Why consumers won’t gain from cheap oil
On 6 March crude oil prices crashed big time, as the cosy deal between Saudi Arabia-led the Organization of the Petroleum Exporting Countries (Opec) and Russia broke down.
Saudi Arabia started a price war with its oil producing ally Russia last week when it slashed the official cost of crude oil to the kingdom’s buyers by the most in more than 30 years. The price of Brent Crude (one of the main benchmarks for oil prices) has fallen from close to $52 per barrel on 6 March to $31.49 per barrel on 8 March. On 11 March, the price had recovered to $36.4 per barrel.
Simply put, the Saudis, the world’s top oil exporter, are trying to destroy the shale oil industry in the US, which isn’t viable at sub-$50 per barrel and create some trouble for the Russian oil industry as well.
