• 40 mins Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 2 hours Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 3 hours OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 hours London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 5 hours Rosneft Signs $400M Deal With Kurdistan
  • 7 hours Kinder Morgan Warns About Trans Mountain Delays
  • 14 hours India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 19 hours Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 23 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 1 day Conflicting News Spurs Doubt On Aramco IPO
  • 1 day Exxon Starts Production At New Refinery In Texas
  • 1 day Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 3 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 6 days Trump Passes Iran Nuclear Deal Back to Congress
  • 6 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 7 days Europe Braces For End Of Iran Nuclear Deal
  • 7 days Renewable Energy Startup Powering Native American Protest Camp
  • 7 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 7 days India Needs Help To Boost Oil Production
  • 7 days Shell Buys One Of Europe’s Largest EV Charging Networks
Alt Text

Clashes In Kurdistan Send Oil Prices Higher

Reports of skirmishes between Iraqi…

Alt Text

OPEC Favors 9-Month Extension Of Production Cut Agreement

According to Reuters sources, OPEC…

Saudi Sending Negative Signals Ahead Of OPEC Meeting

Saudi Sending Negative Signals Ahead Of OPEC Meeting

Saudi Oil Minister Ali al-Naimi says there’s no need for OPEC to reduce production to shore up the price of oil because the market will fix itself. Despite his optimism, Russia said it would refuse to cut output, apparently threatening a price war over oil.

“The market will stabilize itself eventually,” al-Naimi told reporters on Nov. 25 in Vienna, where some of the world’s biggest oil producers were meeting two days before OPEC’s summit at its headquarters in the Austrian capital.

The cartel’s meeting is crucial because oil prices have plummeted by about 30 percent since mid-June, from around $110 per barrel to below $79 per barrel, in part because of the boom in shale oil in the United States and lower demand because of a slowing of global economic growth.

Related: A Truce In The Holy Oil War?

Some OPEC members, including Iran, Libya and Venezuela, have pressed hard for OPEC to reduce production at its meeting. And Russia, not an OPEC member but responsible for more than 10 percent of the world’s oil each year, had been expected to do the same because of the damage to its economy from low prices and Western sanctions.

As it turned out, though, Igor Sechin, the CEO of Russia’s state-owned oil company Rosneft, said after the meeting that Moscow wouldn’t cut production even if oil fell to $60 per barrel. He said whatever pain Russia suffered would be magnified for other countries where harvesting oil is more expensive.

Sechin evidently was referring to the United States, whose shale-oil boom is predicated on new and costly techniques that include hydraulic fracturing, or fracking, and horizontal drilling.

Russia’s animus against the United States stems in part from US and European Union sanctions on Russia’s oil and banking sectors because of Russia’s unilateral annexation of Ukraine’s Crimean peninsula and its suspected involvement in the fighting in Ukraine between pro-Russian separatists and forces loyal to Kiev.

OPEC countries produce 30 million barrels of oil per day, or about one-third of the world’s oil supply. But that amount will exceed global demand by about 1 million barrels per day in the first half of 2015, according to OPEC’s own figures.

Despite those figures and pressure to reduce production, Saudi Arabia has indicated that it may not be ready to act. And as the cartel’s largest producer, it essentially has veto power over the other 11 members because OPEC production decisions must be made by unanimous vote.

Related: Veteran Oil Minister Says OPEC Alone Can’t Set Oil-Price Levels

In fact, some Saudi officials have told Reuters that their country could possibly survive oil prices as low as $70 per barrel for a long time. This obviously would have a deep impact on Saudi Arabia’s income, and theories abound about what Riyadh might get in return.

One line of thinking is that Saudi Arabia is intent on its own price war with the United States, whose shale-oil boom is close to making the country energy independent and could make it an oil exporter competing with OPEC members. Keeping prices low could turn the US boom to a bust.

Another theory is that lower prices badly hurt both Russia and Iran, which are major backers of embattled Syrian President Bashar al-Assad, one of Saudi Arabia’s bitterest enemies.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




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