The reason the Saudis keep pumping oil.

So, I have been thinking this is the case for sometime now. I live in a resource dependent state that is arriving to the party too late. With this being the warmest year on record the political propaganda to support the oil industry is collapsing. Who remembers " drill baby drill!" that was the cry in 2008. Now it is cap that sucker Saudi Arabia. The Saudis understand that in the future their vast reserves may be close to worthless, so they will pump no matter what the cost.
We have new technologies emerging that will greatly diminish the predicted need for oil. Sure, there is still oil that will be needed to fuel the world, its just that the demand won't justify high prices anymore.

This is an interesting read
m.huffpost.com...

Text The price of oil has crashed over the last year and a half. In the middle of 2014, a barrel of crude cost over $100. Now it’s worth just over $30.

Normally, such a collapse would lead OPEC to pump less oil. The idea is that less oil on the market helps keep prices up. But despite a historic fall in oil prices, the Saudi Arabian-led international oil cartel hasn’t budged: The biggest step it has taken so far is offer to freeze production at its current record levels. Production cuts are not on the table.

The big question is, why? One theory is that OPEC simply has less control over the oil market than it used to, thanks to the shale gas revolution. Another possibility is that OPEC wants oil prices to be low precisely in order to drive shale oil producers, which have higher costs, out of business. 

Here’s a simpler hypothesis: Maybe the Saudis aren’t cutting production in the face of low prices because huge portions of their oil reserves might eventually become worthless. That’s what James Rowe, an environmental studies professor at the University of Victoria, thinks. 

If that happens, today’s oil prices won’t look low — not when there’s an overabundance of an asset that can’t be sold. But oil prices are the lowest they’ve been in 12 years, you say. How could they ever be considered high? 

This explanation relies on two related ideas: a carbon bubble and stranded assets. The carbon bubble refers to the fact that energy companies around the world are sitting on five times more fossil fuels than can be burned, the research nonprofit Carbon Tracker estimates. Those assets, worth about $2 trillion, are referred to as “stranded assets.”

So what does that mean for an oil company that controls a state? It might as well sell as much oil as possible while still can.

Saudis can’t sell oil for $100 a barrel, obviously, but Rowe said they “appear to be positioning themselves for the next best option: gobbling up as much of the earth’s remaining carbon budget for themselves before the bubble bursts. Isn’t it better to sell at a lower price than to receive nothing at all from vast unburnable reserves?”

By the time the world has moved on from oil, Rowe said, Saudi Arabia “will have sold what it could while its reserves were still burnable.”

And the country will have moved on as well. Its oil minister, Ali Al-Naimi, has said Saudi Arabia will be a solar exporter by the middle of this century. 

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I read this and started searching for more information.

m.huffpost.com...



orionmagazine.org...



I think it's true. Leaders are starting to realize that climate change is a bigger issue then providing cheap energy to the world and they would rather let oil companies destroy themselves before creating pro oil agendas anymore. The Iran nuclear deal is one of these examples.
m.dw.com...

Text DW: John D. Rockefeller heralded a new era in history with Standard Oil. Are the Rockefellers now ending the oil age?

Stephen Heintz: We are hoping to help to finish the oil age. It is time to move away from fossil fuels, and to move as quickly as possible to clean, renewable energy in order to save the planet. The oil age is now coming to its own end.

www.cbsnews.com...



I searched and couldn't find this all on here... Just wondering what everyone thinks? Is this the end to the oil era as we know it?

Text "The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil"

-- Sheikh Zaki Yamani, a Saudi Arabian who served as his country's oil minister three decades ago

Quoted by the Economist, The End of the Oil Age, 23 Oct 2003

I was just reading through some sites related to this threads topic. I also somehow felt it might be a race to the bottom, The US will pump as much out as possible, Russia is also not looking too great here in this scenario. The thought occurred to me that possibly the US and the Saudis are driving the price down to totally undercut Russian production to the bone in a consorted effort.

The Russians support a nuclear Iran, which the Saudis oppose, Russia and the Saudis are the other two largest oil producer. The US/EU aren't happy they got caught with their pants down over Crimea. So this may be part of how the West back-doored Putin economically. Russian Syrian withdrawals....Hint ?

a reply to: SLAYER69

That's what I originally thought when this first started was that it was to punish Russia... I'm starting to think that there is more to it now.

a reply to: bryan2006

No, Not just to punish Russia, but might as well considering how it's all going to go down.

Wow, thanks ops! This explain alot. That explain so much and is so simple, I really like this article! Stars and flag!

Its a possibility that has crossed my mind.....but well need the oil for plastics and a host of other chemical needs besides fossil fuels...

a reply to: bandersnatch

Yes we will.... Just not on a volume that will make it anywhere near as profitable as it once was.

The Saudis are pumping oil to stop 'fracking' oil being sold, Saudi oil is cheaper to pump than what 'fracking oil, and oil shale gas cost to produce, plus, 'oil' does not just produce Gas and diesel, but many other industries use its contents, plastics, lubricants, sealants, tarmacadam, paints, I bet there are more I cannot think of.

originally posted by: pikestaff
The Saudis are pumping oil to stop 'fracking' oil being sold, Saudi oil is cheaper to pump than what 'fracking oil, and oil shale gas cost to produce, plus, 'oil' does not just produce Gas and diesel, but many other industries use its contents, plastics, lubricants, sealants, tarmacadam, paints, I bet there are more I cannot think of.

This is how it started. Fracking in the US was flooding the market driving prices down. So OPEC decided that since fracking cost more that if they flooded the market and drove the price even lower the frackers would go out of business. Things started going wrong from the start as the frackers were able to hang on a lot longer then hoped by cutting costs. Then more oil started coming out of Iraq as ISIS was suddenly in retreat and in Libya more oil was being pumped than expected as well. Then the Iran deal was coming up and everybody knew that meant Iran would soon be flooding the market as well. So everybody started pumping like crazy fearing more price drops. The final nail in the coffin was the economic slow down in China and the reduction in demand for oil along with it.

Now stopping pumping means somebody else grabs your market share. So everybody is pumping and Iran is just beginning. Bad for oil, good for everybody else.

Someone please explain why gas in southwestern ontario jumped from 82.5 per litre to 93.3 overnight? BS. It takes forever to go down but hours to go up.

originally posted by: whatnext21
Someone please explain why gas in southwestern ontario jumped from 82.5 per litre to 93.3 overnight? BS. It takes forever to go down but hours to go up.

Because people have incorrectly assumed that the over riding factor for final sales price is simply supply versus demand.

today oil is over 40 bucks a barrel.....and yet.....extra oil is sitting in massive tankers off-shore, and there are even railroad tankers that are loaded and have been sitting, waiting to be shipped to a refinery....we are swimming in oil. so...this "supply and demand" BS, should no longer be used by those cockroaches.

Not to be the dumb one around here, but is this Peak Oil?

Nope.

And, that wasn't dumb at all. There are many similarities to what is happening now, and what is expected to happen if/when peak oil occurs. There just happens to be some pretty vanilla and mundane reasons, for what is happening now, that negate peak oil as the effect.

Now they are selling shares of Saudi Aramco. m.huffpost.com...

TextEven Saudi Arabia Is Preparing For The End Of Oil

The world’s richest oil country will build a $2 trillion post-oil fund.

The music is about to stop?

Even Saudi Arabia Is Preparing For The End Of Oil The world’s richest oil country will build a $2 trillion post-oil fund.

Charlotte