Call me crazy, but I think there's something else going on here. What if Saudi Arabia is having a fire sale?
There's a ton of science that says that we can only pull up half of our current oil reserves to cap climate change at 3 degrees (2 degrees isn't even feasible)[1][2]. That combined with the political and economic tides starting to shift in favor of renewables/nuclear and electric vehicles[3], peak carbon is starting to look like it will happen around 2020 (only 5 years away)[4].
So, if the world will only pull up half of what it already has in reserves, it's a great strategy for Saudi to drive down price and try to make sure most of that half is from their pool. I'm in renewables, and there's a common question we always ask: will oil die at a high price or a low price? It looks like it's going to be a low price.
There's a ton of science that says that we can only pull up half of our current oil reserves to cap climate change at 3 degrees (2 degrees isn't even feasible)[1][2]. That combined with the political and economic tides starting to shift in favor of renewables/nuclear and electric vehicles[3], peak carbon is starting to look like it will happen around 2020 (only 5 years away)[4].
So, if the world will only pull up half of what it already has in reserves, it's a great strategy for Saudi to drive down price and try to make sure most of that half is from their pool. I'm in renewables, and there's a common question we always ask: will oil die at a high price or a low price? It looks like it's going to be a low price.
[1]: http://www.carbontracker.org/report/wasted-capital-and-stran...
[2]: https://en.wikipedia.org/wiki/Carbon_bubble
[3]: http://www.npr.org/sections/thetwo-way/2015/12/12/459464621/...
[4]: https://www.iea.org/newsroomandevents/pressreleases/2015/jun...