Global redistribution of oil market

Global redistribution of oil market
17:42 19 Dekabr 2015
Ölkə mətbuatı
A- A+

Baku, Azerbaijan, Dec. 19

By Vagif Sharifov – Trend:

OPEC’s dumping oil prices, Saudi Arabia’s desire to constantly expand its market share, and expectations of coming of Iranian oil after removal of sanctions on Tehran, have forced the US to urgently take the historic decision to start exporting its own oil.

Experts have already reacted negatively to this news, saying that oil prices will fall significantly, at least, due to a psychological factor. However, the US itself doesn’t think so – the Department of Energy believes that by 2025 the price of Brent oil will reach $90.23 per barrel or only $0.18 per barrel less than if the export ban had been kept.

Greatest difficulties will be faced by the business in the domestic US market, where a limited supply of WTI will increase its value at oil refineries, leading to higher prices for gasoline, and dragging consumer price inflation in the economy. On the other hand, it will be easy for China, as it will be selling its consumer goods in the US for higher prices, while their prime costs being kept due to lack of a significant impact from WTI on the Brent oil price.

Meanwhile, Saudi Arabia - the main market player physically pressing the prices - is trying by all means to “pour” oil even to places where others have previously worked.

This, in turn, causes a conflict of interests with Russia, which, because of different prime costs, can’t afford such level of dumping in Europe, as Saudi Arabia does.

Apparently, this “overdumping” game will soon be joined by the US. By the way, the estimates presented by the US Department of Energy look at least strange against the backdrop of the fact that Iran expects the lifting of sanctions in Q1, 2016 in order to begin oil exports.

There is no doubt that Iran would offer its oil cheaper than the market price, pursuing the following objectives:

- to gain market share in the world as fast as possible;

- to fill its budget with money coming from oil exports as quickly as possible to use them for restoration of domestic market infrastructure, including the construction of new oil and gas pipelines.

The whole situation will lead to an unplanned meeting of OPEC in the first six months of 2016, where the countries will blame each other of deliberate glutting the market. But the decision will not be taken to cut the production because there will be the US oil on the market. Any reduction in any direction will immediately lead to a decrease in a market share, despite the break-even point of the state budgets of Iran, Algeria, Iraq, Saudi Arabia and the UAE is rather less compared to the current oil price. Libya will be in the worst situation. Its state budget may be deficit-free only at the price of $207 per barrel.

A $30-35 corridor per barrel of Brent was observed several times for the last nearly 30 years - in 1990, 2000, 2003-2004 and in December 2008. The price returned to the previous level seven years later - in December 2015. In particular, the creation of artificial deficit of raw materials or loosening of the situation in the major oil-producing regions can contribute to a great increase in the oil prices. The supply of oil from these regions has a direct impact on the world oil prices.

The history of the oil industry shows that during the year before the Gulf War, the average Brent price was $18 per barrel. During the war, the price was $29, and even reached $ 41. But it is interesting that the day before the war – August 1, 1990, the Brent price was $19-20 per barrel. And the next day after the war – March 1, 1991, it returned to the same level - $19-20 per barrel. There are many similar examples, namely, the Islamic revolution in Iran, the Iran-Iraq war, the Asian financial crisis, the events of September 11 in the US, the second war in Iraq.

The global redistribution of the oil market between Saudi Arabia and the US is obvious. OPEC ceased to be a locomotive. It became a purely commercial company making a profit regardless of anything. Many specialists believe that there is no need for the cartel any more. Alberta’s Finance Minister once said that we need such a position when we would not listen to OPEC to decide how many schools we should build. If OPEC wanted, it could increase the prices, forgetting about the market share. It is always possible to restore as it was in 1973, when the cartel cut its production so that the price has risen from $3 to $12 per barrel.

Trend expert Vagif Sharifov

Follow us on Twitter @TRENDNewsAgency

OXŞAR XƏBƏRLƏR

BU KATEQORİYADAN DİGƏR XƏBƏRLƏR

Ölkə mətbuatında bugün

Qadının sürdüyü maşının altında qalıb öldü - BAKIDA

29 Mart 2017 13:39

Partizanlar hücuma keçdi

29 Mart 2017 13:39

Fast fud restoranlarının 6 hiyləsi - DİQQƏTLİ OLUN! - FOTOLAR

29 Mart 2017 13:38

22 yaşlı qız dəm qazından zəhərləndi

29 Mart 2017 13:37

Corc Maykl ölümündən 3 ay sonra gizli şəkildə dəfn edildi - FOTO

29 Mart 2017 13:37

İsrailli model hamilədir - FOTO

29 Mart 2017 13:37

Qətər "DÇ-2022" üçün Azərbaycandan işçi qüvvəsi istədi

29 Mart 2017 13:37

Fişinq hücumlarından necə yayınmaq olar?

