Saudi Arabia sees oil stability at $60 per barrel
Saudi Arabia , OPEC's largest oil producer, expects to see the price of oil stabilize at around $60 per barrel. The price of benchmark Brent crude oil is currently hovering at around $70 per barrel, and Saudi Arabia's new attitude, expressed by those familiar with the situation, suggests cuts in production should not be expected soon.
An OPEC conference in Vienna last week resulted in no production cuts, despite the surplus of oil on the market; the decision helped propel the fall in the value of the Russian ruble and a forecast of recession in Russia .
Saudi Arabia seeks to maintain its long-term market share, even if the price of oil stays temporarily low, its oil minister, Ali al-Naimi said, adding, "the market will eventually stabilize itself." The plan is to suffer lower prices to force high-cost oil producers not in OPEC , like U.S. shale oil companies, to cut back production, putting less oil on the market by the second half of 2015.
Another theory regarding Saudi Arabia's risking of enmity within OPEC over the price of oil concerns Iran , a country with growing Middle East influence and substantial oil exports. The BBC suggested that by enduring a short-term downturn in the price of oil, Saudi Arabia could starve Iran of immediately-needed revenue to prop up President Bashar al-Assad's regime in Syria , fight the Islamic state in Iraq and support rebels in Yemen on Saudi Arabia's border. |
