Such a level will make it very hard to bring up further news regarding the low demand for oil from China, and the ongoing increase of oil supply from outside the OPEC+ to make the situation worse. In the meantime, OPEC+ is left with no option but to pump the market with oil, without mercy. The organization now faces two challenges -- losing its annual income by more than 60 percent and losing its market share. OPEC+ never got used to such a dilemma, and some of its members are not adhering to their agreed quota. Russia is trying its best, but it is also losing revenues and volumes of market shares. So, the non-OPEC+ members are also helping in keeping firm the lid on production quota; while taking advantage of Saudi Arabia’s full adherence, leaving the latter alone to face the full consequence, including losing its oil income and its market share to non-OPEC+. Amid such a bad week for oil, the outlook for 2050 does not look so bright as well, with the prediction that oil demand will be in the range of 75 million barrels per day. The International Energy Agency is reducing its global demand figure to 55 million barrels per day, should governments around the world enforce the restrictions on the use of fossil energy.

On the other hand, OPEC predicted that by 2045, the global oil demand will be 116 million barrels. This increase is due to the 15 percent growth of the global population, leading to higher demand for oil than expected. But for now, the picture is grim. We believe it is time for Saudi Arabia to take a firm stand and face the markets’ reality, as there is no more room for comprises for producing countries. This is because more oil will be pouring into all parts of the world. It is now time to have its fixed share of oil to keep its production and oil flow at a minimum of nine million barrels daily at whatever price it takes. This should be the stand of Saudi Arabia: I want my volume and enough of sacrifices. OPEC+ is incurring huge losses in terms of its daily income, but losing market share and income at the same time is something unheard of.

Attacking OPEC's established historical markets at such ease is another disaster; hence, the a need for a firm stand and action. It is now time to act. Saudi Arabia must abandon its production restrictions and play the markets well. Let us do like the US crude oil producers with 13.5 million daily output and it could go higher in no time. Saudi Aramco must do the same and free its production until the new oil producers realize that the party is over. They must be responsible producers, rather than ‘eating’ the legitimate long-established markets of OPEC+. Thus, $60 a barrel is becoming a more realistic figure than we thought!! Email: [email protected]

By Kamel Al-Harami
Independent Oil Analyst