Putin war against shale is risky

[Sean Pruitt 0]

I'm going to take a leap of faith here and say Putin will never beat shale and once his economy takes a major tumble he will use power to save his country although it's all about him maintaining his ego and power.

Unless he is willing to loose his economy and power to beat shale it's never going to happen. He would have to pump oil for years before shale completely dies. Putin would never put his position in jeopardy unless he has a backup plan as that's what power hungry people do.

What is up his sleeve??? Is Russia going to humble themselves and come back to the young prince of SA? Russia rarely respected young MBS authority in the past by not holding to OPEC+ agreements...

I personally believe some how Putin will cause a military strike piercing the heart of oil. I believe it's being planned as we speak. The question is who will take the blame? Very easily Putin can drop bombs where ever he want's through a proxy.

I've been investing in oil for the last 25 years and what we are reading in the news just does not feel right.

Putin just recently past a new law allowing him to serve multiple terms as President. How stupid is Putin going to feel after all that trouble to stay in power just to lead Russia off the cliff? He is more worried about looking weak than evil as his pride grows.

Putin is going to look like an inferior leader to the entire world if shale does not die... If Putin can lay down his ego and pride he might just let Russia fall and start pulling out of the war in the middle east to save his economy...

Call me crazy but I believe bombs in the middle east will be dropped to save Russia.

[Rob Plant + 2,608]

20 minutes ago, Sean Pruitt said:

Call me crazy but I believe bombs in the middle east will be dropped to save Russia.

We live in unprecedented times and have a double whammy with Covid-19 and the oil war happening concurrently, so anything is possible I guess.

However I dont see how a shooty war or bombings is going to help anyone. I was under the impression the oil war was between KSA and Russia and the US shale patch is collateral damage which ultimately helps both of them. I guess the "oil war" could be collusion on KSA and Russia's part in an attempt to destroy US shale, but there is no way KSA can afford to do this as they need oil in the $80 bracket for their budget.

[Sean Pruitt 0]

Russia is taking a huge risk by flooding the market with oil as their economy goes into shambles. The question is can Russia out last Shale? America GDP dwarfs OPEC+ and has stimulus funds to bail out shale. This becomes national security when a country like Russia can take down our GDP.

If Russia beats shale than we are back to the Bush era relying 100% on middle east oil. Democrats win as it gives them more incentive to go green as American Oil has very little options to replace shale.

Even if Trump does not save the shale industry it's still going to take years to kill off the 10+ million BOPD we produce from shale. Even though shale is crashing we are still putting wells online as the process takes months to years to put-online due to service companies being behind.

Russia could beat shale if they had more than 150 billion in their wealth fund but they don't.

What other choice does Russia really have? It's possible everyone in the oil business suffers for the next few years and nothing interesting happens.

[BLA + 1,666]

Beauty of Shale is you can easily turn it off or you can turn it on. 

As the consolidation takes place the weak will be taken over by the strong

The overall break even price avg will come down substantially.  

Lot of disruption and pain for oil industry but this will pass.  

Warren Buffet just upped his ownership of OXY to 10% .  OXY common stock was selling at $48 when Warren invested $10 Billion for OXY preferred stock with 8% coupon so OXY could acquire Anadarko. 

OXY common stock at approx $10.

Watch Warren ends up buying OXY for a prayer and flipping it to a major.

OXY paid $38 Billion for Anadarko.  OXY market cap today with Anadarko is $10 Billion.

 

Edited March 13, 2020 by BLA