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Tuesday, December 30, 2025
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[Salon] Oil: Reason And Rhyme - ArabDigest.org Guest Post
Oil: Reason And Rhyme
Summary: as US oil output hits a record high and the shale sector prepares to ride out lower prices still, Riyadh faces the very real prospect of history repeating itself.
We thank our regular contributor Alastair Newton for today’s newsletter. Alastair worked as a professional political analyst in the City of London from 2005 to 2015. Before that he spent 20 years as a career diplomat with the British Diplomatic Service. In 2015 he co-founded and is a director of Alavan Business Advisory Ltd. You can find Alastair’s latest AD podcast, Saudi Arabia and an uncertain oil market here.
“Never underestimate the American engineer.”
Kaes van’t Hof, CEO Diamondback, 3 November 2025
It is now almost nine months since the ‘Opec+ eight’ started to unwind their voluntary cuts in oil output after Saudi Arabia had strong-armed them into an unexpected u-turn. When the decision was announced on 3 March Brent crude stood at US$71.62 per barrel (pb). Today, it is hovering around US$62pb, a couple of bucks of which can be attributed to the US’s actions against the regime in Caracas (which some believe to be driven primarily by a desire to seize control of Venezuela’s heavy crude reserves to fuel US refineries) and Ukraine’s escalating strikes on Russia’s oil infrastructure and shadow fleet.
The public justification for a change of policy, which has resulted in a shortfall of roughly US$30pb relative to the Kingdom’s balanced budget price, has never been convincing, i.e. maintaining price stability in the face of the Opec secretariat’s bullish forecasts for growth in demand. And there may not have been a single real reason for it. However, despite the failure of similar efforts in 2014-16, a second attempt to squeeze US shale production and claw back market share lost in recent years is now widely seen as a (if not the) major driver. With a three month time-out now called on further unwinding of the voluntary cuts, it is therefore a good moment to take stock of how things stand today in the US shale sector and its prospects into next year.
Overall, two related — in this particular context — quotes widely attributed to Mark Twain spring to mind. First, ‘reports of my death are greatly exaggerated’. Second, and alluded to in the headline to this Newsletter, ‘history rhymes’. For it increasingly appears that many among the commentariat — and, presumably and for the second time, the Saudis — may have underestimated the resilience of US shale.
Looking first at where things stand today, it is certainly the case that, as this 13 December article in OilPrice.com asserts:
“The US shale exploration and production (E&P) and Lower 48 midstream sectors experienced a volatile and challenging 2025, likely a far cry from what operators envisioned this time last year as the second Trump administration’s ‘energy dominance’ agenda was taking shape”.
As I argued in the 9 November Newsletter, the unwinding of the voluntary cuts was far from the only reason for this…and possibly not even the most important as is at least implied by the tirade of criticism of the Trump Administration revealed in successive Dallas Federal Reserve sector surveys including the most recent which was published last week.
However, despite these various challenges, on 9 December the authoritative Energy Information Administration (EIA) raised its forecast for average US 2025 oil production by 20,000 barrels per day (bpd) to 13.61mbpd, the highest on record. This is not to say that “grumpiness” among oil executives is entirely unjustified; after all, as a result of these challenges the oil-oriented rig count fell from 415 at the start of the year to 386 at the end of last month. Nevertheless, in its 3 December Energy Newsletter (behind a paywall) Bloomberg too elected to reference Mark Twain by describing it as “greatly exaggerated”.
Despite Saudi Arabia’s efforts to squeeze US shale production by increasing Opec+ output, US oil production reached a record 13.61 million barrels per day in 2025 as drillers remained resilient in the face of falling prices [photo credit: Sinopec Saudi Arabia]
Sticking with Bloomberg as we turn to 2026, its commodities opinion columnist Javier Blas, in an op-ed published in late November, pinpointed why doom and gloom over US shale prospects going forward is likely to prove equally misplaced as follows:
“Call it shale 4.0 — an arms race to squeeze more oil from existing wells. Today, American drillers recover, at best, 10-15% of the shale oil in place. That could soon change. Increasing the ratio even by a single percentage point is a prize worth billions of dollars over the lifetime of thousands of wells in Texas, New Mexico, North Dakota and Colorado. ‘The best place to find oil is where you already know you've got oil,’ Chevron CEO Mike Wirth tells me in an interview in New York. ‘We know where the oil is. If we left 90% of the oil behind, it would be the first time in history that we didn't figure out how to do it.’ The industry will need sweat, imagination, time — and dollars — to deliver that prize. But I wouldn’t bet against success.”
This is entirely consistent with forecasts published earlier in November by several shale producers to the effect that they expect to increase output in 2026 as they adjust to an average price per barrel for US benchmark West Texas Intermediate (WTI — currently at US$57.50pb) of US$60 or below. (According to the EIA, the average for 2025 was just over US$65pb.) Furthermore, the impact of the lower oil price is being cushioned to an extent by the boom in demand for LNG being driven by the urgent need for more power for AI-related data centres. In consequence, as David Wethe and Kevin Crowley wrote, also for Bloomberg, on 6 November, quoting sector experts at Macquarie Group:
“…prices will have to fall into the low $50-a-barrel range before the industry pulls back”.
This has not prevented the EIA from forecasting a drop in US average oil output in 2026 of 50,000bpd. But relative to this year’s record high and the International Energy Agency’s latest forecast of a global output surplus next year of close to four million barrels per day this is no more a rounding error.
Putting all this together, the question which Riyadh has to answer between now and the end of March is whether it is prepared to boost output still further and suffer the fiscal consequences of US$55pb Brent crude (at which point WTI would likely be hovering just above US$50) despite there being no guarantee that even this would achieve its objective. Having come this far, and especially after its failure to rein in shale a decade ago, this will not be an easy decision.
