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Saudi Arabia may go broke before the US oil industry buckles

  • 09-08-2015 2:49pm
    #1
    Registered Users, Registered Users 2 Posts: 4,945 ✭✭✭


    From an article in the telegraph

    Bit of schadenfreude here, would make for an interesting Middle East , not before its time too.

    http://www.telegraph.co.uk/finance/oilprices/11768136/Saudi-Arabia-may-go-broke-before-the-US-oil-industry-buckles.html

    "Saudi Citizens pay no tax on income, interest, or stock dividends. Subsidized petrol costs twelve cents a litre at the pump. Electricity is given away for 1.3 cents a kilowatt-hour. Spending on patronage exploded after the Arab Spring as the kingdom sought to smother dissent.
    The International Monetary Fund estimates that the budget deficit will reach 20pc of GDP this year, or roughly $140bn. The 'fiscal break-even price' is $106."


«1

Comments

  • Closed Accounts Posts: 12,452 ✭✭✭✭The_Valeyard


    I'm sure the USA will bail them out..........or have they been bailing out the USA?


    Edit: also, f*ck Saudi Arabia with their princes and State sponsored terrorism.


  • Registered Users, Registered Users 2 Posts: 22,382 ✭✭✭✭endacl


    Saudi produces nothing but oil and human misery. Not a sustainable model.


  • Closed Accounts Posts: 46,938 ✭✭✭✭Nodin


    endacl wrote: »
    Saudi produces nothing but oil and human misery. Not a sustainable model.


    There was a chipper near me like that. Lasted for years though.


  • Registered Users, Registered Users 2 Posts: 13,556 ✭✭✭✭kowloon


    Nodin wrote: »
    There was a chipper near me like that. Lasted for years though.

    That's because they keep reusing the same oil.


  • Posts: 0 [Deleted User]


    Wasn't there a Saudi billionaire who said something like, (fixing with proper quote)
    "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel”


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  • Registered Users, Registered Users 2 Posts: 32,370 ✭✭✭✭Son Of A Vidic


    also, f*ck Saudi Arabia with their princes and State sponsored terrorism.

    Unfortunately Saudi sponsored terrorism will persist, as long as Uncle Sam and the West are only too glad to look the other way.


  • Banned (with Prison Access) Posts: 647 ✭✭✭RichardCeann


    The sooner they go broke and are no longer able to finance the spread of Wahhabism in the west the better.


  • Registered Users, Registered Users 2 Posts: 12,248 ✭✭✭✭BoJack Horseman


    so, a government that levies almost zero taxes is shy of a shilling or two.

    what are the odds!


  • Closed Accounts Posts: 2,050 ✭✭✭nokia69


    I'm sure the USA will bail them out..........or have they been bailing out the USA?


    Edit: also, f*ck Saudi Arabia with their princes and State sponsored terrorism.

    I watch the republican primary debates during the week and they were all attacking Iran and the nuclear deal, not one of them said a word about the saudis, who are behind most of the islamic terrorism all over the world

    and no one said a word about Bush who is loved by the saudi royals


  • Closed Accounts Posts: 23,495 ✭✭✭✭Billy86


    nokia69 wrote: »
    I watch the republican primary debates during the week and they were all attacking Iran and the nuclear deal, not one of them said a word about the saudis, who are behind most of the islamic terrorism all over the world

    and no one said a word about Bush who is loved by the saudi royals
    They know better than to bite the hand that feeds. Ironically, it's the same reason that the Zionists just a little to the northwest of the Saudi's are also allowed to go about doing whatever they want. Just a cycle of bad people mixing with bad people.


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  • Registered Users, Registered Users 2 Posts: 13,051 ✭✭✭✭bnt


    I'm sure the USA will bail them out..........or have they been bailing out the USA?
    Not on purpose, perhaps, but they are:
    At present, the surplus petrodollars of the world's top oil exporter are mostly invested abroad by the Saudi Arabian Monetary Agency (SAMA), its central bank, which had net foreign assets worth 2.75 trillion riyals ($733 billion) in October.

