Iran, Libya rejection of oil freeze can only make medium term price collapse

Baku, Azerbaijan, March 28

By Umid Niayesh, Dalga Khatinoglu - Trend:

Iran and Libya's rejection of the oil freeze plan can only make a medium term collapse in price more certain, and the more rapidly they re-enter the market the quicker will be the price fall, Chris Cook, the former director of International Petroleum Exchange(IPE), told Trend.

Russia and OPEC's major oil producers, including Saudi Arabia, agreed to freeze oil production at the January levels during a meeting in Doha in February.

While 11 of OPEC's 13 members which produce a half of the global oil output say they will attend oil production freeze talks next month in Doha, Iran and Libya have rejected to participate.

The proposal by the two biggest oil producers to freeze production at the maximum levels at which they can pump oil is notable only in that the parties agreed on anything at all, Cook said.

"In that sense it [the proposal] has therefore been supportive to rise oil price in the short term because it prepares the ground for coordination on production cuts as and when the pain gets too great as and when prices fall significantly in the medium term, which in my analysis will occur by summer," the expert added.

Cook, who worked as a UK financial market regulator, further said that "a 'dark inventory' of prepaid oil is now entering what has become what as a UK regulator I used to call a 'false market' in physical crude oil."

There is now a 'two tier' physical market in which one or two participants, who are aware of the true economic ownership of oil, are currently making massive profits at the expense of the majority who are unaware of the market reality, he added.

He further said that this unwinding of opaque dark inventory physical positions has caused the current market volatility and temporary 'spike' in price over $40/barrel.

"Once what are essentially illicit profits have been taken, then in my view the price will - in the absence of significant coordinated production cuts - fall significantly and test new lows," he said.

"In my view - and I gave evidence to this effect to the UK Parliament's Treasury Select Committee in July 2008 - the global market in crude oil has been, since at least 2001, subject to manipulation by those with the motivation and the financial capital to do so," Cook said.

Saudi Arabia and the Gulf Cooperation Council (GCC) states have both the necessary capital and the motivation to support the oil price, and have done so since 2009, he further remarked.

It should be noted that Cook was for ten years a UK financial market regulator, and for six years the Director of Compliance & Market Supervision of the IPE - which is now ICE Europe.

