Tuesday, April 12, 2011

The Most Important News You Haven't Heard

Elections can sometimes take your mind off more important stuff.  File this under "Things that will suck no matter who wins":
Saudi Arabia could need the oil price to average more than $100 a barrel by 2015 to sustain the big public spending rises it plans in an effort to forestall the political unrest sweeping the Middle East.

The oil market is growing increasingly worried about Riyadh’s fiscal needs as it fears that they could force Saudi Arabia to pursue oil policies similar to those of Venezuela and Iran, traditionally the price hawks at the Opec oil cartel.

The break-even oil price the Gulf kingdom requires to balance its budget will jump from $68 last year to $88 this and then $110 in 2015, according to new estimates by the Institute of International Finance, a leading industry group.

Obviously, it costs more to pay your security forces overtime, and toss money into the angry crowd.  It isn't like the Saudi leaders will dip into their personal funds for any of that.   Mind you, one salutory effect of the higher gas prices that result:
Emissions go down, as in 2008 and 2009.

1 comment:

Anonymous said...

this is so alarming it may cause increasing of fare.

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