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Russia did not agree to Saudi Arabia's proposal to reduce output so Saudi Arabia are now turning up the faucets to pressure Russia into a deal. Saudi Arabia has
by sword_smith 7y ago
Russia did not agree to Saudi Arabia's proposal to reduce output so Saudi Arabia are now turning up the faucets to pressure Russia into a deal. Saudi Arabia has no intention starting a price war with US shale producers, this is pure tactics to make Russia agree to an output deal.
The United States has a net export of around 0 barrels, meaning that it is neither an importer nor an exporter of oil today. So macroeconomically the US should be more or less unaffected on an aggregated level.
- InTheArena 7y agoArbitrage means that these barrels will flow into the US and offset some of the US production. Of course, Trump could slap some tariffs there, but high energy costs are never popular (no matter how good they may be).
- tenpies 7y agoKeep in mind oil is not oil. The US produces some fairly top quality crude by global standards. This is both good and bad. You don't want to be using WTI crude to produce bunker fuel - that's like using truffles to season canned beans - you could do it, but it doesn't make rational sense to do so. Better to export your WTI for uses that need such a quality crude (and pay accordingly), then import some low quality OPEC basket crude to produce bunker fuel.
- allovernow 7y agoAt this point $60/bbl is a low price. People buying still remember $120/bbl.
- nutjob2 7y ago> The United States has a net export of around 0 barrels, meaning that it is neither an importer nor an exporter of oil today. So macroeconomically the US should be more or less unaffected on an aggregated level. Not true. Shale oil is very expensive to extract while Saudi oil is amongst the cheapest. Low prices are going to put shale producers out of business and the Saudis will gain market share.