A major drop in oil prices that began Monday morning could put thousands of Texas jobs at risk if the market doesn’t recover quickly.
Sergio Chapa, energy reporter for The Houston Chronicle, has investigated the potential long-term effects of the price drop. He says that the oil war between Saudi Arabia and Russia has caused “economic fear” throughout the industry. The Saudis’ recent solution of “flooding the global markets with cheap oil” also doesn’t sound promising, and could actually cause global prices to plunge.
“It’s about getting their cheap oil to more customers,” says Chapa. “They’re sacrificing that short-term financial loss for a long-term gain in contracts and sales.”
For Texas, this could mean a loss in jobs. Without profitable oil production, major energy companies such as those in Houston will suffer. Chapa says it could take months for employment losses to happen. According to economists, however, if prices don’t recover within the next six months, there could be at least 14,000 jobs lost in the Houston area.
“How long can Russia and Saudi Arabia keep up this game of chicken with each other?” says Chapa. “How long can they afford to keep their prices this low?”
What you’ll hear in this segment:
– How a long-term fall in oil prices could affect Texas jobs
– What Saudi Arabia and Russia are doing to fix the problem
– Why their cheap oil won’t help the industry
Written by Samantha Carrizal.