«While Saudi Arabia wins in the market through its radical strategy to lower oil prices. However, the country may enter into a new, dangerous to herself phase of the battle for the establishment of dominance in the market “- says the publication. Saudi Arabia has huge oil reserves and production costs are among the lowest in the world. The publication says that Saudi Arabia is trying to remove such strong competitors such as Russia or the US offshore oil reserves. However, this approach bears and big risks for a key player in the oil market: during the years of high oil prices, Saudi Arabia was able to amass an impressive foreign exchange reserves, about $ 750 billion, but they quickly can be dissipated in order to close the sharp decline of new arrivals to the treasury. Price drop below $ 60 will only complicate the situation. “In the long term” burning “reserve currency could be very imprudent step for Sau di Arabia. Further decline in oil demand and the development of green technologies such as electric vehicles, may lead to the fact that the country will never be able to accumulate the same margin, as in the years of prosperity “- the newspaper writes. World oil prices since the summer have fallen by almost half. Experts attribute this to an excess supply in the market. OPEC’s decision of 27 November to maintain oil production quota at 30 million barrels per day increased the price collapse.
No comments:
Post a Comment