Earlier this year we noted that Saudi Arabia was acting like any business – maximizing its production and revenues as against other large oil-exportering nations.
In advance of the 2015 December meeting of OPEC (Organization of the Petroleum Exporting Countries), Saudi confirmed that it will not scale back its production. Saudi has noted that its recent policy has led to an increased share of the world’s market for oil.
Saudi costs of extraction are among the world’s lowest. The writing is on the wall for fossil fuels, particularly with those producers whose costs of extraction are high Any country that bets on an oil boom is making a bet against long-odds, with serious consequences if the bet is a loser – as Alberta found out.
Next year will see Iran returning full time to the world oil market. This additional production will result in continued lower prices for oil, diminishing the chance of the price recovery needed for exploitation of the Tar Sands.