Post-Oil Middle East

[Queequeg]

It looks like the Middle East is starting to lose it's relative position of oil dominance, and besides that the increasing importance of natural gas and renewables are likely to make budgets in the Petro-states based on $100/b untenable. 

Anyone read any interesting articles on the subject?  Have any predictions? Will Dubai and the other city-states of the UAE survive? 

Personally, I'm looking forward to massive Schadenfruede when the entire Arabian peninsula devolves in to Greater Somalia. 

[Viking]

Shale oil and Tar Sands are changing the nature of the oil industry. The premium we are willing to pay for avoid having to do business with the shits in the Mid East has made them worthwhile.

[Razgovory]

It looks like the Middle East is starting to lose it's relative position of oil dominance, and besides that the increasing importance of natural gas and renewables are likely to make budgets in the Petro-states based on $100/b untenable. 

Anyone read any interesting articles on the subject?  Have any predictions? Will Dubai and the other city-states of the UAE survive? 

Personally, I'm looking forward to massive Schadenfruede when the entire Arabian peninsula devolves in to Greater Somalia.

Dubai will survive, they've invested that money to become the Hong Kong of the Middle East.  Very wise.  The rest of the states including Iraq and Syria will become like Africa.  Iran will probably survive, though it'll be thrown into chaos.  I have a feeling that few Americans will be interested in famine relief for Saudi Arabia.

[Admiral Yi]

Most of the Gulf statelets seem to have done a good job of socking away savings in sovereign wealth funds.  They can go full trustifarian when they run out of oil.

[The Minsky Moment]

The shale boom doesn't change the fundamentals.  The ME still has enormous reserves, but more importantly, they are still the low cost producers due to cheap costs of extraction.  Shale and pre-salt offshore OTOH require high prices to break even.  So OPEC is still in the very nice position of being able to sell their entire quota for whatever the market will bear, and the new alternative sources of supply, are more setting a floor to prices than pushing them down.

[Neil]

Why would other sources of oil make the ME poorer?  People love oil, so the more the merrier.

[Barrister]

And in a world of high oil prices, being a low-cost producer means it's almost all pure profit.

[CountDeMoney]

Why would other sources of oil make the ME poorer? 

It doesn't.  Other producers dump extra oil onto the market, the ME simply reduces their production in response.  Barrel prices stay as static as OPEC wants them to be. 

All shale production does is extend the ME's reserves, while draining ours.  Yay for us.

[Barrister]

Why would other sources of oil make the ME poorer? 

It doesn't.  Other producers dump extra oil onto the market, the ME simply reduces their production in response.  Barrel prices stay as static as OPEC wants them to be. 

All shale production does is extend the ME's reserves, while draining ours.  Yay for us.

Because OPEC has been so effective at setting prices over the last 20 years?

The only OPEC producer with any ability to reduce their production is Saudi Arabia.  Everyone else is producing it as fast as they can (either because of technical problems, or to cover rising expenses).  Increasing ROTW production does lessen ME overall influence somewhat.

[mongers]

It's not going to happen; you might as well talk about a post-industrial America. 


edit:
Oops my bad.