OPEC Emperor Saudi Arabia Has Fallen For Russia's Tricks - Bloomberg:
As the Covid-19 virus hit demand for oil, OPEC kingpin Saudi Arabia wanted an urgent meeting among the cartel’s members and their international partners in order to bring in deeper and longer output cuts. Russia didn’t, and now the emergency gathering of the 23-nation coalition known as OPEC+ won’t happen. This is only the latest in a series of slights that the biggest member of OPEC’s allies has delivered to the wider group, ratcheting up questions about its potency to truly impact oil production levels and therefore prices.
So why does Saudi Arabia continue to tolerate the unwieldy situation in return for very little in the way of real output cuts? Here’s my take, with a bit of artistic license:
“The Emperor Salman and the Tailors of Rus” 1 — with apologies to Hans Christian Andersen
Salman, Prince of the Desert and Emperor of the lands of OPEC, was worried. The empire over which his country had held sway for nearly 60 years was beset on all sides by threats. His uncle, Sam, who had hitherto depended on the oil from the desert kingdom and its allies, had recently harnessed a wild beast called Shale that was threatening the riches of the realm. Salman needed to burnish his image, so he decided to take in his old suit of clothes for a makeover to restore its luster and his country’s reputation as the most important oil broker in the world.
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Russia’s oil output cuts are as real as the emperor’s new clothes, OPEC just can’t admit it.
Source: Culture Club/Hulton Archive |
As the Covid-19 virus hit demand for oil, OPEC kingpin Saudi Arabia wanted an urgent meeting among the cartel’s members and their international partners in order to bring in deeper and longer output cuts. Russia didn’t, and now the emergency gathering of the 23-nation coalition known as OPEC+ won’t happen. This is only the latest in a series of slights that the biggest member of OPEC’s allies has delivered to the wider group, ratcheting up questions about its potency to truly impact oil production levels and therefore prices.
So why does Saudi Arabia continue to tolerate the unwieldy situation in return for very little in the way of real output cuts? Here’s my take, with a bit of artistic license:
“The Emperor Salman and the Tailors of Rus” 1 — with apologies to Hans Christian Andersen
Salman, Prince of the Desert and Emperor of the lands of OPEC, was worried. The empire over which his country had held sway for nearly 60 years was beset on all sides by threats. His uncle, Sam, who had hitherto depended on the oil from the desert kingdom and its allies, had recently harnessed a wild beast called Shale that was threatening the riches of the realm. Salman needed to burnish his image, so he decided to take in his old suit of clothes for a makeover to restore its luster and his country’s reputation as the most important oil broker in the world.
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