>This isn't entirely true. The cost of gas has a hard floor due to the cost of extracting oil from the ground. Nobody is spending $40 a barrel to extract oil that's selling for $25 a barrel. So if oil demand falls and prices fall, many of the current sellers pull out of the market entirely.

Not all producers have the same cost. Saudi Arabia is the cheapest I know of at $2.80 per barrel. Others can be 10 times higher or more.

Is $2.80 the floor? Maybe not, since SA is a monopoly and can manipulate the price.

I think the point is that we can both agree on is that it's a complex dynamic system, with lots of variables and interconnections, and it reacts to changes.

>Saudi Aramco, the monopoly oil producer in Saudi Arabia, boasts an extraction cost of about $2.80 a barrel

>A geographical comparison from the annual reports of four major international oil companies shows that production costs in Russia were about $22 a barrel

https://www.washingtonpost.com/business/energy/by-pumping-at...