Baku, Azerbaijan, Sept. 28
By Mirsaid Ibrahimzade - Trend:
A multicurrency oil trading world is likely, and would be the solution for a peaceful and sustainable outcome in the oil market, Sam Barden, the director of Wimpole International, an energy market development company, told Trend.
Commenting on the existing situation in the global market, Barden stated that the oil market is more price sensitive than usual due to the outages at Saudi Arabia's oil processing facilities resulting from the recent attacks, but any large price rises due this accident will be offset by the US releasing oil from its massive strategic oil reserve.
He stressed that the oil market has a strange way of filling the gaps in delivery so it is clear that Russia, Iraq, Iran and some Gulf States will fill the gaps and work with Saudi to ensure deliveries.
“Saudi will be unlikely to restore normal delivery anytime soon, and so they will have to source oil from neighbors, such as Iraq, with the ultimate irony being that they will likely be buying Iranian crude which has been sent via Iraq,” he said.
However, Barden emphasized that the countries helping fill the shortages will want something in return, or they will simply take over the end customer where the US will be the biggest loser as it will lose influence on Russia and Iran among these countries.
Moreover, he added that if China joins them and they start trading oil using currencies other than the USD, the US will be the biggest loser in the short term again.
“A multicurrency oil trading world is likely, and the opportunity is clearly now. It would be the solution for a peaceful and sustainable outcome as well,” Barden pointed out.
Estimating the scale of an economic impact on Saudi Arabia, he also noted that the security systems of the country failed to live up the money which had been invested in them.
In addition, he pointed at two interconnected problems in the Saudi economy expressed in providing the base for jobs to support all the newly educated Saudi people and the active continuation of the diversification policy.
“Now with well over half Saudi oil production being cut, the race to diversify their economy away from oil is a matter of survival. Tourism will be one option to diversify, and Saudi appears to want to make it easier for foreigners to go there. Whether foreigners want to go there is entirely another matter,” Barden concluded.
It should be recalled that in the early hours of September 14, a drone attack targeted Saudi Aramco's Abqaiq and Khurais oil installations, forcing the national oil company to shut them down. This resulted in a more than twofold drop in Saudi Arabia's daily net oil output. Although responsibility for the attack was claimed by the military wing of Yemen's Ansar Allah movement, also known as the Houthis, the United States and Saudi Arabia have put the blame on Iran.
Shortly after, the Saudi Defense Ministry held a press conference to present what it described as evidence of Iran's involvement in the attacks. Tehran has refuted the accusations.
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