High cost Oil producers should get out of the market says Saudi Oil Minister

A speech was made in Houston that's been highly anticipated by many in the oil patch....
But the news wasn't very happy for the high cost fuel producers....
The Minister has more or less reiterated that Saudis and others wont cut production......they want to drive out competition in the market.....
Oil business execs from all over the world showed up for the bad news....

www.cbc.ca...

Saudi Arabia's oil minister told a crowd of U.S. oil executives in Texas on Tuesday exactly what they were afraid of hearing: that OPEC is more than happy to ride out cheap crude prices until higher-cost producers are pushed out of the market.




Im thinking this news will be devastating for the shale gas business and cause a raft of loan defaults....
As well as bring about a spike in unemployment rates.....
It could be the straw that breaks the camels back too.....
what do you think?
boon or bust?

edit on 23-2-2016 by bandersnatch because: (no reason given)

edit on 23-2-2016 by bandersnatch because: (no reason given)

a reply to: bandersnatch

Yes and two to three years from now when the oil producers are crushed in Venezuela and the US the Saudis will prepare to screw us by jacking up the price to astronomical numbers...eliminate the competitors and charge what you want...not sure if Russia will then be a major exporter of oil to the United States...or maybe we will buckle by buying oil from Isis via Turkey..

a reply to: chrismarco
Why not just burn our own oil?
We have lots.....

a reply to: bandersnatch

we have tons but too many regulations to get it...be interesting to see how the oil industry would behave if we relied on our own oil...then again the oil people of the US could still charge what they want..

Or maybe a few seals could turn off the Saudi pumps at the harbor. They can try to drink that oil I suppose.

Call it business but I call it economic warfare....

This is basically a high stakes race to the bottom to drive out Saudi's competition.

This is not economic warfare, it's economic terrorism. And given that Saudi Arabia is fond of funding terror groups, they should not be allowed to get away with this.

a reply to: markosity1973

Definitely true, and it really is economic terrorism. Wars have begun from far less provocations than this even..

Scary times ahead.

Saudi is able to pressure other oil firms and they have had that ability for a long time the difference from then and now is that they now have nuclear weapons so they have no fear of western nations trumping up false charges to start a war with them like others have seen.

originally posted by: Grimpachi
the difference from then and now is that they now have nuclear weapons so they have no fear of western nations trumping up false charges to start a war with them like others have seen.

Doubt it. They're bluffing, or they would have said so years ago. They're only saying it now because they desperately want Iran and Russia to think they maybe already have a few because of the Syria situation.

The Saudis seem to be making a lot of hot headed decisions these days. Their plans seem slap-dash. Their words seems like hot air. Consider their mess in Syria: it's all for a pipeline route they could already have had if they had the foresight and humility to endorse the three-state solution for Iraq in the first place.

If the Saudis can't test a bomb for all to see like even NK seems to have done, then they must not have one, because the best thing about them is deterrence. You show everyone you have one to maximize the deterrence value.

Well they certainly nuked a plethora of economies with their price war......
The plan seems to be shoot your allies in the back this month....

a reply to: chrismarco

Then all these other producers will simply come back.

originally posted by: NoCorruptionAllowed
a reply to: markosity1973

Definitely true, and it really is economic terrorism. Wars have begun from far less provocations than this even..

Scary times ahead.

It isn't economic terrorism in any way. It is capitalism pure and simple.

Other countries can just refuse to buy Saudi oil of course. This may end up in legal battles of course.

This may actually be a good thing in the long term in terms of investment in renewable energies.

Short term it could result in the invasion of more oil producing nations.

a reply to: Nexttimemaybe

You know I was thinking something similar, in terms on investment.

I have to say, I think the Saudi's are stupid. Basically, they just called the world crack heads and they are the dealer. Do i need to point out the similarities of the CIA drug trade and this? Supply and demand?

Where I live, dealers get robbed all the time.

Guess I'll need to get rid of my Subaru soon.

originally posted by: Nexttimemaybe

originally posted by: NoCorruptionAllowed
a reply to: markosity1973

Definitely true, and it really is economic terrorism. Wars have begun from far less provocations than this even..

Scary times ahead.

It isn't economic terrorism in any way. It is capitalism pure and simple.

Other countries can just refuse to buy Saudi oil of course. This may end up in legal battles of course.

This may actually be a good thing in the long term in terms of investment in renewable energies.

Short term it could result in the invasion of more oil producing nations.

You are correct. This is a great example of how capitalism and free markets allow for monopolization and market manipulation.

Or in other words, there is no such thing as a free market.

I believe that there never was such a thing ever..................free market my arse............

It costs $ 21 bucks to extract a barrel of oil from the north sea around the UK so the profit margin must be cents on a barrel by the time wages are factored in .


And investment has shrunk from £ 8 billion to £ 1 billion in the last year , but why nuke mecca when the price of everything is falling due to the cost of oil < sarc>


The brown stuff is going to hit the fan sooner rather than later me thinks

Here is how you fix the saudis little red wagon. cut off all humanitarian aid to their country and charge 10 times th e going rate for things they get imported. All that fruit and food and water they import? GONE. Military protection? Gone. weapons sales? gone. Oil producing equipment that we lease to them.. gone.

They seem to forget we can hurt them very very bad.

originally posted by: yuppa
Here is how you fix the saudis little red wagon. cut off all humanitarian aid to their country and charge 10 times th e going rate for things they get imported. All that fruit and food and water they import? GONE. Military protection? Gone. weapons sales? gone. Oil producing equipment that we lease to them.. gone.

They seem to forget we can hurt them very very bad.

In this changing set of tides today we may just go that route but incrementally.....