The US said that the oil market awaits after the attack in Saudi Arabia

Recently we Reportedhow “unknown drones” struck the oil and refining industries of Saudi Arabia. And so, American expert in the field of energy and industry Lauren Silva Laughlin already predicted in his article in The Wall Street Journal (WSJ) how the world oil market would react to this.

Laughlin claims that a forced 50% reduction in oil production in Saudi Arabia (5% of global oil supply) will be short but shocking. After which the author went on to discuss the confrontation between the “shale” and traditional oil producers.

According to Laughlin, traders "showed complacency" regarding geopolitical risks. They unnecessarily relied on the development of large shale deposits, especially in the United States (in Texas and New Mexico), which increased world oil production. However, what happened in Saudi Arabia has clearly demonstrated how important it is for the global economics is the middle east.

Laughlin noted that in 2014, oil prices did indeed fall significantly due to the large influx of shale oil to the world market. That is why the Organization of Petroleum Exporting Countries (OPEC) and a number of countries not included in this cartel, "struggled to maintain prices and adapt to the shale era."

It was then, the author is sure, that the traders got the impression that traditional oil producers are no longer so important. Indeed, when OPEC reduced oil production, the “shale” increased their oil production to a record level. However, such self-regulation of the market is possible only in normal times, and not in times of crisis. That is, the “shale” can only compensate for the slow decline in oil production by traditional oil producers.

In the event of sharp drops in traditional production, shale mining will find it difficult to adapt. Loss of 5 million bar. oil per day for the world market is sensitive and it’s good that it will not last long. Laughlin emphasized that the shale revolution “was a boon to the US economy and energy consumers around the world” and the world market will have to somehow adapt to what is happening, in the event of a longer failure, when large capacities of traditional oil production are temporarily lost again.

In this regard, it must be added that immediately after the attack by “unknown drones” in Saudi Arabia, Washington started talking about Iran standing behind this action, who allegedly directed the drone of the Yemenite Hussites with their confident hand at the “defenseless” Wahhabis. At the same time, without telling what Saudi Arabian air defense systems, purchased from the United States for a lot of money, were engaged in at that time.
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  1. gorenina91 Offline
    gorenina91 (Irina) 17 September 2019 06: 30
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    The US said that the oil market awaits after the attack in Saudi Arabia

    -So much has been said on this subject, and personally by me ...
    -And, it seems, for Russia the cards fell out quite successfully ... -this kind of, albeit temporary, but quite significant carte blanche ...- And then there’s how the card will go further ... -Maybe everything goes on for Russia it could be "in chocolate" ...

    -But, just yesterday, the situation radically changed ... -All of a meeting ... a meeting ...- of our guarantor., Erdogan and ... and .... and ... Hassan Rouhani ... -That's how ...
    -And what has changed ... for Russia. ??? - Yes, literally everything has changed ... -Russia again extended a "helping hand" .., a "solidarity hand" ..., a "support hand" ... and so on ... -Well, what can you do ...- times Russia so compassionate ... and lives only with emotions and emotional impulses ...
    -But the oil business; oil price regulation; "oil relations" ... are "guys" impassive and indifferent ... and all their hypostasis is based on rational, mercantile, even greedy observance of their own interests and obtaining maximum material benefits and benefits ... -Do not give a damn about these guys ... -They are managers of capitalism ... -Or not ??? - Then what kind of capitalism is it ...- since such a continuous "economic philanthropy" ... ??? - Moreover, with respect to states far from friendly to Russia ...
    -Eh., Once upon a time, from half a year ago, I personally wrote that by the fall of 2019, the oil price could jump to $ 90 per barrel ... -And it really could happen ...
    -But, after such meetings .., after such new Iranian-Turkish hugs "... -Russia simply" cuts off "itself ... such" prospects "...
    -Well., And now everything is back to square one again ... -For Russia, the same heavy routine and uncertainty in "Syrian affairs" begins ... -All the same quivering expectations of the realization of Russian "oil hopes." .. -And the aspiration of materialization of other rainbow "gas-oil" prospects ... and so on ... and so on ... and so on .. -Sorry ...