Dohaha, Slippery Oil Laughs at Nearly Everyone — Myself Included
By David Haggith
TheGreatRecession.info
April 23, 2016
As predicted relentlessly here, the scuttled meeting in Doha to limit oil production broke up with no agreement at all. The meeting foundered like a tanker snagged in the dessert sands because of the singular obvious factor that should have sunken all hope weeks ago but did not: Saudi Arabia said, “No deal without Iran.”
Doha disaster predictable yet not the disaster that was predicted
That Doha would hit the rocks was predictable because 1) The Saudis repeatedly stated in advance of the meeting there would be no deal without Iran; 2) There was no rational justification for the widespread belief that the Saudis were bluffing, given their desire to restore their own lost market share and their desire not to create a window for Iran to build its share back up while everyone puts their transmissions in neutral in order to wait for Iran to catch up with the fleet.
ran has propelled itself forward toward 4 million barrels a day more quickly than a number of prognosticators thought was possible. Two months ago a number of analysts were saying it would take Iran a year to get production up to 3 million barrels per day. Iran passed that mark in just a couple of months. Their progress to date already offsets all of the slack that would have been created in the market by the ongoing decline in US oil production.
It’s absurd the people did not see with certainty that the meeting would founder. They simply didn’t want to believe Saudi Arabia would stay on the course that it repeatedly stated it would take. They didn’t believe the Saudis were ready to crash the market if that is what it takes to retain their market share and keep Iran in a weakened position. That shows the market is operating in a realm of make-believe and denial. Even after the meeting crashed, the market continues acting as if nothing happened.
Iran seems to think that Saudi Arabia is more interested in placing obstacles in its return to the global energy market than an actual rise in oil prices.
Of course, it is. That is what I’ve been saying all along, and it boggles my mind that so many experts don’t see that just because they don’t want to. If the price of oil were the Saudis’ big concern, they wouldn’t have started down this path of refusing to curb their own production in the first place. They would have done what was necessary to support the price of oil right off … just as they have always done until recently.
The Rest…HERE
