The Forum > Article Comments > Saudi oil strategy: brilliant or suicide? > Comments
Saudi oil strategy: brilliant or suicide? : Comments
By Dalan McEndree, published 14/8/2015Their GDP and national budgets depend significantly on the revenues from their oil exports. As a result, the revenue shortfalls incentivize them to produce as much oil as possible to mitigate the shortfall.
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And given they're able to undercut most oil refinery supply,to eventually control/manipulate that market!? [And they clearly have the capital capacity to do just that!?]
I mean if it costs a dollar a barrel to get it out of the ground; and about that much again to refine? And given the return from fully refined petroleum is well over five hundred dollars a barrel?
It has to be in their ultimate interests as principle refiners, to keep the wholesale price of crude as low as the market will tolerate?
So they can also become bulk buyers exercising even more control of the total market of finished products!
A far more profitable venture than selling oil as price takers to the price gouging refining industry.
Eventually Edmonton will come on line forcing raw crude prices further down!
leaving refiners like the Saudis, laughing all the way to the bank; and able to make big bucks long after their wells run dry?
We for our part could do worse than locate some of our petrol supply from the Saudis, given the current lack of real competition and patent price gouging that appears to go on in this country.
Someone as wealthy as Clive Palmer, e.g., could see the writing on the wall, purchase a tanker or two; and start supplying the independants with low cost fuel?
And make a bigger quid than that from coal with all the inherent problems and delays that presents!
And make it two ways, one as a bulk transport operator and the other as a wholesale fuel supplier.
He would do well to purchase a former mainland refinery, currently on the market, to utilize it as a bulk storage depot.
And win huge local kudos as a patriot for increasing our current reserve beyond just a couple of weeks?
Rhrosty.