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Briefing Note On International Crude

1. Saudi Arabia via the OPEC cartel manage the flow of crude oil to the international markets by limiting supply thus keeping oil prices high

The US and Russia are the largest oil producers outside OPEC
With a fall in demand from the largest crude oil importer, China, the OPEC cartel agreed to drop supply and boost prices.

Russia disagreed..

Russia was keen to keep oil prices low to hurt US shale producers who have made America an oil exporting nation.
Saudi Arabia, NOT OPEC thus went to "war"...

She announced plans to boost production and exports of crude oil and discounts in Europe of more than $8 a barrel.

The US it is also planning a $7 discount to Europe, and about $5 in Asia.
What's the implications?

Who loses? everyone does lose income, OPEC and non OPEC included.

However Saudi Arabia can absorb lower oil costs better than Russia or Shale.

Pain will come to Nigeria who has limited space to boost output and needs a high oil price to breakeven.
There are tons of data sources that point to same conclusion.....a lower crude oil price will cause pain and disruption to Nigeria's budgetary projections.
It's now almost a cliche; but Nigeria needs to decouple her Government earnings from crude oil.

Either by boosting no oil exports and services or getting out of the business of importing and marketing subsidized PMS.
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