Comments ahead of today’s OPEC meeting, playing down calls for a cut in the cartel’s output target, suggest that the Gulf States aren’t too alarmed by the recent slide in oil prices. Indeed, Saudi Arabia’s Oil Minister, Ali al-Naimi, has explicitly said that there is no need for production cuts. This shouldn’t come as too much of a surprise. After all, oil prices would have to fall much further before the Gulf’s current account position swung from surplus to deficit. Even then, large FX reserves provide a comfortable buffer. That being said, with the world set to be awash with oil for the foreseeable future, a repeat of the boom in oil production seen over the past decade is highly unlikely.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services