Current Oil Price is Logical, Says OPEC, Saudi Aramco

by Ship & Bunker News Team
Monday January 26, 2015

OPEC Secretary General Abdalla El-Badri last week told a Davos audience that OPEC's decision not to restrict supply to bolster prices was "a pure economic decision" and logical, Financial Times reports.

"It was a pure economic decision," said El-Badri.

"I don't understand, everyone is crying [and saying this was a] decision against the US, [it is a] war between Saudi and U.S.

"It is all nonsense.  It is the logic."

He said that if OPEC had decided to restrict supply now, it would have been expected to restrict it again and again in the future as non-OPEC supply increased.

Echoing the comments, Saudi Aramco CEO Khalid A Al-Falih suggested prices had been artificially high, having been "propped up by geopolitics."

"The bubble of fear burst [in 2014]," he said, resulting in a faltering of confidence in sustainable high prices, he said.

"People will be more careful before committing large sums to the oil and gas industry [in future]."

Last week, ENI's CEO said the oil price could hit $200 a barrel within five years if OPEC did not act to push prices up to encourage capital investment.

Ship & Bunker News Team
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