Iraqi Economists Network

شبكة الاقتصاديين العراقيين

Arab World - MENA RegionEnergy, Oil & Gas Policy

Saudi Arabia Won’t Win This Oil-Price Standoff. By SHANE FERRO & GUS LUBIN

There’s a standoff happening between the old oil powers and the booming US shale industry, as the OPEC oil cartel is thought to be pushing down prices to drive new production offline.

But the investment bank Citi says it’s not a fight that OPEC leader Saudi Arabia is going to win.

Although no one is sure what is causing the plunge in oil prices from above $105 a barrel this summer to below $80, Saudi Arabia, which helps control oil prices through the amount its vast oil reserves it releases to the market, would reportedly “be comfortable with lower oil prices.” Meanwhile, there’s a risk that low prices will make it unfeasible to continue expensive unconventional drilling projects that are spreading through US shale basins.
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