Saturday , May 8 2021

Three people control oil prices

The Organization of the Petroleum Exporting Countries (OPEC) has lost complete control of the world crude oil market, the Bloomberg agency said.

US President Donald Trump, his Russian counterpart Vladimir Putin and Saudi Crown Prince Mohammad bin Salman, leader of the world's three largest oil producers, will determine the path of crude oil prices next year and so on, according to a report released Monday. Each wants something different from the others.

When OPEC struggles to find common goals, the United States, Russia and Saudi Arabia dominate world oil supplies, collectively generating more output from the Organization, according to a Bloomberg report.

According to Bloomberg data, Russia's production is 12.3 million barrels per day, Saudi Arabia's production is 12.2 million, while US production is 15.2 million.

The report showed that Washington, Moscow and Riyadh pumped oil at record levels, and each of them could increase production the following year, even though they did not like this option.

He explained that Saudi Arabia and Russia were encouraging OPEC and outside producers to reduce production restrictions imposed since early 2017, and increase their production to record levels or approach them, while US production increased unexpectedly.

He pointed out that this increase – in addition to expectations of lower demand growth and the awarding of Trump sanctions exceptions to some Iranian oil buyers – had diverted market sentiment from worries about supply shortages to fears of oversupply.

The report showed that Saudi Arabia announced that it would reduce its oil production by five hundred thousand barrels per day starting next month, and call other producers for the need to reduce around one million barrels per day of production last October, adding that all of this provoked a reaction cold on one side. Putin and reprimanded by Trump.

He said that Muhammad bin Salman needed oil revenues to finance his plans to implement reforms in Saudi Arabia, while the International Monetary Fund expects royal needs for oil prices of $ 73.3 per barrel next year to balance the state budget, five dollars higher than oil prices crude Brent at that time. This time.

The report added that extending production cuts for the third year was the only way Saudi Arabia could reach the price it needed.

He explained that the Saudi crown prince would face many challenges from Putin and Trump, the first not showing enthusiasm to limit his country's oil production again, while the opposition would be the second. Much bigger.

This happened when Trump and Mohammed bin Salman tried to maintain their political relations amid the demands of US senators for harsher sanctions against Saudi Arabia over the war in Yemen and the murder of journalist Jamal Khashoggi.

The report said the biggest US threat to Saudi plans would come from oil producers which could increase their production to 12 million bpd in April.

He concluded by saying that Saudi Arabia would risk Trump's wrath and Putin's indifference and the US oil shale industry were booming if they hoped to achieve balance in the oil market by 2019.

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