King Abdullah of Saudi Arabia was sitting with the heads of other OPEC member states. Everyone looked at each other, but no one spoke.
The reduction in crude oil production has indeed caused the price of crude oil to rise. The income of each country has not decreased, but has actually increased.
However, serious problems have arisen in the trade of these countries. Not only have the United States, China, Japan, Russia, etc. imposed economic sanctions on it, but even the European Union has also participated.
It can be said that OPEC has touched the interests of most countries.
OPEC's reserves and production account for about 40% of the world. At this time, when other countries join forces to start suppressing crude oil prices, they may not be able to withstand it.
The current trade blockade has caused them a lot of losses. The prices of many domestic necessities have increased, which will cause inflation in these countries.
Even if they make more money, the living standards of the Chinese people will decline, and the gain outweighs the loss.
There is also debate within their organization at this time about whether to compromise and resume crude oil production in exchange for other countries lifting their trade blockade.
When these big power organizations join forces, OPEC really can't handle it. Now it seems that crude oil prices are rising continuously, but in fact it is mainly pushed up by international speculators.
Without these funds, how high would the price of crude oil be? The key is that they have made money now, but they cannot exchange for the supplies necessary for life. This is the most troublesome.
Which of these countries are agricultural countries? Except for water, which they produce themselves, everything else, including food, clothing, housing and transportation, is imported.
But if they compromise at this time, other countries will definitely ask them to increase production, thus pushing the price of crude oil back below sixty US dollars again.
And if the shale oil obtained by the United States can be produced in large quantities, it will have a huge impact on them. In addition to energy such as oil, do they have any valuable commodities
That shale oil will greatly increase the production of crude oil, thereby lowering the price of crude oil.
"Everyone is silent, let me tell you. The price of flour for making bread in our country has increased three times, and it is all subsidized by the government. Otherwise, the country will be crushed by inflation." Abdullah said.
Money is worthless, and many lives will inevitably undergo big changes, which will lead to trouble.
"As the United States, Europe and other countries develop shale oil, our crude oil prices will inevitably fall, but they certainly cannot fall too low."
"International demand for crude oil is still increasing. If we maintain last year's production, we can still have high income."
"No, if the price of crude oil falls and our output remains unchanged, then our revenue will definitely fall," someone said.
"The price of crude oil will not fall below 60 US dollars. Do you really think that the cost of shale oil extraction can be lower than ours? Their cost of a barrel of oil must be more than 60 US dollars."
"So if the oil price is very low, then they are producing at a loss, then they will reduce production or even stop production, and then crude oil production will return to normal track." Abdullah said confidently.
The cost of shale oil? They had not considered this issue carefully before. But they all believed Abdullah’s words. How could the cost of extracting oil from oil shale be lower than that of direct extraction? Moreover, it is also a huge investment to build oil pipelines and refining plants.
On average, their costs will be higher. If this is the case, maybe the emergence of shale oil will keep the price of crude oil high!
Everyone suddenly felt that it was not impossible to make concessions on shale oil. Just like if there are one or two more OPEC member countries, they will welcome them with both hands, so that the influence of their organization will be greater.
It's just that the country that wants to vigorously develop shale oil is the United States, which is the largest importer of crude oil. This makes them very worried. If the production of shale oil is very large, will the United States really not be able to import from them in the future
I also heard that China also has this oil shale mine, Russia also has it, and many European countries also have it. If everyone starts to develop shale oil and becomes self-sufficient, their status will inevitably drop a lot.
For example, Saudi Arabia is now a fully developed country. Even among developed countries, all kinds of benefits and benefits are top-notch. You are rich.
If income drops, many of their welfare benefits will not be implemented, which may shake the rule.
"Then let's talk to other countries to restore production? But they ask us to increase production. This may cause the price of crude oil to plummet." Someone said worriedly.
"It doesn't matter. We only promised to increase production this year. As long as January 1 next year, we can limit production again. And the increase in production will bring down the price of crude oil, which can just stop them from getting this shale oil."
There is oil worth fifty dollars a barrel. Do you have to spend seventy dollars a barrel to produce it? Isn’t that crazy
"Yes, we just used to increase production to negotiate with them, asking them to resume trade with us immediately and sign a long-term contract to ensure that we will no longer be threatened in the future!"
Everyone is talking about how they can fight for the interests of their country after taking a step back.
The sharp rise in crude oil prices during this period has eased the economic pressure on many countries. Opec has tycoons like Saudi Arabia, but there are also countries like Iran that owe a lot of debt.
Just now, the price of crude oil has skyrocketed, which has caused their income to skyrocket. In addition, using some crude oil to pay off debts has alleviated their foreign debt pressure.
If crude oil could stay at such a high price, they would have paid off their debts and escaped poverty and become rich!
They also know that this is impossible. Crude oil has now exceeded 140 US dollars per barrel, which is definitely beyond the rational price.
However, they believe that it is very possible to maintain the price above 80 US dollars for a long time in the future. If the United States and others start producing shale oil, maybe the United States will also increase the price of crude oil.
After they negotiated some conditions acceptable to everyone, they began to send representatives to negotiate with countries and regions that import the most crude oil, such as the United States, China, Japan, Russia, and the European Union.
As long as they agree, then the matter is settled.
Feng Yu was swimming in the swimming pool when he heard his cell phone ringing. He climbed ashore and answered the call.
"Feng Yu, we are currently negotiating with representatives from the United Arab Emirates. The other party represents the OPEC organization. They have put forward a good condition. I think it will not take a few days before OPEC will announce that crude oil will resume or even increase production!"
… (To be continued...)