Are More Bankruptcies Next for US Shale Oil Drillers?

Behind the hype, shale drillers have entered a vicious circle.

By Irina Slav,

Something that’s been whispered about in the last few months is now being talked about loudly: U.S. oil drillers’ debts. There have been a few notable warnings that shale boomers might want to slow down their production boost lest they bring on another price crash, but the truth seems to be that they can’t do it: they have debts to service.

Now that international oil prices are once again on a downward spiral, drillers are facing a new challenge, according to Bloomberg: their bondholders are no longer optimistic.

Shareholders were the first to start doubting the recovery as it became increasingly evident that OPEC’s production cut agreement is failing to have the effect that everyone—or almost everyone—expected. Energy stocks have generally been on a slide since the start of the year.

Now creditors are joining shareholders. In June, Bloomberg data shows, junk bonds in the energy industry lost 2 percent. To compare, last year energy junk bonds were up 38 percent despite 89 bankruptcies in the sector. The S&P 500 Energy Sector Index has shed 16 percent since the start of the year. According to one Bloomberg Intelligence analyst, energy sector bonds are beginning to trade like stocks, and that’s not good news for the companies issuing them. Bonds are as a rule are much more stable than stocks, and bondholders are a calmer breed than shareholders because the latter get hurt if profits shrink or the company files for bankruptcy. That the former are getting jittery is a signal that there may be more bad news on the horizon.

Perhaps the worst such news would be OPEC and its partners deciding to change their price-influencing strategy and follow the advice of Commerzbank’s head of commodities research, Eugen Weinberg: turn the taps back on. That would be a bold move, and whether OPEC would make it is very far from certain. Yet it seems to be the only one that would work against shale.

The elephant in the shale room is that despite remarkable advancements in cost-cutting, shale drillers have needed to borrow heavily in the last few years—first to grow, and then to survive the downturn. Last year, Moody’s warned that oil and gas drillers and service providers face a debt load of US$110 billion maturing by 2021. Next year alone, the industry would have to repay US$21 billion. By 2021 this will grow to US$29 billion. What’s more, Moody’s said, 65 percent of that debt is speculative-grade, or junk.

Shale drillers have entered a vicious circle, succinctly described by oil analyst Michael Fitzsimmons. They boost production because they need to generate cash to repay their debts. This production growth fuels the global glut and pressures prices, so the drillers actually make less money than they would otherwise. Debt-servicing expenses rise, so drillers need to continue pumping more to make up for lower profit margins.

It’s an interesting situation in world oil: U.S. drillers are in all likelihood acutely aware that they would fare better if they slowed down their production growth, as prices will certainly rebound as they do every time Baker Hughes reports a decline in the weekly rig count. Yet, it seems they can’t afford to slow down with all this debt looming on their horizon.

The global competitors, OPEC, Russia, and their smaller partners must also be aware that they can do more harm to U.S. shale if they start pumping at maximum capacity. Only they probably can’t afford this, either, not with their budget gaps that were widened by the first stage of the war on shale when OPEC employed the same tactic. What happens next will be interesting to watch—be it increased prices or a train wreck. By Irina Slav,

It’s the worst PE-fund collapse ever. The oil bust just keeps on giving. Read…  $2-Billion Private Equity Fund Collapses to almost Zero

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  29 comments for “Are More Bankruptcies Next for US Shale Oil Drillers?

  1. TheDona says:

    Looks like a game of chicken all the way around. OPEC cuts production and shale wins. All OPEC countries desperately need the money no matter what. Libya, Nigeria, and Iran are exempt from the cuts and Ecuador is not cutting. Then there is the big elephant in the room….Venezuela, who is number 2 for proven reserves in the ground behind SA.

    Notice how Venezuela is not accepting humanitarian aide? Sounds like a coup waiting to unfold for their oilfields.

    • robt says:

      Vz ‘oil’ is like tar, requires special refineries and dilutent. High cost resource, sells for less.
      Ecuador is boosting production.
      Anyway, OPEC has always been a sham – for decades, all they do is ‘set’ a price based on spot history – if spot goes up many members sell over their quota under the table, if spot goes down they boost production anyway to keep gross revenue up.

  2. Bruce Adlam says:

    Trump needs to steep in with trade imbalances against the USA the US CANT KEEP GOING LIKE THIS……LET THE SHOW BEGIN

  3. michae says:

    Everyone desperately needs the money. That is why there is a glut. Their debt does not reduce on a sliding scale with the price of oil. If you have a productive oil well you pump pump pump.

