Saleh Sadi,

Editor (Business)

 

RIYADH – Saudi Arabia acts in favour of lowering the oil costs, which is supported by majority members of the OPEC (Organisation of the Petroleum Exporting Countries). On the other hand, Iran, who is also a member in this institution, has made attempts to increase costs.

Saudi Arabia is the world’s largest petroleum holder and exporter that produces close to 10 million barrels a day with a price tag of $109 per barrel in the oil market, which is assumed to be a pretty high. To balance the market demands of oil, the desired price Saudi Arabia is pushing for is more or less $100 per barrel.

“The price now, we believe is high, and it’s not supported by fundamentals at all. It’s just speculation and geopolitics..we would like to see the price coming down and we are working to bring it down,” said the Gulf source.

The International Energy agency predicts that the oil prices could indeed decrease due to the sluggish economic growth in comparison to oil production. Saudi Arabia, which produces 10 million barrels per day, will try to reach the amount of 12 million barrels per day. North America is another rising oil producer and Iraq has gained back its position as a contributor in global oil production.

Demand will also drop eventually. Since one of the largest petroleum consumers in first hand, China, which is a main engine of demand growth throughout the last decade, as well as Saudi Arabia, gave signs of slowing down in consumer behavior of oil. Moving away from fossil fuels, Saudi Arabia reveals plans to be powered entirely by renewable energy.

The sanctions forwarded by U.S and Europe on the OPEC made Iran react irrelevant. OPEC’s second largest oil producer, according to the U.S Energy Information Administration, Iran’s actions would inevitably have influence on a global scale. “If you continue to add to the sanctions, we will stop our oil exports to the world.” Oil Minister, Rostam Qasemi, said, in a news conference in Dubai. The effect of this could result in very high global crude prices as a result of limited supply.