There is no such concept as global permanent oil production regulation mechanism

26 january 2015 | PostNauka

The Chief Adviser to the Head of the Analytical Center Leonid Grigoriev told “PostNauka” about oil prices fluctuation reasons and its role in the modern world.

Leonid Grigoryev
Leonid Grigoryev
Chief Adviser to Head of the Analytical Center

"In 2014 the volume of oil industrial consumption in the world was 92-93 million barrels a day. The approximate excess imbalance accounted for 0.5-0.7 barrels. This is the direct current cause for the prices’ decline", said the expert adding that everyone “pumped somewhat extra": the U.S., other OPEC countries and countries outside the cartel. Usually economists do without "conspiracies", there is no global permanent oil production regulation mechanism, considers Mr. Grigoriev.

The pricing is influenced by several factors: the first one - current supply and demand, the second one – budgets of leading oil-exporting countries, according to the expert. "We need to consider future oil production costs and its competition with other fuels. This is already included in the reasonable economic level plane", said Mr. Grigoriev. The third factor is the political one in which likes and dislikes, tax regimes and other issues play an important role.

For more information read the interview here