Iran and its neighbor Iraq have together added more than 1 million barrels a day to their crude oil exports in the first two weeks of April, compared with their March average…These increases offered Saudi Arabia the perfect excuse to refuse to freeze its own output.
The kingdom launched OPEC on a policy intended to shake high-cost oil out of the market in November 2014. To date that policy has cost producers an estimated $315 billion of their foreign-exchange reserves. Throwing high-cost producers a lifeline just as the policy is beginning to deliver concrete results would be to pour those billions of dollars down the drain.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
