Which Countries Will Benefit From An Oilpricecrash

[macbeth79]

The price of oil seems to be crash, most threads seem to be on which oil producers will be affected, i wonder which countries will benefit the most from a reduction on losing foreign exchange.

I would guess China and India will do well from this.

[wherebee]

China, India, yes. Australia as well, as it should drive down import/export costs and mining costs (but knowing the aussie monopoly markets, prob not). It will also make some of the planned oilfields off NZ and Oz unpractical for a while longer, which is good long term (i.e. when there is less stuff around, and price is permanently higher, they will have more left than other countries).

A lot of the Asian countries - Indo/Malay etc - need cheap petrol to avoid civil unrest, let alone grow.

[The Eagle]

Every country that is a net oil importer.

[Bossybabe]

Surely exporters are going to suffer too. They can't step up output or the price falls still more. Then there's the Russians l, who think it's part of the sanctions conspiracy.

[Bloo Loo]

losers: anyone running an economy that the great and the good have spent assuming oil revenues are coming in.

[zugzwang]

The winners will be those countries whose finances haven't yet been devastated by the Keynesian menace.

Assuming they can dig themselves out of the wreckage, of course...

[oracle]

not scotland.

[Nuggets Mahoney]

Saudi, Qatar, UAE, Kuwait, Israel, and because it's happy when its Middle Eastern Friends are happy and the Russians are unhappy, the US.

Surely exporters are going to suffer too. They can't step up output or the price falls still more. Then there's the Russians l, who think it's part of the sanctions conspiracy.

And not forgetting the Iranians.

I believe the more usual term used to describe OPEC is cartel, rather than conspiracy

edit: cf. DT(2013): Saudis offer Russia secret oil deal if it drops Syria

[Qetesuesi]

Saudi, Qatar, UAE, Kuwait, Israel, and because it's happy when its Middle Eastern Friends are happy and the Russians are unhappy, the US.

And not forgetting the Iranians.

I believe the more usual term used to describe OPEC is cartel, rather than conspiracy

edit: cf. DT(2013): Saudis offer Russia secret oil deal if it drops Syria

And now Brent Crude is at $70, which according to the above graph wipes out profits in every single country (and plunges several into serious running losses).

I forget the level at which US shale becomes profitable?

Also how come Saudi needs to sell at over $90 when it only costs $2 to extract? How inefficient is that....

[Nuggets Mahoney]

Also how come Saudi needs to sell at over $90 when it only costs $2 to extract? How inefficient is that....

The Saudis have a lot of needy dependants - McDonnell Douglas, Raytheon, Sikorsky, BAE, a few hundred bonkers madrassas, whatever ISIL is being called this week, Tony Blair...

edit: by accident or by design, at the current price levels, which of the major oil producers are likely to say uncle or go down the toilet first? the freedom-loving Sunni monarchies, or Iran/ Russia?

[The Masked Tulip]

Just been thinking about this oddly enough.

I think the US benefits.

Much is being talked about the damage done to US shale-oil producers but they are not the entire US economy. Lower oil prices could stimulate the US economy and finally get it moving. They will probalby just buy houses and Chinese electronics but, generally, I think lower oil prices will be very good for the US economy.

People talk about the Dollar topping out but is it possible that it could get a lot stronger from here.

If their Black Friday sales are like the madness we have seen in the past 48 hours then surely the US stock markets, for things like consumer products, are going to soar next week?

I went out to my local Tesco last night to get petrol - normally get it about the same time on a Saturday evening when passing. For months now that particular huge Tesco has been deserted including the petrol station.

I could not get near it. At first I thought that there had been some road traffic accident or the traffic lights had failed.

Nope, the masses were out in force last night at Tesco.

[richc]

The Saudis have a lot of needy dependants - McDonnell Douglas, Raytheon, Sikorsky, BAE, a few hundred bonkers madrassas, whatever ISIL is being called this week, Tony Blair...

edit: by accident or by design, at the current price levels, which of the major oil producers are likely to say uncle or go down the toilet first? the freedom-loving Sunni monarchies, or Iran/ Russia?

Not sure how much the Sauds really have to fear, though, given how fat and lazy their population is.

[Gigantic Purple Slug]

And now Brent Crude is at $70, which according to the above graph wipes out profits in every single country (and plunges several into serious running losses).

I forget the level at which US shale becomes profitable?

Also how come Saudi needs to sell at over $90 when it only costs $2 to extract? How inefficient is that....

I think that graph is what the price needs to be for those countries to balance their domestic budgets.

[Gigantic Purple Slug]

The Saudis have a lot of needy dependants - McDonnell Douglas, Raytheon, Sikorsky, BAE, a few hundred bonkers madrassas, whatever ISIL is being called this week, Tony Blair...

edit: by accident or by design, at the current price levels, which of the major oil producers are likely to say uncle or go down the toilet first? the freedom-loving Sunni monarchies, or Iran/ Russia?

That'll be whoever has got big costs to produce. Any producer whose portfolio is heavily skewed towards offshore for example. Tar sands is pretty expensive to extract because of the energy required in the separation process. Certain countries have heavier oil, which needs to be steamed out. Not sure, but I think Venuzuala is like this.

My money is on Venuzuala going down first, because they decided to play hardball with the Yanks, and the Americans have a score to settle there.

As for businesses who might be suffering, well without naming names a certain business that has been hit by fines recently is facing the double whammy of fines plus a low oil price.

[macbeth79]

That'll be whoever has got big costs to produce. Any producer whose portfolio is heavily skewed towards offshore for example. Tar sands is pretty expensive to extract because of the energy required in the separation process. Certain countries have heavier oil, which needs to be steamed out. Not sure, but I think Venuzuala is like this.

My money is on Venuzuala going down first, because they decided to play hardball with the Yanks, and the Americans have a score to settle there.

As for businesses who might be suffering, well without naming names a certain business that has been hit by fines recently is facing the double whammy of fines plus a low oil price.

......and that business is in bed with Putin

[Qetesuesi]

I think that graph is what the price needs to be for those countries to balance their domestic budgets.

Yes, although that depends not only on the per-barrel price but the number of barrels sold....

However it still highlights how dependent on oil and/or welfare-bloated some of those countries still are. Really, they've had decades to diversify against just such a rainy day as this - serve them right if they blew it (as a recent analyst put it more or less). E.g. does Kuwait really need to maintain a CI of £30,000 a head?!

[Nuggets Mahoney]

However it still highlights how dependent on oil and/or welfare-bloated some of those countries still are. Really, they've had decades to diversify against just such a rainy day as this - serve them right if they blew it (as a recent analyst put it more or less). E.g. does Kuwait really need to maintain a CI of £30,000 a head?!

I'm hoping that analyst was Norwegian or something. If he were British it might have been more appropriate to just whistle nonchalantly.

The last I heard OPEC wasn't cutting production. Presumably, the Gulf Monarchies aren't that dissatisfied with the current run of events.