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Oil and the Saudi Arabia threat


  • The big picture is struggle between Iran and Saudi Arabia to dominate the region or Islamic Middle East.It was the take-over generation that switched Saudi Arabia oil strategy from an anti-American shale and sand price and market share war against West Texas Intermediate oil to a reduction of output in OPEC.
  • This was the decision of Algiers to raise prices in anticipation of a Saudi Aramco initial public offering of shares next year.Share prices would be sold at higher prices with this cutback of OPEC production.The Crown Prince moved to restore subsidies and salaries, based on oil revenue, which were reduced or eliminated as the oil price fell because of market share strategy to lower oil prices to shut down or slow American shale competition from 2014 to latelast year.
  • The price of oil must increase another 50 percent to $65 per barrel before the  Saudi Aramco sale of its stock worldwide – minimum 5 percent and maximum 10 percent.If this fails or the sale does not meet expectations, the traditionalist  or Old Guard will combine an attack on modernism with a return of Saudi Arabia as the residual or swing world supplier of oil with price setting supply actions of higher output for lower prices or lower output for higher prices.The outcome will impact the future of American exporters of oil.


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