Saudis react helplessly on the oil glut – THE WORLD

Freeze. That was not the word to which they had hoped. Chokes, shorten. So something had many investors and investors, prime ministers and presidents have preferred: Oil production should not be kept at its absurdly high level, they should be reduced, finally. Less oil, rising prices – that was their calculations. But Russia and Saudi Arabia have expectations disappointed.

The two oil superpowers had met in Qatar Doha, with the aim to stabilize the prices. But as the Saudi oil minister announced the result of the discussions, it was clear that the project would fail. They would “freeze” the production, Ali al-Naimi said. That is a reasonable step. Financial markets have a different view. The price of oil swept clear within minutes down. A barrel of Brent crude cost on Tuesday temporarily $ 33.32 – much less than a day earlier than many had still expected a throttling. Experts believe that the Doha meeting a disaster. A declaration of bankruptcy of the producing countries. And a clear signal that the desired higher oil prices are soon to be expected.

“That was nothing,” says Rainer Wiek by energy information service EID. A freeze on funding meant that neither side is willing to change the current strategy – the strategy that has led to the historic oil spill. The oil states promote unbridled, particularly Saudi Arabia. The country flooded the market and can thus collapsing the quotations. A year ago, a barrel cost more than $ 100 – so three times as much today. A disaster for countries who live by their commodities for sale.

The prices are expected after the meeting in Doha fall further, especially as the rates at a record level be frozen: In January, the oil rigs in the world as much oil as never collected from the ground. “The oil glut continues,” said Wiek. The big loser of this development is Russia. Moscow has the greatest interest to curb global promotion. Among the major sponsors, the Russians are the ones who suffer the hardest under the price decline. The trade sanctions from Europe and America and the dramatic decline of the ruble to put the economy. The Kremlin can hardly cope if now break away even the revenue from oil exports.

It therefore seemed like an act of desperation, as Russian Energy Minister after the meeting also Iraq and Iran invited to join the initiative. “Only then freezing the January levels can succeed,” Alexander Nowak said. But the desire of the Moscow Minister is unlikely to meet. Especially Iran has little interest to reduce its just to restarting production. The country is only willing to discuss such a step if the promotion is back at the level they had reached before the international sanctions, said a source close to Tehran. “And since we are still far.”

Another loser Doha: Opec. The Organization of Petroleum Exporting Countries. The cartel has disintegrated, not officially, but behind the scenes. Again and again they had met in recent months to curb the odds. Again and again ended the talks without result.

The smaller producing countries like Brazil , Venezuela and Nigeria want to push the odds, to stabilize the prices. On the other side is Saudi Arabia, the secret leader of the cartel. The sheikhs want to support as before, although the stock almost overflowing. They fear, otherwise lose their market shares against American fracking oil. They also use the price of oil as a political weapon: The Wahhabi Saudi Arabia wants to keep him therefore low in order to prevent the rise of Shiite rivals Iran

. A dangerous game. Even the Arabs escape billion if oil remains cheap as now. The stock index of the country, the Tadawul is broken by a third since the beginning, 2015.

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