Say goodbye to OPEC, powerful Putin pal predicts
Source: Reuters
Internal differences are killing OPEC and its ability to influence the markets has all but evaporated, top Russian oil executive Igor Sechin told Reuters in some of his harshest remarks ever about the oil cartel.
Russia, which has been hit hard by the oil price collapse, was flirting with the idea of cooperating with OPEC in recent months until tensions between OPEC members Saudi Arabia and Iran ruined a global deal to freeze output.
Sechin - one of the closest allies of President Vladimir Putin - was the only Russian official to consistently oppose the deal with OPEC even after the Kremlin effectively endorsed the plan.
Now that his gloomy predictions about talking to OPEC have come to pass, Sechin feels vindicated and wants to help Russia avoid similar embarrassment in future.
"At the moment a number of objective factors exclude the possibility for any cartels to dictate their will to the market. ... As for OPEC, it has practically stopped existing as a united organization."
Read more: http://www.reuters.com/article/us-russia-opec-sechin-idUSKCN0Y1104
Saudi reshuffle points to era of oil volatility
The removal of Ali al-Naimi as Saudi Arabia’s oil minister ushers in a new age of uncertainty, and more erratic prices. Naimi was a major architect of Saudi’s current policy of forcing oil prices lower through higher supply of crude, but he was also a trusted voice within government and a respected figure at the Organization of the Petroleum Exporting Countries. His successor Khalid al-Falih is unlikely to command the same influence over output decisions that his 80-year-old predecessor had once enjoyed.
The son of a Bedouin who climbed through the ranks of Saudi oil industry technocrats, Naimi commanded the respect of successive rulers in the oil-rich kingdom. Through boom and bust cycles he repeatedly emphasised that Riyadh’s oil policy was driven by market forces and not politics. Over almost 21 years as oil minister he was given a large degree of autonomy to devise the best strategy for the kingdom.
That arrangement has now changed. Falih represents more centralisation of power by his royal masters. With Naimi gone there is little in the way of the kingdom’s powerful Deputy Crown Prince Mohammed bin Salman dictating oil strategy as part of his plan to reform Saudi’s economy – which is helpful – and put pressure on Iran, its main political rival in the Middle East – which may not be.
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http://blogs.reuters.com/breakingviews/2016/05/09/saudi-reshuffle-points-to-era-of-oil-volatility/
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