Chapter 817 Oil Competition

"Mr. President, the results of our investigation are out. Due to geological reasons, the originally estimated recoverable reserves of our important Monterey shale oil production area will be greatly reduced. Now, we predict that only 600 million barrels of shale oil can be extracted from there." Secretary of Energy James said to President Reagan with great disappointment on his face.

The Monterey shale oil base is the main shale oil production base in the United States, but now, the expected recoverable reserves have been cut by more than 90%! Originally, relying on this oil base, the United States planned to add 2.8 million jobs and generate $24.6 billion in tax revenue each year. For the current United States, this is a major project!

But what about now? A big oil field is gone! Everyone present looked unhappy, especially Vice President Bush. After all, the Bush family is a big oil family in Texas, and now that the reserves of shale oil have dropped sharply, the family will also suffer great losses!

Moreover, if all shale oil bases are like this, then the shale oil revolution in the United States would be a joke?

"What about our other shale oil bases? Will the same thing happen?" Reagan asked.

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If this is the case, then it is conceivable that the US economy will experience an avalanche! The short-lived prosperity now maintained by shale oil will all disappear, and the United States will experience a cold winter!

"The Monterey shale oil base is mainly due to geological structure reasons. There are too many faults underneath, which means that even though we want to mine, we are unable to do so. Other shale oil bases should not have the same result," said James.

The original expectations were too high, and now, based on the results of the re-analysis of the oil wells that have withered, there is no worse result than this. Even if the reserves of the Monterey shale oil base are greatly reduced, it will not affect other oil fields. Moreover, with the advancement of technology, there may be a way to recover the unrecoverable shale oil in the future! Just a few years ago, who could have thought that shale oil would be produced on a large scale?

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Reagan nodded. He could accept this analysis result.

"Mr. President, something bad has happened!" At this moment, Baker, the White House Chief of Staff, hurried in. He turned on the TV and tuned it to the international channel.

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Inside, there was a replay!

A bearded man with a scarf on his head was saying something in Arabic, and there were subtitles translated into English below.

"Several years of war have traumatized our economy, but now, after working hard to rebuild our own homeland with our own hands, we have finally restored the country to its pre-war state. However, the conspiracy of some countries to interfere in our internal affairs will not change, and at the same time, their conspiracy is doomed to fail. Originally, OPEC coordinated the crude oil production of various countries and maintained the supply and demand relationship in the world crude oil market, and had achieved a balance between supply and demand. But now, new oil exporting countries have joined in and maliciously interfered with our oil exports, resulting in low oil prices. We reduced our own oil production in the hope of maintaining normal prices, but what was the result? Other oil-producing countries increased their oil production and maliciously increased exports, causing us to suffer huge losses! Now, in order to safeguard the interests of our oil-producing countries, we have decided to engage in fair competition to face this deteriorating situation. We will expand our production to meet the crude oil needs of various countries! We must defeat those malicious oil exporting countries through legitimate commercial competition!"

Damn it! Seeing this, Bush's face suddenly changed. What on earth are these Middle Eastern bumpkins thinking?

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Needless to say, the other party is targeting the United States! Back then, the United States was also one of the world's largest oil importers. Why did the United States deliberately maintain its hegemony in the Middle East? Of course, it was to control oil resources and ensure its own energy security! In this case, it is most beneficial for the United States to maintain a low price for oil. In the 1980s, the Americans used various excuses to make Saudi Arabia and other countries frantically increase oil production. At the same time, Saudi Arabia also reduced the price of oil to about ten dollars a barrel for its own benefit, and enjoyed the low price of oil.

But now, with the large-scale exploitation of shale oil, the United States has changed from an oil importer to an oil exporter! So, for the United States, it is natural to hope that the world oil price is as high as possible!

The United States is continuously increasing its oil production and expanding its share of the oil market. However, this does not mean that the United States wants to lower the world oil price. All this is caused by the continuous reduction in oil production by the oil-producing countries in the Middle East. After the outbreak of the Middle East war, the oil production of Middle Eastern countries was less than half of the pre-war level. The world crude oil market is in a stage where supply is less than demand, so oil prices remain high.

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Of course, the increased oil production in the United States and the United Kingdom has indeed seized the Middle East's share of oil exports, but these are also the result of normal competition.

However, the speaker now is the Iraqi oil minister, who is also one of the important representatives of the newly established Organization of Petroleum Exporting Countries in Moscow. His speech basically represents the statement of all oil-producing countries in the Middle East!

The Middle East will change its previous policies and seize the market with large-scale oil exports! At the same time, a bloodless fight between the world's crude oil exporting countries is just around the corner!

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This is an even worse idea! Upon hearing this news, President Bush, who already looked unhappy, looked even uglier.

As a family of oilmen, Bush certainly knows the difference between Middle Eastern oil and American oil. The Middle East is full of high-yield self-flowing crude oil. You can drill an oil well from the ground without even using an oil pump. The oil will just gush out by itself, and the cost of extraction is less than ten dollars! However, the cost of extracting American oil is definitely more than twenty dollars, and the cost of shale oil is about forty dollars a barrel! It is similar to the extraction cost of the North Sea oil fields in the UK.

If oil is produced in large quantities, the world crude oil price will plummet! In this way, the US plan to save the economy by exporting oil will be on the verge of bankruptcy!

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All of this, of course, was a Soviet conspiracy! The Soviets’ oil fields under the frozen soil of the plateau also had high production costs, but the Soviets also controlled a large number of oil fields in the Middle East, such as those in Saudi Arabia, which had Soviet shares. Even if the oil price fell and caused losses in the Soviets’ local oil fields, they could still make up for it from the profits of Saudi Arabia’s oil fields. However, the United States could not do that. Where would the United States get the wool from?