Published in Fox Business
Omar Al-Ubaydli, affiliated senior research fellow at George Mason University’s Mercatus Center, said the meeting’s outcome was 100% predictable and all the bluster about a growing rivalry between Iran, which earlier this year saw relief from international trade sanctions, and Saudi Arabia is a distraction. The bottom line, he said, is there is no international cartel in any commodity – be it gold, copper, wheat, and even oil. Rather, he contends the swift swoon in oil prices in the summer of 2014 to the recovery crude has made so far this year, is a simple act of market forces. ”The market is bigger than any of these nations,” he said. “There is a large enough number of producers that no one nation is going to do anything to steer prices in one direction. Like any other commodity, there are ups and downs.” Al-Ubaydli said while it’s good publicity for OPEC nations to make it seem as though there were active policy negotiations, for the most part, it’s smoke and mirrors. “Western countries were happy to let OPEC think it had power because they could blame [low prices] on any difficulties. OPEC likes to think it has power because they get to say we’re sticking it to the man, and holding the West by its throat…but ultimately it’s about politics in each country,” he said. Continue
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Published in Fox Business
“This is a good opportunity to overcome some internal political opposition that would exist if they tried to introduce economic reforms. When there are high prices, it’s difficult to convince local stakeholders to change the way the economy starts up, but with low prices now…this is time to introduce reforms,” Al-Ubaydli continued by saying it’s simply a coincidence that an oil-minister regime change came about at the same time the nation looks to enact a change in economic policies. Continue |
Omar Al-Ubaydli
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June 2020
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