The 30-year-old Saudi who could scuttle oil deal
Saudi Arabia’s 30-year-old deputy crown prince may have already tanked any hope of an oil deal.
Saudi Arabia’s 30-year-old deputy crown prince may have already tanked any hope of an oil deal.
Oil-producing countries from inside and outside of OPEC hope to strike a deal this weekend to freeze production in order to stabilize the price of crude. Since Saudi Arabia, Russia and others first agreed to a meeting in February, oil prices have been supported at somewhat higher levels.
Other than Russian President Vladimir Putin, there’s no single individual seen as having more sway over the world oil market, and Deputy Crown Prince Mohammad bin Salman is critical to the success or failure of this weekend’s meeting in Doha, Qatar.
While there still could be a deal, some analysts see the chances of a meaningful agreement as slim. The reason is that bin Salman stated the kingdom’s position and is unlikely to change his mind, barring a dramatic about-face in behavior from Iran.
“This could be the mother of all buy-the-rumor, sell-the-news,” said John Kilduff, partner at Again Capital.
Saudi Arabia’s 30-year-old deputy crown prince may have already tanked any hope of an oil deal.
Oil-producing countries from inside and outside of OPEC hope to strike a deal this weekend to freeze production in order to stabilize the price of crude. Since Saudi Arabia, Russia and others first agreed to a meeting in February, oil prices have been supported at somewhat higher levels.
Other than Russian President Vladimir Putin, there’s no single individual seen as having more sway over the world oil market, and Deputy Crown Prince Mohammad bin Salman is critical to the success or failure of this weekend’s meeting in Doha, Qatar.
While there still could be a deal, some analysts see the chances of a meaningful agreement as slim. The reason is that bin Salman stated the kingdom’s position and is unlikely to change his mind, barring a dramatic about-face in behavior from Iran.
“This could be the mother of all buy-the-rumor, sell-the-news,” said John Kilduff, partner at Again Capital.
In a five-hour interview with Bloomberg, bin Salman recently laid out his position on a freeze deal, saying Saudi Arabia would participate only if major producers, including Iran, also participate.
“Actually I think nothing is going to happen there. I think the likelihood is that the Saudis will continue to say the conditions are not right for a freeze in production,” said Edward Morse, global head of commodities research at Citigroup. “It’s a combination of factors. They have the excuse that Iran is not part of it, but I think overall Saudi strategy has been a function of recognition that there’s oversupply in the market, and if they don’t take the market share, someone else will.”
Iran has said it would participate in the Doha meeting this weekend, but it will not freeze production. Iran is working to return oil to market, now that it is no longer under sanctions for its nuclear program, and its goal is to bring back 1 million barrels in a year.
“If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers freeze production, we will be among them,” bin Salman told Bloomberg. He also said that Saudi Arabia was not threatened by the drop in oil prices. Analysts say that comment signaled a willingness to persevere with low prices as long as it takes to end the supply glut.
“I think he’s the biggest wild card factor,” said Helima Croft, chief commodities strategist at RBC Capital Markets…
