Posted on 01/12/2016 8:12:07 PM PST by TigerClaws
Russia’s break-even price was about $102 as of around mid-2014.
Fracking and shale break even is around $30 per barrel.
Gulf Coast, South Dakota. Lots of oil economy pain on the way.
;’) And don’t forget, the US dollar is going to collapse every week during that same period.
Raise the funds rate! That’s the answer! Or better yet, combine that with the G-whatever simply fixing currencies. Between that and killing oil production with maniacal propaganda, we’ll be in great shape. And remember, as said over 40 years ago, who needs evil manufacturing on U.S. soil, when we can have American-based manufacturing with communist slaves on foreign soil? What could go wrong?
And hold the line on the planning, building and zoning regulations against small houses and manufacturing shops in rural areas. Who needs men and women in America being allowed to work? There’s too much competition!
And how about those efforts to monitor and disarm the rabble, eh? Way to go. Smart!
[There’s been too much inbreeding in academic, political and business leadership for a long time.]
Not all. And some are probably doing it for the paycheck or to stay alive. http://www.reuters.com/investigates/special-report/mideast-crisis-iraq-islamicstate/
I'm a little curious about this too; Isis seized the wells, along with territory, weaponry, food and slaves. All that this has cost them is human life--at least half the lives are the other side's. Neither is of any concern them. They're running their economy free of overhead or obligation. If the price goes lower, they just pump more. If they run out material, weapons or food they just they just take it. Whose to stop them?
Modern living standards can't be attained via medieval governance methods. War economies mean significant privation. During WWII, there was rationing even in the US. British subjects went hungry and Soviet citizens starved in the millions, despite Russia's abundance of raw materials and agricultural land. And while ISIS's leadership are in some cases true believers, they are living well relative to the populations they rule. The ebbs and flows of territory due to battlefield developments mean that the population they rule have significant opportunities to flee, if they are mistreated. Therefore they need to keep conditions somewhat reasonable, relative to what the rest of Iraq or Syria has to deal with.
ISIS-controlled Mosul produces only 200K barrels of oil per day. This is out of total Iraqi production of 2.9m barrels per day. But the Iraqi government can sell its oil at world market prices. ISIS has to sell its oil at cut rate prices. In late 2014, world oil prices were $78 per bbl. ISIS was selling its oil at $20. At the same time, everything it buys from the outside world (including food, weapons, oil drilling equipment and parts) - a necessity, due to its lack of industrial capacity as well as its location in the middle of a desert - is at exorbitant prices, because of sanctions. And all this in the midst of a war economy, where every spare dinar is being diverted towards feeding and arming the troops.
As to just taking what you need - to take it, ISIS has to defeat better-armed foes backed by American air support. Most of ISIS's initial victories in Iraq were against areas manned mainly by Sunni Arabs who had been suborned, some of whom has no idea about the true nature of ISIS. Today, the gains are a lot harder, especially against Shiites and Kurds who know they will be massacred if they surrender.
ping
Riverside area, Inland Empire, near Doug of Upland (hey Doug).
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.