qatar, every country in the Middle East requires at least $60, with Algeria at $157 and Iran at a whopping $390. The average Brent price of oil over the past month has been a ha…
Iran's oil is not expensive to extract. These aren't marginal break-even prices on each barrel of oil...rather they're how much their current oil production would have to be sold for in order to balance their national budget, which includes defense and healthcare and whatnot. 79% of Iran's exports are unrefined crude oil: https://commons.wikimedia.org/wiki/File:Islamic_Republic_of_... (edited to 2017) Countries typic…
https://commons.wikimedia.org/wiki/File:Islamic_Republic_of_...
Source:
https://oec.world/en/visualize/tree_map/hs92/export/irn/all/...
It's times like these that I really wonder where all the oil peak guys are who you used to see crawl out of the woodwork whenever anyone talked about oil. Now they're suddenly quiet. They used to predict doom and gloom due to an oil shortage, but what we got instead was doom and gloom and an oil glut. Where are they now?
Earlier quoted context omitted.
Iran's oil is not expensive to extract. These aren't marginal break-even prices on each barrel of oil...rather they're how much their current oil production would have to be sold for in order to balance their national budget, which includes defense and healthcare and whatnot. 79% of Iran's exports are unrefined crude oil: https://commons.wikimedia.org/wiki/File:Islamic_Republic_of_... (edited to 2017) Countries typic…
But is their ability to produce or sell refined vs unrefined oil effected by the sanctions? Maybe not directly; maybe in how they're able to access funding for infrastructure, for example?
Schlumberger, a French/Texas/Dutch/UK company, earned themselves the largest international sanctions fine ever for skirting the rules. It wasn't illegal for them to work with Iran, even though they are headquartered in Houston, TX. However, they used US-based personnel and assets and now are barred from doing any business with Iran as part of the penalties.
So Iran does find it difficult to get some of the latest technological advantages. That said, their geology doesn't demand super high tech solutions to extract oil. And they could be using 1960's technology to refine their oil into higher value products but they simply aren't, for reasons I don't understand.
The details of the sanctions have changed a lot over the past 10 years. Between 2013 and 2016, sanctions were globally supported and it was extremely difficult for Iran to sell its oil. Now it's just a few countries embargoing Iran, so Iran seems to be able to sell nearly as much as it wants, presumably at near-market prices.
I really appreciate this piece as there's a lot of the world of oil I don't understand. One thing I don't understand is, why is it favorable for OPEC not to cut supply? Is it they want to crush all non OPEC based producers? Or are their buyers forced to buy at a particular price so they don't care if they keep producing?
On top of that, the Covid19 happened.
Some theorized that SA and Russian pumping more oil was a plan to kill USA's fracking and shale industry. I'm just hoping it'll force us to move toward renewable so we won't be dependent on these countries.
Earlier quoted context omitted.
Indeed: https://commons.wikimedia.org/wiki/File:Islamic_Republic_of_... (edited to 2017) 79% of their exports is unrefined crude oil. While exports are not always the whole story, in this case it is extremely relevant. If Iran's economy was 99% domestic and 1% trade, (essentially autarkic) then it wouldn't really matter at all what the price of oil is, as Iran makes everything it needs for itself, whether that be aut…
All oil and gas exporters become dependant on that revenue. It's human nature to spend it all.
>...The Government Pension Fund Global, also known as the Oil Fund, was established in 1990 to invest the surplus revenues of the Norwegian petroleum sector. It has over US$1 trillion in assets, including 1.4% of global stocks and shares, making it the world’s largest sovereign wealth fund.
https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
