Its risky, no doubt. The risk of taking a bath is always there but it's not a huge bet in the grand scheme of things. I don't think OPEC has the stomach to hold out much longer.
Originally Posted by WombRaider
The problem is Saudi Arabia likes the effect of shutting down fracking, and if Iran is going to defend market share, which they say they will, it will be a flooded market.
The Bakken will die first, because of the cost of rail transportation on Warren Buffett's railroad which is 10 to 15 dollars a barrel higher than Permian Basin pipelines to the gulf and to Cushing, Oklahoma.
They do not want any more infrastructure development in the Bakken, and they don't want any more holes in the ground. They can hold out for years and also don't want to see Iran benefit.
Once the Bakken dies, then we will see oil equilibrium. Plenty of oil will flow from oil friendly West Texas. Everywhere else might see increasing environmental resistance.