  4. nick kelly says:

    Agree with everything but might add that Russia is in much the same death spiral as shale but on a much larger scale.
    The US does not need shale- until recently it didn’t have it.

    Putin’s empire was built on 100 dollar oil, during which time every other part of the economy was neglected.
    Russian incomes have fallen, up to 50% for pensioners and the average Russian now spends half his income on food.

    Since 2014 it tapped into a much publicized reserve fund, now mostly gone.
    It would be interesting to know just how strictly Russia is adhering to the cutbacks in production. It is notoriously corrupt and surrounded by other countries where oil could be trucked in with no official interference.

    • TheDona says:

      Speaking of corrupt….the largest foreclosure ever (the infamous NYC Billionaires Row {Laundry}) is a Nigerian who received oil-extraction contracts from the Nigerian government, and failed to pay the the government the oil-sale proceeds. Oopsie! Read upon Kolawole “Kola” Aluko. He is the Super Star of corruption.

    • Thor's Hammer says:

      Nick, it’s interesting how different the viewpoint of someone who was born in Russia but lived most of his life in the US is from yours. Dmitry Orlov is a cheerleader for the changes he sees in Russia and may see it through rose colored glasses, but he speaks the language and understands the nuances of its culture.

      His opinions deserve to be listened to as a counterpoint to what we Americans “know” about Russia.

      From his blog dated 7/18/2017

      “Facts on the Ground”
      “It is a sad fact that people in the West, and in the US especially, are presently living in a world that is bereft of actual news about what goes on in many parts of the world, ”

      “Last week I flew back to St. Petersburg, Russia, after a five-year absence. As usual, it has turned out to be insightful to catch a periodic glimpse of a very familiar place. I grew up in St. Petersburg and have visited it seven times over the past 28 years.” “Being from here, I am not confronted with any sort of cultural or linguistic barrier. I can read facial expressions, catch snippets of conversation and assess the general mood. It is very different from what I have been seeing recently in big cities in the US,”

      “On my previous visits, I have caught very different glimpses of St. Petersburg. In 1989 I saw pretty much the old USSR except for a lot of talk—it was the “glasnost” period.In 1995 and 1996 I saw a land in the grip of ethnic mafias, with goods sold from locked metal booths erected in city squares” In 2013 I saw a city that has made a full recovery, with a vibrant economy, close to full employment ” in 2017 “It is perfectly obvious that the consumer economy here is in overdrive. Huge shopping malls combined with entertainment complexes springing up around the city while a myriad of specialty shops and boutiques have opened up in the city center. The Western sanctions regime, which was supposed to “isolate” Russia and leave its economy “in tatters” has had close to zero effect.” “The only noticeable effect of the sanctions regime is the appearance of a vast number of locally produced, domestic brands to replace Western food imports blocked by Russian counter-sanctions”

      “By all appearances, most Russians are still behind the shrinking American middle class, but they are surging far ahead of the working class in the US, which hasn’t seen a substantial pay raise in several generations, whereas Russian incomes have doubled several times between 2000 and 2014.” “But another obvious development is that the purchasing power of Russians has shrunk appreciably (since 2014)”

      As a a casual observer evaluating how much of Orlov’s writing I should lend credence to, several things do come to mind.

      —Putin is a highly skilled international politician, and makes the Obamas Clintons, and Trumps of the world look like children playing in their prams.

      —The US sanctions are a great gift to Russia, forcing it to develop its internal production diversity and thus create a stronger economy not dominated by Western finance capital. One of the unexpected results of sanctions will be the acceleration of the demise of the dollar as the world trading currency as Putin forms necessary alliances with China and other players in the world energy markets.

      —Russia’s military policy is by necessity and national history defensive — the exact opposite of the US attempt to project power and dominance over the entire world.

      —Again partially because of the sanctions, Russia has a radically different level of government indebtedness than the US, Japan and the EU. (Russian debt is 17% of annual GDP— US is 107% -117%.) Based upon that profile, which one looks like the economic basket case?

      —Cheney famously said that debts don’t matter. He was not just evil, but in this case totally wrong.