    Most of that money is believed to be in low-risk U.S. dollar assets such as U.S. Treasury bonds and bank accounts, which tend to earn low returns compared to the more aggressive, higher-risk investments favored by some other rich oil exporters.
    Buying a US Treasury bond = lending money to the US Treasury, which uses the money to support the Dollar.

    Ye Hypocrites, are these your pranks
    To murder men and gie God thanks?
    Desist for shame, proceed no further
    God won't accept your thanks for murder.

    ―Robert Burns



  • Closed Accounts Posts: 2,050 ✭✭✭nokia69


    the Saudis are also keeping prices low to punish Vlad for his support for Assad


  • Registered Users, Registered Users 2 Posts: 3,091 ✭✭✭Antar Bolaeisk


    Don't forget about the huge unemployment in the country and even those who are employed are primarily employed by the government with only a small percentage working in the private sector.


  • Closed Accounts Posts: 24,465 ✭✭✭✭darkpagandeath


    Good, Maybe then they will stop funding... Something something.


  • Moderators, Business & Finance Moderators, Society & Culture Moderators Posts: 9,763 Mod ✭✭✭✭ToxicPaddy


    The Saudis like the Chinese have purchased massive amount of foreign debt to subsidise themselves when things go bang.

    According to various articles published, they are pulling oil out of the ground for less than $30 a barrel and its currently selling for $50+ a barrel so they are fine.

    When the US started passing laws allowing fracking for oil, they were saying they would be self sufficient in 10-15 years for oil, that's some feat considering they apparently used 8 million barrels a day to run their economy, according to an article in Bloomberg I read a while back.

    However fracking costs more than $50 a barrel to get out of the ground apparently. The main reason OPEC countries are refusing to reduce production is that they want to kill all of these operations off before they start.

    Brazil has the 5th or 6th largest oil reserves off its coast but it's at deep sea levels and costs a small fortune to retrieve, not cost effective at the moment.

    Russia is crippled financially at the moment due to sanctions and the main buyer of their oil and gas, China slowing down. They have even turned to courting India in hope but that probably won't happen. Plus add to that Putins ego to refuse to give in to Europe about sanctions and he will drive Russia back to the dark ages to save face.

    OPEC controls a large portion of the worlds oil production, Saudi Arabia control OPEC so unless their oil runs out soon. I can't honestly see the Saudis being in any sort of financial trouble soon. If they do, they will simple reduce subsidies and quash any revolt by those who try to protest against it.

    The wealthy will not say a word as they can afford to take a hit and they know what side their bread is buttered on. Plus with thousands of palaces around the country for all extended members of the royal family, I'm sure their spending will be reeled in and that alone will save stupid amounts of money.


  • Closed Accounts Posts: 4,935 ✭✭✭TallGlass


    The West should be pushing now to move to more sustainable methods. Keeping people rich is not an excuse, oil will run out. We should be using oil to our advantage so we can get the sustainable model up and running before the lights literally go out when the oil runs out.


  • Registered Users, Registered Users 2 Posts: 15,411 ✭✭✭✭Oat23


    Wasn't there a Saudi billionaire who said something like, (fixing with proper quote)

    That was Rashid bin saeed Al Maktoum who was the emir of Dubai until he died in 1990.

    He had similar concerns for Dubai as to what is going on in Saudi Arabia though. He was worried Dubai was too dependent on the oil discovered in the 60's and spent the last two decades of his life working to develop the place so it would survive when it runs out.


  • Closed Accounts Posts: 24,465 ✭✭✭✭darkpagandeath


    TallGlass wrote: »
    The West should be pushing now to move to more sustainable methods. Keeping people rich is not an excuse, oil will run out. We should be using oil to our advantage so we can get the sustainable model up and running before the lights literally go out when the oil runs out.

    we had 50 years of oil 20 years ago...


  • Closed Accounts Posts: 843 ✭✭✭QuinDixie


    let them return to goat herding


  • Closed Accounts Posts: 4,935 ✭✭✭TallGlass


    we had 50 years of oil 20 years ago...

