Pop quiz, hot shot… What country is currently the largest oil producer in the world? Saudi Arabia? Russia, perhaps? Oh, please… those guesses are so 2008.
The International Energy Agency announced in June of 2014 that the United States of America is currently the single biggest producer of both crude oil and natural gas in the world. Oil extraction in the United States is now soaring at shale formations in places like North Dakota and Texas, ever since the recent development of the process of hydraulic fracturing of rocks using high-pressured liquid. This process is more commonly referred to as “fracking”.
A few months ago, Saudi Arabia and their partners in OPEC decided to declare war on the United States. They did not do this by wagging their fingers at the United States or by pounding their chests. Saudi Arabia silently declared war on the United States through inaction.
Normally when oil prices start to fall, OPEC will cut back on oil production and prop these oil prices back up. Much to everyone’s surprise, Saudi Arabia did nothing to intervene last year when oil prices started to plummet. Saudi Arabia has intentionally flooded the global market with cheap oil over the past few months.
What the hell is Saudi Arabia thinking? Their plan is actually quite solid and would actually make big corporations like Wal-Mart very proud. The Saudi government is the big business bully in this global scenario. They believe that they are positioned to absorb these self-inflicted financial losses over the long-term. Saudi Arabia has even built up massive foreign-exchange reserves to finance their deficits. The Saudi Arabian government has declared a financial war with the private oil enterprise of the United States. As with the case in any war, the ultimate goal of Saudi Arabia is to completely destroy the other side.
These recent actions of Saudi Arabia have already caused the entire Russian economy to implode. It may only be a matter of time before private fracking companies in the United States go “belly up” due to these falling oil prices. The last time oil prices fell this far and this fast was in 2008 when the entire United States economy went “belly up” as well. Saudi Arabia plans to bring down everyone around them in an effort to eventually be the “last man standing”. If they ever gain majority control over the oil market once again, you can bet that oil prices will quickly go back above $115 dollars per barrel.
Just remember, the next time you smile at the sight of the unbelievably low prices at your nearest gas pump… what you are really cheering for is a secret war initiated by Saudi Arabia to once again make the United States their oil-dependent little bitch. I hope you enjoy your cheap gas for now… because it will come at an incredibly steep price.
not bad pretty good analyist, it will be awhile and alot can happen between now and later.
Thanks. I hope we can find a way to get out from under the thumb of Saudi Arabia. We keep treating the leaders of Saudi Arabia like they are our friends but they sure don’t act like friends.
Posh. This is luxury consumption. Its classified as luxury consumption because it is flexible.
This was planned. Its a whole market thing. Much of the oil wells being extracted now were drilled two decades ago. I know because I received a report from a oil rig worker saying they did nothing but drilled wells and capped them (that was 7 years ago I received that information. At the time, I thought it was a war (I don’t use the term war to describe non-war conflicts btw) strategy. Apparently its something else entirely.
By the way, I am very sorry to hear that you don’t use the term “war” to describe non-war conflicts. This must make it very difficult to discuss television shows like “Storage Wars” and topics such as the “Cold War” or “Star Wars”. I admire your conviction and wish you luck in your quest.
When oil gets back to $110, what’s to stop the “fracking companies” from ramping up their drilling again? The Saudi inaction is in effect putting a ceiling on price.
That is an excellent point. There is nothing to stop the United States from ramping up their drilling again once prices go back up… and when these oil companies return all these laid off oil workers back to work, there is nothing to stop Saudi Arabia from dropping oil prices once again. Saudi Arabia’s primary advantage is that it is much cheaper for them to retrieve oil from the ground than it is for the United States because the technique we use is more cost prohibitive. They have calculated that they can bankrupt these private oil industries without destroying their own economy. We will have to wait and see if their calculations are correct.