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Technology is reshaping the world of oil by 2018. The U.S. Permian Basin stretching from West Texas to New Mexico now produces more oil than the UAE and is likely to soon surpass Iran- production is at 3.1 million barrels a a day. There are as many rigs as in 2011 yet the production has tripled because of the use of high tech rigs that can move quickly to new locations over wide areas and with tech that can see hundreds of feet into the rock. By 2019 the U.S. will surpass Russia as the world's largest producer of oil. The drop in oil prices to about $40 a barrel in recent years is a result of Saudi efforts to block shale oil development by lowering prices. This has not worked. Initially some high cost producers exited the industry and the shale industry suffered. Over time the new technologies spurred by lower oil prices have led to the anticipated drop in cost. Shale oil can now be produced by core producers at $40 a barrel and still be profitable according to this WSJ report. All Middle Eastern countries cannot meet budget needs at $40 a barrel. In 2018 oil prices increased back up to $77 a barrel. In the next wave of declining prices the shale industry is better positioned than the OPEC countries.   ...

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Atsuyoshi Koike of Japan's Rapidus co-developing with IBM new 2 nanometer chip for production in 2026, wafer by wafer in 15 days instead of in batches taking 50 days. Koike says he will charge a Shinkansen fee referring to the bullet trains in Japan. He sees the failure by Japan to join the US in co-producing chips as a mistake, ceding ground to Taiwan's TSMC and South Korea's Samsung. Japan's government supports Rapidus with $600 million in funding and anotehr $1.7 billion comes from Japanese companies Sony, NTT and others. By comparison TSMC will invest $56 billion to produce advanced chips in scale in 2026. Japan is step by step getting back into the chip business by making a joint effort with the US.

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Saudi Arabia and the UAE are emerging as large arms buyers. Saudi Arabia spent $80 billion on arms purchases in 2014, more than France or Britain, according to the Stockholm International Peace Research Institute. The Emirates spent $23 billion, triple the amount spent in 2006. Qatar made a $11 billion deal in 2014 for air defense systems and helicopters. It is looking for F-15 fighter jets to replace its fleet of older Mirage jets. Lockheed plans to replace smaller Pentagon sales by increasing global arms sales to 25-30%, according to CEO Marillyn Hewson. It has setup a separate division for foreign military sales.

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Russell Gold's interview with Shell CEO, Jack Voser. Voser describes his perspective on the global oil situation in the next three decades with a doubling of demand in 40 years, a third of which would come from renewables and 10% from nuclear, the rest from fossil fuels. Natural gas plays a large role in Shell's future strategies. Voser sees the potential of China's shale gas supplies being larger than the U.S., with clearer energy policies than the U.S. The cost of producing China's shale gas will be higher because of complex geology. He sees the potential for the reindustrializing of the U.S. midwest with the abundant shale gas supplies, bringing back jobs that were exported to other countries. Clear standards and regulations are needed to make investments. He thinks it will be very unusual if the U.S. did not grasp this opportunity. Shell's operations generate $470 billion in revenues and its capital budget for 2012 was $32 billion, providing enormous scale and requiring careful planning for long term projects in Australia, Africa, Canada and the Middle East....

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High oil prices have reduced oil demand by about 8% compared to last year. The EIA looks at gas demand average for 2017 to 2019 and finds that in late February 2022 it was 99% of this average, in May it was 93% and June 95%. US refineries have cut production by 800,000 barrels a day since the pandemic began causing oil shortages, and shale oil companies are reluctant to make the investments to scale up production.

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Greg Ip points out that Saudi Arabia's effort to get back market share is not working so far as shale oil producers continue to increase production. OPEC now confronts a very different competitor in the U.S. shale oil industry- 77 different producers produce 75% of American oil production, each acting like a tech startup, with access to capital markets which are continuing to provide capital. These producers can increase or reduce production with agility, and act differently from state owned oil producers or the major western oil companies. He cites Goldman Sachs figures showing average rig in Texas Eagle Ford shale yielding 5000 barrels a day in the first year compared to 2000 barrels in 2011. This analysis also shows shale oil production cost on a declining curve- $80 in 2014 and $60 in 2015, which could upset Saudi calculations with the advances in technology. Majors such as ExxonMobil are also moving forward with the technological advances.

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Gas at pump costs about $8 in Germany and France, $7 in UK and $4.50 in Canada- in the US $4 for March 2026. As far back as 2011-2014 gasoline prices averaged about $3.50 a gallon in the US. Today's $3.92 average in 2026 is only 12% higher than $3.50 of 10-15 years back in the US for gas prices at the pump. Gas pries before the war in Ukraine in 2017 were $5.67 a gallon ($1.50 a litre) with a price increase in 2026 10 years later to $8 an increase of 41%. By any comparison with European nations Americans are way better off in 2026 and also in comparison with 15 years back considering the 12% increase and the much higher wages today. The average annual wage salary was $43,000 back in 2010 compared to $65,000- $75,000 today. Much of this was achieved by increased shale production to make US oil self sufficient. Americans are clearly so much better off today with oil at an average price of $3.92 a gallon.  The higher price of oil also acts to increase incentives for accelerating renewable energy production which will make it possible to achieve a future free of fossil fuels while at the same time giving average wage Americans a chance for a better life during the transition. ...

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This issue of the Economist magazine looks at Saudi oil price cuts and the future for shale oil in the world's energy mix. In the short run overleveraged companies in the shale oil business in the U.S. will be affected by oil prices below $50 a barrel. The Economist points out that shale oil deposits are extensive in the U.S. and other parts of the world. The upfront costs are as little as $1.5 million for drilling a well. As a result the economics of shale will depend on new advances in technology and efficiency to bring costs down below existing costs averaging of about $57 a barrel, with some producers at costs of $35 a barrel. Because of technology advances anticipated in the field it points to shale oil as a reliable source of low cost oil supplies in the future, keeping oil prices lower than in the past and much less subject to manipulation by cartel pricing or oil price shocks. The lower volatility and lower level of oil prices will be good for the rapidly growing economies in Asia and the developed economies of Europe and the U.S., and for countries in Latin America such as Argentina with large shale deposits....

