- All of this has since changed. OPEC now produces only about 40 percent of the world’s oil, and the days when it could dictate global oil prices are over. The U.S. is one of the key reasons: It has surpassed Saudi Arabia in both recoverable oil reserves and total hydrocarbon production, and U.S. shale production has put a ceiling on the price of oil. In addition, the U.S. has become a significant oil exporter, increasing exports by a factor of 20 in the past four years, which means the U.S. has gone from major consumer of Saudi oil to competitor practically overnight. In 1977, the U.S. imported 1.38 million barrels of oil per day from Saudi Arabia. In 2012, that figure had not changed much – just under 1.37 million bpd. Since then, U.S. oil imports from Saudi Arabia have fallen by 30 percent to 949,000 bpd.
The question I've never seen answered is why would China want the rmb to become a global reserve? I've heard some BS about global respect, but there's no way that can outweigh the downside for them. Namely, that when everyone hoards your currency, its value is inflated, damaging exports. I've always assumed Germany intentionally contributed to the euro chaos because their export dependent economy benefited from it. I doubt China would invite domestic strife for something as intangible as global respect.
"Let me issue and control a nation's money and I care not who writes the laws" - some antisemitic shill pretending to be Mayer Anshelm Rothschild When trade is delineated in your currency, you delineate trade. If kb, bb and wo are trading partners, and we all trade in kbbux, I get more trade by printing more kbbux. You don't. And yeah - obviously you can raise your price in kbbux but now you're reacting to me... and wo is not only reacting to me, he's reacting to you reacting to me. Meanwhile if wo experiences a crisis and his currency plummets, his goods become cheap to me. If my currency plummets the value of your trade goods plummets, too. And when you're talking major trade, you're talking major bux. Borrow a little money and the bank owns you. Borrow a lot of money and you own the bank. When your currency is the peg, the bank - the rest of the world - has to play along with you.The question I've never seen answered is why would China want the rmb to become a global reserve?
I understand why it's advantageous. What I meant was with China specifically I don't think that the price tag that comes along with being a reserve currency is affordable for them. Firstly, it will curb exports, and second, it will demand that they play by world rules (even if they're more in a position to dictate those rules, we still need a rules based system--which they have never been keen on domestically or internationally). China showed a few summers ago that they will do anything to avoid a domestic economic calamity, and I therefore doubt they'd be interested in creating one out of nothing just to project soft power overseas. Maybe if they start to adopt a more interventionist foreign policy (beyond just stealing territory from neighbors), then it makes more sense. Unless that happens, I don't think they're there yet.
Hard to credit that the U.S. would ever export so much petroleum, with net imports declining fast. I'm not sure about the claim that the U.S. "has surpassed Saudi Arabia in both recoverable oil reserves and total hydrocarbon production". Saudi Arabia is still #2 on some lists of proven reserves, well ahead of the U.S. The Perfect Oil Field is a good look at an exceedingly productive middle eastern oil field.
The tinfoil hatter in me would argue that from a PNAC/Club for Growth/Bilderberg standpoint, flooding the market with cheap oil retards alternative energy development amongst the developing world while simultaneously depressing the economic power of global competitors. Not a fan of the Iraq War but from a Machiavellian standpoint, that instability and those refugees aren't spilling over our borders.Hard to credit that the U.S. would ever export so much petroleum, with net imports declining fast.
Obviously I'm no expert here, but I assume it's quibbling over the definition of "recoverable". Of course recoverable oil depends highly on the price. I remember reading a couple years ago that Saudi was intentional flooding the market with an eye toward driving shale production out of business. Guess that didn't work out for them (who could have guessed?).
Yeah that fucked Saudi Arabia, Russia and Venezuela. Meanwhile, shale oil extraction is a lot less stationary; you can turn the rigs off, let 'em sit, liquidate 'em, refurbish 'em and deploy 'em at a whole new shale field when the price is high enough again.