    So that still leaves 30 years. Care to explain your post or just leave it at the maths equasion your after leaving for everyone.


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  • Registered Users Posts: 540 ✭✭✭Madd Finn


    ToxicPaddy wrote: »

    According to various articles published, they are pulling oil out of the ground for less than $30 a barrel and its currently selling for $50+ a barrel so they are fine.

    When the US started passing laws allowing fracking for oil, they were saying they would be self sufficient in 10-15 years for oil, .....
    However fracking costs more than $50 a barrel to get out of the ground apparently. The main reason OPEC countries are refusing to reduce production is that they want to kill all of these operations off before they start.


    OPEC controls a large portion of the worlds oil production, Saudi Arabia control OPEC so unless their oil runs out soon. I can't honestly see the Saudis being in any sort of financial trouble soon.
    There's an interesting chart in an earlier thread on a similar topic that illustrates some of the points you're making about the relative cost of different extraction techniques.
    Click here
    http://www.boards.ie/vbulletin/showpost.php?p=93722356&postcount=8


  • Closed Accounts Posts: 24,465 ✭✭✭✭darkpagandeath


    TallGlass wrote: »
    So that still leaves 30 years. Care to explain your post or just leave it at the maths equasion your after leaving for everyone.

    It was a figure tossed out to scare everyone about oil running out. They have absolutely no idea when oil will run out they keep just spouting about 50 years.


  • Registered Users Posts: 6,933 ✭✭✭smurgen


    Horrible country.was living with an Indian chaps who's father was a doctor there for years.he said the place was like a prison for them and they were subjected to daily racial abuse by the locals.the sooner they don't have a pot to piss in the better.they're poisonous.


  • Closed Accounts Posts: 2,050 ✭✭✭nokia69


    ToxicPaddy wrote: »
    The Saudis like the Chinese have purchased massive amount of foreign debt to subsidise themselves when things go bang.

    According to various articles published, they are pulling oil out of the ground for less than $30 a barrel and its currently selling for $50+ a barrel so they are fine.

    When the US started passing laws allowing fracking for oil, they were saying they would be self sufficient in 10-15 years for oil, that's some feat considering they apparently used 8 million barrels a day to run their economy, according to an article in Bloomberg I read a while back.

    However fracking costs more than $50 a barrel to get out of the ground apparently. The main reason OPEC countries are refusing to reduce production is that they want to kill all of these operations off before they start.

    Brazil has the 5th or 6th largest oil reserves off its coast but it's at deep sea levels and costs a small fortune to retrieve, not cost effective at the moment.

    Russia is crippled financially at the moment due to sanctions and the main buyer of their oil and gas, China slowing down. They have even turned to courting India in hope but that probably won't happen. Plus add to that Putins ego to refuse to give in to Europe about sanctions and he will drive Russia back to the dark ages to save face.

    OPEC controls a large portion of the worlds oil production, Saudi Arabia control OPEC so unless their oil runs out soon. I can't honestly see the Saudis being in any sort of financial trouble soon. If they do, they will simple reduce subsidies and quash any revolt by those who try to protest against it.

    The wealthy will not say a word as they can afford to take a hit and they know what side their bread is buttered on. Plus with thousands of palaces around the country for all extended members of the royal family, I'm sure their spending will be reeled in and that alone will save stupid amounts of money.


    it depends on the field but saudi production costs are a lot lower than $30 a barrel, so yes the saudis are still selling oil at a profit, so are most of OPEC and Russia BTW, but thats not the issue

    to balance the national budget the saudis need higher prices, they have a young growing population who expect to be kept in the style that they have become accustomed to, they also want to fund ISIS and the war in Yemen, all of these things are hard to do with oil below $100

    Brazil are nowhere near the 5th or 6th largest reserves and Russia is NOT going back to the dark ages LOL

    the Saudis however are in serious trouble IMO, Yemen is the future of the arab world, there is a massive war on the way to the middle east, its not going to be pretty


