Здравствуйте. Вся информация этого сайта бесплатна. Вы можете сделать пожертвование и поддержать наше развитие. Спасибо.

Hello. All information of this site is free of charge. You can make a donation and support our development. Thank you.

2015-08-09 18:20:00

THE NEXT OIL WAR - 2

THE NEXT OIL WAR - 2

The Kingdom of Saudi Arabia may suffer a financial crisis before winning the economic oil war with the United States if the oil prices remain at its current level. The Kingdom needs the oil price to be around $106 per barrel to maintain its economy.

Saudi Arabia leads the Organization of the Petroleum Exporting Countries (OPEC), launched an economic oil war with the United States in November last year when it decided not to cut its production despite the declining oil prices.

Its intention was to stop the rapid development of the U.S. shale industry, and put all American oil producers out of business by driving oil prices down to levels to make it difficult for them to sustain their operations.

Saudi Arabia believed that it was better to endure short-term pain to achieve a long-term gain. Saudi Arabia underestimated the resilience of the U.S. shale industry.

Saudi Arabia oil war policy is not working

The latest stability report of Saudi Arabia's central bank indicated, "It is becoming apparent that non-OPEC producers are not as responsive to low oil prices as had been thought, at least in the short –run. The main impact has been to cut back down on developmental drilling on new oil wells, rather than slowing the flow of oil from existing wells. This requires more patience."

An oil industry expert in Saudi Arabia said, "This policy hasn't worked, and it will never work."

Saudi Arabia's policy is not working because U.S. shale producers found new ways to extract oil cheaper. Although the number of fields declined, the production output per field increased. Oil industry experts believed that U.S. shale producers will be able to reduce their costs by 45% this year.

At present, the WTI Crude Oil on the New York Mercantile Exchange is $44.17 per barrel and the Brent Crude on ICE Futures is $48.92 per barrel.

Saudi Arabia is experiencing budget deficit

Saudi Arabia's economy is dependent on high oil prices. The Kingdom generates 80% of its revenue from the oil industry. The oil-rich country is now experiencing a budget deficit due to the declining oil prices and increasing military spending.

The budget deficit prompted Saudi Arabia to run down its foreign currency reserves by almost $62 billion this year and borrowed $4 billion from local banks last months. Saudi Arabia's budget deficit is estimated to be around 20% of GDP this year.

Saudi Arabia intends to $27 billion by selling bonds, a sign that it is hurting from the economic oil war with the United States. It needs deep pockets to achieve its objective.

valuewalk.com

-----

More: 

THE NEXT OIL WAR 

RUSSIA & OPEC STRATEGY 

SAUDI PRICE WAR 

U.S. SEIZED SAUDI

 

 

 

Tags: US, SAUDI, OIL, PRICES

Chronicle:

THE NEXT OIL WAR - 2
2018, January, 19, 12:15:00

S.KOREA'S DIVERSIFICATION

PLATTS - For full-year 2017, South Korea's crude imports from its biggest supplier Saudi Arabia fell 1.7% to 319.02 million barrels, compared with 324.45 million barrels in the previous year, customs data showed. On the contrary, South Korea has imported 1.77 million mt, or around 13 million barrels, of crude from the US in 2017, about four times higher than in 2016. Shipments from Russia grew to 140,000 b/d last year from 112,000 b/d in 2016.

THE NEXT OIL WAR - 2
2018, January, 19, 12:10:00

ADNOC'S 2030 STRATEGY

AOG - ADNOC’s 2030 strategy, he said, aims to capitalise on predicted global economic growth and demand for oil and petrochemical products, particularly in non-OECD countries. As its business responds to changing market dynamics, the company will continue to broaden its partnership base, strengthen its profitability, adapt to new realities and expand market access.

THE NEXT OIL WAR - 2
2018, January, 19, 12:05:00

TOSHIBA SELLS WESTINGHOUSE

WNN - Under the terms of the assignment and purchase agreement it has signed with Nucleus and Brookfield, Toshiba will sell its rights to assert claims against Westinghouse related to the parent guarantees in the amount of $5.788 billion, and on account of other claims Toshiba holds against Westinghouse in the amount of $2.284 billion to Nucleus, for the sale price of $2.160 billion.

THE NEXT OIL WAR - 2
2018, January, 17, 23:50:00

OIL PRICES: NOT ABOVE $70 YET

REUTERS - Brent crude futures LCOc1 were at $69.23 a barrel at 0808 GMT, up 8 cents from their last close, but down from a high of $69.37 earlier in the day. Brent on Monday rose to $70.37 a barrel, its highest since December 2014, the start of a three-year oil price slump. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $63.84 a barrel, down from a high of $63.89 earlier, but up 11 cents from their last settlement. WTI hit $64.89 on Tuesday, also the highest since December 2014.

All Publications »