Saudis waging an oil war on Iran?
`Oil traders and others believe that the Saudi decision to let the price of oil tumble has more to do with Iran than economics.
Their belief has been reinforced in recent days as the Saudi oil minister has steadfastly refused calls for a special meeting of OPEC and announced that the nation is going to increase its production, which will send the price down even farther.
Saudi Oil Minister Ibrahim al-Naimi even said during a recent trip to India that oil prices are headed in the “right direction.”
Not for the Iranians.’
January 27th, 2007 at 1:42 pm
I am shocked! The story is full of mistakes that might disqualify a journalist from his job! He did not even mention a single name of any of the traders he claimed that he talked to.
First, the name of the Saudi oil minister is Ali Al-Naimi, not Ibrahim Al-Naimi as Robert Windrem stated in his NBC story.
Second, Saudi oil production have been decreasing in recent months! (By the way, if the meeting between VP Cheney and King Abdullah was secret, how did Windrem know what went on in that meeting?)
Third, Mr. Windrem will not find a single expert who will claim that the cost of oil production in Iran is between $15-18 as he claimed in the story.
Fourth, Mr. Windrem and his “secret” trader do not know the difference between ‘reserves” and “production”. He states that Iran’s oil reserves are declining. What he meant was production. Iran’s oil reserves have increased substantially in recent years.
Fifth, he was unable to distinguish between the huge amount of investment needed to develop a filed and the cost of producing oil from the same filed. It seems that he understood that if investment needed to develop Asadgan filed if very high, the cost of producing oil should high! This is a 26 billion barrel field and the cost of extracting oil might be less than $2/b.
Finally, the regime has survived economic sanctions, a long destructive war with Iraq, and two oil prices collapses (where prices dropped below $10/b), why a decline in oil prices from $70 to $50 will cause a regime change?