Baku, Azerbaijan, Oct.16
By Leman Zeynalova – Trend:
There are some things happening at the moment which are having an effect on supply, Sam Barden, Director of SBI Markets, an international commodity trading and advisory company, told Trend.
“OPEC countries can begin increasing supply through increasing quotas. However, there are some things happening at the moment which are having an effect on supply. Firstly, Saudi Arabia is under quite a bit of pressure from US and Europe, UK over the murder or suspected murder of the journalist Kashogi. There is talk of sanctions against Saudi Arabia, from USA and others, which if true, will mean it will make supply even tighter and put upward pressure on oil prices,” said the expert.
The other issue is Iran, he said, adding that sanctions are due to kick in against Iran in November, driven again by the US, which will mean even more upward pressure on oil prices.
“In my view, this situation cannot last long, and I believe that Iran will have to increase output dramatically, and that USA will have to come to the table and make a deal with Iran and remove sanctions. If USA and Iran cannot agree and remove sanctions, then Russia, Turkey and China will facilitate Iran’s oil sales into the market, and Europe will also be part of this,” said the expert.
Higher oil prices at best will slow growth and at worst will precipitate an economic collapse globally, he noted.
“It is not high or low prices the world needs, it is stable oil prices. Market love stability, middle men love volatility. The game is not between consumers and producers, but between the market and middle men,” Barden concluded.
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