Arguably, after the end of the Iraqi civil war, the most exciting thing was the battle for oil prices.

In early 2021, after a number of negotiations within OPEC, Saudi Arabia, together with Kuwait, the United Arab Emirates and Oman, announced on the same day that it would increase oil production by 5 million barrels.

It's every day, not every year!

As soon as the news came out, the international oil price fell from the peak of $188 per barrel to $140 per barrel within a week.

It's just the beginning.

A month later, Saudi Arabia and four other countries announced again that they had decided to increase oil production by another 5 million barrels because of strong demand from the international market.

As a result, within three days, the price of oil was back within $100.

By the end of the first quarter, oil prices had fallen to around $90, the equivalent of halving at their highs.

Since then, oil prices have been steady.

By the end of the third quarter, it had fallen to less than $80.

For most of the year, the saddest thing was the Russian oil companies.

Why?

Among several major oil producers, Russia has the highest cost of oil production!

The point is, Russia's oil comes mainly from Siberia, and Siberian oil fields are often drilled to depths of more than 3,000 meters.

Even without equipment depreciation, the cost of oil extraction in Russia is more than $40 per barrel.

If it is depreciated, it is even more expensive.

In addition, because of the sanctions imposed by Western countries, it is difficult for Russia to import oil extraction equipment from Western countries, and Russia cannot produce all the extraction equipment itself.

Prior to this, Russia mainly imported key equipment from China.

Affected by the high price of oil, the price of oil extraction equipment is also rising.

Because it is optimistic about oil prices and believes that oil prices will not fall in the short term, after the outbreak of the Iraqi civil war, Russia expanded the exploitation scale of Siberian oil fields and imported key equipment from China on a large scale, some of which can even be used for ten years.

As a result, the cost of extracting oil from Russia has been rising.

When oil prices fell to around $80, it was already difficult for Russia to make a profit on exporting oil.

According to the assessment of international institutions, the break-even point of the Russian oil industry is between $80 and $85, that is, as long as the oil price is below $80, the Russian oil industry will inevitably lose money.

By the end of the third quarter, oil prices had fallen below $80.

However, the price reduction does not end there.

Why?

Saudi Arabia and other major oil producers are not only targeting Russia, but also the US shale oil industry.

Thanks to the huge scale of exploitation, the country's relatively complete industrial system, and the ability to buy extraction equipment from other countries through trade, the shale oil industry in the United States has been developing steadily, and the cost of shale oil extraction has been steadily declining.

Of course, the sharp rise in oil prices has made the shale oil industry the biggest winner.

According to the estimates of international institutions, the profit and loss line of the US shale oil industry has fallen to less than $40, and it can even maintain a loss at $35.

It was also through the Iraqi civil war that American shale oil occupied more of the international market.

Japan, for example, has overtaken China as the largest importer of shale oil from the United States, and shale oil has become Japan's number one importer.

In fact, U.S. shale oil has become the number one competitor to Gulf oil.

Although shale oil is of poor quality, it is sought after by more countries due to its lower price.

For example, when the international oil price peaked, that is, when it reached $188, the market price of shale oil in the United States was controlled at about $150.

The price difference close to $40 makes more people more willing to import shale oil.

In fact, the average cost of refining shale oil is only about $20 higher than that of Gulf oil.

In the past, shale oil has not been promoted, or rejected by many developed countries, the key is that there are not many oil refining companies to make relevant investment.

As long as the international oil price remains at a high price, then there must be many oil refining companies willing to invest.

When the time comes, when the infrastructure is completed, who will buy more expensive Gulf oil?

It can be seen that without killing the shale oil industry in the United States, Saudi Arabia and other Gulf countries will not want to eat oil dividends, and it is impossible for them to continue to dominate the international energy market.

You know, the reserves of shale oil in the United States and Canada alone exceed the total reserves of oil in the world.

In fact, since 2008, international oil prices have remained low, to a large extent, because Saudi Arabia and other countries have hit the US shale oil industry.

In the fourth quarter of 2021, Saudi Arabia and other four countries launched a price war again.

This time, it is not only about increasing production and reducing prices, but also about annual negotiated prices.

According to later announcements, Saudi Arabia and other four countries took the lead in signing an annual agreement price with Huaxia, and it was as low as $45 per barrel.

What is this concept?

This means that Saudi Arabia and other four countries have set an average annual oil price of $45 per barrel in 2022, or it is expected to be reduced to this level.

Since then, Saudi Arabia and four other countries have signed an annual agreement with Japan at a price of $65 per barrel.

It's $20 higher than Huaxia!

Why?

First and foremost, of course, is political relations.

Secondly, of course, there is the Japanese oil industry.

You know, Japanese oil companies began to purchase a large amount of shale oil in 2020 and 2021, and they did not focus on shale oil before.

In other words, Japan's investment in equipment for refining shale oil is not very large.

According to outside estimates, unless the United States lowers its shale oil exports to Japan to $40 per barrel, it will not be able to compete with Saudi Arabia and other countries.

So, will the US be able to reduce the export price of shale oil to $40 per barrel?

It's not impossible, it's that there's nothing to gain.

Since then, Saudi Arabia and other four countries have signed annual agreements with several major oil importers such as India, and the prices are all around $60.

As a result, oil prices fell to $60 per barrel in the last week of 2021.

Entering 2022, oil prices continue to fall.

In the first quarter alone, oil prices fell by almost 20 percent.

By mid-2022, oil prices fell to a minimum of $42, a new low since the Iraqi civil war, as Saudi Arabia and other countries could increase production at any time.

Of course, this is also the lowest point of the year.

Since then, oil prices have steadily recovered to around $45 per barrel.

Until the end of 2022, oil prices fluctuated between $45 and $50.

This price is not enough to kill the shale oil industry in the United States, but it is enough for Saudi Arabia and other countries to maintain their hegemony in the international oil market.

It was only at the end of 2022 that the impact of the Iraqi civil war on international oil prices fully subsided.