Let us Tweak the Oil Price-US
OPEC pulled down the oil prices because they wanted to show the world that they still hold the leash on the oil prices not the US. And it was done to puncture the shale oil boom bubble. US doesnt export oil but Many other countries do. US heavily imports. It also produces its own. The fracking has lead to shale oil oil which is a little costly process, nevertheless produces oil. So US doesnt export oil then oil prices should not affect the shale oil companies. In fact low oil prices is a boon, It will as the they have to sell in their own country at very low prices. So the logic that OPEC gave was that we want to cripple the other industries who produce shale. This is because shale has a very high breakeven point.
Well doesnt the pieces fir together ? yes they dont. they never were to. Pushing oil prices down was to destabilise the Russian Economy as said by the US president. Russia is a heavy exporter of oil. The economy runs on it. Low oil prices could spill disaster for Russian Economy.
“Ultimately, the big advantage we have with Russia is we’ve got a dynamic, vital economy, and they don’t. They rely on oil; we rely on oil and iPads and movies and you name it,” Obama said, adding that“making sure that prosperity is broadly shared” is also important for American people to feel confident about the future.
Obama revealed that it was a “part of our rationale” that the “only thing” keeping Russian economy“afloat” was the price of oil.
Because Crimea and Ukarine.