The Organization of the Petroleum Exporting Countries meeting in Vienna just got a lot more interesting. Saudi Arabia's new oil minister Khalid Al-Fali wants to show a softer side and repair diplomatic damage done that the failed “Doha Initiative.” He said that the Kingdom will back an oil production ceiling at today’s meeting.
Donald Trump laid out his vision for American Energy to North Dakota shale country as he received the delegates he needs to clinch the Republican Nomination for President of the United States. Trump vowed to change the anti-energy movement under the current administration and reverse "draconian climate rules” and says he will lead by having the government out of the way.
OPEC's thorniest dilemma of the past year - at least from a purely oil standpoint - is about to disappear. Less than six months after the lifting of Western sanctions, Iran is close to regaining normal oil export volumes, adding extra barrels to the market in an unexpectedly smooth way and helped by supply disruptions from Canada to Nigeria.
Now you see it, now you don’t. Presto chango, and all of a sudden barrels of crude are disappearing at a time when demand is rising, causing a path to global oil supply tightening. Not only did the Energy Information Administration (EIA) shock the market with a 3.5 million-barrel-drawdown, the International Energy Agency (IEA) is lifting its global demand forecast.
Even as the international sanctions placed on Iran come to an end, the country’s oil industry faces a serious challenge from within. Internal conflict within the Iranian government threatens the future of Iran’s oil industry and could significantly hinder Iran’s economic growth in the process. This can be traced to the legacy of the 1979 Revolution, 1951 oil crisis and even to the discovery of oil in the Middle East.
Saudi Arabia backed out of a deal to freeze crude oil output at the “Doha Initiative” in a sign that the politics of OPEC have changed forever. There seems to be a widened slip from the old energy guard led by Saudi oil minister Ali al-Naimi and the factions led by the new Saudi King Salman.