The World's Oil Producers Prepare for a New Era of Low Prices
Jan 7, 2019 | 10:00 GMT
(JOE KLAMAR/AFP/Getty Images)
- The oil market is likely to remain oversupplied in 2019, leading OPEC and non-OPEC countries to cut production to prevent another collapse in prices similar to 2014-15.
- Prices are likely to remain weaker than what many of major producers anticipated just three months ago.
- Venezuela will find itself in a most difficult spot because lower revenue will drive competition among the country's political elites, exacerbating its political crisis.
- For the United States, the domestic impacts will be both positive and negative, but Washington may now have the freedom to lean heavily on Iran's oil customers and force them to reduce those imports even further.
- Saudi Arabia will encounter difficulties because it must use state-led development — financed through oil revenue — to achieve Crown Prince Mohammed bin Salman's ambitious reforms.