Volume of exported yarn from Turkmenistan revealed
Volume of exported yarn from Turkmenistan revealed
Turkmen chemical plant announces volume of produced sulfuric acid
Turkmen chemical plant announces volume of produced sulfuric acid
Asaka Bank supports confectionery manufacturer of Uzbekistan
Asaka Bank supports confectionery manufacturer of Uzbekistan
Loading Bars
Latest
Armenia flagrantly violates ceasefire in direction of Azerbaijan’s Nakhchivan
Volume of exported yarn from Turkmenistan revealed
Azerbaijan announces number of RES agreements signed with foreign companies
Azerbaijan’s crude oil exports down
Iran’s exports via Golestan Province railways up
Iran's Army Ground Force Airborne Unit to receive new missiles
Turkmen chemical plant announces volume of produced sulfuric acid
Bahar Azadi gold coin rises to record price in Iran
EU officials concerned over tensions on Armenian-Azerbaijani border
Export of Georgian natural wines to Azerbaijan declines
Asaka Bank supports confectionery manufacturer of Uzbekistan
Iran's honey export declines to zero
Petrochemical product revenues in Iran may push out oil revenues
Minister talks construction projects as part of 25-year Iran-China agreement
Iran's gross domestic product grows
AZAL deliveres doctors from Cuba to Baku (PHOTO)
IMF welcomes fiscal measures in Georgia's supplementary budget
Azerbaijan confirms 529 new COVID-19 cases
Azerbaijani, Russian FMs hold phone talks on Armenian-Azerbaijani armed escalation
President Ilham Aliyev: Our servicemen have been avenged and we will continue to do so in future
Tehran Stock Exchange index on the rise
Iran’s Chabahar-Zahedan railway to allow big transit of goods
ADB ready to help Uzbekistan to mitigate economic impacts of pandemic
President Ilham Aliyev: Current chaos in Armenia, events reaching critical point prompted them to commit these heinous acts
President Ilham Aliyev: If Azerbaijani positions, Azerbaijani villages are fired upon from territory of Armenia, of course, we will respond and give fitting rebuff
Turkish ruling party: Armenian actions against Azerbaijan not to remain unpunished
No territorial losses due to Armenia’s recent provocation - Azerbaijan's Ministry of Defense
President Ilham Aliyev: Ugly, insidious policy will lead Armenia to abyss
Barclays gets capital boost ahead of potential coronavirus loan losses
Iran continues to implement additional protocols on nuclear deal
Number of enterprises with foreign capital participation shrinks in Uzbekistan
President Ilham Aliyev: Another provocation of Armenia resolutely prevented, adequately rebuffed
French government funds Uzbek project on safe management of medical waste
Second COVID-19 wave could pressure Kazakhstan's payments balance, exchange rate
Passenger traffic may increase between Turkmenistan, Russia
Volume of exports via western ports of Iran's Hormozgan Province grows
Uzbek-Korean JV buys material & technical resources for pumps via tender
Continued structural reforms needed for sustained economic dev't in Kazakhstan
Baku Network Expert Council head: Armenian PM losing control over armed forces
Spain not planning to make masks compulsory at all times
ADB: Georgia’s success in fighting COVID-19 can boost its attractiveness for investors
Alphabet's Google to commit $10 billion to India
Tunisia raises 2020 budget deficit estimate to 7% of GDP from 3%
LNG share in total extra-EU gas imports hit six-year high
Russian Foreign Ministry: We deem unacceptable further escalation on Armenian-Azerbaijani border
Thailand tightens borders over fears of second wave of coronavirus
Georgia appreciates Czech contribution to monitoring COVID-19 in country
Wizz Air Abu Dhabi to operate new flight from Georgia's Kutaisi airport
Deputy PM: Azerbaijani army heroically suppressed Armenia’s provocations in direction of Tovuz
Europe’s gas consumption dragged down by COVID-19
Trade turnover between Turkmenistan, Russia increases several times
Russian expert: Armenian PM makes provocation against Azerbaijan for being unable to cope with crisis in country
Uzbekistan prepares to launch ammonia-carbamide plant jointly with Mitsubishi
Payments on vehicle insurance in Kazakhstan revealed
Iran discloses number of commissioned water and electricity facilities
TAP project contributes to Europe’s clean energy goals
French Airbus presents new digital projects to Uzbekistan
Azerbaijani FM holds telephone conversations with co-chair of OSCE MG and personal representative of OSCE Chairperson-in-office (PHOTO)
Iran to launch its first ICT free zone
Iran gov't cancels terms of upstream oil, gas contracts
TAP can ensure further transport of Caspian gas to wider European markets
Iran to increase production of Sarvestan, Saadatabad oil fields
Latvia to promote sustainable dev't in EU Eastern Partnership, Central Asia countries
ECB calls on Croatia, Bulgaria to do more before joining euro
Iran plans to offer venture capital funds at stock exchange
Kazakhstan boosts containers handling at its seaports
Georgia's Gurjaani ice cream company launching new product
Turkmenistan, Russia preparing new contract for economic co-op
Iran reveals its COVID-19 data for July 13
Medical masks production to increase in Iran
Investments in Azerbaijan's fixed capital decline
Kazakh national atomic company's subsidiary to buy paints via tender
Oil prices won’t move like previous time without OPEC+ bullish surprise
Geostat: External merchandise trade declines in Georgia
Iran first time manages to redesign offshore drilling jacket protection system
Azerbaijani oil prices (July 6-10)
Kazakhstan, Romania boost mutual trade
UK trade fair industry warns 30,000 jobs at risk as events yet to resume
Uzbekistan reveals its COVID-related expenses
Indonesia reports 1,282 new coronavirus cases, 50 deaths
Ukraine interested in resuming air communication with Turkmenistan
Azerbaijan's President Ilham Aliyev chaired meeting of Security Council (PHOTO/VIDEO)
Kazakhstan’s revenue from railway cargo transportation up year-on-year
Gold price in Azerbaijan shows growth
Georgia reports 9 new cases of COVID-19
Mass production of mung beans to increase in Turkmenistan’s Dashoguz region
Central Bank of Uzbekistan sets exchange rates for July 14 - 21
Russia to export potato seeds to Turkmenistan
Uzbekistan, France establish joint company
Bomb blast, clash at Afghan government compound, dozens hurt
Azerbaijan to ink important renewable energy agreements
UAE, UK, Afghanistan buy liquefied gas from Turkmenistan
Russia reports more than 6,500 new coronavirus infections
Kazakhstan boosts oil & gas condensate production in 1H2020
Kazakh oil & gas company to buy pumps via tender
UK will place priority on national security in Huawei decision
Expert details why Iran's co-op with China is favorable
Egyptian media outlets publish Azerbaijani Embassy's statement on recent Armenian provocation
Uzbekistan may start exports to Arkansas state of US
Chatham House: COVID-19 to encourage renewables development
All news