  • Closed Accounts Posts: 24,465 ✭✭✭✭darkpagandeath


    nokia69 wrote: »
    it depends on the field but saudi production costs are a lot lower than $30 a barrel, so yes the saudis are still selling oil at a profit, so are most of OPEC and Russia BTW, but thats not the issue

    to balance the national budget the saudis need higher prices, they have a young growing population who expect to be kept in the style that they have become accustomed to, they also want to fund ISIS and the war in Yemen, all of these things are hard to do with oil below $100

    Brazil are nowhere near the 5th or 6th largest reserves and Russia is NOT going back to the dark ages LOL

    the Saudis however are in serious trouble IMO, Yemen is the future of the arab world, there is a massive war on the way to the middle east, its not going to be pretty

    :pac:


  • Registered Users Posts: 130 ✭✭PolaroidPizza


    This whole post started with an article from the telegraph. Keep in mind that tge telegraph owners (barclays brothers) are in a heated battle with some saudis in a billion euro hotel deal at the minute....


  • Closed Accounts Posts: 24,465 ✭✭✭✭darkpagandeath


    This whole post started with an article from the telegraph. Keep in mind that tge telegraph owners (barclays brothers) are in a heated battle with some saudis in a billion euro hotel deal at the minute....

    What has that got to do with Oil ?


  • Registered Users, Registered Users 2 Posts: 4,595 ✭✭✭enfant terrible


    It was a figure tossed out to scare everyone about oil running out. They have absolutely no idea when oil will run out they keep just spouting about 50 years.

    I saw a documentary that said we will soon reach "peak oil" and the world economy will collapse :)

    Also overpopulation, climate change and finally a super volcano will completely destroy the human race.


  • Registered Users Posts: 1,188 ✭✭✭LDN_Irish


    smurgen wrote: »
    Horrible country.was living with an Indian chaps who's father was a doctor there for years.he said the place was like a prison for them and they were subjected to daily racial abuse by the locals.the sooner they don't have a pot to piss in the better.they're poisonous.

    My dad had a Pakistani fella in his taxi over in London recently enough, the chap had just moved to London and they were chatting. He was saying how much he loved London and how it's amazing to be able to walk around whenever you wanted and people are so friendly. (Sidenote: how ****ing unfriendly do the people have to be where you were before to think London is really friendly!?) My dad asked him did he have any concerns about racism and he said no matter what happened it could never be worse than where he was before which turned out to be you guessed it! Saudi Arabia! He said you have to literally walk along in the road if there are Arabs walking towards you because they will kick you in to the road it they feel you haven't adequately acknowledged their place above you in the hierarchy.

    Big time anecdote of course, not even told to me but to my father but I found it interesting.


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  • Moderators, Business & Finance Moderators, Society & Culture Moderators Posts: 9,763 Mod ✭✭✭✭ToxicPaddy


    Madd Finn wrote: »
    There's an interesting chart in an earlier thread on a similar topic that illustrates some of the points you're making about the relative cost of different extraction techniques.
    Click here
    http://www.boards.ie/vbulletin/showpost.php?p=93722356&postcount=8

    Yeah a lot of people think "oh it costs x amount to pull oil from a well and sure they all do it the same way" which is very far from the truth.

    Iran and Iraq have some of the biggest oil deposits in the world, yet political turmoil, sanctions, lack of investment, technologies involved etc all affect the cost of getting a barrel of oil from the ground.

    Plus there are different types of crude, for instance sweet crude favoured for European petrol as European fuel is generally more refined and the less carbon found in the oil means it's easier and less costly to meet the standards required so more profile. Libya is one of the main producers of crude oil so the troubles there really hit the cost of fuel in Europe.

    Saudi and much of middle eastern oil is at shallower depts so it's easier to extract.

    Statoil makes a huge amount of money from its patents from technology to extract oil from deep sea locations as it spends vast sums developing this technology.

    It's a very diverse industry and they wealth involved and profit margins are astronomical!


