Guyanese Online

Saudi price decision brings new uncertainties

By David Jessop

Two days before Christmas, the Saudi Oil Minister, Ali al-Nami, made a statement that is likely to change geo-politics and the face of the world economy in 2015.

Speaking to The Middle East Economic Survey, a specialist oil industry publication, the Minister said that the Organization of the Petroleum Exporting Countries (OPEC) will not cut oil production, even if the price falls to US$20 per barrel.

His comments reflect a dramatic change in policy, and given his country’s leading role in OPEC, signals an end to the cartel’s traditional approach which has previously involved agreeing to limit members’ output to maintain high oil prices. “Whether it goes down to US$20, US$40, US$50, US$60, it is irrelevant,” he was quoted as saying. He also noted that the world may never again see prices at US$100 a barrel. Continue reading →