Published in Newsweek ME
“You can’t run a business based on sympathies,” the controversial billionaire oil broker, Marc Rich once said. The business of oil is no different; it lubricates the region. And as the price of oil has taken a hit from a high last year of $115 a barrel to $50 a barrel, many are casting about for reasons as to why. In recent weeks, Saudi Arabia has attracted much criticism from analysts over its response to tumbling oil prices. As the nation met with other oil suppliers on December 4 in Vienna, it let it be known that that it wouldn’t reduce supplies to stabilize the price. Continue
Published in MarketWatch:
“The view that Saudi Arabia can increase its profit by unilaterally cutting production is incorrect and outdated,” Omar Al-Ubaydli, program director for International and Geo-Political Studies at the Bahrain Center for Strategic, International and Energy Studies, told MarketWatch.
Other countries inside OPEC cannot be trusted not to cheat on their quotas, he said. Shale oil production is quick to “reactivate” as soon as prices rise, and as more shale oil comes back on line, the need for the U.S. to import oil decreases which would then pressure prices for oil at Saudi Arabia’s expense, he said.
"Defending its market share is the right call in what has almost become a competitive market,” said Al-Ubaydli, who is also an affiliated senior research fellow at the Mercatus Center at George Mason University. Continue
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