Although OPEC's decision pulled the oil price back a few cents, it failed to bring it back into the organisation's preferred price band of $22-28 a barrel. And within days of the decision, benchmark Brent crude was again trading at more than $30 a barrel.
Market concerns focus on the danger of military action in Iraq that could shut off the country's oil production of more than 2 million b/d. That would leave the market significantly short of oil, even if Saudi Arabia increased production to its full capacity of 10.5 million b/d. In the event of a war in Iraq coinciding with the Venezuelan strike, oil consumers would be likely to release some of their strategic petroleum reserves - which have enough oil to satisfy basic energy needs for several months.
As the markets absorbed the OPEC decision, the organisation's Secretary-General, Alvaro Silva Corderon, asked Russia, the largest non-OPEC producer, to help stabilise markets. 'Russia can now play an extremely important role,' he said in a 14 January interview with a Russian newspaper. 'Moscow expresses a permanent wish for co-operation, with the goal of stabilising the world's oil market.' However, Russia is also believed to be pumping at full or near-full capacity.
You might also like...
Red Sea Global awards Marina hotel infrastructure
18 April 2024
Aramco allows more time for MGS package revised prices
18 April 2024
Morocco tenders high-speed rail project
18 April 2024
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.