... prematurely, announced via Twitter that Saudi Arabia and Russia appeared
ready to compromise
on production cutbacks. But some analysts warned that the Saudis seemed "
much more measured
" in their statements.
Russia has withdrawn
from the OPEC+ deal among oil-producing nations to cut production and regulate the market, and Saudi Arabia announced earlier this week it would increase its oil output. The breakup not only sent the market into a spin, but it also triggered a controversial reaction in Russia. Al-Monitor previously reported the
ambiguity in positions
between captains ...
..., their rivalry has escalated in both Europe and China. In 2016, Saudi Arabia
began exporting crude
to Polish, Lithuanian and Czech refineries, while Russia, following the launch of the Eastern Siberia - Pacific Ocean (ESPO) pipeline,
became a key oil supplier
to China. Despite the ongoing calls for an output freeze, Saudi Arabia and its OPEC partners have been offering generous discounts to Asian and European customers, which
pits them squarely against Russia on these markets
.
Investments and joint projects
Oil-and-gas cooperation is also possible in the form of investments and technology ...
... output. (This is because these states understood that the Saudis could always flood the market with additional oil, which would have put pressure on prices up to the point where those countries having violated output quotas would incur losses. The other OPEC members' oil production costs are typically higher than those of Saudi Arabia.)
EPA/CHRISTIAN BRUNA/Vostock Photo
Viktor Katona:
The level of trust, both within OPEC as well as
among the members of the oil club and non-
member states, is extremely low
After the 1980s, the situation on the global market radically changed,...
... progress had a number of consequences for the world economy. All attempts to coordinate oil production made by the world energy leaders in recent months were frustrated
by cancelling the clause on fixing production at the January level
. Thus, all oil producers may act at their discretion and, taking into account Saudi Arabia’s refusal to live by the OPEC quotas announced in December 2014, as of today there is not a single, not even an optional, format ensuring the coordination of energy policy among oil producers. By no means does this suggest that a similar forum cannot convene in the future. But ...
... forecasts that we are more likely to see an increase in oil prices before the hypothetical 1968-type oil slump occurs. Since OPEC producers have almost filled their existing storage they are unlikely to keep ramping up production. National budgets of OPEC members are now critically dependent on the price of oil. Saudi Arabia, for example, had to issue first sovereign bond since 2007 to cover the budget deficit caused by cheap oil.
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 ...
... – all this is aggravating the situation. The fall in prices is fraught with unexpected consequences.
Conspiracy, the laws of the market, and the oil weapon
When everything is so bad, conspiracy theories are the simplest explanation. What they boil down to is the idea that the USA and its OPEC ally Saudi Arabia have taken a political decision to bring about a collapse in prices in order to weaken Russia for acting, as they see it, too independently in the international arena, especially in Syria and Ukraine.
diepresse.com
Sami Faraj, President of ...
... in fact a double-edge sword, if it prices oil too highly by lowering production [which is not instantaneous, as markets must firstly adjust], it also leads to alternatives being more appealing. It would be wrong to suggest that emergence of USA shale oil boom was due to Saudi Arabia/OPEC pricing policy, as it was more to do with speculation, but still, as prices increased to all time highs US local producers decided to jump on the bandwagon. I doubt that the US will be able to overtake Saudi Arabia and Russia as some reports argue ...
