Feeling Left Out

Many OPEC members are feeling left out as the growing bromance between Saudi Arabian Crown Prince Mohamed Bin Salman and Russian President Vladimir Putin are making them feel like the world was a black tuxedo and they are all just a pair of brown shoes. The feeling is that most of the opinions of OPEC members really do not matter and that OPEC production decisions are really being dictated to by Saudi Arabia and Russia and to a lesser extent President Donald Trump.

The hurt feelings and frustrations by some OPEC members are being vented as the cartel faces the most important production decision since the ill-fated production war started in November of 2014. That misstep caused a price crash that bankrupted many shale players and almost bankrupted Saudi Arabia as well. In fact, some might argue that the country hurt the most by the OPEC production war was Venezuelan, as tanking oil revenues made it harder to cover for all the graft and corruption.

Shale oil producers that survived were forced to become more efficient and yet even with major advances are still rooting for OPEC to get its act together. Yet OPEC is changing. We already have Qatar announcing that they will leave the cartel, the first member from the Middle East to do so. This is leading to speculation that another member might take the same path. What that does for the high-end hotel business in Vienna remains to be seen.

What makes it worse for these members, they feel that their fate is really going to be decided by Vladimir Putin. They think Putin is calling the shots because the Crown Prince is under pressure, especially from U.S. Senators, after a classified briefing by the CIA, who say they are certain that the Saudi Crown Prince ordered the murder of the Washington Post columnist Jamal Khashoggi.

Oil also wavered after Saudi Oil minister Khalid al-Falih said “that It's premature to say what will happen, (AT OPEC) Saudi Arabia is of course an advocate for stable global oil markets. We need to get together and listen to our colleagues and hear about their views on supply and demand and their projections of their own countries' production."

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