Saudis Tell Shale Industry It Will Break Them, Plans to Keep Pumping Even at $20 a Barrel

[marmar]

When the Saudis announced their intention not to support oil prices when they were sliding towards $90 and plunged quickly through that level, we deemed the move to be a masterstroke. It served to damage both economic and political enemies. On the economic front, the casualties would include renewables, Canadian tar sands, and the US shale gas industry. On the geopolitical front, the casualties would include Iran, Syria, Russia.... and the US.

Even though Riyadh is nominally still an ally, relations with the US are fraught. The Saudis are mighty unhappy with America over its failure to get rid of Assad, its refusal to indulge Saudi demands of attacking Iran (our leaders may be drunk on power, but they haven't quite gone over the deep end) and or indirectly working with Iran against ISIS (which started out as Prince Bandar's private army and may still have the kingdom as a stealth patron). So the Saudis are not at all unhappy if the US suffers as a result of the whackage of its energy industry. First, that's an inevitable outcome if the Saudis are to succeed in maximizing the value of their oil assets, which is a survival issue for the royal family. Second, since relations between the US and Riyadh are frayed right now, it is an opportune time to show that the kingdom is not to be treated casually.

Yesterday, the Saudis made it even more clear that they are not pulling out of their game of chicken with other energy producing nations. The Saudis will keep pumping and by implication, will force production cuts on others. But in its clever formulation, which has the advantage of being true but misleading, the Saudis insist that all they are doing is preserving market share. ............(more)

The complete piece is at: http://truth-out.org/news/item/28282-saudis-tell-shale-industry-it-will-break-them-plans-to-keep-pumping-even-at-20-a-barrel

[Recursion]

1. In the process they're going to kill Venezuela and Russia

It's possible Saudi could beat us in a petro Mexican standoff, but frankly that's not certain, and I'm pretty sure Riyadh also knows that. We really don't know how much shale we can pump from, but if the higher estimates are right we actually have significantly larger reserves.

[Warren Stupidity]

4. The difference is that the Sauds will continue to make a profit at 20

while shale is extracted at a loss, a huge loss, at those prices. They can't shut down the shale fields either, as any revenue is better than none and they have huge operational costs even with no oil being extracted. Plus the Saud bankroll is their national wealth fund, while unless the US nationalizes the oil industry their bankroll is each corporate entities credit worthiness - the owners of those fields are on their own.

[PDittie]

8. And Texas and South Dakota

in the short term. Is that a bad thing?

[annabanana]

2. They are not our friends.. . .n/t

[still_one]

3. I don't feel any sympathy for either the shale industry or the oil industry. In fact this fiasco

Last edited Sat Jan 3, 2015, 01:25 PM - Edit history (1)

just demonstrates that they have been gouging us for decades.

Maybe they will call another congressional investigation to look into the price of oil, and find again there is no manipulation......

It is way past due that we stop being dependent on fossil fuels.

As far as the Saudis unhappy with us not getting rid of Assad or attacking Iran, I guess we are a little bit unhappy that the hijackers involved in 9/11 were from where again?

[Warren Stupidity]

5. Why do you think our government was unhappy at all about 9-11?

It seems to me, regardless of any conspiratorial issues, that 9-11 was just what the government wanted to get its war on. Sure a few thousand americans and other nationals got killed that day, but look at where we got to - permanent global war, national security state, trillions in defense spending. This was a dream come true.

[still_one]

7. I agree they wanted a watershed event, but I do not believed they were part of it. However, I do

believe that in spite of numerous warnings, starting with the Clinton administration's report from Hart and Rudman, along with other warnings preceding 9/11, their gross incompetence fell into what they wanted to do. This is exactly what the Project for a New American Century was hoping for, and that was what the bush administration was comprised of at the time.

In short, no, I do not think they were happy about it, but I do believe they exploited it

[CJCRANE]

11. Most of them didn't have a clue what was coming.

The US Capitol Building and Congress was saved by the fact that United 93 was delayed by 41 minutes giving the passengers and/or a fighter jet time to take it down.

Even Bush was caught out in an insecure location and seemed shocked by the severity of the attack.

Which makes them all doubly stupid for not investigating it properly.

[still_one]

12. I agree

[rickford66]

6. I guess Bush jaw-boned em pretty good.

If anyone recalls, during the 2000 campaign, when asked about the price of gas, Bush said he'd jaw bone the Arabs because he was an oil man.

[phantom power]

9. One wonders what happens when the Saudi oil starts to run dry

[A HERETIC I AM]

10. The entire peninsula drops 30 feet.....

creating a new body of water.

[Quackers]

13. Is there any estimates on how much oil is left in the Saudi's fields? nt

[Fred Sanders]

14. America is "suffering" under the weight of cheap energy? When did that ever happen?

The oil barons are suffering, the 1% of GDP the energy extraction industry represents is suffering, Wall St. Banks are suffering a bit...lower energy prices are good for the American overall net economy....by far a net gain.