The Great Saudi Oil Dilemma

Energy and Capital Keith Kohl uncovers one of the greatest fears coming true for Saudi Arabia, and reveals why Texas oil drillers are about to take full advantage of the situation. You are receiving this email because you subscribed to Energy and Capital. [Click here]( to manage your e-mail preferences. [Energy and Capital logo] The Great Saudi Oil Dilemma [Keith Kohl Photo] By [Keith Kohl]( Written Jul. 31, 2019 You have to love it when a plan comes together. For the Saudis, it was a question of how on earth they could deal with the booming Permian Basin. To put it lightly, the U.S. oil industry was a thorn in the side to Saudi Arabia. This year, however, a revelation came to light regarding Saudi Arabia’s pride and joy — the Ghawar oil field — that was even more harmful to the House of Saud. For decades, roughly 5 million barrels of crude was flowing out of the wells at Ghawar, making it the largest oil field on the planet. When it came to giant oil fields, nobody was able to come close to it, and that’s even despite the fact that the Saudis were pumping an ungodly amount of seawater into its wells in order to keep production high. Then the Saudis dropped a bombshell: The mighty Ghawar wasn’t living up to the hype! Have you heard of these Superpower Checks? $1,818 each This is news to most Americans... but Congress unanimously approved a program that’s sparked a $270 billion spending spree across America. Part of this spending is required to be paid out to everyday Americans in the form of these American Superpower Checks. You could collect up to 24 per year — each worth $1,818 or more. [Go here for full details and to sign up.]( Some of you might remember when we [talked]( about this Saudi dilemma back in February. I mentioned back then that the Ghawar field accounted for 90% of Saudi Arabia’s export revenue, half of its GDP, and nearly 90% of the government’s budget. Well, it turns out drillers weren’t extracting 5 million barrels per day from Ghawar. When Saudi Aramco filed its base prospectus back on April 1, we all learned the cold, bitter truth behind the world’s largest wishing well. The Saudis revealed to the world that the Ghawar oil field’s production capacity was actually 3.8 million barrels per day — more than a million barrels per day LESS than everyone believed! Back in 2004, the Saudis had stated that field production was 5 million barrels per day. Given how closely guarded Saudi field data has been up to this point, do you really trust them at all? I didn’t think so. As if things weren’t bad enough, the U.S. tight oil boom threatened the Saudis’ market share in the Gulf of Mexico, which it had already been fighting with Venezuela over. Since 2003, Saudi oil exports to the U.S. have dropped by 45%. The House of Saud had to find a new oil customer. It had to be done quickly, too. In 2018, 88% of the world’s oil production growth was from the United States. And with our crude exports picking up momentum, it was only a matter of time before [the Saudis’ greatest fear]( would come to fruition: a world supplied by U.S. crude. Keep in might that with OPEC+’s production cut deal still in place, the Saudis have lost their position as the world’s swing producer to the United States. Fortunately for young Saudi princes, China has developed a taste for their crude. Turn every $2 into $2,500 I just got off a conference call with the management of a little-known $150 million West Texas oil explorer. On the call, they revealed the discovery of $185 billion worth of oil under their land. This means for every one of this company’s $2 shares you buy, you’re buying $2,500 worth of oil. This is a recipe for massive windfall profits. [Here’s my full write-up and recommendation.]( Trade War Blues Recently, Reuters reported that Chinese customs data showed a 60% year-over-year decline in oil imports from Iran. With full sanctions in effect and no more waivers after May, China turned to the Saudis. But this isn’t some sudden phenomenon. Saudi Arabia has been steadily increasing its oil exports to China for more than a year. What’s interesting is that throughout this bitter trade war, China still hasn’t imposed tariffs on U.S. crude oil. Perhaps it’s because they know just as well as we do how valuable U.S. oil is to them; let’s not forget that China took over as the world’s largest oil importer last year. Besides, beggars can’t be choosers, can they? Soon, they may not have a choice, especially if the mighty Ghawar wishing well peaked and is officially in an irreversible decline. As you read this, plans are already underway to build the necessary pipelines to get that light, sweet Texas Tea in the Permian to the right ports along the Gulf of Mexico. Need more proof? A few weeks ago, a quiet project commenced in the port of Corpus Christi. It was an expansion project that will deepen the Corpus Christi ship channel to accommodate the huge oil tankers that will be feeding U.S. crude to the rest of the world — China included. And there’s one place my readers and I are looking that could play a huge role in fueling the U.S. export boom out of Corpus Christi. [Why don’t you take a look at the full details for yourself right here?]( Until next time, [Keith Kohl Signature] Keith Kohl [[follow basic]@KeithKohl1 on Twitter]( A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of [Energy & Capital]( as well as Investment Director of Angel Publishing's [Energy Investor.]( For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's [page](. [in-case-you-missed-it-banner-550]( 2019 Is the Year of Clean Energy Last month, the International Energy Agency made a firm declaration: The time is right to tap into hydrogen’s potential to play a key role in a clean, secure and affordable energy future. Once a laboratory experiment, hydrogen has now become the most efficient and economical source of alternative energy. Major companies like Google, Apple, Amazon, and more have pledged to completely use alternative energy... some by next year. But to meet their goal, these companies are going to need equipment from a third-party source. And there’s a tiny company’s quickly setting itself apart from its competitors. Its clients already include the U.S. military, a frenzy of Fortune 500 companies, and many more. Between all these impressive partnerships, this stock could easily shoot up to 15 times where it is today. So if you’re interested in this breakthrough and want to make 1,587% gains in the process... [Then click here now.]( Enjoy reading this article? [Click here]( to like it and receive similar articles to read! Browse Our Archives [What Are the Blue Chips Telling Us?]( [The Curious Case of Iran's Missing Oil]( [What 5G Means to Health Care]( [The Bloody History of the Search for the Fountain of Youth]( [What 5G Means for Manufacturing]( --------------------------------------------------------------- This email was sent to {EMAIL}. It is not our intention to send email to anyone who doesn't want it. 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