Saudi Arabia Will Continue To Flood OIl Market
- Thread starter tay
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Of course the Saudis are pumping more. It's their prerogative to squeeze the competition out of the market.
And if we create export pipelines, it will only accelerate that process because they have cheaper oil and they will squeeze us out of the market too.
The ethical oil fallacy is one of the most naive ideas anyone has ever come up with as commodities are the closest thing to a free market and no one will be buying expensive Canadian oil. OPEC would just pump out more crude, and those terrorist states that the oil ethicists like Ezra worry about will just get more in their pockets.
The only way to resolve this issue is if the international community put sanctions on them, but that won't happen any time soon.
And if we create export pipelines, it will only accelerate that process because they have cheaper oil and they will squeeze us out of the market too.
The ethical oil fallacy is one of the most naive ideas anyone has ever come up with as commodities are the closest thing to a free market and no one will be buying expensive Canadian oil. OPEC would just pump out more crude, and those terrorist states that the oil ethicists like Ezra worry about will just get more in their pockets.
The only way to resolve this issue is if the international community put sanctions on them, but that won't happen any time soon.
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Are China and Mexico the biggest manufacturers?
The places that have the cheapest labour and resources are the ones that get the most business and they can do so because of free trade. It doesn't matter if they harbour terrorists or employ under age workers at pitifully low wages because the international community allows free trade with them.
The places that have the cheapest labour and resources are the ones that get the most business and they can do so because of free trade. It doesn't matter if they harbour terrorists or employ under age workers at pitifully low wages because the international community allows free trade with them.
what does this say to you?
Feb 05 16
In recent days, signs of a possible breakthrough in the year-long stand-off between Russia and Saudi Arabia on crude production strategy have emerged.
Saudi Arabia, OPEC's dominant member, has long insisted OPEC (read Saudi Arabia) would not reduce output to balance supply and demand absent corresponding cuts from non-OPEC members (read Russia), while Russia has consistently insisted harsh climactic conditions prevent Russian producers from reducing output and in any case Russia insists it could withstand low prices as well as any other country.
They already tried to do this earlier this year.
It still won't stop them from pumping out even if Russia creates a bilateral agreement with someone else.
It still won't stop them from pumping out even if Russia creates a bilateral agreement with someone else.
Geopolitics happens when you deal with non-renewable resources.
And I'm sure democratic states like the UK will give a fukk about ethical oil when they say shyt like this:
Bank of England: Oil price fall 'good for UK economy' - BBC News
And I'm sure democratic states like the UK will give a fukk about ethical oil when they say shyt like this:
Bank of England: Oil price fall 'good for UK economy' - BBC News
ummmmm...Yes it is and it's the Saudi's against their enemies to which Canada becomes a victim. That is something the salty types in Alberta don't seem to be able to connect the dots on with their crayons.......
6 February 2016
One night in his tent in Tripoli, Libya, Col. Muammar Khadafi told me, “the Saudis are a very rich family hiding behind high walls, terrified their neighbors will come and steal their wealth.”
He was right. The covetous neighbor most feared by the Saudis are Iran, followed by Egypt, Turkey and, more distantly, Israel. Iraq also used to be on the list until it was destroyed by the United States in 2003.
One must keep Saudi Arabia’s fear factor in mind to understand the oil wars that are now shaking the world’s economy to its foundations.
The Saudi royal family decided to kill two competitive birds with one stone – Iran and surging US shale oil producers – by kicking off a price war to run them out of business. Saudi Arabia is one of the world’s lowest cost oil producers. The Saudis also hoped to punish Russia for backing Syria’s government.
Price wars are the last recourse of all bad businessmen.
The problem with this ham-handed strategy is that your competitors will hang on desperately and cut prices to survive, even if it means running big losses. Price wars hurt all concerned. They dislocate production, markets, future investments and capital spending.
The result of Saudi Arabia’s oil price war has been to drive the once “black gold” down to around $32 a barrel from a high of $105 in 2015. Other Gulf producers joined Saudi Arabia in slashing prices. We have gone from panic over “peak oil” (worldwide shortages) to panic that we are drowning in oil.
