Fortune.com quotes "an unnamed Saudi official" as confirming what many industry analysts had guessed at the end of last year:
That "Saudi Arabia might be trying to flush out the new competition that had cropped up in recent years, like American-based shale gas producers."
"There is no doubt about it, the price fall of the last several months has deterred investors away from expensive oil including US shale, deep offshore and heavy oils."
"Saudi Arabia wants to extend the age of oil (…) we want oil to continue to be used as a major source of energy and we want to be the major producer of that energy.”
Fortune says the Saudi strategy -- to maintain its production in the face of the oil price collapse -- was successful to the extent that "the recovery in the price of oil since February has caused the U.S. to cut its production" to levels unseen since 2010.
However, as prices rebound, so too will the Russian economy, which will in turn create a shift in alliances.
On Wednesday, Russia's deputy energy minister said that given the current price of oil, they are less likely to "collaborate" with OPEC.
Fortune concludes that China's demand for oil and the West's technological advances in shale extraction both mean that, as one senior analyst told the magazine, "Shale will never die. It's here to stay."
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