Before when Kuwait's oil minister SheikhAliKhalifaal - Sabah see now falling oil prices, his mind back to the 1980 s, he was forced to sell at a price of $5 a barrel Kuwait oil era.
SheikhAli was the oil minister, he had to be sold at $5 a barrel price of a ship or two crude oil, just in order to maintain the extremely dependent on crude oil export country of cash flow. He responded: "we do not want to do this, but the $5 is the market price at the time."
As the overproduction of crude oil in the 80 s, the current international oil prices to let him back to the days of those desperate. The interview with the other participants showed, although few of them to predict the oil price is hovering low will continue for how long, but experience tells us that the excess supply of crude oil will not end soon.
Representatives of the oil industry will this week IHSCERAWeek convention in Houston in the United States, to the current low oil prices and excess supply of crude oil were studied.
In the 1980 s in the face of weaker oil prices, with the help of the Kuwait, OPEC members agree on a production to end the situation of excess supply. Kuwait's daily oil production from 2 million barrels to 600000 barrels. OPEC output in the highest production of Saudi Arabia is also reduced.
But there are three factors to make the plan final bankruptcy: some former OPEC members in production; In the 70 s oil crisis after consumers started buying more fuel-efficient vehicles, economic demand for crude oil have inhibition; Some non-opec countries such as Mexico and Norway have worry about production can cause damage to the interests of the country.
Later in 1986, Saudi Arabia and other OPEC countries to increase supply again to occupy more market share, oil prices since then, no rebound.
The experience made the 71 - year - old SheikhAli held out no hope for oil prices rebound.
SheikhAli said: "if oil prices fell below $20 a barrel tomorrow, I wouldn't be surprised. The excess supply of crude oil cannot be digested quickly. So, in the 80 s the situation even worse."
The dual factors
AdrianLajous served as Mexico's state oil company (Pemex) chief executive. He thinks that the main oil producing countries in dealing with the excess supply can play a role on the issue of space is not large, although Saudi Arabia and Russia reached a production agreement.
Now Lajous said oil prices driven by two factors. First, demand is weak, and second is OPEC members of the supply, such as shale oil in the United States. He said: "the supply and demand both sides has a problem. I don't see this year's international crude oil market balance again." He thinks, as the global economic slowdown, oil prices rebound may be delayed until next year or longer.
SheikhAli says oil prices would need to 7 to 10 years to rebound. He said: "in the hope of the American firm or they stop production is simply daydreaming. Restart has been closed to production of oil Wells is very simple.
SheikhAli believe that Saudi Arabia is no longer the world market regulator, the United States now take on the job. Reason is that if crude oil prices rebound slightly, North Dakota and shale oil producers to resume production in Texas than those in the deep ocean oil-drilling developers are much more simple.
Technological innovation makes the shale oil production costs have fallen sharply, the return of the Iran also make the current pressure on oil prices.
SheikhAli said: "I don't think this (a drop in oil prices) for the Persian gulf countries it is a bad thing. This will make us more rational, more focused on our economy, can reduce corruption more efficiently and more effectively management. A blessing in disguise."