Interesting happenings with the price of oil now that the United States is a net exporter - from Zero Hedge:
Saudi Arabia Starts All-Out Oil War: MbS Destroys OPEC By Flooding Market, Slashing Oil Prices
With the commodity world still smarting from the Nov 2014 Saudi decision to (temporarily) break apart OPEC, and flood the market with oil in (failed) hopes of crushing US shale producers (who survived thanks to generous banks extending loan terms and even more generous buyers of junk bonds), which nonetheless resulted in a painful manufacturing recession as the price of Brent cratered as low as the mid-$20's in late 2015/early 2016, on Saturday, Saudi Arabia launched its second scorched earth, or rather scorched oil campaign in 6 years. And this time there will be blood.
Following Friday's shocking collapse of OPEC+, when Russia and Riyadh were unable to reach an agreement during the OPEC+ summit in Vienna which was seeking up to 1.5 million b/d in further oil production cuts, on Saturday Saudi Arabia kick started what Bloomberg called an all-out oil war, slashing official pricing for its crude and making the deepest cuts in at least 20 years on its main grades, in an effort to push as many barrels into the market as possible.
In the first major marketing decision since the meeting, the Saudi state producer Aramco, which successfully IPOed just before the price of oil cratered...
Without the oil revenues, the Arabs have nothing. Zip. Zero. Zilch. All of their glamorous cities and apparent wealth is a crude maquette propped up by the continuous influx of hard currency from oil exports. Lose that and they lose their world status. I do not doubt that they have forseen this day and have solid investments to carry them forward but still, sucks to be them right now. Some serious belt tightening is in order.
Title of the post? One of my favorite Clash songs:
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