Saudi Arabia changed oil politics

 Over the last decade Saudi Arabia along with OPEC acted as a safety net for the oil price; cutting the production whenever price fell too much.

This time around the Saudis are playing a different ball game. They are not playing along to benefit other producers across world, who have increased production recklessly according to the regime namely US companies, Russia and African producers.

Saudi Arabia's view along the fall -

• August 2014; oil price at $103/barrel - Supply concerns starting to surface across China, India and rest of Asia. Saudi Arabia expressed concern over its decline in market share namely in Asia.

• September 2014; oil price at $ 94.67/barrel - Concerns started surfacing among producers across world; mainly from higher cost. Saudi's took stance to teach high cost producers a lesson. Oil minister Naimi said, he is not concerned over the price.

• October 2014; oil price at $85/barrel - Saudi's maintained their plan and refused to cut the production. Production up in Russia over Ukraine concern.

• November 2014; oil price at $70/barrel - Global producers and even poorest members asked for cut in Vienna Opec meeting. Saudi minister Naimi said they would not be taking lion share of the cut and policing the crude market over the cuts is not possible. Talks broke down.

• December 2014; oil price at $58/barrel - Saudi Arabia refused to cut, not ready to lose market share and give advantage to US and other producers.

• February 2015; oil price $57/ barrel - Strategy succeeded. Market share of Saudi Arabia increased prompting the country to raise prices but still refuses to cut production.

Oil prices are not expected to see better days ahead

• Demand has yet to pick up significantly.
• OPEC cooperation remains broken.
• Supply might further increase with Iranian crude in the market.

Brent is currently trading below $58/barrel, down 1.54% for the day.