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Could someone clarify what is happening. Seems like the pivotal sentence in the article is: >The sell-off will hurt producers all around but will bring Riyadh
by yboris 7y ago
Could someone clarify what is happening. Seems like the pivotal sentence in the article is:
>The sell-off will hurt producers all around but will bring Riyadh and Moscow longer-term benefits. With their low costs and vast financial reserves, the two can withstand a loss of oil revenue better than most producers.
In short: Russia and Saudi Arabia are using this shock to the global system to force the prices to plummet so as to make the competition fold up and leave. Right?
- 8jef 7y agoRight on. Main target are shale and sand oil production in North America, with have much higher extraction costs.
- woodandsteel 7y agoYes, that's the intention. The problem for Russia and Saudi Arabia is that, thanks to global climate change and the push for renewable energy, petroleum is on its way out over the coming decades, so both nations are on the path to financial disaster. Saudi Arabia realizes this and is trying to diversify its economy, though it is hard to see how it can do it fast enough to avoid disaster. Russia isn't even trying, and instead is more focused on Putin's geopolitical adventurism.