Last week, the chairman of Saudi ARAMCO, Khaled al-Faleh, said “we are not comfortable with current oil price levels, and are worried about them.” The average OPEC oil basket reached $118.09 per barrel in April, after standing at $100.29 in January and $109.84 in March. This rise in oil prices is due to the fighting that Moammar Gaddafi began against his people, and the intervention by the Western alliance to protect the Libyan people; this has led to the absence of around 1.3-1.4 million barrels a day of Libyan oil from the market up to now. In addition, the events in Yemen have also led to a drop in oil production, of around 150,000 barrels a day. Around 1.4-1.5 million barrels of light oil have disappeared from the market, while Iranian oil sales have dropped sharply because international sanctions on Iran's primary bank for trade have made oil purchase transactions very difficult for international banks and brokers in this sector. Certainly, the rise in oil prices is based on the political tensions in oil regions; moreover, in Europe, the United States and big oil countries like Saudi Arabia, we are entering a period of refinery maintenance activities that precedes the return of a period of high consumption in the summer, in terms of electricity and car fuel. It is expected that oil prices will be most volatile in July and August, if supply rises and the revolutions in Libya, Yemen and elsewhere continue. In Nigeria, there is unrest in the form of the people of the north not recognizing the election of Goodluck Jonathan. A rise in oil prices will certainly have a negative impact on the global economy; oil price fluctuations have led to profits for international investors. The profits by financial firms have shown a significant improvement in returns for commodities; financial funds bet heavily on oil, which helped giants such as Goldman Sachs and J.P. Morgan achieve huge profits. However, oil price fluctuations, whether up or down, do not suit oil exporting countries, because their economies and investments prefer seeing oil prices remain at an acceptable level, of around $80-90 a barrel. But a drop in the value of the dollar, the primary currency for the global oil trade, has made a level of $100 a barrel acceptable for the world economy. When the price of oil reached $100 a barrel, the value of the dollar dropped sharply, and this price level was not negative for the global economy, or demand for oil. Today, an OPEC conference awaits next month. Will member states increase their production, especially if events in Libya, Yemen and the Middle East remain as they are now? OPEC countries should discuss meeting the rise in the demand for oil, which is expected in the coming months. But the question remains: who represents Libya, and can the current Libyan oil minister, Shukri Ghamen (a Gaddafi supporter), attend the OPEC conference on 7 June? It is uncertain if what OPEC countries will do next month in Vienna will be connected to political events, because they have an impact on international oil markets, even if OPEC wanted to exclude politics from the process of managing production. If the tension in Syria remains as it is, or worsens, it could lead to Iran taking a hard-line position within OPEC, similar to Venezuela's stance, every time producing countries want to increase production to dispel the tension in the markets. In the end, what will happen if oil prices reach the levels they earlier reached, when they topped $145 a barrel, and the warning bells were sounded in the global economy? In the end, the countries of the Gulf, which are the biggest exporters, are the countries that are responsible, and if such a rise takes place, they will move to calm markets.
