كنت ضيفاً على برنامج د. زكريا خنجي وتحدثت عن رفع الدعم في البحرين

I appeared on Tim Constantine's Capitol Hill Show to discuss recent trends in oil markets

Published in the Daily Caller

“The widespread perception that OPEC has been operating a coalition in the last 30 years is incorrect,” Omar Al-Ubaydli, a senior affiliated research fellow with the George Mason University Mercatus Center, told The Daily Caller News Foundation. “OPEC countries have been violating their quotas and basically mimicking the production levels of non-OPEC countries ever since the 1970s, and it’s just a strange configuration of incentives that keeps fueling the false perception of the OPEC monolith.”

Al-Ubaydli points out OPEC has always been substantially more fragile and less interested in global politics than it appears to Americans.

“OPEC’s members are locked in a geo-strategic battle that has nothing to do with oil,” said Al-Ubaydli. “For example, how on earth are Saudi Arabia and Iran going to coordinate oil output if they don’t even have diplomatic relations?”

The rise of the United States as a major producer and future exporter of oil completely alters the oil market in a way that isn’t good for OPEC. America surpassed Russia’s production of oil last year, and is now the world’s largest and fastest-growing producer of oil and natural gas. This is almost entirely due to the dual innovations of hydraulic fracturing, or fracking, and horizontal drilling which have made drilling for shale oil economical.

“[S]hale oil means that even if they did coordinate, demand for OPEC oil is more sensitive to price than in the past, because when the price of oil rises, shale oil producers quickly come online and steal OPEC market share…shale oil places an effective price ceiling that won’t be relaxed any time soon. While I expect oil prices to return to around $50-$60 a barrel in the coming 18 months, they won’t rise much more than that.” Continue

Published in Investor's Business Daily

Omar al-Ubaydli, an affiliated senior research fellow at George Mason University’s Mercatus Center, pointed out that Saudi Arabia and Iran have cut off diplomatic ties with each other, and Russia is engaged in a proxy war in Syria against other OPEC members.

“The idea of cutting production is never going to work in the near future,” he told IBD. “In order for a cut to work, you need to be able to effectively monitor each other.”

Al-Ubaydli sees a drop in production from global oil markets over the next 12 months, as output from older oil fields decreases and new investment slows.

“Output will decrease, but not because cartel members are sitting at a table playing with numbers,” he said. Continue

Published in the Financial Post

The pact would have little impact on prices as the countries are freezing, not cutting, output, said Omar Al-Ubaydli, a Bahrain-based analyst.
“All the Saudis are doing is showing the world, and their internal constituents, that the rest of the world can not be trusted and, sure enough, Iran didn’t waste any time,” said Al-Ubaydli, a senior affiliated research fellow with the Arlington-based George Mason University.

A few months from now, look for Russian President Vladimir Putin to claim he can’t control Russian oil firms as they are private companies. Continue