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Saudi stocks slump as minister warns of ‘painful’ measures ahead

bloomberg.com

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Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#71

Post by MR4D »

gaukes wrote: post #5
ashtonkem wrote: post #2

Can the Saudi government survive a reduction in services? Their economy is largely built around the distribution of oil sale proceeds, I’m worried that cutting benefits might destabilize that regime.

Ya, and they were diversifying into tourism which is also bust. I’m sure they’ll survive though. Their wealth is in the trillions.

Foreign reserves are only about 1/2 trillion and dropped about 5% last month. They aren’t in the best position, and the longer this goes on, the more the downside accelerates. Once people think you’ll run out soon, you’re screwed.

At these prices, SA can’t just turn oil into dollars (well, not many dollars anyway).

[0] - https://www.middleeastmonitor.com/20200430-saudi-foreign-res...

Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#72

Post by ashtonkem »

arcticbull wrote: post #59
ashtonkem wrote: post #9

Earlier quoted context omitted.

Needed, past tense. US foreign policy used to be shaped around our need for Saudi oil, and IMO hasn’t properly adjusted to the fact that America is energy independent again. The realpolitik question now isn’t “how can I secure Saudi oil” But rather “what’s the least I can do to reduce any risk of terrorism”.

C'mon now, for years the largest source of foreign oil going into the US was from Canada. Even today, Canadian oil accounts for 40% of imports, with the KSA a distant 11% [1]. The whole energy independence as a form of security through reduced financing of questionable governments thing was a red herring, even if you're worried about the northern border. Imports remain around 7 million barrels of oil per day, down fr…

The Canada thing is a good point, I always forget how much of our imports come from our peaceful neighbors.

America continues to import KSA oil mostly because California won’t frack, which could be changed if necessary.

As far as continuing to import, I believe that’s a factor of oil and refinery quality. America has some amazing refineries capable of eating garbage quality oil, including diluted tar. Since fracking produces high quality oil, my suspicion is that it’s cheaper to export that to older refineries, and import lower quality crude to refine domestically. But I’m no expert here.

Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#73

Post by mataralhawiti »

bpodgursky wrote: post #51
emilsedgh wrote: post #26

Earlier quoted context omitted.

I'm an Iranian who moved to the U.S. only a few years ago. Something most people here in the U.S. don't understand is that countries like Iran have a far different threshold of pain. Iran, as a result of sanctions had already entered starvation-levels of economic collapse. There are people who are sleeping in open graves. Yet, the regime is not backing down in any way. It hasn't change course at all.

I'd draw a pretty significant distinction between Iran and Saudi Arabia. Iran has a theocratic regime, and gets a lot of oil revenue, but is a fundamentally diversified and surprisingly self-sufficient economy. They have factories, an educated population, and they produce a fair number of things other than oil. Agriculture exists (if not self-sufficient). Saudi Arabia is oil rich. The princes are oil rich. The wealth…

I'm a Saudi citizen, and most of you just wrote is false & completely not true..

" Most of the citizens simply don't work -- at all"

Where in the world you got this??

Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#74

Post by kingofpandora »

toomuchtodo wrote: post #14
grouseway wrote: post #12

Earlier quoted context omitted.

Venezuela and Syria have survived much worse with fewer resources. There will definately be enough money for the police and military.

Those countries are not surviving. They are failed states. Edit: So too will be Saudi Arabia; they waited too long to take meaningful action to diversify away from oil revenue. Norway is the model for how to avoid the resource curse. https://en.wikipedia.org/wiki/Resource_curse

But Syria wasn't exactly an oil-rich country. Sure they had some oil but not game changing levels like in the Gulf.

Also notable is that Syria is a "failed state" largely because of the oil money pumped into the opposition by those same Gulf States.

Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#75

Post by arcticbull »

ashtonkem wrote: post #72
arcticbull wrote: post #59

Earlier quoted context omitted.

