The high cost of oil is whose problem ?

[DrBeer]

As we know, Saudi Arabia has recently made several significant statements on oil:
1. abandoning the pursuit of an oil price of 100 dollars per barrel
2. The other day - a threat to reduce the price of oil in the market to the level of 50 dollars

It would seem that judging by the situation - a country whose income depends to a significant extent on the cost of oil “shoots itself in the foot” !?? Doesn't it look silly?
But it is very difficult to call Saudi Arabia a country with stupid policy and stupid actions, which is a fact.

Back to the title of the thread - “whose problem is the high price of oil ?”. What lies on the surface - of course consumers, i.e. buyers of oil, countries that do not have their own reserves, production and refining of oil. I.e. the majority of countries !
In this case - they will be forced to buy oil and petroleum products at the price at which it is sold by producers. And here is the most delicate point. As we know - market rules are such that if there is a resource, for which the price is deliberately raised, there is always an alternative product, fully or partially replacing it ...
Now let's eavesdrop on what Saudi Arabia is saying about the oil market. not for the public:
- We are heavily dependent on the sale of oil
- We see that the rising price of oil, is leading to a very rapid development of alternative energy, which in the medium term will markedly reduce the consumption of petroleum products
- Reduced oil consumption will create an oversupply of oil in the medium term, leading to falling prices and loss of consumers
- We need a market where we will be able to trade oil as much as our resources allow us.
- Also, we do not benefit from competitors who do not comply with agreements (for example, within production limits).
- Bottom line: we benefit from a lower oil price, as it will not create additional motivation to abandon oil, actively develop and switch to alternative energy sources (where possible), and will knock the market out from under the feet of competitors, as the key competitors have production costs of about 35-45 dollars per barrel.

What are your thoughts ?

[Findingnemo]

To answer the title, it's everyone's problem.

We don't realize that increase of oil price almost take a hit on every goods we purchase because the transportation cost will increase so obviously the price will increase and it affects the potential buyers so it will disrupts the circulation of money in the economy and when it happens it creates an imbalance in the country's economy so to resolve this government will increase the taxes so then again it will come right back at us.

[_act_]

As we know, Saudi Arabia has recently made several significant statements on oil:
1. abandoning the pursuit of an oil price of 100 dollars per barrel
2. The other day - a threat to reduce the price of oil in the market to the level of 50 dollars

It would seem that judging by the situation - a country whose income depends to a significant extent on the cost of oil “shoots itself in the foot” !?? Doesn't it look silly?
But it is very difficult to call Saudi Arabia a country with stupid policy and stupid actions, which is a fact.

Saudi is quite aware of the risk of impeding inflation, they are doing all these in other to cut down the rate of inflation and also make life affordable for their people, this is also another way of reducing the value of the exchange rate of dollar to their own local currencies, when they are beating down on every commodity price, this may seem stupid in the eye of many others, but there is going to be more opportunity for them in doing so and still meet up with the required standard of living for their people.

[albon]

Each country faces a similar problem if the price of oil suddenly doubles. Due to the increase in the price of fuel, the cost of transportation of goods is also increasing naturally. As a result,
 there is a fear of increasing the price of daily necessities including consumer goods. Because the issue of fuel oil price is directly related to public interest as well as business and overall economy. However, when the government announced the increase in oil prices, various arguments were put forward. But when the expenditure is more than the income of the people then everyone will live a difficult life. There is no doubt that this added pressure is leading people to serious problems. On the other hand, agriculture sector, industrial sector and power sector have the biggest problems because oil consumption is high here.

[DrBeer]

As we know, Saudi Arabia has recently made several significant statements on oil:
1. abandoning the pursuit of an oil price of 100 dollars per barrel
2. The other day - a threat to reduce the price of oil in the market to the level of 50 dollars

It would seem that judging by the situation - a country whose income depends to a significant extent on the cost of oil “shoots itself in the foot” !?? Doesn't it look silly?
But it is very difficult to call Saudi Arabia a country with stupid policy and stupid actions, which is a fact.

Saudi is quite aware of the risk of impeding inflation, they are doing all these in other to cut down the rate of inflation and also make life affordable for their people, this is also another way of reducing the value of the exchange rate of dollar to their own local currencies, when they are beating down on every commodity price, this may seem stupid in the eye of many others, but there is going to be more opportunity for them in doing so and still meet up with the required standard of living for their people.

I partially disagree, as for the Saudis selling oil for dollars to reduce the value of the dollar is an illogical goal ! Well, if they were idiots, they would probably pursue such a goal
The idea of dedollarization is not profitable for a developed country interacting on the world stage, first of all economically. The reason is banal - the lack of alternative mechanisms for assessing and fixing the value of goods for imports and exports. Yuan ?  No, only a fool would use the yuan to import inflation and the problems of a “ship with a hole” called China, where the captain tries to pretend that nothing is happening.  Any other options? There are none.
And you have to give credit - the Saudis first of all defend the interests of their country - comfortable prices for the economy, in stable currencies, long-term supplies to the market of oil products. For long-term stable profits, without destroying the market of oil products.

[DrBeer]

Each country faces a similar problem if the price of oil suddenly doubles. Due to the increase in the price of fuel, the cost of transportation of goods is also increasing naturally. As a result,
 there is a fear of increasing the price of daily necessities including consumer goods. Because the issue of fuel oil price is directly related to public interest as well as business and overall economy. However, when the government announced the increase in oil prices, various arguments were put forward. But when the expenditure is more than the income of the people then everyone will live a difficult life. There is no doubt that this added pressure is leading people to serious problems. On the other hand, agriculture sector, industrial sector and power sector have the biggest problems because oil consumption is high here.

