Oil has hit a two-year low around $90 a barrel amid plentiful supplies and weak demand growth. Now the Organisation of the Petroleum Exporting countries (Opec), which controls 60% of the world’s reserves and around a third of daily supply, is discussing what to do.
If prices fall too far, members face a fiscal squeeze, says Andrew Critchlow in The Sunday Telegraph. The chart shows the prices at which Opec members, along with non-Opec exporters Bahrain, Oman and Russia, can balance their budgets.
Iran has the highest breakeven price and a weak economy, so is keen to slash production. But the Gulf states, including Saudi Arabia, which has already cut output, are hesitating. They have enough cash to weather a short-term price slide, and would rather see whether the price rebounds in winter.