The representative for Saudi Arabia at the Organization of the Petroleum Exporting Countries (OPEC) has announced that the price of oil is unlikely to fully recover and reach the record levels it got to a few years ago.
The representative was Mohammed al-Madi, the governor from Saudi Arabia for the organization. He informed those attending the energy conference in Riyadh that reaching prices of $100-$120 for each barrel would prove ìdifficultî.
He went on to argue that Saudi Arabiaís approach to the oil industry did not have a ìpolitical dimensionî. The announcement is significant considering the fact that Saudi Arabia are the biggest producers for OPEC and consequently have the most forceful presence within the organization.
Expanding on these statements, Mohammed al-Madi commented: ì$100-$120- I think itís difficult to reach $120 another time.î
He went on to state: ìThere isnít any political dimension in what we do at the oil ministry- our vision is commercial and economicÖWe are not against anybody or against the [production of US shale gas]. On the contrary we welcome it, as it balances the market in the long run.î
This announcement comes after data released last Friday revealing Brent crude prices at the close of the day were at $55.2 per barrel and US oil had got to $46.5 per barrel.
Mr Madi went on to address the perception that the Saudi governing bodies have been allowing the price of oil to plummet due to competitive motivations in the economic and political spheres. He was partly rebutting the criticisms from Iran who have argued that Saudi Arabia is declining the opportunity to support the global price of oil by reducing their production levels.
Other experts have suggested that the Saudiís are content with witnessing the price drop in oil due to the fact that it will damage the growing shale gas industry in the United States.
However Mr Mohammed al-Madi maintained that the 50% drop in the worldwide price of oil from the middle of 2014 was all down to integral supply and demand considerations and definitely not factors outside of the economic realm.