EconAir

Saudi Oil Minister BACKGROUND INFORMATION Oil is measured in barrels. A barrel is 42 gallons. Total global daily production is around 96-97 million barrels/day. Saudi Arabia, Russia and the United States all produce around 10 million barrels a day.   With their allies, these three countries account for close to 40% of global production. Because of the improved technology of shale oil production, U.S. output has gone up almost 5 million barrels/day since 2008. Currently, total global production is greater than total demand by somewhere between one and three million barrels/day. There are record amounts of oil in storage. A small percentage increase of supply over demand has led to a large decrease in price. In the fall of 2014, a barrel of oil cost about $100/barrel.   Last month the price fell to around $30/barrel.   Since then, it has rallied to around $40/barrel. THE ECONOMICS AND GEOPOLITICS OF OIL The economies of seven...

Middle East Oil Wells OVERVIEW Outside of the United States and Canada, most of the world’s oil and natural gas is owned and produced by governments or government-dominated companies with minority shareholders. Two examples of the latter, public companies with stockholders, are Petrobras in Brazil and Gazprom in Russia.   But government officials, especially the president, control management and make the important decisions. Production and investment decisions are not made based on financial criteria alone.   Often, internal political or foreign geopolitical factors are more important. Many countries' economies and government budgets depend critically on oil and natual gas revenue from exports. Maintaining internal peace and welfare programs are more important than rational economic considerations. What this means is that production and distribution decisions in these countries are made using different criteria than by private companies in the United State...