Saudis Accept Lower Barrel Prices In Fight Against US Production
While some OPEC nations are panicking over oil prices not being above $100/barrel, Saudi Arabia says it wouldn’t mind accepting barrels worth $90 or $80 for the next year or two, so long as it slows down production elsewhere.
Reuters reports the nation is playing the short-term, low-profit game for medium-term gains, with the long-term goal of retaining its market share for years to come in mind. The move would affect other OPEC members financially, forcing reductions throughout the industry.
In particular, lower barrel prices would put a dent in North American petroleum production, from the oil sands in Alberta and the Bakken Formation in North Dakota, to deep-sea reserves in the Gulf of Mexico.
Whatever cuts do occur, they would likely happen after the group’s meeting November 27, which may prove contentious as most members would rather raise the price than reduce production. That said, the Saudis have already cut prices for its Asian customers earlier this month, a sign of price wars to come.
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
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