... meeting on 30 November, at which the member nations are hoping to agree on individual production quotas and a freeze date.
In the foreseeable future, global crude output is set to grow not because of Russian or Saudi production but rather thanks to Iraq, Iran and possibly also Libya and Nigeria.
Russia's cooperation with Saudi Arabia bypassing OPEC appears ineffective. The two countries' combined crude output amounts to just 22% of global production
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; cutting back production would not achieve much, while losing them their market share. Moreover, in the foreseeable future, global crude ...
... and the EU in the event of revising the current agreement and resuming sanctions. This suggests that the “ghost” of Iran is most likely to haunt the market for long enough to generate occasional but noticeable shifts in prices.
Factor 3: OPEC policy
How much time will it take Iran to recover its pre-sanctions production level?
OPEC is the largest actor on the oil market and until recently had the opportunity to directly dictate the price. The U.S. shale revolution changed the situation dramatically. The emergence of such ...
... the country could increase its oil exports by one million barrels from 1.2mln bbl a day to 2.3mln bbl, which constitutes 1% of global production. It is likely, however, that the effects of this dynamic on the oil market will be minimal.
Even though OPEC says it intends to maintain the output ceiling to defend its share of the market and that low oil prices is a short-term development, they soon may be forced to start negotiating a coordinated cut in oil production.
Iran’s plan is to return to the pre-stations level of production of about 3.5mln bbl a day, which will take several years, as well as significant investment that Tehran needs to attract from the West. The impact of this change on the oil price will ...