  • Closed Accounts Posts: 24,465 ✭✭✭✭darkpagandeath


    I saw a documentary that said we will soon reach "peak oil" and the world economy will collapse :)

    Also overpopulation, climate change and finally a super volcano will completely destroy the human race.

    And a mega tsunami solar flair also a meteor strike/comet. Or a Gamma Ray burst Earth core shutting down the list goes on. :pac:


  • Registered Users, Registered Users 2 Posts: 7,019 ✭✭✭uch


    And a mega tsunami solar flair also a meteor strike/comet. Or a Gamma Ray burst Earth core shutting down the list goes on. :pac:

    Don't be silly if there's a Gamma Ray burst we'll all just turn into Incredible Hulks

    21/25



  • Closed Accounts Posts: 2,050 ✭✭✭nokia69


    Russia is NOT going back to the dark ages LOL
    :pac:

    how long will this decline to the dark ages take, unlike most of the other countries in OPEC Russia has other elements to its economy which can be developed and the sanctions with Europe won't last forever

    so I agree that they will have problems in the years ahead, but they have seen far worse not too long ago


  • Registered Users, Registered Users 2 Posts: 8,034 ✭✭✭mad muffin


    Did anyone else think penis nose? :pac:


  • Closed Accounts Posts: 1,616 ✭✭✭masculinist


    This news just made my day :)


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  • Registered Users, Registered Users 2 Posts: 17,371 ✭✭✭✭Zillah


    nokia69 wrote: »
    Yemen is the future of the arab world

    ...what? Why? Isn't Yemen a largely undeveloped backwater currently rife with sectarian conflict?


  • Closed Accounts Posts: 6,363 ✭✭✭KingBrian2


    Saudi Arabia is the biggest source of terrorism in the Arab world. If they go broke they deserved it.


  • Closed Accounts Posts: 2,050 ✭✭✭nokia69


    Zillah wrote: »
    ...what? Why? Isn't Yemen a largely undeveloped backwater currently rife with sectarian conflict?

    well yeah, just like much of the arab world

    people won't pay $147 for a barrel of sand, and apart from sand, oil, and religion, what do the saudis have


  • Registered Users, Registered Users 2 Posts: 7,020 ✭✭✭BlaasForRafa


    nokia69 wrote: »
    and apart from sand oil and religion what do the saudis have

    an innovative technological sector and a vibrant service economy....oh wait er nothing...:pac:


  • Banned (with Prison Access) Posts: 12,333 ✭✭✭✭JONJO THE MISER


    smurgen wrote: »
    Horrible country.was living with an Indian chaps who's father was a doctor there for years.he said the place was like a prison for them and they were subjected to daily racial abuse by the locals.the sooner they don't have a pot to piss in the better.they're poisonous.

    Exactly, there pure savages, sooner there eating sand again the better.


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  • Registered Users, Registered Users 2 Posts: 3,750 ✭✭✭fleet_admiral


    Feck. I only noticed a drop in the price of diesel below 120 tonight in the maxol in Harolds Cross. That will be up tomorrow no doubt


  • Closed Accounts Posts: 3,389 ✭✭✭NachoBusiness


    Was watching some docu last year that said the planet is very close to using 100 million barrels of oil per day.

    They said to imagine Niagara Falls flowing oil instead of water for around 7 hours straight, each day, every day and that that would be it's equivalence.

    Then again, could have just been an episode of The Beverly Hillbillies I'm remembering.


  • Registered Users, Registered Users 2 Posts: 8,187 ✭✭✭Wompa1


    Things are working out pretty good for the US right now. They slowed down on the fracking because like someone else mentioned. It costs about 50 dollars a barrel to produce....now they can buy it for less from the Saudi's. A Saudi fella had said they were fine with the drop in price and it seemed fair. I would think they now know, the US can turn around tomorrow and start producing more of their own oil if they go over 40-45 a barrel.

    Ultimately like somebody else said. This is the time to pursue alternative sources. Ironically, a former Republican candidate in the US, John McCain was pushing that as part of his campaign.

