The Saudis Have a High-Stakes Plan to Win the Global Oil War

Post by djmobley » Thu, Mar 19, 2020, 8:43 AM UTC

siruncledrew wrote: post #3

Saudi Arabia has shifted away from thinking like manufacturers to thinking like investors. Oil doesn’t matter to them - it does now, but it doesn’t psychologically. Wealth is what matters. Oil is still their golden goose - their special “10x” or “unicorn” status sauce. If the forecast for long-term global oil demand is losing steam in light of desires to shift away from fossil fuels, then perhaps sooner is the best t…

Post by [deleted] » Thu, Mar 19, 2020, 8:57 AM UTC

siscia wrote: post #8

I don't get it. It is estimated that below 50$/barrel Saudi Arabia is basically pushing wealth out of their country. (Balance of payment in negative, it is right?.) And below 80$/barrel they are running the country at a deficit. They are now selling to 30$/barrel. What is the strategy here? Push all "high-tech" producers out of the market and shut up the price again? How long can they last? And how much it will cost?

Post by DyslexicAtheist » Thu, Mar 19, 2020, 9:18 AM UTC

aliswe wrote: post #13

siscia wrote: post #8

I don't get it. It is estimated that below 50$/barrel Saudi Arabia is basically pushing wealth out of their country. (Balance of payment in negative, it is right?.) And below 80$/barrel they are running the country at a deficit. They are now selling to 30$/barrel. What is the strategy here? Push all "high-tech" producers out of the market and shut up the price again? How long can they last? And how much it will cost?

FWIW, I don't like the statement "KSA needs 80USD per barrel to break even". It's too blunt, and obscures lots of variables, including their bond market, their megaprojects that aren't really being paid for (yet) as they haven't started at full scale, fluctuations of external work forces, the operations in Yemen, etc etc ... were these parameters included or not? Were they compensated for in any way? I don't know the…

Post by thendrill » Thu, Mar 19, 2020, 10:05 AM UTC

JanSt wrote: post #11

siscia wrote: post #8

I don't get it. It is estimated that below 50$/barrel Saudi Arabia is basically pushing wealth out of their country. (Balance of payment in negative, it is right?.) And below 80$/barrel they are running the country at a deficit. They are now selling to 30$/barrel. What is the strategy here? Push all "high-tech" producers out of the market and shut up the price again? How long can they last? And how much it will cost?

It's a stupid move, because the tech and reserves won't go away. As soon as prices rise again to levels needed by Saudi Arabia the reserves will be exploited again. Probably they hope that banks give less money and hedges to shale companies, but that won't work long-term. Saudi Arabia may see civil unrest soon as the house of Saud need all the money they can to spend on social welfare to stay in power.

Post by narag » Thu, Mar 19, 2020, 10:11 AM UTC

aatharuv wrote: post #5

LeoTinnitus wrote: post #2

Who is that moron that wrote the article? Byzantine art of diplomacy? Saudia Arabia never existed when the Byzantines did! Also the Byzantines weren't known for their diplomacy. It's like saying the prussians enagaged in Catholic meditative sessions.

If you're not a fluent English language speaker, you might want to look at a dictionary before calling people morons. In addition to its original definition as "what the Eastern Roman Empire morphed into", it also means: "excessively convoluted" "highly complex, intricate, and devious". These other definitions unsurprisingly are based on what English language speakers thought of the Byzantines..