OPEC's No-Cut Strategy is Not Working, Iran Says

Reuters via Rig Zone ^ | April 10, 2015 | Chen Aizhu & Adam Rose

[Zhang Fei]

Iran tells OPEC they need to cut production to raise price. Iran also states that they plan to put more oil on the market. We’ll see how that works out.

In translation: "Iran tells Saudi Arabia it needs to cut production to make way for new Iranian oil." Obviously new Iranian oil exports will produce additional profits for Iran. They want to maximize those profits by having the Saudis cut production. When Iran has operational nukes, they might threaten the Saudis with a nuclear strike to get them to cut production. And that is why Obama's acquiescence to Iranian nukes might be storing up trouble.

[thackney]

Interesting chart.

Apparently OPEC oil production started many decades before OPEC existed.

[riverdawg]

Exactly. The Saudis’ strategy is to hurt both Russia (which they view, correctly, as a destabilizing force in the region) and Iran.

[Zhang Fei]

Apparently OPEC oil production started many decades before OPEC existed.

I assume they're referring to historical production from existing member countries before the organization came into being.

[thackney]

I am sure you are correct. It just seemed silly to chart production back that far in time.

[Zhang Fei]

I am sure you are correct. It just seemed silly to chart production back that far in time.

Actually, I thought it was very useful. The key part of that chart was the 73-74 time frame, when the two lines crossed for a time, and oil prices went to the moon, relative to where they were.

[thackney]

But from before 1960?

[Zhang Fei]

But from before 1960?

That's actually the more useful part of the chart. It shows us that OPEC producer dominance is relatively recent, and provides a great overview for further research into various oil market-related theses.

[thackney]

It is misleading info by itself.

Cheers