The oil industry in the world is experiencing a real crisis affecting entire oil countries. This is in light of the continued decline in prices of these vital material in recent months. Venezuela and Nigeria, along with Saudi Arabia, are among the most affected countries, and this has clearly reflected their economies.
Of course, the crises in these countries differ in the extent of their power and the damage they inflicted on the economies according to the capabilities of each of them and the various other data.
Venezuela has reached a very bad stage that has ignited political tension in the country and thousands of families have fallen into the trap of poverty, artillery and famine.
In Nigeria, it has pushed the country to float its currency and is looking for new markets for its oil and gas, which it also produces and boasts.
In Saudi Arabia, this has prompted Saudi Arabia to adopt Vision 2030, which makes the oil sector a secondary factor in the country's revenues.
All these countries have put their official budget at a price that is supposed to be the price of oil urges that price so as not to be affected by further fiscal deficit.
But there are many reasons why the sector can return to $ 120 per barrel, confirmed the investment manager of the Allianz Global Investors European Stock Markets Division in an interview with CNBC.
Real risks threaten the decline in supply of oil
In the interview, Mr. Neil Dwane stressed that there are many risks that would quickly lead to a decline in supply and thus higher oil prices.
Starting from Venezuela where there are risks of stopping the arrival of one million barrels of daily output to world markets, in light of the great tension in the country and conflicts, which sometimes take an armed character between the opposition and the regime.
On the other hand, Mexican and Azerbaijani oil are experiencing a period of instability, followed by a decline in production or almost a halt to certain periods.
China's oil production continues to decline at an accelerated pace. China is one of the oil producers, although it imports it a lot and imports from the top.
Geopolitical risk is a growth concern
Mr. Neil Dwane added that there is a lot of geopolitical risks in the world that would push oil prices higher.
Although the United States of America continues to produce shale oil and companies have achieved success in this area and the production has grown since the introduction of Donald Trump presidency, one of the reasons for deepening the oil crisis in the world, but the oil of the Gulf and Nigerian, Russian and Venezuelan Mexican is very important and lack of supply will make prices again.
He added that if the current situation continues and the supply decline, the price of the barrel may jump to $ 120, but added that it would logically reach at least $ 80.
OPEC's efforts to cut output continue
The OPEC countries hope to get out of the current crisis by reducing production and distribution of quotas of producing countries in the market in a fair manner, and there are many countries that are convinced of this policy, including Russia and Saudi Arabia, but Libya last month to raise production by about 80 thousand barrels, Produced.
The OPEC countries have long complained of a significant drop in oil prices, which has clearly affected their revenues, budgets and economies.
The organization is betting on a cut in supply to raise prices again to at least $ 80, a good price for producers.
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