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Behind the deal Apple made to buy 100 million chips from TSMC's $165 billion plant near Phoenix is, yes, DJT Tariff exemptions. Yes, it took tariffs to get Apple and TSMC to invest in the US after much if not all of chip manufacturing was sent by Apple to China and Taiwan's TSMC. Was the Biden administration successful in getting Apple to invest in the US on a the scale that was needed? The answer is no. Even when TSMC agreed to invest in plants in the US under Biden it's management described the US as a difficult place to attract talent and build plants as reported in the WSJ at that time. There is a real element of truth in saying that it took a real effort such as the DJT tariffs move to change a situation in which most manufacturing was shipped out by US business to China. The Taiwanese had a condescending attitude that the US could not build advanced technology plants as evidenced in statements by head of TSMC, who was himself educated in the US technology institutions in the 1960's and 1970's. The US business shipped out its industrial and technological knowhow to Asia in a mistaken theory only found in textbooks that this was not going to affect US leadership and US dominance in the world. And with it the dominance of the scientific and industrial revolution culture of Europe and the US that enabled its free institutions of government and ideas of liberty of man. It is an astounding story of our times that this has actually been allowed to happen under previous administrations, technology elites, by economists, and governing elites, with some still clinging on to these ideas found only in textbook economic theory, when something entirely different has happened to neighborhoods, communities and factories now abandoned in the US. ...

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US-Swiss trade deal November 2025 for 15% US tariff in exchange for $200 billion in investment in US. This includes access to Swiss markets for the US. The agreement also will let in dairy products and chocolate to the US at 15% tariff to reduce cost of living concerns. Swiss dairy producers and chocolate makers are likely to bear most of the 15% tariff burden because of higher margins. The $2000 rebate to all Americans from tariffs is a good idea of the DJT administration to give Americans protection from the smaller share of the tariffs that are passed on to consumers that are not borne by the producers exporting to the US. Overall in that situation the US will benefit in the restructuring of world trade that the DJT administration will have accomplished without hurting American consumers and bringing large scale investment into the US for jobs and higher wages. This is the part of the DJT Deal that could help America rebuild its manufacturing and economy in new ways.  ...

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Shale oil producer spending in the U.S. is forecast to drop by 3%, but this will still add one million barrels a day of additional shale oil production. Prices are now at about $45 a barrel and shale producers are cutting back on production rigs in operation with the 40% decline in oil prices. The EIA expects oil production to reach an average of 12.1 million barrels daily in 2019 from an average of 10.9 barrels a day in 2018. This suggests there will be additional supplies and continued downward pressure on oil prices. The situation is favorable for the U.S. and countries such as India which benefit from lower oil prices.

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Ailworth and Faucon describe the ways in which shale oil producers such as Continental Resources in Texas and S. Dakota are responding to the drop in oil prices. One strategy adopted is to put off 60% of the expense of production by not completing the final stages of production of hydraulic fracturing, but keeping the wells ready so that production can quickly be ramped up if prices go to the $60-65 range. EOG Resources, Andarko, Apache, Chesapeake Energy, are also following this strategy. There are about 3000 such wells, not pumping but drilled and ready for hydraulic fracturing, according to RBC Capital Markets estimates. This strategy would mean large shale oil supplies well into the future to keep oil prices low. Production from lower cost wells continues with U.S. oil production climbing to a new high of 9.4 million barrels a day for week ending March 6, 2015, according to federal data. This shows that this is a new situation and the resilience of shale oil supplies may have been underestimated. Another strategy adopted by other large companies such as Exxon is to continue to develop technology by learning to get the oil out of the rock in the most cost efficient way. The capital investment in U.S. shale oil has dropped by $50 billion in 2015 compared to 2014. The number of oil rigs drilling declined to 866 in the U.S. by March 2015, according to Baker Hughes....

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Daniel Yergin of IHS Cambridge Energy Associates describes the revolution in the development of natural gas supplies in the U.S. with the development of new technologies to extract natural gas from abundant shale deposits in the U.S. and Canada.

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The sharp drop in oil prices from the Saudi decision to increase output and cut prices is putting the U.S. oil shale drilling industry in a difficult position. About $200 billion in debt is coming due in the next couple of years for oil shale drillers who made large investments to get U.S. oil production up to 13.1 billion barrels per day by Feb. 2020. Most U.S. oil shale producers cannot make a profit at the oil price of $34 a barrel after oil price declines on March 9, 2020. At $34 these producers can no longer find it economical to extract oil.

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DJT MAGA factions in general support action in Venezuela and in Western Hemisphere for Monroe Doctrine, this includes J.D. Vance, Steve Bannon and Hispanic supporters from Cuba and Latin America in Florida. They support action to bring drug traffickers to justice in the Western Hemisphere. Essentially supporting the Monroe Doctrine that no colonial European or other foreign powers should interfere in the running of Latin America in the western democratic tradition set by Britain and the United States, and now popular throughout Asia and Latin America and Africa. The government in Venezuela say Canada and Britain is illegitimate and lost the 2024 election by a huge margin 30% or lower to 67% for the opposition under Machado and Gonzalez. And the drug trafficking by Maduro and his associates against the US is an offence that can be tried in US courts, is something Republicans support, and has general support in America. Worse drug trafficking to the European Union constitutes something the Europeans should be worried about because of its growing scale and damage to Europe. ...