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Saudis Seek Payments for Any Drop in Oil Revenues

Old 10-14-09, 09:11 AM
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Saudis Seek Payments for Any Drop in Oil Revenues

Saudi Arabia is trying to enlist other oil-producing countries to support a provocative idea: if wealthy countries reduce their oil consumption to combat global warming, they should pay compensation to oil producers.
http://www.nytimes.com/2009/10/14/bu...4oil.html?_r=1

Is the Saudi Arabian version of April Fool's Day in October?
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Old 10-14-09, 10:27 AM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

They have NOTHING else to offer and purposely suppress the education of their masses which has basically made them non-functioning in any other aspect of the economy
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Old 10-14-09, 10:37 AM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

I was wondering when they were going to chime in w/ something like this. I didn't think they would be so bold as to state it this way, but if you think that part of the world is messed up now when we are dependent upon them, wait until (if it actually happens and I have my doubts) they find out they are irrelevant. Once the wealthy rulers start to lose their money they are going to start losing control and then it's anybody's guess as to what happens next.

Last edited by nemein; 10-14-09 at 10:40 AM.
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Old 10-14-09, 10:38 AM
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Old 10-14-09, 10:52 AM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by nemein View Post
I was wondering when they were going to chime in w/ something like this. I didn't think they would be so bold as to state it this way, but if you think that part of the world is messed up now when we are dependent upon them, wait until (if it actually happens and I have my doubts) they find out they are irrelevant. Once the wealthy rulers start to lose their money they are going to start losing control and then it's anybody's guess as to what happens next.
#1 is they would no longer have the funds to export their backwater 'desert' Islam to the FORMER centers of the Muslim world, liberal Islamic big cities like Cairo, Damascus, etc...
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Old 10-14-09, 11:05 AM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by Tommy Ceez View Post
#1 is they would no longer have the funds to export their backwater 'desert' Islam to the FORMER centers of the Muslim world, liberal Islamic big cities like Cairo, Damascus, etc...
How expensive could it be to train a camp of 50 homeless extremists in the desert?
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Old 10-14-09, 11:28 AM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by Save Ferris View Post
How expensive could it be to train a camp of 50 homeless extremists in the desert?
Its not that

Saudi Money has basically bought all the Arab worlds television programming and celebrities paying them to present a more traditional view to the masses.

Ever notice how in movies from the 50's-60's places like cairo just seemed like exotic versions of European cities? Look at old movies, women and nightclubs and drinking and generally a fun looking place. Now? Saudi influence has forced these places into repressive semi-theocracies.

I read somewhere (oh, yeah! in Friedman's HOT FLAT AND CROWDED) that it is the equivalent of West Virginia having almost all of the USA's wealth and exporting thier religious beliefs and lifestyles to NY and LA.
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Old 10-14-09, 12:10 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

I think it happens as a market function anyway. With an inelastic commodity like oil, if we actually reduce consumption, the price will just go up. I mean, what else are we going to do? Drill for our own?
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Old 10-14-09, 12:37 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by Tommy Ceez View Post
Ever notice how in movies from the 50's-60's places like cairo just seemed like exotic versions of European cities? Look at old movies, women and nightclubs and drinking and generally a fun looking place. Now? Saudi influence has forced these places into repressive semi-theocracies.
And, I would say the increase in Saudi influence corresponds directly with the weakening of the strong Western influence (and presence) in the region in the latter 19th and 20th century.

But anyways, even if the oil goes bust for them, they've still got good old-fashioned extortion. That's largely why we give millions every year to Middle Eastern countries, the Palestinians, Pakistan, etc. "If we don't pay them, it will be our fault when they turn to extremism and violence!"
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Old 10-14-09, 01:49 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by Ky-Fi View Post
And, I would say the increase in Saudi influence corresponds directly with the weakening of the strong Western influence (and presence) in the region in the latter 19th and 20th century.

