Don’t propagate such nonsense. Saudi Arabia doesn’t tax its people like we do. They fund their government with oil sales.
Right now, the Saudi national budget needs $89/barrel Brent oil prices to break even. Sure, Saudi Aramco has $10/barrel in extraction/production costs...but that just pays for Saudi Aramco, not the Saudi national budget.
Moreover, the plunge in oil prices has come from 0bama and Europe relaxing the embargo against Iranian oil exports...they think that they can score a nuke deal...the Persians know to game them as long as they can.
Today, global oil production is on track to be 1.5 million barrels PER DAY greater than global oil demand.
What do you THINK oil prices are going to do?! Pretty soon the global oil surplus will be so large that there won’t be any places left to store the oil above ground.
The whole “fiscal breakeven” meme is weak, at best. Yeah, KSA needs $XXX to fund government.
What happens if they don’t get it? They cut spending or they BORROW. You know any lenders who would refuse to lend to KSA? I don’t. If someone is willing to lend hundreds of billions of dollars per year to the insolvent US government, why in hell would they refuse to lend to God’s Oil Spigot?
KSA had nothing to do with this price event and they are 1) not obligated to act to save the US shale industry and 2) under zero pressure to achieve fiscal breakeven. That’s what deficits do, and they’d be delighted to run a deficit for years if it destroys shale.
It’s not nonsense.
It’s parody.
How could anyone take my comment seriously?
I was poking fun at the guy who said we should subsidize American oil producers.