Saudi Arabia Set to Secure $10 Billion Loan to Address Budget Shortfall

Thrugelmir

Budget deficit of 19% makes even Greece look prudent.

DUBAI—Saudi Arabia is set to secure a $10 billion loan from international banks as the kingdom seeks to address a budget shortfall caused by the fall in oil prices

http://www.wsj.com/articles/saudi-arabia-set-to-secure-10-billion-loan-to-address-budget-shortfall-1461148491

CLAPTON

Thrugelmir wrote: »

Budget deficit of 19% makes even Greece look prudent.



http://www.wsj.com/articles/saudi-arabia-set-to-secure-10-billion-loan-to-address-budget-shortfall-1461148491

this is clearly another example of the impact on the world's stability due to the brexit referendum.

Mistermeaner

No I think this proves the case for an independent scotland

Thrugelmir

CLAPTON wrote: »

this is clearly another example of the impact on the world's stability due to the brexit referendum.

An issue far closer to home. The amount of debt that now exists.

stator

Could cause quite a lot of problems for the non-democratic previously oil rich countries.
When the people realise how much of the countries wealth has been transferred into private wealth for the people who run the country you could be looking at civil unrest.

michaels

Are oil prices being kept low to discourage 'non-conventional' supplies or is in now the case that they also need to compute against renewables? Either way is there now an effective upper limit of ?60 usd a barrel for the foreseeable future?

Out,_Vile_Jelly

Without oil or tourism, what do most middle eastern countries actually have to offer as employment to their growing populations (Muslims tend to have large families)? Even more turbulent times ahead for this region I fear.

mwpt

Out,_Vile_Jelly wrote: »

Without oil or tourism, what do most middle eastern countries actually have to offer as employment to their growing populations (Muslims tend to have large families)? Even more turbulent times ahead for this region I fear.

I actually spoke about this once to a friend of mine who works in the O&G industry. I asked if it was in the West's interest to keep O&G prices high to keep these regions stable. I genuinely don't know the answer to this but my thought process was similar to yours above. What do these countries produce that will sustain their way of life in the absence of high O&G prices? How will populations react to this changing?

Thrugelmir

michaels wrote: »

Are oil prices being kept low to discourage 'non-conventional' supplies or is in now the case that they also need to compute against renewables?

Supply exceeds demand. Saudi Arabia benefited from the export embargo on Iran. Iran wants it's market share back. With no one willing to cutback on production the price will remain low. Until more US shale producers bite the dust.

CLAPTON

mwpt wrote: »

I actually spoke about this once to a friend of mine who works in the O&G industry. I asked if it was in the West's interest to keep O&G prices high to keep these regions stable. I genuinely don't know the answer to this but my thought process was similar to yours above. What do these countries produce that will sustain their way of life in the absence of high O&G prices? How will populations react to this changing?

they are not stable
their main export is terrorism
Saudi will have to develop some real industry and learn to live in a poorer manner.
they could usefully save money but stop exporting their extreme view of islam

michaels

Thrugelmir wrote: »

Supply exceeds demand. Saudi Arabia benefited from the export embargo on Iran. Iran wants it's market share back. With no one willing to cutback on production the price will remain low. Until more US shale producers bite the dust.

But the point being even if US shale largely closes down, any resulting increase in price will only result in that production and other non-opec marginal production opening up again and thus putting a ceiling on prices.