Saudi Arabia Lost a Texas-Sized Gamble on Oil

One country learned not to bet against Texas when it comes to energy production.

By Alain StephensSeptember 8, 2015 11:18 am, ,

In November 2014, the leaders of Saudi Arabia made one of the biggest bets in history: They bet against Texas and they’ve already lost.

So writes Glen Hegar in an audacious editorial in the Wall Street Journal. You may recognize Hegar’s name; he’s the Comptroller of the State of Texas.

He speaks with the Standard on Saudi Arabia’s bet that the country could maintain high oil-production levels during a time of falling prices. Hegar says that the purpose of his op-ed was to look “out into the future.”

“If you look at Saudi Arabia today, yes, their cost production to getting oil out is extremely cheap, but they’re a one-stop economy: oil and gas is it,” he says.

Hegar says countries in the Middle East can’t sustain low prices, losing billions of dollars each month, only to dig into reserves in order to subsidize their respective economies.

Texas, on the other hand, has a more diverse economy that proves itself successful with job creation and growth in business.