Petroleum politics

Oil prices fell further on Jan. 5 as the crude supply glut overshadowed a diplomatic row between key producers Saudi Arabia and Iran.

Tensions between the two major oil producers over Saudi Arabia's execution of a prominent Shiite cleric have erupted into a full-blown diplomatic crisis after Riyadh and its Sunni Arab allies cut or reduced ties with Iran, sparking global concern.

Oil prices rebounded in Asia on Jan. 5 as a diplomatic row between Saudi Arabia and Iran deepened, but a global crude supply glut and economic weakness in China are keeping any increases in check.

Azeri President Ilham Aliyev said on Dec. 23 the devaluation of the national manat currency this week had been made inevitable by a sharp decline in world oil prices.

OPEC said Dec. 10 that it expects oil production by countries outside the cartel to fall in 2016 by more than it previously forecast, in a sign that its audacious strategy may be working at last.

Brent crude prices sank under $40 on Dec. 8 for the first time in almost seven years, rocked by OPEC's recent decision to maintain oil output levels despite a chronic supply glut.

European benchmark oil contract Brent North Sea oil for delivery in January tumbled to $39.81 a barrel - the lowest point since February 2009.

 Oil prices are not expected to rise next year, the head of French energy giant Total told reporters in Qatar on Dec. 7.

"We don't anticipate a recovery in 2016," Total CEO Patrick Pouyanne said on the sidelines of the International Petroleum Technology Conference (IPTC) in Doha.

The amount of oil smuggled into Turkey from areas of Syria controlled by the Islamic State of Iraq and the Levant (ISIL) is economically insignificant, the United States said on Dec. 4, after Moscow accused Ankara of profiting from the trade.

The U.S. has adjusted its policy in the campaign against the Islamic State of Iraq and the Levant (ISIL), turning its focus on targets, including energy infrastructure facilities, that are more difficult to replace, U.S. Special Envoy and Coordinator for International Energy Affairs Amos Hochstein has said. 

Gulf economies need to adjust to the ?new reality? of oil prices expected to remain low for some time, the International Monetary Fund (IMF) said, recommending spending cuts and income diversification.

Russia's oil production may drop if crude falls below $40 a barrel, Deputy Energy Minister Alexei Teksler said on Sept. 18, the first time Russia, one of the world's biggest producers, has acknowledged low prices could hit output.