The edgy Middle East

The Saudi Arabian royal family almost succeeded two years ago in bankrupting America’s nascent shale gas industry. It came very close. Over 2,000 shale wells were priced out of existence and only abut 500 were profitable. However, those that remained have been assiduously developing all sorts of improvements and, today, can make as much profit as those of two years ago.

From now on, the Permian Basin being as extensive as it is — occupying almost the total width of the country — and investment funds of the oil majors being as large as they are, then we can be certain that the Saudi Arabian oil and gas fields will not have the same price-setting powers that they once had — or that they thought they had. Furthermore, Saudi Arabia is going to use its large national surplus in order to pay for the education and training of its young people — now clamouring for attention and relevant jobs.

All this is yet another busted spoke in the wheel that we call the Middle East. The whole region is edging towards some sort of catastrophe.

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