Didn’t certain OPEC members actually increase output in order to depress oil prices?
There have been articles in the last two or three months about Saudi concerns that the OPEC “oil weapon” was being undermined by cheaper US oil and that crashing the oil price was a way for OPEC to put these US producers out of business. Since OPEC economies and social service networks are heavily dependent on the on-going flow of oil royalties, the question is how deep a price fall and how long can it be sustained.
I would imagine that the Saudis have enormous cash reserves and can sustain the pain for a while. The other OPEC states, not so much.
Since this is an economy of scale/production issue, I’d support using every last drop of OPEC oil at bargain basement prices while holding our domestic oil in reserve for the day when OPEC production falters, the price rises, and we reverse the flow of petrodollars from low cost outgoing to high cost incoming.
No. Most OPEC members are arguing to cut production, not raise it. But they also expect Saudi to make most of the cut, like always.
Typically they cheat on their share of the cut and let Saudi finance their increased revenue.
Saudi is unwilling to do so any more. They have also made statements that other nations need to get their government spending under control and not expect to continue to hold the world hostage to pay for it.
I'm not trying to claim Saudi's our are friends or working for our best interest. They are not; they are looking out for themselves. But their goals are long term, very long term.