New Oil Market Strategy Hits Opec Members Too

摘要

Opec is letting the market work, relying on slumping prices to start shutting in high non-Opec supplies. But the market works on Opec members as well. First, the physical oil market is using less crude and the value of crude sales is plummeting with the oil price. Less revenue means difficult choices about cutting social, or in some cases military, spending, and about running down sovereign wealth funds or borrowing — choices that carry political and financial risks (pi). Somewhat on the periphery, the price declines also change the parameters of reserve and capacity evaluation, putting some higher-cost Opec spare capacity — primarily West African deepwater — at risk as well.