Monday, October 19, 2015

How long can Saudi Arabia still hold out with low oil prices?

Earlier this year, Saudi Arabia decided to put all their chips on the table for a gambit that they believed would crush foreign oil producers, and allow them to remain at the top of the global oil scheme despite their dwindling supply problems.  However, even with the U.S. fracking industry being decimated by declines in prices, the Saudi’s have not been able to crack Russia’s hold on production and distribution.  And in what is soon to be a nightmare scenario for the OPEC giant, Iran is within weeks of adding another 500,000 barrels of oil into the markets, creating even greater pressures on prices as the world sinks into a new recession.
Now several months later, Saudi’s gambit may have put themselves on the verge of decimation as the Arab Kingdom is experiencing massive budgetary problems that is finding the government unable to pay its debt obligations, and are forcing them to delay payments to contractors.

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