NewCaledonia

So as you have seen, oil is down to $80 a barrel.

Production is going down as well, particularly in Qatar and Saudi.

Is there any talk in the region about what will that mean for expats, the economy and even social peace?

Bahtatboy

Dunno, but with instability in various quarters its got to be worth buying at that price.

DubInRiyadh

Took your advise and filled the car up with petrol this morning

Bahtatboy

NewCaledonia

At $69 once OPEC didn't get an agreement... now is up again.

It was at $105 back in July.

amideislas

General speculation is that OPEC has decided to let the price slide in order to counter growing US and Russian production.

US producers of shale oil need a price of about $70 per barrel to be profitable.

Russian production needs a price of about $50 per barrel to be profitable.

OPEC needs a price of $12 per barrel to be profitable.

Impact? short term: we all pay lower prices. long-term: if this continues, the US oil boom will subside, and they'll be buying Middle eastern oil again. Russia may go bankrupt.

Gobobo

Impact on us? Well, petrol is cheaper than water so none there. ME countries have billions in cash in reserve and trillions in oil in reserve, so none there.

I agree, Russia, shale, deep water and fracking will suffer.

OriginalSunshine

Apart from Saudi, majority of ME countries need >100 to balance their budgets
Some such as Oman will be in big doo doo. They are talking about charging 2% tax on expat remittances to get more money.

Bahtatboy

Agreed. The costs cited in the post further above don't take into account the budgets which those countries have set. However, if Iran gets its shit together and strikes a deal with the West, and (probably a bit further in the future) if Iraq stabilises and production gets going there, they'll be a lot more oil on the market. But that's a couple of year off, I fear.

NewCaledonia

I am surprised about this.

I assumed Qatar and UAE have more diversified economies, and way smaller local populations, so they would cope better than Saudi.

btw since I think u live in Oman, have u read this? What do you think?

UK's key Gulf ally Oman faces catastrophe from Opec oil price war - Telegraph

mikewot

Dubai's airports account for 28% of the GDP and employ over 100,000 people. That is forecast to grow considerably.

OriginalSunshine

The article is too optimistic. The budget needs 110/bbl, and EOR oil costs more than 30/bbl to produce.

OriginalSunshine

18 months ago, the states were more honest

Abu Dhabi break-even for oil at $95, says Merrill Lynch report | The National

NewCaledonia

Very interesting indeed.

It is almost funny that in the right side (Editor's Pick) I just saw this:

UAE expats priced out of their lives | The National

It just doesn't add up to me mixed with the oil prices.

scrubbedexpat141

This was quite a good article:

BBC