So far, the Saudi oil war has indeed badly damaged the US shale and regular oil industry but has not put them out of business.
However, oil industry dividends are being cut way back or eliminated. Blundering by the US, Canadian and Japanese central bankers has made things far worse.
Other major oil producers like Russia, Iran, Algeria, Malaysia, Kazakhstan and Indonesia have also been badly hurt but are hanging on. The oil war has seriously damaged the economy of the European Union. Japan should have been boosted by low oil prices but is also suffering relentless industrial decline, as witness by the humiliating sale of Sharp Electronics to China’s Foxconn.
Oil has become tightly correlated to North America’s stock markets, meaning that they rise and fall with the price of oil. Low oil prices may have helped a few industries like airlines, but they have created a worldwide recession. Canada, a dire example, has been battered by low oil prices and faces a bleak future unless resources rise sharply in price.
Efforts by OPEC and other oil producers to agree to cut back production and thus foster a price rise have so far failed due to fears that nations who reduce exports will see their former markets taken by cheating competitors. In economics, it’s known as ‘beggar they neighbors.’ The Saudis and Gulf producers keep blocking a decrease in oil production.
Now, the desert oil producers are deeply worried that Iran, freed from US economic prison, will soon begin exporting at least 500,000 bbls a day of oil. Iraqis oil production is finally returning to pre-US invasion levels. Oil prices could drop even further unless a deal is reached.
But Saudi Arabia is so petrified of Iran it is very reluctant to make a deal that will help grow the Islamic Republic’s economy – and hence even limited military power. So what’s to be done?
Some critics are saying that a group of obscenely rich Bedouins should not be allowed to hold the world economy to ransom. The western powers should press the Saudis to cut production or risk seeing vast Saudi investments in the US and Europe frozen – just as was done with Iran. The Saudis should also be told to stop their bloody war against Yemen that has killed thousands, cease their human rights abuses, and cease funding dangerous Islamic extremist movements, including ISIS and Syrian revolutionaries.
Why has this not been done? Because too many American and British politicians are on the Saudi payroll, and too much of Britain’s and America’s arms producers are dependent on Saudi business. The Saudis’ heads have swelled with arrogance while their dim-witted oil policies threaten the global economy.
The Saudis and OPEC must be offered a deal by the great powers that they can’t refuse. Otherwise, the Saudis may remain a bigger threat than ISIS.
SAUDIS – STOP THE OIL FLOOD – OR ELSE « Eric Margolis
The only way to stop it is if the international community agreed to put sanctions on Saudi Arabia and that would allow for demand to grow for other exporting countries.
Thanks for finally admitting throttling oil back will increase the price.
I remember when you tried to convince us Mulcairs plan to do so, wouldn't.
Mulcair didn't want to throttle oil, he just didn't want the oil and manufacturing industries to negatively influence each other.
That would probably be why we used terms like "throttle" in our argument, uh huh.
The petro dollar is certainly a problem and so manufacturing picks up a bit of the slack when oil falters but then the opposite tends to happen when the price of oil goes up.
That's nice. I'm just glad you finally admit throttling oil back causes the price to go up.
I think the only reason we are good allies with the Saudi's is because they have agreed to exclusively use our Currency for the trade of their oil.
This also means they have ended up with so much surplus of American Currency they probably don't know what to do with it all.
I think the recent move by China to buy Russian oil with Chines Yuan Currency triggered this economical war, and the move by Saudi's to undercut.
It's in the best interest of Saudi's to protect the Green Back, since they have trillions in reserves.
The move to trade oil with their own currency by China would depreciate the value of American currency.
And that would suck if you had trillions of American dollars in your reserves.
This also means they have ended up with so much surplus of American Currency they probably don't know what to do with it all.
I think the recent move by China to buy Russian oil with Chines Yuan Currency triggered this economical war, and the move by Saudi's to undercut.
It's in the best interest of Saudi's to protect the Green Back, since they have trillions in reserves.
The move to trade oil with their own currency by China would depreciate the value of American currency.
And that would suck if you had trillions of American dollars in your reserves.