29 Mart 2017 13:35

“Məşhur aktyoru ayağından güllələmişdilər” - Akif Aşırlı

29 Mart 2017 13:33

Kürdə boğulan şəxsin adı açıqlandı – sərxoş olub

29 Mart 2017 13:29

Qarabağın qaytarılması ilə bağlı GİZLİ SAZİŞ: Sarkisyanla Ter-Petrosyan RAZILIĞA GƏLDİ

29 Mart 2017 13:28

Azərbaycanda da ölüm hökmü geri qayıda bilər...

29 Mart 2017 13:28

Millimiz Moldovaya qarşı

29 Mart 2017 13:27

Pişiyə dəmiryolu stansiyasında vəzifə verildi - FOTO

29 Mart 2017 13:27

Polşanın Ukraynadakı baş konsulluğu atəşə tutuldu

29 Mart 2017 13:27

Azərbaycanlı məşhurun model tanışı ana oldu - FOTO

29 Mart 2017 13:27

Seks effekti yaradan pivə, tapançalı araq və bikinili... - FOTOLAR

29 Mart 2017 13:23

Əməkdar artist hədələdi: "Özünü yığışdır, elə eləmə gəlib səni..."

29 Mart 2017 13:22

Aeroport yolunda avtomobillərin hərəkəti məhdudlaşdırıldı

29 Mart 2017 13:22

Cem Yılmaza qarşı gözlənilməz ittiham

29 Mart 2017 13:22

Sabahın HAVAsı

29 Mart 2017 13:22

Azərbaycanda "körpü bank"lar yaradılacaq

29 Mart 2017 13:19

Sabah hava necə olacaq?

29 Mart 2017 13:18

Təbiətin şıltaqlığı uçuşları iflic etdi - Sərnişinlər didərgin düşüb

29 Mart 2017 13:18

Türkyəli məşhur aktrisa HƏBS EDİLDİ - YALNIŞLIQLA

29 Mart 2017 13:17

Sabah Bakıda 17°, bölgələrdə 23° isti olacaq

29 Mart 2017 13:16

Havalar isinir – PROQNOZ

29 Mart 2017 13:14

ABŞ-ın patrul gəmiləri Qara dənizdə...

29 Mart 2017 13:09

Elza Seyidcahan: “Şeir gecəsi keçirəcəm, tezliklə kitabım da çıxacaq” - MÜSAHİBƏ

29 Mart 2017 13:08

Həbs edilən gözəl qız baxışları ilə "danışdı" - FOTO

29 Mart 2017 13:05

"Heç kim şoka-zada düşməsin, Cavanşirlə uzun illər..."

29 Mart 2017 13:05

Rusiya dövlət başçılarının ən mühüm sənədləri imzaladığı kabinetin İNANILMAZ SİRRİ

29 Mart 2017 13:03

"Neft Daşları" üçün yeni platforma istismara verildi

29 Mart 2017 13:01

Narkotik qaçaqmalçılığının qarşısı alındı

29 Mart 2017 12:59

Aeroport yolunda avtomobillərin hərəkəti qismən məhdudlaşdırıldı

29 Mart 2017 12:59

Aktyorun 8 illik sevgilisi gənc oğlanla kafedə tutuldu - FOTO

29 Mart 2017 12:57

ŞOK: naməlum varlıqlar peyda oldu, burada...

29 Mart 2017 12:56

Aparıcı mini ətək geyindiyini unutdu

29 Mart 2017 12:54

“Ayın o biri üzü”

29 Mart 2017 12:53

Bu yolda hərəkət etməyin

29 Mart 2017 12:53

Almanlar İncirliyə alternativlər tapdılar - SİYAHI

29 Mart 2017 12:53

Dəb ikonası sərgidə

29 Mart 2017 12:49

Teymur Məmmədov Avropa çempionu oldu

29 Mart 2017 12:47

Putin Rusiya hərbçilərinin sayını artırdı

29 Mart 2017 12:47

"Qəbələ"nin hücumçusu darmadağına töhfə verdi

29 Mart 2017 12:47

Moldova millimizlə oyun üçün heyəti açıqladı

29 Mart 2017 12:47

Qriqorçuk İngiltərə çempionu ilə görüş istədi

29 Mart 2017 12:47

Hitler, Xruşşov və Roma Papasını BİRLƏŞDİRƏN MƏQAM

29 Mart 2017 12:43

Aleyna 17 yaşını dostları ilə qeyd etdi - FOTO

29 Mart 2017 12:42

Fransadan gələn cərrah Xankəndində erməniləri pulsuz əməliyyat edir

29 Mart 2017 12:42