      • Wolf Richter says:

        The Russian consumer paradise. How wonderful. How could we have missed it? It’s so obvious…

        But auto sales over the fist 6 months in 2017, while up from a year ago, are still down about 50% (!) from the same period in 2012. Because Russian consumers have been doing so well? Could that be the reason for the plunge?

        • Seek the truth UK says:

          Thanks for those figures Wolf but are you able to confirm how the Russians bought those vehicles? Was it on finance or outright? I wonder how car sales would have performed in the US and UK etc WITHOUT finance?

        • Wolf Richter says:

          All Russian banks offer auto loans. It’s good business. Here’s Sberbank – good for over $80,000 (5 million RUB):

          Finance companies in Russia securitize auto loans just like finance companies in the US and the EU. Russia is financially an advanced country. They have the same (explosive) financial instruments we have. Credit is key, even in Russia.

          For example, total loans to the private sector, which includes consumer loans, have jumped 136% since mid-2010 to about $380 billion. How big is that in Russia? Keep in mind that Russia’s economy is smaller than California’s.

        • Thor's Hammer says:

          Wolf, I’m an American with no direct knowledge of Russia or its language as I suspect you are as well. What I do observe is the relentless American anti-Russian propaganda that has been a mainstay of our culture for a generation. In the latest iteration there is a total lack of factual evidence presented even though the drums of war have been beating for a year. I can also listen to speeches given by Putin and contrast their rationality and reference to international law with the known American policies of undeclared regime change wars, assassinations by remote control drones, rendition and presidentially sanctioned torture. In the end speeches are for public consumption— what counts are actions —like Russia “conquering” Crimea by organizing a vote and getting 95% approval for annexation. Or Russia diplomatically refraining from bringing in the Russian army to put an end to the Ukrainian regime of 1940’s-style Nazis installed in one of their historical provinces by US assistant secretary of state Victoria Nuland with the aid of 5 billion US dollars in bribes and weapons.

          Such heresy is enough to get me banned from polite society, close the minds of most readers of a liberal/libertarian blog like this, and put me on one of the many lists of dangerous thought deviants. But I’m 73 years old and there is not much they can do to me that won’t happen naturally—.

          Given my cynical conclusion that the business of all governments is the fabrication of reality for the purpose of maintaining power, control, and profit, I look at American Russiaphobia through a very skeptical lens. As always, cui bono. We do spend as much as the entire rest of the world on high tech armaments and other weapons of mass destruction. As well as having an 80% world market share in the sale of such weapons. And have 17 agencies in the “Homeland Security” business, each with an expansionary vision.

          So what am I to make of a figure like Orlov? Obviously a true believer—far too skilled a writer to be a mere propaganda hack–and probably the owner of a very powerful pair of rose colored glasses. Worth listening to to provide counterpoint to the MSM reporting, but not to be taken as factual gospel. Well, maybe more reliable than the Washington Post—-.

          ps. Wolf, I know you are a car guy, but just perhaps the level of car sales is not the best and only measure of the health and success of a society.

        • duck says:

          I’m in Saint-Petersburg now and I can tell you that this is a vibrant European capital. And BTW no homeless people on the streets, no drunks either. Propaganda machine paint Russians as drunks… Brouhaha! A lot of gooood looking women every where. Lots of cars in good shape, clean streets and no potholes, at least in the SPb. Supermarkets are full of food also. Yes it is getting more expensive here, but the last time I was in Stop&Shop I left with two bags I could carry with my index finger and a $100+ less in my pocket.

        • Wolf Richter says:

          First time I went to Saint Petersburg was in 1996. Even then, it was a great city – though a little rough around the edges. Saint Petersburg is one of the great cities in the world. No one doubts that.

          If you went to major cities in the US during the Great Recession, the stores were well stocked too, the women were still “gooood looking,” and you’d see “lots of cars in good shape,” in fact you’d see brand new cars too, and people were going to work, and there were traffic jams, and things looked mostly normal. But things weren’t normal. That’s why we use data – such as retail sales, auto sales, consumer spending, etc. – because what we see as individuals is just a tiny speck of what is visible on the surface in one corner of the national economy.

          Russia’s economy was in recession for seven quarters in a row. Four of those quarters, the decline of the economy was steep. It has now bottomed out and the past two quarters has started growing again, but from the low levels to which it had fallen by the end of the recession. It has a long way to go before it is back where it had been in 2013.

