By next year there will be enhanced oil production in the U.S. Similarly, while Iran will start exporting more oil to the world after the sanctions are lifted. The oil production will also get an edge when Libya starts producing in its full capacity. In such a situation there will be more supply of oil which may debacle the global oil prices; however, OPEC members are not worried about this.
In a statement, ministers from Saudi Arabia, Kuwait and Iraq said that OPEC needn’t cut production next year to make room for additional supplies from Iran, Libya and U.S. shale oil. The statement has come up after apprehensions have been shown that the oil prices may face a steep decrease thanks to increased production in 2014.
Saudi Oil Minister Optimistic About Oil Market in 2014
Following his earlier statements that he made last month, Saudi Oil Minister Ali Al-Naimi said in a speech at a meeting of Arab oil exporters in Doha, Qatar that Shale oil is not posing any threat to Saudi Arabia and OPEC. He seems too determined on his stand that he has been clearing quite often that there is no need to increase or decrease the production.
He said that he is optimistic that the market will stay balanced and stable next year. His statement has come up when expectations were made that since output will increase after Iranian and Libyan production return to the market, OPEC will need to revise its policy and reduce oil production to maintain a balance in favor of the oil producers.
However, as the Saudi Oil Minister says that he is content with current oil price levels and there is no likelihood of changing the policy till at least June 2014, the current production will continue even after Iranian and Libyan oil is available for export. Iran which has been facing economic sanctions for its disputed nuke program is seeking to raise oil output to 4 million barrels a day.
Earlier in a statement Iranian oil minister, Bijan Namdar Zanganeh, said at the OPEC meeting, after a Nov. 24 agreement over its nuclear program opened the door to an easing of sanctions that the country is willing to increase production and export oil to balance its deficits which it has suffered after the U.S. and allied countries imposed economic sanctions on it.
To contact the reporter of this story: Jonathan Millet at email@example.com