That's why by inflating oil prices just because of the desire to “make more money”, some oil suppliers get short-term gains to solve their problems, but destroy the oil market by pushing consumers to find alternative energy sources. This is the whole point of the balance with price that the Saudis want to strike. And I agree - at the expense of their competitors, because their production costs are much higher.

[0t3p0t]

This is actually everybody's problem and the root of this brings you to those greed oligarchs who just think of themselves. Poor people are the most affected on this and that is why we need to stay out of poverty so that we can have alternative solution to the problem.

[Stompix]

It's pretty simple, Saudi Arabia cut much of the production thinking everyone would do the same, but the rest didn't and drove the price lower while Saudi Arabia was selling even less for less, so they will change the tactic, drive down the price while growing demand and bankrupting everyone with a high cost production!
They did the same in the previous shale oil war and they will do it again!
Also, they try pretty hard to diversify away from oil and unlike many others they have the stash to do it!

[Sim_card]

Each country faces a similar problem if the price of oil suddenly doubles. Due to the increase in the price of fuel, the cost of transportation of goods is also increasing naturally. As a result,
 there is a fear of increasing the price of daily necessities including consumer goods. Because the issue of fuel oil price is directly related to public interest as well as business and overall economy. However, when the government announced the increase in oil prices, various arguments were put forward. But when the expenditure is more than the income of the people then everyone will live a difficult life. There is no doubt that this added pressure is leading people to serious problems. On the other hand, agriculture sector, industrial sector and power sector have the biggest problems because oil consumption is high here.

That's why by inflating oil prices just because of the desire to “make more money”, some oil suppliers get short-term gains to solve their problems, but destroy the oil market by pushing consumers to find alternative energy sources. This is the whole point of the balance with price that the Saudis want to strike. And I agree - at the expense of their competitors, because their production costs are much higher.

It is good that the Saudis are putting their citizens interest in mind and that is why they are looking for every means to make sure that high oil price should be reduced to sustain the high demand of oil so that consumers will be comfortable with the price and not look elsewhere for alternative because that will be a big blow on their economy since they depend more on oil for survival. A lot of people will get broke if there is a good alternative to oil that is cheaper.

[Findingnemo]

That's why by inflating oil prices just because of the desire to “make more money”, some oil suppliers get short-term gains to solve their problems, but destroy the oil market by pushing consumers to find alternative energy sources. This is the whole point of the balance with price that the Saudis want to strike. And I agree - at the expense of their competitors, because their production costs are much higher.

Still we are far away from reaching a place of not relying on the natural gases, there are alternatives but they're are at the start up stage and it will take atleast 10 to 20 years from now to not dependent on the oil if government make the right moves today until that who has the resources will just make the best out of it and of course that's how the business works.

[DrBeer]

That's why by inflating oil prices just because of the desire to “make more money”, some oil suppliers get short-term gains to solve their problems, but destroy the oil market by pushing consumers to find alternative energy sources. This is the whole point of the balance with price that the Saudis want to strike. And I agree - at the expense of their competitors, because their production costs are much higher.

Still we are far away from reaching a place of not relying on the natural gases, there are alternatives but they're are at the start up stage and it will take atleast 10 to 20 years from now to not dependent on the oil if government make the right moves today until that who has the resources will just make the best out of it and of course that's how the business works.

I agree that today we can't just give up oil and gas in one fell swoop. Moreover, oil will remain and gas will remain as a product for chemical products. But, for example, the consumption of oil as a fuel for fuel and gas as a fuel for heating and heating processes can be significantly reduced. Which is already happening in reality. This is why the Saudis, the largest owners of oil reserves, have been the largest investors in alternative energy projects for years. They are looking to the future, not living on the primitive ideas of the last century.....

That is why their country is prosperous, while some other countries with oil, gas and other natural resources have a large part of their population either poor or below the poverty line.

[target]

So us the end users are just going to scramble find our green energy alternative while the governments have access to oil which it doesn't really make any difference when it comes to making the environment clean. Those oil and gas are still the source of energy when it comes to them providing energy to every home  in the country.

But this must be planned since they all are coordinating which means the Saudis will lead this development. But do you think Iran will not figured this is going to cut them out?

[DrBeer]

So us the end users are just going to scramble find our green energy alternative while the governments have access to oil which it doesn't really make any difference when it comes to making the environment clean. Those oil and gas are still the source of energy when it comes to them providing energy to every home  in the country.

But this must be planned since they all are coordinating which means the Saudis will lead this development. But do you think Iran will not figured this is going to cut them out?

That's the point - as soon as a systematic and mass search for alternatives begins - there will be sponsors of research and equipment manufacturers who will find and implement these alternative energy sources, and it will become a trend that will take away, and what is very important, REALLY take away part of the market from oil! And this means that consumption will systematically decrease, which means that incomes will fall, and it is also likely that there will be competition among those who will decide to “get something for the last time” by crashing prices with wild oil sales.

[_act_]

This is an act of being conscious of humanitarian affairs other than the political and other government policy implementation which not not really work for the populace, they have their people first in mind, they consider the way of how they could reduce their dependencies on dollars and boost their own economy from withing, making their citizens have full participation over the use of thier local economic commodities.

[rachael9385]

Actually the high cost of oil is not a one person problem but rather it affects everyone wether rich or poor when the oil is sold costly it's everyone's problem because should I say 98% of every products you see today in one way or the other has passed through this petroleum process, be it food, clothes vehicles and even water and the petrol itself must need oil to be refined. Now after all these processes every person must still use money to purchase it.

So in conclusion high cost of oil is everyone's problem.