Sunday, December 21, 2025
Saturday, December 20, 2025
The Madness Goes On and On -
The Madness Goes On and On - micheletkearney@gmail.com - Gmail
https://mearsheimer.substack.com/p/the-madness-goes-on-and-on?publication_id=1753552&post_id=182177799&isFreemail=false&r=1y80w&triedRedirect=true
Friday, December 19, 2025
Thursday, December 18, 2025
Franciscan Friars of the Atonement Advent Reflections Week 3 - The True Peace of Christmas
Franciscan Friars of the Atonement -
Advent Reflections: Week 3
The True Peace of Christmas
During the 1960s and early 1970s, the “peace sign” seemed to be everywhere. It appeared on T-shirts, jewelry, flags. It was even painted on walls and stitched onto blue jeans. It’s a simple design – a circle divided by lines forming a kind of broken cross. It became a symbol of protest, hope and unity. The sign made a comeback in the 1990s, but few people today know its true origin or intended meaning.
We don’t need to debate the history of that symbol. Instead, we can look to a far older and far greater sign of peace: one announced more than two thousand years earlier. The first true peace sign was proclaimed by the angels on that first Christmas night. As St. Luke tells us: “And this will be a sign for you: you will find a babe wrapped in swaddling clothes and lying in a manger.”
That Child, lying in the humblest of places, was – and still is – God’s promise of peace. Before going to the cross, Jesus told His friends, “Peace I leave with you; My peace I give you.” And after His resurrection, His first words to them were, “Peace be with you.”
St. Paul wrote to the Romans, “The Kingdom of God is not a matter of food and drink, but of righteousness, peace and joy in the Holy Spirit.” The peace of Christ is not a slogan, a gesture, or a passing feeling. It is the quiet assurance that God is with us – even amid the chaos we face in everyday life.
This Christmas season, do not seek peace where it is shallow or short-lived. It will not be found in worldly possessions, success, or distraction. True peace can only be found where the shepherds found it: in the presence of Christ, the Prince of Peace, lying in the manger.
So, when you see a peace sign this season, let it remind you of a far greater one: not drawn in ink or stitched on denim, but revealed in flesh and love.
For the truest peace sign was, and always will be, a Child in a manger.
Yours in Christ,
Fr. Robert Warren, S.A.
Spiritual Director
Wednesday, December 17, 2025
Fr. Bob's Homily - Third Sunday of Advent - Franciscan Friars of the Atonement
Fr. Bob's Homily - Third Sunday of Advent - Franciscan Friars of the Atonement
John the Baptist stands as the commanding figure in today’s Gospel. He is a man sure of his mission, ignited with purpose. He is God’s prophet, bold and confident in his message. Strong and fearless, John acts without hesitation.
Yet somewhere along the way, doubt begins to creep in. Was he right? Had he truly been called by God? Or was it self-delusion? Was Jesus really the One he had been preparing the way for?
When we meet John in today’s reading, he is in prison, jailed by King Herod for speaking the truth. From his cell, he sends his followers to ask Jesus the question that weighs on his heart: “Are you the One who is to come, or should we look for another?”
The question is simple, but deeply human. And Jesus answers not with arguments, but with evidence of God’s power at work: “Go and tell John what you see and hear: the blind see, the lame walk, lepers are cleansed, the deaf hear, the dead are raised and the poor have good news proclaimed to them.”
Then, with tenderness, He adds, “Blessed is anyone who takes no offense at Me.”
John the Baptist’s struggle is one we all share. We begin with strong faith – a clear “yes” to God. But over time, life tests that confidence. We pray, we go to Mass, we try to live faithfully, and yet things don’t always turn out the way we hoped.
A woman once wrote to me about her three children: one thriving, another living with a man outside marriage, and the third married outside the faith, with no plans to baptize her children. She had raised them with deep Catholic roots, prayed for them daily, yet nothing seemed to change. “I don’t understand,” she said. “I did everything right. Why hasn’t God answered?”
Her question echoes John’s: “Are You the One who is to come, or should we look for another?”
Generations have asked that same question. Faithful people through the centuries have wondered, “Was I wrong to trust so deeply? Have my prayers been in vain?” We’ve all prayed for a cure that never came, or for a miracle that seemed to pass us by.
Yes, miracles happen. I’ve heard many stories of God’s extraordinary power at work. But perhaps we need to speak just as often about the quieter miracle: the grace that sustains us through suffering. God’s presence in our darkest hours is no less real, and no less miraculous, than a dramatic healing.
When doubt comes, and it will, the key is to hold fast to that presence. In our worst moments, simply clinging to faith is itself a victory of God’s love.
Even Jesus knew what it was to doubt and struggle. In Gethsemane, He prayed, “Father, if it be possible, let this cup pass from Me.” On the cross, He cried out, “My God, why have You abandoned Me?”
But listen to what follows: “Not My will, but Yours be done.” “Into Your hands, I commend My spirit.”
That is faith at its deepest – trusting God even when He seems silent.
Advent calls us to hold onto that same trust. It reminds us of Mary’s quiet “Yes” to God. For the Child she carried is Emmanuel, which means “God is with us.”
And that is our assurance, even in doubt and suffering: God is with us – in the silence, in the waiting, in the questions. With that knowledge, we can face whatever comes and still say, with Mary and with Christ, “Lord, let it be done according to Your word.”
Yours in Christ,
Fr. Robert Warren, S.A. Signature
Fr. Robert Warren, S.A.
Spiritual Director
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