Oil cartel OPEC has lost its long-held control over controlling the price of oil.
And Saudi Arabia’s oil minister Ali Al-Naimi has said he knows exactly why.
“No one can set the price of oil — it’s up to Allah,” he said Tuesday in an interview with CNBC.
Saudi Arabia and OPEC, the 12-member oil cartel of which Saudi Arabia is the most influential member, has insisted on maintaining its oil production targets despite the more than 60% tumble in oil prices.
The slide really started to gain momentum on Thanksgiving day last year when OPEC decided not to cut production. OPEC will meet again in June.
And of course, there has also been America’s shale boom, which has increased global supply and pressed prices lower.
Al-Naimi also told CNBC that he is not worried about Iran’s oil production coming back online. If political sanctions on Iran are lifted, the country would begin exporting oil again, and the US Energy Information Administration estimates that extra supply from Iran could sink oil prices by as much as $US15.
Oil prices, however, have have rebounded in recent weeks; West Texas Intermediate crude oil held above $US50 per barrel for most of April, and on Tuesday, climbed by more than 1% to as high as $US59.89 per barrel.
Brent the international benchmark, is also up about 1% to trade near $US67 a barrel.