"Bloomberg" agency warned that the drop in crude oil prices currently threatens to erode the financial reserves accumulated by the Gulf countries during the past decades.
According to the agency, the price war will drive the disappearance of some other oil producers, those who cost them more than $10 per barrel of production, while the cost of producing a barrel in Saudi Arabia, for example, is $ 2.5.
"Bloomberg" considered that the excess of production is not the product of geopolitical factors, but rather the outcome of mathematical accounts linked to low oil prices, because with the decline in dollars that are received for every barrel they sell, the Gulf countries need to pump a much larger amount to maintain what is similar to current revenues.
In principle, these countries have an arsenal sufficient to go to war, as the cost of pumping one barrel of oil from Gulf oil fields does not exceed the price of a bottle of luxury drinking water, according to Bloomberg.
According to the same agency, in order to deal with the repercussions of the price fall crisis, and with the potential for declining demand for crude in the long run, Gulf central banks have deposited huge amounts of money in sovereign funds, but in front of the falling prices, these funds may erode very quickly.
Source (The New Arab Newspaper, Edited)