      • nick kelly says:

        Re: Petersburg. It is well known that the city and Moscow are two of the few places in Russia with a modern infra-structure and most of the high- end consumers. In the rest of the country sanitation is of the hole in the ground variety.

        This was the experience of any who wandered a few hundred yards from Sochi.

        Re: debt. The US can service its debt and always has. Russia defaulted in 1998. The street person begging on a sidewalk is a winner buy this standard: he has no debt.

        Re opinions of those who live there: former minister of finance Alexei Kudrin was fired by Putin after saying Russia could not afford a 500 Billion US $ equivalent arms buildup.
        With growing economic pressure, he has since been ‘rehabilitated’ and appointed to an advisory board.
        Both he and the head of the Russian central bank ( I assume she lives there ) have said: ‘there is no alternative to painful fundamental reforms’

        • nick kelly says:

          PS: Russia has an economy about the size of Canada’s but with about 4 times as many people to provide for.

          Given anything remotely like the equality of Canada, which itself is no socialist paradise, it should have a much smaller number of billionaires than Canada.

          But it has almost 2.5 times the number of them: 40 versus 96.

          Then there is the famous video where the former oil oligarch tells Putin that Russian companies can’t list on Western exchanges when 10 percent of the GDP is lost to corruption.

          As the capo du tutti capi, Putin looks like he’s swallowed a bug, and soon solves this problem by seizing the company and jailing the owner.

          Of course this loot has to end up somewhere and no doubt
          Petersburg is a far better place than Canada to sell diamonds etc.

        • nick kelly says:

          ‘Or Russia diplomatically refraining from bringing in the Russian army to put an end to the Ukrainian regime….’

          Incredible that such tripe, almost universally contradicted by all independent media, is here unchallenged. The thousands of lives lost in Ukraine are actually more important than Petersburg’s retail.

    • DV says:

      That is not exactly true or rather it is entirely untrue.
      First, because of the $100 price Russia has experienced a very noticable loss of competitiveness in manufacturing and even many services. This is because its currency was so much overvalued relative to productivity. The situation is much more balanced now. Russia would probably like to see oil price going to $60, but it can easily live even with $40 (sure, the growth is likely to be sluggish). The total life-cycle cost of barrel is Russia is well below $25.

      The Gulf monarchies are struggling even now with $50 oil. But so far they have maintained their Dollar pegs, so devaluation is still an option to close the budget gaps.

      In the US shale the cost is the major unknown, but most likely for most fields it is in the range of $40 to $60. So at $50 most drillers are likely to break even on cash flow basis, meaning they make little or no money. But what they have is on one side the debt pile they will need to service and refinance, most likely at higher rates, and cost constraints on the other side, i.e. further ramp up in the activity is likely to cause much more than what it cost to get to the pre-crisis levels. This is due to variety of reasons, such as that they will have to order more rigs, to pay more for services and materials, such as sand, to develop new properties. So there is a natural limit on ramping up.

  5. Lee says:

    So when is the crude oil price actually going to reflect the facts in the supply and demand equation?

    I wonder how much demand is now permanently gone as a result of the fall in income for many people around the world?

    The usual ‘pump’ in many economies from a falling oil price appears to be gone as a result.

    I also wonder when in the world we are ever going to get cheap gasoline here in Australia…..

    When I first came here gasoline was around 60 cents a litre. The A$ is now higher than is was back then and the oil price ranges from 10% to 20% higher, but the price of gasoline is 100% higher than it was back then on most days.

    We have these huge price cycles and swings here where it will fall over a period of weeks and one day zoom up 20 cents or more a litre (60 US cents a gallon) in one day only to repeat.

    IIRC the highest price I paid was around A$1.60 a litre when the price of crude was at its high and the A$ was well over parity with the US$.

    The price of crude has crashed by around US$100 a barrel from that time and the A$ has fallen around 30%, but the price of gasoline hasn’t fallen to reflect those moves. The recent high was A$1.399 a litre which has now moved down to A$1.299 a litre.

  6. david says:

    Good God, how many times are we going to dig this hole and bury this debt. Hate to say it but more fake news. I wish, maybe, i hope, possibly, next year, i think, ect. Bullshit until it happens.

    • nick kelly says:

      See: ‘2 billion dollar PV energy fund collapses to zero’ 2 days ago this site.
      If that was fake news some of the pension funds holding the debt will be relieved.

