Kent Moors: My meetings here in Dubai are at the Burj Al Arab, the fabled “seven-star hotel” built like a huge ship’s sail on its own man-made island.
At center stage are some of the region’s top oil policy makers, including a rather impressive forty-one year old, His Excellency Suhail Mohamed Faraj Al Mazrouei.
As the Minister of Energy here in the United Arab Emirates (UAE), His Excellency occupies a key place in the center of OPEC’s oil war.
Together, these are some of the very people involved in OPEC’s recent decision to maintain current production levels.
What I’ve learned at these meetings is setting up one of the best opportunities in decades…
It’s Official, OPEC Has Declared an Oil Price War
The truth is nobody is really certain what comes next in the Persian Gulf. But a symbolic omen of sorts did hit this week.
Here in Dubai, where the desert meets the water, something very unusual occurred. It rained.
The accompanying clouds have appeared figuratively in my meetings over the past several days as well.
Given the big time difference in the weekly schedule in this part of the world, the Dubai Stock Exchange (DSE) was open on Sunday and today in advance of a two-day national holiday. That gave my meetings much more focus.
As felt elsewhere throughout the world, stocks on the DSE were hammered in the aftermath of OPEC’s decision to maintain current production levels in the face of falling oil prices.
But Dubai isn’t just focused on oil. The country is now a center for real estate, finance, and trade. The other six emirates, however, led by Abu Dhabi, are still dependent on global oil price swings.
And in the center of it all is His Excellency Suhail Mohamed Faraj Al Mazrouei, who has been the Minister of Energy for almost two years now. As happens in places like the UAE, he began his career at any early age, acquiring experience in several ministries and with the major national oil companies.
His English is impressive, as expected from a 1996 graduate of the University of Tulsa (in petroleum engineering; no surprise). And his demeanor is even more so.
His opinion reflects the swing position in OPEC – between the dominant Saudis and those members who have clamored for a cut in production to bolster the price.
This latter camp includes Nigeria, Venezuela, and especially Iran. Each of these countries needs the price of oil to be above $100 a barrel to support badly balanced budgets. Meanwhile, other members are also showing signs of concern as the oil price hovers around $70 a barrel.
All of which simply intensifies the divisive nature of last week’s decision at the OPEC session in Vienna to maintain current production levels.
The Minister was quick to emphasize the global responsibility in balancing supply and demand to avoid oil price volatility. Yet, privately he acknowledges the cartel’s objectives are now in a direct collision course with unconventional production elsewhere in the world, especially in the shale-rich United States…