On the front pages of the newspapers were stories about Saudi Arabia explosions on oil operations which were some of the key production and processing facilities. It was interesting that Drones are now used, for a while only US companies had access to drones and their ability to fire rockets. Saudi Arabia has been fighting the people at Yemen for a number of years and from a humanitarian prospective think about the condition of Syria. There are many similarities between both.
For an economic standard point, Saudi Arabia is the world’ s largest producer of oil and it was expected Saudi Aramco the state oil company was going to be the world largest IPO next year. One can expect another delay, although when it does come out because of the vast reserves which are relatively inexpensive to access, the company will be the most profitable company in the world. Saudi Finance Minister said it will have no impact, but we will see.
As expected, wit the Drone explosions, the price of oil increased, but understanding there is a global weak demand as we all try to be more energy efficient The price of oil is not expected to remain high for months, just a couple of weeks as Saudi brings other reserves into the market. On the geopolitical scene, the US went to war with Iraq over oil, what will the do with Iran?
Linking to dividend paying stocks, the big oil companies have been business for generations and will continue. They have a wide variety of supply options including US reserves, oil in Africa, Russia and tar sands. Those options can make up the Saudi oil until things return to normal and the increase in the price of oil helps the oil companies sustain their profits.
There are more questions than answers, till the next time – to raising questions.