Publications: Notes at the Margin

The Price War's Target: Venezuela, the Weakest Link (October 19, 2015)


There are several issues that many oil market followers fail to understand. The first relates to OPEC. OPEC is a club, not a nongovernmental organization. It has no power to enforce any decision taken by its members. The second is that the focus of OPEC’s price war is on fracking. While many experts now accept the view that the goal is to shut down frackers permanently, it is not. The third missed point is that the price war was not designed to hit one particular producer. Saudi Arabia’s price war is designed to force the weakest link in the oil supply chain out of business, whomever that might be. We think the weakest link is Venezuela.


To request subscription information for Notes at the Margin, please Contact Us or send us an Information Request.