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Iran Says OPEC Decision Not to Cut Oil Output Will Hit All Producers

© Fotolia / marrakeshhGlobal oil prices continued falling Friday amid a worsening forecast by OPEC on oil demand by 2035
Global oil prices continued falling Friday amid a worsening forecast by OPEC on oil demand by 2035 - Sputnik International
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Iran has slammed OPEC decision not to reduce oil output, claiming it would hit all oil producers, but abstained from protesting. Experts claim the decision will precipitate a crisis in the oil market by the first half of 2015.

First Deputy Prime Minister Igor Shuvalov noted on Saturday that the government will pull through despite OPEC’s decision not to reduce output, and identified a number of priorities for the government, including tackling inflation and pushing through efforts to increase import substitution, Russian media have reported. - Sputnik International
Russia to Withstand OPEC Decision, Focus on Import Substitution: Deputy PM
MOSCOW, November 30 (Sputnik) — Iran has criticized decision of OPEC not to decrease oil production, claiming it would inevitably hit all oil producers, but abstained from protesting.

"I don't think that this decision is beneficial to all OPEC member countries because some countries in OPEC were against this decision; however, because of the unity and solidarity of OPEC, we decided not to protest this decision," said Iranian oil minister Bijan Zanganeh, as quoted by Shana, an Iranian media source.

Iran insists that the swift drop in oil prices was caused by the Persian Gulf exporters' deliberate policies, which are aimed at undermining Tehran's economy.

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During the OPEC meeting in Vienna on November 27, the Saudi oil minister called upon members of the organization not to reduce crude oil production in order to deal a heavy blow to North American shale oil producers, Reuters notes. The United Arab Emirates energy minister praised OPEC’s decision:

"We don't support being a swing producer whenever the price falls; the decision benefits the market, the customers and the world economy‎. OPEC countries will compensate for any decline in the world supply as we are the most cost-effective producers compared to unconventional ones," Suhail bin Mohammed al-Mazroui claimed on Twitter, Reuters reports.

Low oil prices are not likely to last indefinitely, the tendency is expected to change within the next six months - Sputnik International
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USA Today has already described the consequences of the latest OPEC decision as a "pain train," citing financial analysts at Robert W. Baird & Co.

"In our view, [OPEC's] decision throws the market balance into crisis most acutely in the first half of 2015 when seasonal demand is weak, and perhaps before US tight oil producers have had a chance to make any major adjustment to activity levels.  We estimate that sustained pricing at $60 [per barrel] of WTI is the level which would trigger a material shift in the trajectory of US production growth," Deutsche Bank strategist Michael Hsueh, as quoted by the Wall Street Journal.

In trading on Friday November 28, oil prices fell to below $70 per barrel.

 

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