We need a process for getting rid of the old oil stocks

15 september 2016 | Russia - 24

Russia and Saudi Arabia have decided to coordinate efforts in the global oil market. Until very recently, it seemed like this partnership, which still exists in theory only, would simply have been impossible. However, reality is pushing oil exporting nations to look for new ways to stabilize the market.

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

“For the time being the market is stuck with the oil price fluctuating around USD 50 a barrel. It is also possible that the price may go up,” said Analytical Center expert Alexander Kurdin on Geoeconomics show on Russia 24. But, according to him, for that to happen, the old stocks of oil must go first. “In the second half of 2016 there were no signs of that happening so for the time being the market is in equilibrium,” the expert explained.

It is not yet clear what is going to happen in 1H 2017, but a lot will depend on what the major oil producers will do, Mr. Kurdin believes. “If producers start expanding production the minute the market shows the first signs of revitalization, it is going to make the situation worse,” he said.

It is not yet clear if oil exporting nations will be able to find some kind of a consensus as demand grows. What is clear, however, is that the alliance between Russia and Saudi Arabia is bound to bring about major changes in the global energy markets, experts are sure.