Organization of the Petroleum Exporting Countries of 15 nations was founded in 1960 and it initially had just five members Iraq,Iran, Saudi Arabia, Kuwait and Venezuela. However OPEC has now lost all its control over the oil market.
The tweets and action of three eminent men – the president of United States Donald Trumph, President of Russia Vladimir Vladimirovich Putin and crown prince of the Saudi Arabia Mohammed Bin Salman, will be responsible for determining the set the course oil prising from the year 2019 onwards.
However the major problem is that each of the three men are adamant about following a different path. The organization of the Petroleum Exporting countries is facing a really hard time, trying to find a common purpose.
US, Russia and Saudi Arabia are the most dominating countries in matters of oil supplies as they together produce much more oil than the 15 members of OPEC.
All three countries are pumping oil at record rates and each of them is capable enough to raise an output the upcoming year.
Saudi Arabia announced that its export will decrease by 50000 barrels per day from the following month as the oil price have headed South.
It even warned its fellow producers that is a dire need for all of them to cut their production level by 1 million barrels per day from October.
Mohammad Bin Salam, the crown prince of Saudi Arabia needs the oil revenue inorder to fund his ambitious plans for transforming this country and he is clearly avoiding unrest from the people who are injured during the process.
To balance the Fiscal budget according to the International Monetary Fund the kingdom will need an oil price of $73.3 per barrel from next year onwards.
However the president of Russia is not willing to curb his country’s production again.
Source: Bloomberg, EconomicTimes
