By Micah Halpern
I've Been Thinking:
Saudi Arabia is in a cash crunch. The Saudis have burned through almost $100 billion of their cash reserves putting them way over budget. They are even thinking of selling shares of Aramco, their state owned oil company.
Aramco could be the most important company in the world right now. Selling part of it could be a huge risk, or, it could buy Saudi Arabia the time they need to prop themselves back up.
The Saudis are in this financial hole as a direct result of the drop in oil prices.
Given the oil market and given the nature of the Saudi oil reserves which stands at about 300 billion barrels, Saudi Arabia has only 5 to 7 years left as king of the mountain.
They need to get the price of oil back up and they need to start being more fiscally responsible.
Saudi Arabia is trying to do good in the region. Most of the $100 billion deficit that is now crippling them comes from their decision to protect the Arab world and keep it in relative check.
If the Saudis lose their power it is not they alone who will suffer. If the Saudis lose their position of power, it will result in a reshaping of the Middle East.
We, the West, have an interest in this, too.
Micah@MicahHalpern.com
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