Mr. Adel Abdul-Mahdi warns of coup in the oil market if prices continued low

Economic Page
January 26, 2016 16:18

Oil Minister Adel Abdul-Mahdi warned Tuesday what he described as a coup in the global oil market and rising "violent and sudden" If big drop in crude prices continued investment and continued with stops in many regions of the world.

Abdul-Mahdi said in front of an oil conference in Kuwait, "If the crisis continues long oil market would shift from a buyers market to market and from surplus vendors display to an increase in demand."

Abdul-Mahdi stressed that if oil prices continued to decline in investment limits may be higher prices, "a violent and surprising."

And oil producers now complain of buyers, not sellers control in the global oil market, given the excess of supply over demand by a large margin, which makes sellers competing among themselves on market shares we are not able to impose their conditions and their prices in the face of buyers.

He pointed out that there are many investments in oil production is currently stalled due to the low prices, "he said, adding that" a significant portion of the oil producers of rock and many of the producing countries increased operational cost is higher than the price of a barrel of oil rates the same means they will bear the losses for the sake of the continuation of production ".

Abdul-Mahdi said the global oil market has become "more complex than we imagine" because of the entry of many factors, including the modern technology and the expansion of the economic cycle than it was from the traditional economic cycles in the past.

He stated that "eight of the thirteen OPEC members less operational and investment costs for the production of the barrel for $ 30," noting that "we have lived for decades with prices of $ 25 to $ 30 a barrel, but now has the highest cost of production."

He said that OPEC countries suffer from economies heavily dependent on oil, while economic diversification of other countries provides non-OPEC extra feature, but added that the cost of oil production in countries outside OPEC is much higher than the OPEC countries, which makes each team a comparative advantage for the other.

Abdul-Mahdi said "our colleagues in the non-OPEC have oxygen masks breathe out [underwater] and we do not have the masks," referring to "his country's readiness to participate in the production cut if the cooperation of all Members."

The Iraqi minister said to reporters, "we see some flexibility to make a deal between OPEC and producers outside of" A.