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

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

#21

Post by PopeDotNinja »

DyslexicAtheist wrote: post #16
aliswe wrote: post #13

Earlier quoted context omitted.

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…

what kind of mega projects are they involved in outside oil? I learned that they invested 40B in the SoftBank fund. Is this what you're referring to? Where would I look or what should I read to learn more about this? thanks

They're building a bunch of new cities:

https://www.index-saudi.com/more-info/saudi-mega-projects/

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

#22

Post by DyslexicAtheist »

PopeDotNinja wrote: post #21
DyslexicAtheist wrote: post #16

Earlier quoted context omitted.

what kind of mega projects are they involved in outside oil? I learned that they invested 40B in the SoftBank fund. Is this what you're referring to? Where would I look or what should I read to learn more about this? thanks

They're building a bunch of new cities: https://www.index-saudi.com/more-info/saudi-mega-projects/

thanks for this

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

#23

Post by aliswe »

DyslexicAtheist wrote: post #16
aliswe wrote: post #13

Earlier quoted context omitted.

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…

what kind of mega projects are they involved in outside oil? I learned that they invested 40B in the SoftBank fund. Is this what you're referring to? Where would I look or what should I read to learn more about this? thanks

Dunno about good sources, but Neom and Qiddiya AFAIK still have prospected budgets of 500 billion dollars, each. This is of course an approximation and the actual amount is in a state of flux, so these are just two mega-parameters that are obscured by the x-dollars-or-bust statement that I hear so often.

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

#24

Post by balola »

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?

There's probably never a better chance to crush competitors, now that demand is low and high-cost private wells are fragile.

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

#25

Post by aliswe »

PopeDotNinja wrote: post #21
DyslexicAtheist wrote: post #16

Earlier quoted context omitted.

what kind of mega projects are they involved in outside oil? I learned that they invested 40B in the SoftBank fund. Is this what you're referring to? Where would I look or what should I read to learn more about this? thanks

They're building a bunch of new cities: https://www.index-saudi.com/more-info/saudi-mega-projects/

Please note that these projects are not all governmentally funded and thus do not burden the state budget (affecting the x-usd-per-barrel-or-bust number) per se - Jeddah Tower is built "privately" by prince Waleed and his company if I'm not mistaken.

But, the list does match the OP title "The Saudis ..." ... hehe ...

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

#26

Post by nickik »

godzillabrennus wrote: post #9
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?

Bankrupt the fracking companies in America and deprive Russia of money so they can’t effectuate greater sphere of influence in the Middle East through Syria/Iran. It’s a temporary measure for sure but obviously they felt it necessary,

> Bankrupt the fracking companies in America

So are they fighting a war with North Dakota?

Overall this is good for the US and the frackers equipment is still there, if price goes up they will come back, as they have done before.

> Russia of money so they can’t effectuate greater sphere of influence in the Middle East through Syria/Iran

Why are you referencing Iran? Iran and Russia while not enemies are hardly friends.

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

#28

Post by christophilus »

balola wrote: post #24
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?

There's probably never a better chance to crush competitors, now that demand is low and high-cost private wells are fragile.

This is the answer. They think they can send US shale into bankruptcy before they go bankrupt themselves.

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

#29

Post by D_Alex »

djmobley wrote: post #12
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…

At $30/barrel they’re selling oil at a loss, not building up wealth to invest elsewhere.

No... the Saudi oil production costs are circa US$10/bbl, and their marginal production costs (ie costs to produce one more barrel) are circa US$3.00.

They are not selling at a loss, but they are not making enough to run their country (that would take prices of ca US$80/bbl at the current rate).

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

#30

Post by rcMgD2BwE72F »

LatteLazy wrote: post #27

Driving everyone else bankrupt failed with fracking. Why would it work with Russia?

Nothing needs to work with Russia, it is an excuse. Russia's oil output as % of global production hasn't really changed for decades. It's is all about US frackers, peak oil demand, and a prince's concern about his personal future.
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