Oil & Gas for dummies, page-42

Yes thank you, it all makes sense. I'd imagine there would be a lot of scenario analysis and stress testing going on by all oil companies to try and figure out if the cost of closing for a period outweighs the cost of producing oil at a loss at the moment.

The higher cost producers would likely be the first to turn off the wells and from my understanding it's shale oil that has the highest production costs. Initially when OPEC+ broke down talks I thought it was a ploy to take advantage of the reduced demand in oil to try and bankrupt many US oil producers that have been flooding the markets over the last couple of decades, eroding OPEC's market share.

I'm not sure how successful this will be. From what I understand the US has been wanting to be self-sufficient in oil since the 80's oil crisis when a foreign power was able to materially hurt the US economy by reducing oil supply. If US oil is considered to be of strategic importance we might see US government support to see the major US producers get through the crisis.