The Organization of Petroleum Exporting Countries (OPEC) will not cut production, even if oil prices fall to $ 20 a barrel, said in an interview with Middle East Economic Survey Saudi Oil minister Ali Al-Naimi.
He noted that regardless of oil price placement, cutting the production is not in the interests of OPEC producers. No matter will it fall to $ 50, $ 40 or even to $ 20 per barrel.
According to the minister, the world may never see oil at $ 100 a barrel. "If Saudi Arabia will lower production, prices will go up, and Russian, Brazilian and shale developers in the United States will take away my share of the market," said Al-Naimi.
He estimated that the budgets of the Gulf countries are able to withstand a long period of declining prices, as the cost of production in the region is $ 4-5 per barrel.
First, according to the minister, will be affected offshore oil projects in Brazil, West Africa and the Arctic. "So sooner or later, no matter how much they may be stretched, in the end their financial capabilities will make them to cut production," he predicts.
"We want to tell the world that only countries with a high efficiency of oil production deserve a market share." Saudi oil minister concluded.
“It seems that their strategy is to do away with all the weak players in the market, which can not survive in oil prices below $ 60 per barrel or below $ 50.” said John Kilduff, an analyst at energy hedge fund Again Capital.
While alternative sources of crude oil, such as shale and tar sands, have caused a big increase in supply, some analysts argue that the oil price collapse is more to do with falling demand due to a slowing global economy.