Saudi Oil Minister: ‘We Haven’t Declared War on Shale Oil’

Saudi Oil Minister, Al Naimi, is in Houston today, casting aspersions on those who suggest that his government was purposely seeking the complete and total annihilation of American shale oil. After all, why would his government want to bankrupt a bunch of inefficient, highly leveraged, high cost producers of shit oil?

The natural order of things will hash out the shale oil producers. Our good friends at the House of Saud are merely expediting the inevitable. For this, we owe them out sincerest gratitude.

“We have not declared war on shale or on production from any given country or company, contrary to all the rumors you hear and see,” he said.

“We are doing what every other independent representative in this room is doing. We are responding to geology and market conditions and seeking the best possible outcome in a highly competitive environment.”

The market will determine where on the cost curve the marginal oil production lies, he said. Drillers with higher costs must find ways to become more efficient, borrow cash, or liquidate, he added.

“The oil market is much bigger than OPEC. We tried hard to bring everyone together — OPEC and non-OPEC — to seek consensus. There was no appetite for sharing the burden, so we left it to the market as the most efficient way to rebalance supply and demand,” Naimi said.

“It was, it is, a simple case of letting the market work,” he added.

Unlike American and European bail out schemers and connivers, the Sauds are ‘letting the market work’, old school, Old Testament style.