    I'd bet oil companies would be up for it too...people think it's a war for oil and the oil companies will keep others out...the oil companies have more money than God and politicians in their back pockets. They can be the ones to sell the alternative sources and set the price they want. It's their world. We're just spectators


  • Registered Users Posts: 521 ✭✭✭Voodoo_rasher


    Their working-age population by then may likely be heading where 100,000s

    of Syrian Arabs, Afghans, Eritreans and Sub-Saharan Africans are going now..That is when there is nothing to hold them back over there.


  • Registered Users, Registered Users 2 Posts: 4,945 ✭✭✭Bigus


    Their working-age population by then may likely be heading where 100,000s

    of Syrian Arabs, Afghans, Eritreans and Sub-Saharan Africans are going now..That is when there is nothing to hold them back over there.

    They're too lazy and work shy to head anywhere.


  • Registered Users, Registered Users 2 Posts: 17,371 ✭✭✭✭Zillah


    It's such a shame that they've squandered their wealth so much. The greatest financial bonanza the world has ever seen and instead of using it to transform their country into a diverse and prosperous nation with strong industry and an incredible nest egg, they've indulged in populism and exorbitant waste. With the amount of sun Saudi Arabia gets they could have arranged it so that they would become a solar power powerhouse as soon as they can't rely on the oil any more. Imagine, Saudi of the future entirely green.

    Nah lets just create another water garden in the desert.


  • Closed Accounts Posts: 12,318 ✭✭✭✭Menas


    I am scratching my head here to find nice things to say about the Saudi's...and I cant.

    I have a buddy working in Riyadh at the moment. He is getting very well paid for been there with his family...but hates the place. Not sure the money is worth it.


  • Closed Accounts Posts: 1,707 ✭✭✭arayess


    KingBrian2 wrote: »
    Saudi Arabia is the biggest source of terrorism in the Arab world. If they go broke they deserved it.

    who else deserves "it"?

    USA? Israel ? UK?

    Maybe most countries are cnuts one as bad as the other in their quest for natural resources.


  • Closed Accounts Posts: 1,616 ✭✭✭masculinist


    Their working-age population by then may likely be heading where 100,000s

    of Syrian Arabs, Afghans, Eritreans and Sub-Saharan Africans are going now..That is when there is nothing to hold them back over there.


    Let the Saudis live in their own excrement. They were not a colonized country and they never welcomed anyone foreign or different into their own country except for harbouring despots like Idi Amin. The west owes them nothing and has already given them money in return for oil beyond the dreams of the Arabian Nights tales. In their case any PC attempt to load some additional imaginary guilt onto the shoulders of Europeans wont work. Saudi is one of the most racist intolerant countries in the world and they still enslave Filipinos and bonded serfs from the poorest parts of India etc. Slavery there is very real.

    That whole region is royally screwed. They desperately need unbelieveable amounts of water and how will they run desalination plants when there is no oil ? It's game over then. I predict the undeserving dictator royals of Saudi Arabia will take their trillions and go live in Switzerland and leave their religiously brainwashed population behind. Poverty will bring humility and impotence. it is an unbelievabe absolute testament to their uselessness to the world that they have produced no industry , no big companies and nothing of value whatsoever despite multiple generations of them being gifted with free pensions and top class incomes for life in the form of oil.
    I was just thinking. When have you ever bought a product which had a ''Made in Saudi Arabia'' label written on it? I can't even think of one.


    .


  • Closed Accounts Posts: 1,707 ✭✭✭arayess


    Menas wrote: »
    I am scratching my head here to find nice things to say about the Saudi's...and I cant.

    I have a buddy working in Riyadh at the moment. He is getting very well paid for been there with his family...but hates the place. Not sure the money is worth it.

    Not just you - but some amount of comments here about the Saudi's and Saudi Arabia that if were said about any african country and its' people would have the righteous screaming "racialist, racialist"...

    I guess you can only be racist to black people.


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