How to Analyze Allied Energy Corporation Tactics

The Saudis have been doing something interesting – which I will explain.

On the one hand – they are pumping out and drowning the market with excess barrels of oil. They are doing this to dissuade investment by American companies in shale gas and so to dissuade future competitors from entering the market.

This means that the Saudi oil cartel situation is suffering because they have to take a huge hit in revenue as the price per barrel drops. This, conversely, obviously helps the consumer as oil hasn’t been cheaper for years. This also helps economic areas that are heavy net importers – such as the Euro Zone, India and China.

The long term impact on allied energy corporations in Saudi Arabia and others is that they will both lose out on the short term and long term – including unfortunate smaller oil companies that can no longer afford to stay in business.

Dirty tactics all around – but at least the consumer is better off this time around. No more capitalist bubbles! Down with oil prices!

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