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CLARIFICATION to Parent Position on a thread about Mitt Romney.

Oil prices are not local, they are global and defined by a projection on the global supply - demand balance by the speculators whose opinion depends on their vision of where this balance will be shifting in the future. Under the normal circumstances (no fears of spontaneous disruptions) as any other industry the oil production should have profit margin within 15% - 20%. The cost of oil production varies in average from $30 to $50 per barrel. This means that the fair price should be in the range of $50 - $60 per barrel. Declaring a program that would affect the supply %u2013 demand balance by 5% will bring the global oil prices to a minimum - close to $50 per barrel. This will cut the amount of money going to Arab countries and Russia by a factor of two, which will reduce their profits 5 - 6 times.

Currently natural resources export constitutes about 20% of Russia%u2019s GDP and about 50% of their budget. Reducing this share of the budget by a factor of 5 will slash the Russian budget by at least 40%. The same applies to other oil and gas producing countries, which are not exactly friendly to US. This would make it much easier to deal with those corrupt governments and will help to develop much healthier entrepreneurial environment.  


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