- Sputnik International
World
Get the latest news from around the world, live coverage, off-beat stories, features and analysis.

Saudis are First Casualty of Oil War: Kingdom’s Economy Screams to a Halt

© AP Photo / JOHN MOOREKhaled al Otaiby, an official of the Saudi oil company Aramco watches progress at a rig at the al-Howta oil field.
Khaled al Otaiby, an official of the Saudi oil company Aramco watches progress at a rig at the al-Howta oil field. - Sputnik International
Subscribe
Riyadh appears to be falling victim to a crisis of their own making as their bid to undercut the world's oil market has left the country's economy in shambles.

Economic data suggests that Saudi Arabia may finally be feeling the effects of the oil war they waged against the world sending prices barreling into crisis levels in February below $30 per barrel and well below the country’s own breakeven price of roughly $65 per barrel.

Oil rig - Sputnik International
$10 a Barrel Oil Coming Soon? Market Expert Warns the Worst is Yet to Come

In the first quarter of 2016, real GDP growth decelerated to 1.5% year on year well below last year’s first quarter figure of 3.3% growth signaling that the government’s austerity measures imposed to withstand the shock they instilled in oil prices may soon trigger a recession in the Kingdom. 

With oil prices recovering, Saudi Arabia’s struggles are a promising sign for energy-rich countries around the world that may soon be able to look forward to a surge in oil prices if Riyadh starts to pull supply offline. 

In recent months, Saudi Arabia has pledged to continue over suturing the oil market even if prices once again cascade down to February levels with the country already increasing oil output 20% to 10.5 million barrels of oil per day and with the Crown Prince calling for the country to supply 11.5 million barrels per day by the end of 2016 and an unprecedented 12.5 million barrels daily by early 2017.

The Bill, Hillary and Chelsea Clinton Foundation will continue to accept donations from a limited group of foreign countries - mainly from six nations in particular - despite the fact that Hillary Clinton has officially announced her bid for the US presidency. - Sputnik International
Perjury Trap: Hillary Clinton May Lose FBI Primary if She Lied to Agents

Saudi Arabia reasoned that in the long term it was more important to protect market share from regional adversary Iran and to bankrupt US shale oil drillers, but with the country’s economy starting to barrel off a cliff of their own making the House of Saud may be forced to take a step back.

The news may ultimately avert catastrophic damage to countries like Venezuela, Algeria and Libya whose economies are heavily dependent on oil, but who lack the requisite access to capital markets to weather the collapse in the commodity’s price. 

It may also prevent a doomsday scenario, as suggested recently by oil analyst A. Gary Shilling who predicted that world oil markets could crash down to $10 per barrel of oil saying that the market’s recovery is short lived and based heavily on lost Canadian output due to the oil sands fire in Fort McMurray.

Newsfeed
0
To participate in the discussion
log in or register
loader
Chats
Заголовок открываемого материала