Just how long can the Saudi’s and OIC nations afford to keep prices this low? This appears to be a double edged sword that will hurt OIC economies as well, while the fracking industry can readily be resurrected from hibernation status as necessary.
Saudis aren’t worried about US Fracking. That’s going to be around for the next 300 years, and they know there isn’t a thing they can do to stop it.
The Saudis are trying to kill the Russia/Iranian axis. Between the two of them, they’ve likely got about 11 more months of capital reserves available to keep their governments going. The Iranians need $140/BBL oil, and the Russians need $100/BBL - just to break even.
The US isn’t a petrostate, and the current owners of fracking assets could be easily picked up cheaply by any number of hedge funds or investment groups that would happily sit on those assets until the price comes back.
This is how bad the news has become. The very notion that the Saudis could hurt fracking is stupid. That the Russians and Iranians can’t take low priced oil much longer, and how it will almost certainly require the two of them to wipe out the Saudis doesn’t cross their minds.
Stupid, stupid people running the media. It’s either that or they are purposefully misleading us.
They can’t do it for long. The Saudi’s essentially keep control of the population by bribing them...and funding just about all public services with oil money.
They just built a large off-shore/near-shore project, which had a very short payback period - they will have to re-calculate that. To me, the fact that they are now building man-made islands in shallow water to drill must mean one thing: the era of 50 ft deep oil wells in Saudi is about over. The old fields must be dropping in production, and their price gap advantage in getting oil out of the ground will gradually diminish.