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What would you call the US's massive increase in oil production if not preparing for possible problems in Saudi Arabia?
by cco 8y ago
What would you call the US's massive increase in oil production if not preparing for possible problems in Saudi Arabia?
- rossdavidh 8y agoIt is certainly relevant to the economic situation, but I'm not sure it was done out of an awareness of potential instability in SA. I think it was done more purely for shorter-term economic motives. Which doesn't make it wrong, but I don't think it's evidence of a perspective on a larger situation. For example, if KSA blows up politically, and it leads to (for example) 6 months of no oil coming out, do we even have the tanker or pipeline capacity to keep Europe supplied?
- danielvf 8y agoThe US's massive increase in production in 2018 seems to be a pretty natural outcome of the free market. Oil prices go up. Mind-bogglingly huge investments go into getting previously impossible-to-get oil out of the ground. These techniques get cheaper through scale, experience, and innovation. Now it's possible to profitably use them at medium prices. (However, in 2014 the US ended a 40 year ban on exporting crude oil. We also would not have seen this boom without a return to more free market on oil.)