Saudi Arabia may go broke before the US oil industry buckles

If the oil futures market is correct, Saudi Arabia will start running into trouble within two years. It will be in existential crisis by the end of the decade.

The contract price of US crude oil for delivery in December 2020 is currently $62.05, implying a drastic change in the economic landscape for the Middle East and the petro-rentier states.

The Saudis took a huge gamble last November when they stopped supporting prices and opted instead to flood the market and drive out rivals, boosting their own output to 10.6m barrels a day (b/d) into the teeth of the downturn.

Bank of America says OPEC is now “effectively dissolved”. The cartel might as well shut down its offices in Vienna to save money.

  • Ron MacDonald

    The Saudis should have learned their lesson after 1973 when western ingenuity made automobiles far more efficient, this time western ingenuity has made them redundant. The bloodbath to come will make what is happening in Iraq and Syria look like child’s play.

    • Let them have at it;)

    • dance…dancetotheradio

      The Saudis are just rich aborigines.

      • G P

        That evolved?

        They have 29 million restive citizens. What happens when the welfare bribes stop being handed out in Saudi Arabia?

        • dance…dancetotheradio

          What happens when they run out of water, too?

          • UCSPanther

            They they will return to the days before Ibn Saud launched his conquest of Arabia in the olden days…

          • jew-b-gone

            And then you dirty hebes will take over the oil fields

          • Doug Kursk

            Fuck off.

          • jew-b-gone

            Right back at you, jew boy.

          • Minicapt
          • DVult

            We can sell them water. $100,000 a cup plus delivery.

          • Maurixio Garcia Sanchez

            They already run of water mister C H they get their drinking water from the ocean.

    • American free enterprise does in the oil cartel.

      Too bad.

      Wait till the next big solar and battery technological leap further hurts them.

      • tom_billesley

        I’m waiting for nuclear fusion. Why catch the rays of a sun when you can make your own?

    • MRHapla

      I’m rooting for a massively high body count Sunni mudslime vs. Sheeyut mudslime. Let the games begin.

  • mauser 98

    my grandfather rode a camel
    my father drove a car
    i fly in a jet
    my son will ride a camel

    … Arab saying i read somewhere

    • We can hope;)

      • jew-b-gone

        You guts are all semites- why the hate? Besides- the Saudi royals trace their roots back to jewish camel traders before the Brits plunked them on the throne

  • jew-b-gone

    Don’t worry you filthy Arabs- the jew speculators up on Wall St will run the price right back up with some fresh Fed joobux

  • eMan14

    Pity… Pity F**king Great

  • Petey

    That’s one very ugly man.

  • David Murrell

    The Saudis going broke? Why, this bit of news is cheerful.

  • marty_p

    Unfortunately in Canada we are being deprived of the bonanza of cheap oil prices….gasoline is as low as $2.17 a US gallon for regular in Virginia.

  • Hard Little Machine

    The Saudis and others are shrewd enough to invest heavily in western economies. When the oil runs out they’ll own major banks and insurance companies, ports, airports, shipping companies and vast tracts of commercial real estate.

    • Millie_Woods

      I’m with you on this. I’d cast a skeptical eye on stories of the Saudis going broke anytime soon. However political unrest and Islamic turmoil are starting to creep into the kingdom. Just three years ago Syria looked pretty stable. Could Saudi Arabia be next?

    • John

      Yes they’re smart enough to strike while the iron is still hot.

  • Tokenn

    This is economic warfare. ..I don’t know why the Saudis haven’t been called on it already. It appears that the West is still robust enough get through the siege. ..and when the Muslim world collapses and turns chaotic it will be easy enough to loot their ‘ investment properties’ abroad…and bad cess to them. This assumes that their lackeys and suckholes in the west don’t support them in exile…