December 14, 2014

TUMBLING PRICES AND CRUMBLING REGIMES:

Saudi Arabia's oil war against Iran and Russia (Ralph Peters, December 14, 2014, NY Post)

If oil prices remain low through next year, the effect on rogue governments, from the Russian Federation to Venezuela, will go from damaging to devastating.

But Western economies (and China's) stand to benefit, with cheap oil possibly tickling Europe's snoozing markets awake. Even most underdeveloped states will get a welcome break.

This price plunge has been driven by Saudi Arabia, OPEC's dominant power. While it's true that part of Riyadh's actions respond to the energy renaissance in North America, the greater motivation is breaking Iran's will.

The Saudis believe they can no longer rely on the US to contain Tehran's imminent nuclear threat, so they're out to do what our lukewarm sanctions couldn't.

There's no love lost between the Saudis and the Russians, either. The Saudis want the Assad regime in Syria to go. Moscow props it up.

OPEC isn't scared of $40 oil (Gregory Wallace, December 14, 2014, CNNMoney)

OPEC won't rush to cut oil production even if prices fall as low as $40 per barrel, one of the cartel's members said Sunday.

The energy minister for the United Arab Emirates told Bloomberg at a Dubai conference that the middle eastern oil producers believe "the market will stabilize itself."

"We are not going to change our minds because the prices went to $60 or to $40," Suhail Al-Mazrouei said.

Even as it has watched prices dip, OPEC declined to cut back on production at its November meeting. Some observers had expected a production cut to boost the price of crude.

Posted by at December 14, 2014 7:01 PM
  

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