{"id":11837,"date":"2015-09-04T12:58:48","date_gmt":"2015-09-04T17:58:48","guid":{"rendered":"http:\/\/olduvai.ca\/?p=11837"},"modified":"2015-09-04T12:58:48","modified_gmt":"2015-09-04T17:58:48","slug":"fallout-from-petrodollar-demise-continues-as-qatar-borrows-4-billion-amid-crude-slump","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=11837","title":{"rendered":"Fallout From Petrodollar Demise Continues As Qatar Borrows $4 Billion Amid Crude Slump"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\/news\/2015-09-04\/fallout-petrodollar-demise-continues-qatar-borrows-4-billion-amid-crude-slump\" target=\"_blank\">Fallout From Petrodollar Demise Continues As Qatar Borrows $4 Billion Amid Crude Slump<\/a><\/h3>\n<p>Early last month in \u201c<a href=\"http:\/\/www.zerohedge.com\/news\/2015-08-05\/cash-strapped-saudi-arabia-hopes-continue-war-against-shale-feds-blessing\">Cash-Strapped Saudi Arabia Hopes To Continue War Against Shale With Fed&#8217;s Blessing<\/a>,\u201d we noted the irony inherent in the fact that Saudi Arabia, whose effort to bankrupt the US shale space has blown a giant hole in the country\u2019s fiscal account, was set to tap the debt market in an effort to offset a painful petrodollar reserve burn.<\/p>\n<p>\u201cSaudi Arabia is returning to the bond market with a plan to raise $27bn by the end of the year, in the starkest sign yet of the strain lower oil prices are putting on the finances of the world\u2019s largest oil exporter,\u201d\u00a0<a href=\"http:\/\/www.ft.com\/intl\/cms\/s\/0\/e9e197fe-3b5d-11e5-8613-07d16aad2152.html\">FT reported<\/a>at the time.<\/p>\n<p>The reason this is so ironic is that at various times, we\u2019ve characterized persistently low crude prices as essentially a battle between the Fed and the Saudis. Many struggling US producers would likely have been out of business months ago were it not for the fact that ZIRP has kept capital markets wide open, allowing otherwise insolvent drillers to stay afloat. Obviously, that works at cross purposes with Riyadh\u2019s efforts to \u201cpreserve market share\u201d, and so ultimately, the Saudis are betting their FX reserves can outlast ZIRP.<\/p>\n<p>There are other factors at play here that weigh on Saudi Arabia\u2019s financial situation including two proxy wars and the defense of the riyal peg which is why turning to the bond market is an attractive option especially considering that capital markets are so favorable thanks to &#8211; and here\u2019s the irony &#8211;<em>\u00a0the very same Fed policies that are keeping US shale producers in business.\u00a0<\/em><\/p>\n<p>But Saudi Arabia\u2019s \u201cwar\u201d with the US shale space isn\u2019t unfolding in a vacuum and now Qatar is looking to borrow to alleviate the financial strain. Here\u2019s more\u00a0<a href=\"http:\/\/www.businessweekme.com\/Bloomberg\/newsmid\/190\/newsid\/1044\/Qatar-Bond-Issue-Raises-41-Billion\">from Bloomberg<\/a>:<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fallout From Petrodollar Demise Continues As Qatar Borrows $4 Billion Amid Crude Slump Early last month in \u201cCash-Strapped Saudi Arabia Hopes To Continue War Against Shale With Fed&#8217;s Blessing,\u201d we noted the irony inherent in the fact that Saudi Arabia, whose effort to bankrupt the US shale space has blown a giant hole in the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3,5],"tags":[303,305,2022,1721,505,1775,626,1026,701,846,4318,1939],"class_list":["post-11837","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","category-geopolitics","tag-fed","tag-federal-reserve","tag-fx","tag-fx-reserves","tag-market-share","tag-oil-price-collapse","tag-petrodollar","tag-qatar","tag-saudi-arabia","tag-us-shale-oil","tag-zerohedge","tag-zirp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11837","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11837"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11837\/revisions"}],"predecessor-version":[{"id":11838,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11837\/revisions\/11838"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11837"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11837"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}