Oil price crash: Saudis told to embrace austerity as debt defaults loom

Telegraph (UK) ^ | 30 January 2016 | Mehreen Khan

[Lorianne]

Kingdom faces a future of higher taxes and low fuel subsidies amid fears the world's weakest oil producers will soon begin to buckle ___ Saudi Arabia faces years of tough austerity as the worst oil price crash in the modern history forces the kingdom to make radical cuts to government largesse, the International Monetary Fund has warned.

The world's largest producer of crude oil will need to "transform" its economy away from oil revenues, which make up more than 80pc of the government's wealth, according to Masood Ahmed, head of the Middle East department at the IMF.

The Saudi monarchy has already been forced to unveil the largest programme of government austerity in decades as oil prices have collapsed by more than 70pc in 18 months.

[mowowie]

Yea, time to sell your stock in Lamborghini...

[EBH]

Actually, if the monarchy loses control of the kingdom...all Middle East bets are off. Everything comes unhinged. And a true Caliphate will be born. SA has been funding ISIS for quite some time.

This is bad, very bad.

[Vic S]

They could auction Mecca to the highest bidder.

[mowowie]

No Saudi Arabia has a lot to offer the world, Things like sand and......more sand.
F them

[poinq]

Its possible that the Bush/Clinton alliance with Saudi Arabia has been a major cause in most of the middle eastern turmoil of the past three decades. While the middle east has always had its issues. The times of peace have been paid at a great cost. And have germinated many extreme groups.

[grania]

There's no chance the rest of the world will wake up, is there? The Saudi Royals will bankrupt their country, cause global economic collapse and possibly a world war in their lust to maintain control of the global oil market.

Then they'll take off with their billions, leaving their country destitute, and buy up the pieces when everyone and everything else is destroyed, financially and otherwise.

Meanwhile, world leaders are still looking at it in terms of what's in it for them. And they wonder why voters across the globe are angry.

[arthurus]

Perhaps the Sauds think they can tough it out until the American oil ventures all crumble and then the Arabian oil can zoom up again on the wreckage of the American bust. Aint gonna happen. While the Sauds are tightening their belt the Americans are refining their methods and developing new ones. They know that oil is down there and they can get it out and it is becoming steadily cheaper to do it. The break-even price for American oil is declining a little steadily and the oilcos expect it to decline a lot. The Sauds abdicated to the market at the crucial time after the American breakthrough in technology. They probably cannot force that toothpaste back into the tube. And Iran is going to sell a bit of oil, too.

[nascarnation]

I’m not too worried.
China needs their oil.
You know, that friendly country with mafia business practices and 1.5 billion expendable people to enforce them.

[Migraine]

Yeah they started this flooding the market policy to slip the green weenie to Russia and Iran. Somehow, it got away from them.

It was an interesting idea, then there are always strange and unintended consequences when you try to manipulate economics. That is why the phrase, “Hoist on his own petard”, was coined in the first place.

Now, as producers walk away and cap off their wells, the rise back up to the $4-$5 will be very rapid indeed.

[gunsequalfreedom]

There go the gold plated toilets

[arthurus]

When the Sauds declined to shut down the spigot the average break even price of American oil was about $60. Now I think it is around $40. The technology cannot be unmade, or even slowed, short of a general nuclear war.

[mowowie]

What keeps the Saudi’s from buying up all of the bankrupt U.S. Fracking ventures that they themselves caused with keeping the OPEC prices down?
Especially under a hillary/Bernie/RINO regime?

[Georgia Girl 2]

Time for the Saudis to get back to tents and camels. :-)

[allendale]

Good part of the stock market decline is because both the Saudis and the Chinese need cash and are liquidating their portfolios. Unfortunately for the US this is in fact a large withdrawal of capital from the US economy and will hurt.

[Grampa Dave]

Elect Trump and get congress to make it legal to sell our oil to other countries.

Destroy the Opecker Princes for what they have done to America in the 1960’s!

[txrefugee]

Shoulda saved the ill-gotten gains from their thieving oil cartel instead of funding Muslim terrorists all over the world. If every last one of them has to eat sand so be it. Not one dime to save them ever.

[nascarnation]

Those guys are done already.
They are probably are studying Mandarin (or hiring translators).

[Tea Party Terrorist]

If they cut back on the terror subsidies the clergy would overthrown them.

[MNDude]

Finally, when the ME begins to lose power and influence, the rest of the world would not have to worry any more about what the Muslims are up to, then they import millions of them.

[Principled]

There is something quite satisfying when those who attempted to crush us with their oil are themselves now being crushed.

I was in many a gas line in the early 70s. They sat in their thrones and were fanned and fed grapes by their slaves.

Screw them.