• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 5 hours Satellite Moons to Replace Streetlamps?!
  • 2 days US top CEO's are spending their own money on the midterm elections
  • 16 hours EU to Splash Billions on Battery Factories
  • 20 hours U.S. Shale Oil Debt: Deep the Denial
  • 1 day The Balkans Are Coming Apart at the Seams Again
  • 12 hours Owning stocks long-term low risk?
  • 16 hours The Dirt on Clean Electric Cars
  • 3 hours Can “Renewables” Dent the World’s need for Electricity?
  • 2 days Uber IPO Proposals Value Company at $120 Billion
  • 2 days OPEC Is Struggling To Deliver On Increased Output Pledge
  • 2 days A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 1 day 47 Oil & Gas Projects Expected to Start in SE Asia between 2018 & 2025
  • 11 hours The end of "King Coal" in the Wales
Alt Text

Will The U.S.-Saudi Spat Upend Oil Markets?

Saudi Arabia appeared to threaten…

Alt Text

Hedge Funds Continue To Reduce Bullish Bets On Oil

Money managers and hedge funds…

Alt Text

Saudi Arabia Calls The End Of Russia’s Oil Prowess

Saudi Crown Prince Mohammed bin…

Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for US-based Divergente LLC consulting firm, and a member of the Creative Professionals Networking Group.

More Info

Trending Discussions

Oman Offers to Slash Oil Production If OPEC Follows Suit

Oman Offers to Slash Oil Production If OPEC Follows Suit

Oman wants to slash oil production in order to staunch the price slide and ease the supply glut—but it won’t move before OPEC does.

It’s a story we’ve heard before. None of the 12 OPEC countries are willing to take a hit on production unless the others take a hit first, but non-OPEC Oman is reeling from the financial consequences.

Oman has had to borrow $1 billion to make up for low oil prices. And there is a lot to make up for considering that four-fifths of the government’s revenue comes from oil and gas exports—and its 2015 budget was calculated against $85 oil.

On Monday, Oman said it would cut production by 5 percent to 10 percent in order to stabilize the market, but the ball is still in OPEC’s court. Related: Kenya Hoping to Export Oil, Despite Global Downturn

Venezuela—which is losing billions—has long criticized the OPEC policy of not budging on the production cap. Iran, which has been languishing under sanctions, had nothing to lose by calling for a reduction in production. Saudi Arabia—the very tenuous king of OPEC—has stayed the course.

Last year, the kingdom’s most famous tag line was one suggesting that Allah sets oil prices.

Pretty much everyone has been saying the same thing for some time, so Oman’s new statement doesn’t carry much weight.

At its November meeting, OPEC voted to maintain its production target.

One thing has changed since then: Sanctions against Iran were lifted over the weekend, and the Saudis and their followers were in part hoping that their staunch position on crude production would help sway the sanctions decision. It didn’t, and now the Saudis have less to bargain with. Related: $20 Oil No Longer Seen As Good For The Economy

Iranian oil will flood the market. On Monday, to no one’s surprise, Iran ordered an increase in production by 500,000 barrels, and the market responded with oil slumping below $28. The Saudi-aligned OPEC members had hoped that Iran’s planned increase in production would help deter the lifting of sanctions.

How the Saudis handled the anticipated market free-fall when sanctions were lifted added another twist. In the face of additional Iranian production, OPEC predicted that the U.S.—and other non-OPEC producers—would scale back production to boost prices, taking a bit of the heat off the slide.

The Iran sanctions part of this game is over, but the rest is nowhere near being resolved. OPEC has spoken. It’s about who will blink first.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News