Saudi Arabia and its price war in the international market

The analysts for the international economy have declared that the world is in the middle of serious unconventional warfare, where the money is the main player in the game. According to these analysts the countries and its economy are a way to seize the power in various parts of the world and the way to stop those countries that can be considered as a threat to the world stability. A good example of this action, are the sanctions that the European Union and the United States of America will apply to Russia’s annexation of Crimea. Another example is the price war increasingly prolonged for the crude.

The crude was some years ago at its best, the price of oil rose as high as $ 100 per barrel, which made ​​the largest exporters of this raw material had a time of great wealth, but as easy as they got the prices high, they left. Now the market is in one of its worst moments, with prices that are below 50 (fifty) and even $ 40 (forty), which is a catastrophe for the countries that inflated their budget by the belief that the oil prices would never come down.

The price of the oil has been falling by an oversupply of product oversupply that is largely due to the use of new ways to export the oil from the ground. The Fracking, or hydraulic fracturing is a method of exploiting the fossil energy being conducted in the United States of America. This technology pollutes the environment, but generates enough resources to make the country of the United States of America to become a provider of the fossil fuel, plus for the future to emerge as an exporter of the crude oil, which is not thought imaginable so far.

With the arrival of this new player in the oil market, Saudi Arabia sees a threat to its power in the market, which has continued to flood the market with its light crude, much easier to refine and extract crude to North America. This makes the world is in a period of oversupply and prices that are plummeting, causing the fracking no longer profitable for companies in North America. But despite the Saudis struggle to eliminate the American competition, the United States of America companies have continued to produce the oil, thanks to subsidies and social benefits the United States of America government, which does not intend to let the Saudis with the power to control the international oil market.

As if this were not enough, the country of Iran, one of the biggest oil producers in the world, in a few years will begin to exploit and export the crude to rise when the sanctions are imposed by the western world. This represents another danger for the Saudi kingdom, which does not want the country of Iran to become another threat to their market share.

To prevent the country of Iran from achieving a scale position in the market, the Saudis have lowered the price of crude oil in the continent of Europe, the largest market in the Middle East. Before the economic restrictions on Iran’s Islamic Republic, the continent of Europe, mainly the country of Spain and the country of Italy represented an important trading partner for the Iranians, but after locking the Saudis and the Russians became allies and blocked the void left of the country of Iran. The country of Iran now seeks to regain its former trading partners, but the country of Saudi Arabia will not let this happen.

The Saudis reduced the price of Kurdish in 20 (twenty) and 60 (sixty) cents, which makes the light oil look more attractive by the European partners. The oil price war led by far by the Saudis, is often considered as a war of resistance, who manages to resist the low prices, will be the winner. North America cannot continue to give subsidies for many years to the American companies to exploit the expensive crude, but has no intention of letting the Saudis win this battle. The Saudi prosecutors are having problems at home by the low oil prices, but despite having to raise the taxes, eliminate subsidies to the services and the commodities, the government will not leave room for the Americans in the oil market. Finally the Iranians, they will enter as actors in this price war in the end, are preparing to increase its oil production to recover its old customers and gain the market share they had in the past, the problem is that they will reach a market with disadvantage, with an outdated industry, with international actors of power, which will not allow the growth prospects of the Iranians to reached within the period of time these provide

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