Saudi Arabia, Russia oil dispute is about the 'restructuring of supply,' strategist says
were around $34 a barrel. Both grades were trading above $40 a barrel last week.
Low-cost producers like Saudi Arabia have been supporting prices for years through supply cuts — which in turn boosted higher-cost producers like shale companies in theThe latest market developments will allow for the restructuring and rebalancing of supply to take place, Courvalin told CNBC, who expects oil prices to stay low — around $30 a barrel for Brent crude — for two quarters.
And there will be a point at which there will be a "material change" in the landscape where overall production would fall due to low prices. A higher price for crude will then emerge as supply falls. The transition period will eventually lead to a smaller fiscal deficit for Saudi Arabia, and higher net revenue in 2021 for both Saudi and Russia, he said.
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