To the surprise of no one OPEC will not get a deal done on a production freeze. Was it due to some backdoor deal with Russia? Is it to keep kicking the US in the nuts? Is it because everyone hates Venezuela? Nope. It is because the Sauds hate the Iranians. The story is the Saudi Arabia will not just freeze production, but decrease it if Iran agrees to a production cap. Something that Iran will absolutely not do as they are trying to ramp back up to pre sanction levels. So now the Sauds can act all shocked that such a reasonable offer of theirs was rejected by the barbaric Iranians, and keep flooding the world in cheap oil. All the while shrugging and saying that there is nothing they can do, its all Iran’s fault. The question now is how much is that needless BS, and will the Sauds decrease production anyways. Saudi Arabia is currently producing at record levels, and has been for a few years now. But how long can they really sustain that. Its not like they have tapped into fresh new wells. Most of their production is coming from very old fields and from all indications all of them are producing at maximum. And despite what tricks are used, all oil fields decline. And the Sauds are running out of tricks. They have been injecting both water and CO2 into Ghawar for decades. The only way they were able to increase production and maintain those levels is to bring every well they have online and run them at full capacity. So the only question that remains is can they use their inevitable decline and drag down Iranian production, or will they just concede and roll production levels back and try to suck up a little good will.
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