Last week when I was writing about the oil price, I had a look around for a neat graphic that showed the various break-even points for global oil producers. I couldn’t find one at the time, but the Financial Times have since compiled one. Here’s a graph showing the cost of production for various regions:
Today the WTI oil price stands at $55.91, which means those on the far right of the graph aren’t making any money. They tend to be the unconventional sources of oil, shale and tar sands. Saudi Arabia on the other hand, can produce oil very cheaply.
The lower the oil price drops, the larger the section of global oil production that isn’t breaking even. And the longer prices stay down, the more investment gets pulled, leaving a potential shortfall in supply in the future.