But anyways, even if the oil goes bust for them, they've still got good old-fashioned extortion. That's largely why we give millions every year to Middle Eastern countries, the Palestinians, Pakistan, etc. "If we don't pay them, it will be our fault when they turn to extremism and violence!"
See Africa in reference to countries mired in extremism and violence that have no natural resource that anyone cares about anymore

i.e. no one cares
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Old 10-14-09, 02:05 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by kvrdave View Post
I think it happens as a market function anyway. With an inelastic commodity like oil, if we actually reduce consumption, the price will just go up.
That's not even remotely how it works. For one thing, if demand goes down then by definition the commodity is elastic.
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Old 10-14-09, 03:28 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by kvrdave View Post
I think it happens as a market function anyway. With an inelastic commodity like oil, if we actually reduce consumption, the price will just go up. I mean, what else are we going to do? Drill for our own?
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Old 10-14-09, 03:31 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Price going down will just accelerate the reduced demand.

A 50 mpg car with $15.00 a gallon gas still means that I'm taking the subway
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Old 10-14-09, 05:19 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by wendersfan View Post
That's not even remotely how it works. For one thing, if demand goes down then by definition the commodity is elastic.
So all this talk about oil being an inelastic is bullshit, because demand went down during the recession.

And food isn't inelastic either because people quit eating so much.
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Old 10-14-09, 06:11 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by Save Ferris View Post
How expensive could it be to train a camp of 50 homeless extremists in the desert?
Learning how to turn a jet liner around in mid-flight is pretty costly.
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Old 10-14-09, 07:08 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by kvrdave View Post
So all this talk about oil being an inelastic is bullshit, because demand went down during the recession.

And food isn't inelastic either because people quit eating so much.
Wendersfan is wrong (I can't believe I got to say that!) but you aren't doing much better. Elasticity isn't black or white. Oil is an inelastic good, because the consumption doesn't change that much if price changes. Demand went down during the recession, but I'm not sure how much it went down.

Originally Posted by wiki
An "elastic" good is one whose price elasticity of demand has a magnitude greater than one. Similarly, "unit elastic" and "inelastic" describe goods with price elasticity having a magnitude of one and less than one respectively.
So the price of oil may double, but demand isn't going to halve, therefore it is inelastic.
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Old 10-14-09, 07:17 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Replace "Saudis" and "oil" with "U.S. farmers" and "crops" and it goes from crazy to plausible.
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Old 10-14-09, 07:18 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by Mordred View Post
Wendersfan is wrong (I can't believe I got to say that!) but you aren't doing much better.
So long as I'm doing better than him, I win.
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Old 10-14-09, 07:26 PM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by wendersfan View Post
That's not even remotely how it works. For one thing, if demand goes down then by definition the commodity is elastic.
No, if demand goes down because of an increase in price, it's elastic. If demand goes down because electric cars are taking market share from combustion engines, that's different.
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Old 10-15-09, 06:57 AM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

I'd argue oil demand is elastic, while price inelastic. Although people may buy less if the price goes up, they still buy it. A more accurate analysis of oil elasticity/inelasticity would be at what price point would people refuse to buy any gasoline and do without regardless of the situation.
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Old 10-15-09, 10:11 AM
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Re: Saudis Seek Payments for Any Drop in Oil Revenues

Originally Posted by rw2516 View Post
I'd argue oil demand is elastic, while price inelastic. Although people may buy less if the price goes up, they still buy it. A more accurate analysis of oil elasticity/inelasticity would be at what price point would people refuse to buy any gasoline and do without regardless of the situation.
But in this case of decreased consumption, the rise in prices would accelerate the rate of decrease.

In addition, there is a tipping point here. Right now we assume a theoretical world where we have a widespread viable replacement. Right now it is only theoretical. Once it becomes a reality (maybe just for 10% of cars) we will have reached a state where everyone now accepts that oil is on the way out and policy and consumer preference will shift to the alternative.
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