Quote:
Originally Posted by SiMor29
A) the Saudis hate a low oil price
not so simple, saudis have often intentionally drive price down for extended periods
the primary reason is to disincentivise capital investment/R&D into alternative sources, but they also do it to squeeze traditional competition and as a geopolitical tool (sustained low price ****s up tehran, for instance). there are a bunch of other reasons too
it cuts into their short-term margin obv, but they can do it and remain profitable because they are the cheapest producer, costs them like $7.50 to extract a barrel as sand is easy to dig. (places like usa and venezuela = more like $30-$40/barrel)