FILE PHOTO: The logo of Opec is seen at the joint Ministerial Monitoring Committee in Abu Dhabi, United Arab Emirates September 12, 2019. REUTERS/Ben Job
THERE was an elephant in the room during the recent Opec+ meeting: The record-breaking initial public offering of Saudi Arabia’s mammoth oil company Saudi Aramco occurring at exactly the same time.
The coincidence meant that the output cuts agreed by Opec and its allies were designed as much to bolster the share price of Saudi Arabian Oil Co., as they were to balance the oil market going into 2020.
This will greatly complicate matters for Saudi Arabia when it finds itself having to impose discipline on fellow producers looking for ways to adhere to their targets without actually cutting production. The deal is much weaker than it looks.
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
