Posted on 04/07/2025 8:10:18 AM PDT by marcusmaximus
The Kremlin said on Monday that Russia would do everything necessary to insulate the world's second largest crude exporter from a global "economic storm" which has sown extreme turbulence in oil markets and raised concerns of a recession.
-snip-
The plunge in oil prices poses a direct threat to Russia, which is spending hundreds of billions of dollars on its military campaign in Ukraine, Russia's most expensive military operation since the Soviet-Afghan war of 1979-1989.
Kremlin spokesman Dmitry Peskov said that the oil price was being monitored very closely as it was key for funding the Russian budget.
"We are very closely monitoring the situation, which is currently characterised by extreme turbulence, is tense and emotionally overloaded," Peskov told reporters.
"Our economic authorities are monitoring this situation very closely and, of course, are doing and will do everything necessary to minimise the consequences of this international economic storm for our economy."
The price for Russia's Urals blend for cargoes loading from Primorsk, Ust-Luga and Novorossiisk ports fell to around $53 per barrel, below the $69.7 per barrel average Urals price Russia has based its 2025 budget on.
Oil and natural gas sales account for a third of Russia's federal budget revenues - which are funding a 25% rise in defence spending this year to the highest levels since the Cold War.
(Excerpt) Read more at uk.finance.yahoo.com ...
Lower oil prices is great news for Deplorables.
“Lower oil prices is great news for Deplorables.”
Good for the country, but not so great for the several million Deplorables that work Petro-Chem,
Every silver-lining has a cloud.
Must be trickle down price plunging...
Gas in my area is $3.31 up from $2.83 just two weeks ago.
There is a cloud, of course, and it will be for American shale.
A bit of lecture. Shale wells “drill horizontally and die vertically” — meaning, you drill down a couple of miles and then turn sideways to horizontal to expose maximum perforated pipe to rock that has oil in it. But the nature of shale oil is that on day 1 a well produces about 900 barrels/day, and on day 365 it is down to 450 and so forth for subsequent years. The graph of decline is very steep. It drilled horizontally and it dies vertically.
This means to keep the entire field’s output constant or growing, you have to drill frantically. Add new wells faster than that vertical decline for each well can add up to cumulative decline overwhelming the new wells’ output.
The inclination to spend that enormous amount of money (from loans) to drill enough new wells to overcome the legacy declines disappears if the price per barrel declines.
And this means Trump’s goal of spectacular rises in US oil production can’t happen. A lot depends on that. If it doesn’t happen, it’s not a good thing.
I scanned the whole excerpt and didn't see a single time where Reuters credited President Trump for the "plunge in oil prices".
Mine is up too.
We are breaking weekly production every week and will continue to. This is very good news for the Deplorables.
Waah waah....call OPEC+ and whine to them...they just raised output....
Trump is recycling the Reagan formula for breaking Russia. And yes, he will also break the domestic upstream oil and gas business. Oil and gas investment for domestic production growth is going to fall off a cliff. “Drill baby drill” and low oil prices cannot co-exist.
Reagan did this in the 80’s to bring down the iron curtain. Trump appears to be doing it to bring Russia to the table on Ukraine, among other reasons.
But if he thinks domestic producers are going to drill money losing wells, he’s dreaming. And he is too smart for that. He is banking on the oil and gas industry asking itself “To whom shall we go?” Certainly not the enviro-kook demon-crats.
In the meantime lower gasoline prices buys votes from the gas buying classes. Guys like me who make our living drilling wells will take it in the shorts. We’ll see how this one plays out.
Summer blends are usually more expensive because they don’t use ethanol.
I know nothing about shale drilling other than that it exists. Is it possible to take an existing well that has declined in production and dig down a few more thousand feet and extract from a new layer of shale? Is there only one layer of shale?
you just NEVER CARE what happens to America.
Never an AMERICA article, or if it is, it is associated with Russia or Ukraine.
Truly sickening.
It is possible in some instances to re-frac wells that have been depleted. Much depends on the mechanical integrity of the wellbore and downhole casing.
Since the wells are drilled horizontally through the producing interval, it is generally not possible to “dig a little deeper.” The other, much more significant obstacle is property boundaries. In Texas, you would have to secure new oil and gas leases (never cheap or easy) from the adjoining mineral owners, or from the owners of the deep rights.
Very few shale fields offer multi-pay opportunities that would allow a deeper lateral, the Permian in West Texas being the main one. The Eagleford in South Texas is pretty much one and done.
However, it has been learned that oil does not migrate laterally through shale formations very well, so you can many times locate a new well between two existing, depleted wells, and find new reserves. This is limited by depletion of the reservoir pressure.
Thanks for the response. I know a lot more about shale drilling now than before.
Yep. What oil price you need to feel secure in your job?
Multi layers are not unheard of.
This is all explored by seismic imaging. You drill the most promising layers first.
You would probably just drill a new well a few hundred feet. The word is “communication”. It doesn’t mean what you think. It means one well communicates with another — which then can become cannibalization, where you are taking oil from rock that would have been tapped by the other well.
There is some babble there. The concise answer is that some formations will have multi layers. They are not rare, but also not common.
Think North Dakota. There were a few fairly small areas with multiple layers.
Not unheard of. But not common. And there’s another freeper commenting . . . yup, could just move a few hundred feet and drill another well at the original depth and find some oil there.
In the world of shale this has been going on for 15ish years, since 0% interest rates let it happen. It’s going empty. No way to predict the date, but it’s inevitable.
I actually knew that from the movie "There Will Be Blood," where actor Daniel Day-Lewis' character Daniel Plainview puts it this way:
"Drainage! Drainage, Eli, you boy. Drained dry. I'm so sorry. Here, if you have a milkshake, and I have a milkshake, and I have a straw. There it is, that's a straw, you see? Watch it. Now, my straw reaches acroooooooss the room and starts to drink your milkshake. I... drink... your... milkshake!"
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