[denydenydeny]

The unspoken word in this article is “Iran”, Saudi Arabia’s arch-enemy. The lower oil prices are KILLING them and their patron Russia.

[cicero2k]

The Saudis did have the privilege of controlling the price increase until early 2008. At that point even they could not produce enough to satisfy and control prices. This was a large contributor to the 2008 financial collapse.

Who can afford real estate when your cost of living went up significantly? We hunkered down. Then the unstable mortgage insurance industry tipped as the value of the underlying property dropped.

Now we have oil rig loans, but most of the operators hedged, so their unraveling will be slow. This will dampen the financial hit and allow time to scale down.

After that, it’s back to dealing with the change to affordable energy.

[Vince Ferrer]

If we were smart enough, and I don't think we are, because this would be John Kerry's job, we would be able to look around the world at who is being hurt, and work to bring them more into our fold. Venezuela is one. Cuba is another.

Cuba needs a buddy, and for a long time Russia was that buddy. Then they collapsed, and Venezuela became their buddy. Now Venezuela is collapsing, and they need another buddy. We could be that buddy, or maybe China. I'd prefer us. We could negotiate an end to the blockade, and when the Castro's go, even give them territory status like Puerto Rico.

[bestintxas]

This is the reason why cartels are never good for a consumer

‘”The drop in oil price is not good for anyone,” Ramirez said in an interview, reiterating that Caracas sees $100 as a ‘fair price’.’

What is ‘fair to a producer is unfair to a consumer.

[mountn man]

It's important to note that Saudi Arabia is a one trick pony. All they have is oil. (Oh...and sand)

Every nation has an economy and expenses. SA has no other real income. They may be able to weather this better than other area countries, but only for the short term.

The US oil industry is only a small piece of many pieces of the US economy.

SA's oil industry is all about oil exporting.

The US can't export it's oil. We are all about consumption and importing.

If crude is cheap, we'll just buy the cheap stuff and hold on to our own. The majority of the US oil industry can withstand it by refining.

In time, Saudi Arabia WILL HAVE TO raise prices just to survive.

[gogeo]

Of course, when Venezuela talks about the need for 'OPEC' to cut production, they mean the Saudis.

I think SA is making a virtue out of necessity. I think it would take a cut of 3 MBD to bring the market back, and it wouldn't be immediate.

Practically speaking they can't do that. They have a longer time horizon than the next 12 months.

I also suspect geopolitical factors are at play.