Raising oil output not in Saudis’ interest: expert
Baku, Azerbaijan, Nov. 4
By Leman Zeynalova – Trend:
Raising oil output is not in Saudi Arabia’s interest, Sijbren de Jong, analyst at The Hague Center for Strategic Studies and expert in energy security, told Trend Nov. 4.
He was commenting on the recent Reuters report, which, citing sources in OPEC, said that Saudis have threatened to raise their production to 11 million barrels per day (bpd) and even 12 million bpd, bringing oil prices down, and to withdraw from the upcoming OPEC Vienna meeting.
Old disputes between Saudi Arabia and Iran resurfaced at a meeting of OPEC experts last week, with Riyadh threatening to raise oil output steeply to bring prices down if Tehran refuses to limit its supply, OPEC sources say.
“In the long term, this is not in Saudi Arabia’s interest,” de Jong said. “Saudi Arabia still has the deepest pockets of all OPEC members. But, is that really effective?”
Reminding that Iran has been dealing with crippling sanctions for years and years, de Jong said, “They know what it is like if not many countries buy their oil.”
He also pointed out that the non-oil share of the Iranian economy is much larger than the non-oil share of the Saudi economy.
Officials and experts from OPEC countries and non-OPEC nations, including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia met for consultations in Vienna on Oct. 29 and only agreed to meet again in November before a scheduled regular OPEC meeting on Nov. 30.
OPEC and non-OPEC countries said in a joint statement that the meeting on Oct. 29 was “a positive development” towards reaching a global output limiting deal on Nov. 30.
In September, OPEC producers agreed during the informal meeting in Algiers to cut down the oil output to 32.5 million barrels per day (bpd) from current production of 33.24 million bpd.
How much each country will produce is to be decided at the next formal meeting of OPEC in November.