How to Restore Trust Among Oil Exporting Countries and Manage a Gradual Price Recovery
Article from: OGEL 4 (2016), in Economic and Commercial Context for Oil, Gas and Energy Law
Introduction
March 2016 - Current discussions among oil exporting countries based on a proposal to freeze output at January levels, as presently formulated, will neither secure a lasting recovery of oil prices nor build durable trust.
Such a freeze - even if most OPEC members were to adhere - cannot secure a lasting recovery in oil prices because it does not squarely deal with the fundamental problem of excess supply. While the market has reacted to the prospect of a freeze with a temporary price bump to over $40/bl for Brent, the impact will not last.