C'mon now, for years the largest source of foreign oil going into the US was from Canada. Even today, Canadian oil accounts for 40% of imports, with the KSA a distant 11% [1]. The whole energy independence as a form of security through reduced financing of questionable governments thing was a red herring, even if you're worried about the northern border. Imports remain around 7 million barrels of oil per day, down fr…

The Canada thing is a good point, I always forget how much of our imports come from our peaceful neighbors. America continues to import KSA oil mostly because California won’t frack, which could be changed if necessary. As far as continuing to import, I believe that’s a factor of oil and refinery quality. America has some amazing refineries capable of eating garbage quality oil, including diluted tar. Since fracking…

The article about why Canada imports oil is interesting. Some of the Maritimes are cut off from pipelines, and aren't set up to refine bitumen. It's actually just cheaper to buy KSA oil than solve these problems. I wonder if this is true in the US since I was under the impression West Texas Intermediate was pretty comparable to Arab Light. I'd love to learn more about the specifics here.

Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#76

Post by birdyrooster »

dan-robertson wrote: post #3
ashtonkem wrote: post #2

Can the Saudi government survive a reduction in services? Their economy is largely built around the distribution of oil sale proceeds, I’m worried that cutting benefits might destabilize that regime.

Maybe they can use some of they money they invested in wework and such

Hilarious that while the rest of the market was booming they were losing billions.

Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#77

Post by Mediterraneo10 »

haltingproblem wrote: post #70
duxup wrote: post #68

Earlier quoted context omitted.

I think the moment anyone decides on a violent regime change... it's a roll of the dice. People rightfully take issue with US involvement in some regime changes... but it seems many of those people have their own plans that seem no more likely to result in a positive outcome.

I could not agree more. The second gulf war led to ISIS and the rise of the Quds force and the general destruction of society in Iraq/Syria. ISIS is an an existential danger to the world as asymmetrical warfare can have high-impact outcomes beyond our imagination. In comparison, Saddam's Bath party was secular socialists. Libyan intervention led to the disintegration of a stable and despotic regime but today there ar…

Saddam's Baath party were no longer "secular socialists" by the time of the US invasion. Saddam Hussein had begun pivoting towards islamism already in 1993. This had little to do with any direct US actions, and can to a large extent be blamed on the collapse of the USSR and Eastern Bloc, which discredited the secular Arab socialist traditions as a viable force.

Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#78

Post by birdyrooster »

koolba wrote: post #20
gaukes wrote: post #5

Earlier quoted context omitted.

Ya, and they were diversifying into tourism which is also bust. I’m sure they’ll survive though. Their wealth is in the trillions.

Saudis aren’t exactly known for their adherence to austerity.

They will have to make due with BMW and Mercedes Benz.

Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#79

Post by dan-robertson »

birdyrooster wrote: post #76
dan-robertson wrote: post #3

Earlier quoted context omitted.

Maybe they can use some of they money they invested in wework and such

Hilarious that while the rest of the market was booming they were losing billions.

I think it would be silly to assume that their only incestments were in the vision fund. Those were surely expected to be high risk.

It wouldn’t even be that surprising for a sophisticated investor to have some funds which lose money while the market is booming (eg even the best performing short selling funds lose money) as they may be hedging against the market no longer booming.

Re: Saudi stocks slump as minister warns of ‘painful’ measures ahead

#80

Post by lowdose »

darkerside wrote: post #47
emilsedgh wrote: post #26

Earlier quoted context omitted.

I'm an Iranian who moved to the U.S. only a few years ago. Something most people here in the U.S. don't understand is that countries like Iran have a far different threshold of pain. Iran, as a result of sanctions had already entered starvation-levels of economic collapse. There are people who are sleeping in open graves. Yet, the regime is not backing down in any way. It hasn't change course at all.

What does sleeping in an open grave mean? While you were in Iran, were you involved in what the US called the Arab Spring? Was it really spread by Twitter? Did it seem like the regime might topple?

It seems like the Arab spring was mainly caused by a spike in food prices.
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