THANK YOU!!!A nation balancing its budget is a very different thing from a private company making a profit.
Saudi Arabia can pump oil for $10 a barrel, so of course they can make a profit. But they need $90 a barrel to cover the government budget, which is an entirely different metric.
You made an EXCLLENT poit about needing $ 90 to cover the government’s budget.
Having said that I feel compelled to more accurately define the term “Government Budget”. Like almost all third world countries, and Saudi Arabia is definitely a third world country, the bulk of the government’s budget is spent suppressing rebellion. In Saudi Arabia’s case this means direct payments to their citizens so they don’t have to work.
What happens if the government misses a payment? Look to Paris for an answer.
“Saudi Arabia has the lowest oil production costs in the world thanks to three advantages: Abundant pools of oil close to the surface and the sea, public ownership and no taxes on production.
Because of that, it can make money in almost any oil price environment. This state of affairs is the prize that the United States has long coveted, and vied with other countries to claim.
The cost is also low in Iran and Iraq ($10), but higher than $19 in Russia and $23.33 in the U.S. There isn’t one generally acceptable estimate of these costs. More recent estimates put the cost of production per barrel to exceed $60 dollars in the United States.”
THANK YOU!!!