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Crude Economics
Petrostates in Peril
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  • Jacksonian_Libertarian

    What isn’t shown in the graph is that the breakeven price has been steeply falling in the US, while it has been steeply rising in the Petro States. The graph shows a breakeven price for US production as ~ $75 per barrel, but the most recent wells breakeven in the ~ $45 per barrel range with the price continuing to improve.

  • Andrew Allison

    We get that falling prices are a problem for petrostates — TAI has been telling us that about once a week. The question is not whether current prices are hurting, but how much lower they will go and what the effects will be. As my fellow libertarian points out, the US breakeven is already south of $60 and falling, and the Saudis are trying to catch a falling knife. It seems to me that we’ll know where the bottom when US oil production starts declining. Fracking may turn out to be the Star Wars of the 21st Century.

  • Pete

    Two points:

    1. Petrostates in Peril — this could not happen to a more deserving bunch.

    2. Saudi Arabia will soon enough run out of oil. No, not this year or next, but eventually.

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