Brent Scowcroft Center Senior Fellow Robert Manning writes for Global Times on the global implications of Saudi Arabia’s energy policy:
The Saudi-driven drop in world oil prices, from more than $100 a barrel in June to around $60 a barrel now, is already having a huge impact on the global economy. But it is also filled with geopolitical consequences. And recent statements by Saudi and other Gulf Cooperation Council (GCC) officials suggest that lower oil prices may be a trend, with oil at $60-$95 range or lower – well into 2015 and perhaps longer.
Why? The short answer is global oversupply – the result of a combination of the global economic slowdown and a surge in US production from the “shale revolution.”
But reinforcing this trend is the reality that the Organization of the Petroleum Exporting Countries (OPEC) largest producer, Saudi Arabia, which pumps 9.7 million barrels a day and its GCC allies, have made it clear that they can live with lower prices.