With oil cheap, Arab states cannot balance their books

Post by minikites » Tue, Jul 21, 2020, 5:10 PM UTC

pydry wrote: post #11

opportune wrote: post #4

It’s hard to feel bad for them but there are a lot of outcomes here which result in a lot of people dying. Pretty sure half the reason SA and friends promote violent, reactionary interpretations of Islam is to serve as a dead man’s switch in case of regime change.

Oil is basically what made the middle east a violent and reactionary place. Natural resources dominating the economy drives conflict and economic clusterfucks in all but the richest, most stable democracies (i.e. everywhere except Norway). Oil's decline in importance might be the only way to escape this cycle (even if it will probably lead to bloodshed first).

Post by marcosdumay » Tue, Jul 21, 2020, 5:11 PM UTC

pydry wrote: post #26

supernova87a wrote: post #7

I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998... These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have littl…

It's not strictly a "wrong leaders" problem. It's much more systemic than that. Elect a good leader and the oil will provide the impetus to tear that leader down. Industry also won't form because of Dutch disease. Who wants to build a factory in Saudi Arabia even if it weren't unstable? Everything just costs too much because of the oil - land, materials, labor. Sovereign wealth funds also don't really solve the probl…

Post by derefr » Tue, Jul 21, 2020, 5:11 PM UTC

pydry wrote: post #26

supernova87a wrote: post #7

I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998... These petro states suffer from the curse of natural resources combined with leadership that is too busy feasting off of the intermittent boom cycle to prepare their people constructively for the bust that comes later. So you have entire countries that are basically dependent on the oil handout, and in bad times, have littl…

It's not strictly a "wrong leaders" problem. It's much more systemic than that. Elect a good leader and the oil will provide the impetus to tear that leader down. Industry also won't form because of Dutch disease. Who wants to build a factory in Saudi Arabia even if it weren't unstable? Everything just costs too much because of the oil - land, materials, labor. Sovereign wealth funds also don't really solve the probl…

Post by GordonS » Tue, Jul 21, 2020, 5:15 PM UTC

andi999 wrote: post #52

nickfromseattle wrote: post #18

Earlier quoted context omitted.

>Some of the leaders do know that they can't live on oil forever, so you see some sovereign wealth funds investing in things that their people can learn and use to build their society more resiliently Do the Saudi's have the experience and culture to make this work? $90B invested in Softbank Vision Fund. [0] [0] https://www.businessinsider.com/saudi-arabia-45-billion-with...

A long time ago on an island far away... called Nauru, they tried to invest their wealth from their natural riches (phospor fertilizer). It didnt work out, if I remember correctly.

Post by lsaferite » Tue, Jul 21, 2020, 5:17 PM UTC

jeffreyrogers wrote: post #42

ogre_codes wrote: post #28

Earlier quoted context omitted.

> I mean, this happened just a few years ago back in 2015, right? And 2008, and 2001, and 1998 The point here is that sub $40 oil is becoming the new norm. While these countries can weather a 2-3 year drop in oil prices, those short term drops are more and more frequent and the bottom keeps getting lower. Between electrification of transportation and reduced travel which may last for another 6 months (or much longer,…

As they say in the oil industry: the cure for low oil prices is low oil prices. In any case, if the developing world is really to develop as much as hoped for and claimed they will need a lot of oil. Even if it is all renewables based (which is a fantasy) those renewables require large oil inputs to be manufactured (those 400 ton mining trucks won't be electrified anytime soon). So while I expect oil to be down over…