Quote:
Originally Posted by Webstral
I’d like to know more of the details that are hidden from general view. For instance, I have read that the Saudis don’t have the kind of liquid cash reserves they once did. Other members of OPEC may not have the reserves for a long term price war, either. If the dropping price of oil results in a major disruption, the global economy could go back into recession. The Saudis and OPEC have to be sensitive to this. Capturing control of a reduced market may look good in the long term, but not everybody can afford to think long term. The bills that accumulate during a price war will have to be paid.
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Everything I have read in the past 2 months say that the Saudis have at least 750 billion in cash reserves (up 20.1% since last year) and can break even at 38 dollars a barrel. Other members of OPEC are nowhere near this level, but the Saudis have a lot of economic flexibility.