GOOD: Oil’s Price Collapse Is Quickly Draining Petrostate Coffers.
The petrostates assembling in Doha to discuss a potential output freeze two days from now aren’t coming together in a show of solidarity or out of some sense of duty towards one another, but rather as an act of desperation. Bloomberg ran the numbers, and found that the oil price collapse has collectively cost the 18 countries involved in this meeting nearly one third of a trillion dollars . . . .
$315 billion is an enormous sum, and it represents the cost of OPEC’s Saudi-led plan not to cut production at any point during oil’s period of sliding prices these past 22 months. Until this February, this seemed like a price Saudi Arabia was willing to pay—though it’s been paying it dearly. Now, though, the Saudis are finally looking to coordinate production with other petrostates, spurred on by the speed at which their rainy day fund is being depleted.
And with Riyadh ready to play ball, there’s not much more in the way of a deal to limit output…except for Tehran, which is looking to boost its own production to the levels it was posting before Western sanctions were enacted. Iran is one of many reasons why this Doha meeting looks unlikely to produce the sort of price rebound those 18 assembled nations really want, but Bloomberg’s data give us a better idea of why these petrostates are finally trying something.
All the money transferred to the OPEC nations has mostly funded terrorism and war against the West. Bring on the fracking!