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Has OPEC Gone Mad?

November 3rd, 2015 · No Comments

  • OPEC’s strategy to force a dramatic retreat of American shale isn’t succeeding anywhere near the scale needed for the strategy to be called a success.
  • The cost to OPEC itself is too big for this strategy to be continued. Steep revenue losses, severe budgetairy problems, foreign currency losses, political instability and rift within OPEC itself.
  • Other casualties have emerged in the form of expensive oil exploration (deep sea, tarsands, Arctic, etc.) and an increase in oil demand offers some compensation.
  • However, expensive oil is facing an onslaught already from alternative energy and climate change regulation, OPEC has no need to slay this dragon.

Source: Has OPEC Gone Mad?

Tags: Oil