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yes you can stop taking it out of the ground. except Russia and Saudi could not agree with one another to do that, so now we have a reduction in demand coupled
by celticninja 7y ago
yes you can stop taking it out of the ground. except Russia and Saudi could not agree with one another to do that, so now we have a reduction in demand coupled with no reduction in supply. soon storing that oil will start to be a cost centre. then we will see less demand at the wholesale level combined with price cuts to move existing stock. all of which will ultimately hurt oil producing countries.
- njarboe 7y agoThey will stop pumping when the price to extract gets too low. To stop pumping does not reduce the amount of oil you will get out of a reservoir to any significant degree and you can start up again with little cost. The big issue is that if lots of oil companies go bankrupt (many US fracking ones are highly leveraged and must sell oil at a certain price in order to survive) and people get other types of jobs, you can't ramp up the creation of new wells very easily. Oil from fracking takes a lot more effort and wells than the old style wells.