Saudi Arabia Aims at US Fracking Industry, Hits Its Own Foot

Oil prices have plunged, in reaction to a slew of factors that have finally come together: the ‘shale revolution’ that led to an oil (and gas) production boom in the US and Canada; a separate tar-sands boom in Canada whose only export customer is the US due to infrastructure constraints; iffy demand in China and other emerging economies; declining demand in Europe and Japan….
Add to that an apparent strategic goal by Saudi Arabia to do some real bloodletting among its competitors, namely the exuberant shale-oil drillers in the US and the tar-sands operators in Canada. For years, they’ve been eating Saudi Arabia’s lunch with gusto. It would be time to take that lunch away from them and put the hurt to them via big price cuts [read… The Major Threat to Some of the Largest Oil Producers].
It worked: the hurt is spreading. But not necessarily in the right direction, if stock markets are a measure of pain.

This post was published at Wolf Street on November 11, 2014.