The saudis for example only recently dropped the price of oil by increasing production in order to drive out the competition that is coming from those seeking alternative sources of oil. They wish to maintain their dominance.
They let them spend all the money to get the infrastructure in place first and then dumped the price in order to make these projects non-cost effective and effectively make all the money spent to date on these projects just disappear as they cannot compete cost wise and their business plans were based on a higher oil price.
Most likely these alternative, currently non-viable projects will be acquired and then once that is complete the price of oil will rise again.
China is doing the same thing with Rare Earths to Molycorp and Lynas, both were setup and constructed using a higher pricing model and once the money had been spent and interest and debt had to be repaid they flooded the market and made them worthless.
Once Lynas and Moly go out of business what do you think will happen to the price of Rare Earths ?
