Saudi Energy Minister Khalid Al-Falih said that since the worldwide oil glut has vanished, Saudi’s strategy of flooding the global market to try to put American drillers out of business is no longer necessary.
“We are out of it,” Falih told the Houston Chronicle. “The oversupply has disappeared. We just have to carry the overhang of inventory for a while until the system works it out.”
Analysts say the resurgence of U.S. oil drilling after 21 months of decline “suggests that Saudi and the U.S. fought to a draw.”
The Saudis started the war on U.S. shale in June 2014 after a 4-million-barrel-a-day surge in U.S. shale oil production. The surge sent Saudi into a panic as OPEC’s four-decade-long influence over global oil prices was in decline.
Riyadh decided to outlast U.S. producers by flooding the market and forcing down oil prices. When Russia did the same, oil prices plunged below $27 a barrel by March 2015, down from an average over $100 a barrel from 2011 through 2014.
Full article: Saudis end their war against U.S. frackers (World Tribune)