      Every watch a zombie movie? They don’t all die at once.

  7. James says:

    Two issues to keep in mind is that the executives of the fracking/shale producers are paid according to how much raw production each well has. Executives get paid first, before any other company accounts are settled. So if they don’t have enough to pay off creditors, they use accounting trickery and loan modifications and good old “rob peter to pay paul” to make their finances seem better than they really are.

    Secondly, the “reductions in drilling costs” is largely phony. The way they reduce costs is by cutting payments to the oil field service companies by 40%, and by cutting the royalty payments to landowners by 30, 50, and in a few cases, 90%. Chesapeake in particular has been infamous for these practices, but all the frackers are doing it to some degree (except maybe Apache). If they get sued for breach of contract (and many are, Chesapeake in particular) they can just string the case along in court for the next couple of years and count on corrupt Big Business friendly judges to rule for them.

    I have a lawyer relative who is involved in lawsuits with the industry and he says the level of bullshit being pulled is shocking. And much of it is unknown due to gag orders and court secrecy, all designed to help the company.

    • Maximus Minimus says:

      By those numbers, the whole shale breakthrough might not have been technological at all. Another question that lingers, are they just tapping the easiest, and cheapest deposits?
      I am preparing myself for high energy prices in not so distant future.

  8. James says:

    PS. if you want an eye-opener, just Google “Shale oil is a Ponzi scheme”. A lot of financial reporting on shale has skeptical in the past couple of years.

    • Wolf Richter says:

      Just as a fun curio, in July 2014, on the eve of the oil bust when WTI was still at around $100, and no one predicted the oil bust (and I didn’t either), I wrote this article:

      I wrote that shale oil drilling was a “horrendous treadmill” for drillers that they couldn’t get off, and that even at $100, it was tearing up their balance sheets.

      • DV says:

        Sometimes this reminds me of a command economy – you have to make the country “energy independent” no matter the cost! The problem with this is that it defies the basic economic logic of rational investment. Most of it is just a huge waste of resources, the tangible ones, not the financial…

  9. mike says:

    shale oil was for one thing only, to hit global oil price. Its never been competitive and it isn’t profitable. Its subsidised by bonds that the Fed buy up to provide near zero interest rate financing that when it fails wont matter as its held by the Fed, who just print the same amount of money to cover the debt. Production is enhanced by flowing back oil from the Strategic Petroleum Reserve which was created to be bidirectional for just that purpose, and that leaves a black hole in SPR audits, which will necessitate at some stage an announcement of sale of oil from the SPR just to balance the books, when the oil has already been gone. It will go to tender but end up on the books of the original recipients of it.

    The reason for shale was actually the opposite to the media circus about ‘gluts’. There is no glut, there is absolute concern that we will not be able to pump oil at the levels currently anticipated as we face terminal declines in some of the super giant fields such as Ghawar, and we are not replacing oil used with new found oil.

    Over the years to even get the sort of production the world uses daily we have had to change from using just sweet conventional oil, to include sour oil, now producing the majority of oil, we have had to use tar sands, the filthiest production on the planet, we have had to move into more and more deeper and more dangerous offshore production and we have had to enter the foray of unconventional oil, shales, just to try to keep supply going.

    One reason the US joined the climate change bandwagon, where previously it was refuted, was because the U.S. military were so concerned at the forthcoming oil shortages, that they expended billions on trying to find synthetic alternatives costing up to 15X what oil cost.

    The Joint Operating Environment Report of 2010 demonstrated this, but received little press coverage.

    That’s why now we have Tesla and all the media reporting about devil incarnate hydrocarbons, when to put it into perspective 1 100Kw lithium carbonate battery for a Tesla S contributes more Co2 than driving an average diesel for 8.2YEARS!

    Likewise, the ‘inconvenient truth’ which was a very convenient lie failed to hit hardly any of its firm predictions, but billions upon billion are spent still, along with the massive gaps in treasure take from the sale of hydrocarbons.

    Yet all the money for Solar PV, EVs, turbines etc., all so heavily subsidised but said to be able to compete still has every watt in the system and still oil use increases.

    A stupid logic and strategy that will come back to bite us, simply because the US and the West didnt want a panic in oil prices if people realised it was literally peak oil passed.

