(September 29, 2016 at 10:35 pm)Minimalist Wrote:(September 29, 2016 at 9:19 pm)Thumpalumpacus Wrote: They've been doing this for three years now trying to drive frackers out of business. It doesn't seem to be working.
Better news yet -- they're depleting their reserves ever more quickly in the attempt, meaning that in the foreseeable future they'll go back to being irrelevant assholes unable to finance madrasas and Al-Qaeda operations.
They're having an impact.
https://www.zacks.com/stock/news/232115/...production
Quote:Low Oil Prices 'Slams Brakes' on North Dakota Production
They've certainly had an effect ... but only at the cost of broaching their own social compact:
Quote:The shift away from fossil fuel presents a formidable challenge to the ruling monarchy, which has long relied on oil revenue to provide its citizens with generous welfare benefits and cushy government jobs. Last year, oil revenue accounted for more than 70% of overall government revenue.
Two years of low oil prices have strained the kingdom’s finances, resulting in a record budget deficit of about $98 billion in 2015. It has also drawn down its foreign-exchange reserves, which fell to about $581 billion at the end of April from a peak of $746 billion in August 2014.
The government has taken some steps to address this, issuing domestic bonds, cutting spending and raising the domestic cost of fuel, water and electricity. It borrowed $10 billion from a consortium of global banks in April and could raise as much as $15 billion by selling bonds for the first time to international investors, some bankers said.
The kingdom’s debt is likely to grow further: The NTP document says the nation’s ratio of debt to gross domestic product is expected to widen to 30% by 2020, from 7% today.
http://www.wsj.com/articles/saudi-arabia...1465252667
I wonder how those changes will go over domestically there? Easy Street is in the rear-view mirror, and we all know what happens to autocracies once the money stops flowing. They're in a pickle, and good, I say.