    The media rarely mentions decline rates or red queen syndrome where shales decline so rapidly losing up to 70% of their initial peak production in the first year, which necessitates drilling more and more wells, for no real increase in production, leaving more and more wells needing to be plugged and abandoned but trickling out non commercial production as its cheaper than the plugging.

    Oil supply is failing, leaked cables via Wikileaks showed this some years ago, with the Saudi’s stating that.

    where Saudi’s and most the ME do not audit figures so can say what they like on production and export, to boost the fictional supply, but where its not possible.

    The other fake news which is so ridiculous is that shale technology and cost savings makes it so cheap….its usually put out by majorcompanies to suggest their break evens are so low, but a quick look at their accounts shows they lose millions on shale at almost any cost, because as oil price rises so do costs.

    The facts about shale seem to escape these idiots. A shale well can NEVER be cheaper than a conventional well because all wells start off as conventional, with a vertical or deviated well before in the case of shale wells, they require much more work, including very long multi lateral drilling, hydraulic fraccing using up to 6,000,000bbls of water, and tonnes and tonnes of proppants, so the idea that shale can catch up with the cost on conventional wells is literally bullshit, and treating others with contempt.

    The main advance in shale, is not actually technological its logistical, which was the move to PAD DRILLING, this is responsible for wells being drilled quicker, but its not necessary by virtue of quicker drilling its because if you have 8 wells drilled from the same pad, you inevitable have very little or no downtime compared with previously when the rigs all had to be decomissioned and moved to the next site.

    But pad drilling applies equally to conventional and non conventional wells.

    No one mentions the fact that the Super Giant Wells such as Ghawar are in terminal decline, all requiring enhanced oil recovery techniques.

    SO when you read a lot of this fake media news thats simply propaganda, just think about it….we started using just sweet oil, we included sour, now the majority, we then sought out oil in the oceans and ever deeper and inclement weather there. We sought out oil from tar sands, oil by pumping water and gas back into wells to try to keep production from falling off a cliff….then we tried to persuade people we didn’t need oil any more, engaging in false data, making hydrocarbons appear to be the devil, then we subsidised Tesla, solar PV, everything green to produce the most expensive energy ever seen on the planet and to persuade us of this non existent oil glut…..where production drops from decline rates every single hour of the day.

    If we took 96,000,000bbls daily production and extract the shale of approximately 4,000,000 and the tar sands approximately 3,000,000 we are left with 89,000,000 of conventional and enhanced recovery oil, declining in the region of 7-12% annually but where many of the major oil areas are ultra mature fields, such as Saudi, Iraq, Iran, etc. etc.

    If we say 10 just for ease it gives an idea of decline….8,900,000bopd DAILY loss that has to be replaced.

    Then we take the shale of 4,000,000 with a decline from initial peak of up to 70%, but lets just use 60%.

    That is a decline from 4,000,000bopd to just 1,600,000bopd with the need then for thousands more wells to even keep production going, where quickly we run out of holes to drill.

    Tar sands, the most expensive in terms of ecological damage and cost, you can forget that, it should not be used anyway, but is a measure of how desperate we are to keep the oil taps flowing.

    But you wont find the media mentioning any of this, they just make out that there is a massive oil glut….which is complete rubbish as the above shows. if there were such a glut the US would never have eased sanctions on Iran, and think of all the places at War…and how many of them concern oil, gas or oil transport infrastructure

    Sadly the US are engaging in most of the media, pulling the strings, and even now having to suggest they are exporting oil using Saudi tactics of making up figures to explain why they are still importing so much oil that is getting harder and harder to produce.

    • Maximus Minimus says:

      Well said, and that does not even mention some other relevant trends. OPEC member Indonesia has turned from exporter to importer not in small part because of booming population. Similar trends are present in other exporting countries, with KSA being even a bigger wastrel than North America.
      That, in addition to natural reserve depletion.

    • Lee says:

      Well what you should do then is when oil crashes over the next year or so because of the hype, buy good quality oil producing properties directly and bypass all the middlemen.

      Oil will zoom up again once more making those that bought at the right time a fortune.

    • Thor's Hammer says:

      Excellent overview of the role of Ponzi Oil in world oil production.

      Perhaps there is a Great Game policy choice that underlies the physical realities you describe. To what extent is the practice of producing Ponzi Oil using zero interest FED funny money connected with the goal of holding prices down long enough to bankrupt Russia? A lot more effective than wrist-slap sanctions—.

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