After more than a quarter-century of estrangement, Saudi Arabia and Iraq are just getting started in repairing their relationship.
The recent tension in Iraq highlights the ongoing reality of the global oil market: Many key oil-producing countries are politically unstable.
Despite the effects from the OPEC production cut and austerity measures, Saudi Arabia can ride out the current economic headwinds without having to switch market strategy. That outcome, though, is not a certainty since there are factors that could further negatively impact the Saudi economy.
The Kurdish predicament is defined by energy and oil. Their assets hold the promise of prosperity and independence—but they also serve as tripwires for conflict and sources of leverage for opponents.
It’s clear that nothing is off-limits now and Tidal Wave II has gone into overdrive under President Trump.
In combination with robust U.S. shale oil production, the wild cards of Libya, Nigeria, and Iraq could force OPEC and its allies to go back to the drawing board.
Between now and OPEC's next meeting in May, much more must be done in order to make sure the cuts are fairly distributed, slackers come around, and non-OPEC members stick to the deal.
Success and security over the long-term for Iraq depend not on only defeating ISIS soon but also on addressing new and unique priorities, lingering vulnerabilities, and old grievances, many of which are oil-related.
The biggest questions at CERAWeek this year is whether OPEC and its non-OPEC counterparts will recommit to throttling back in May and whether U.S. shale can fully offset these cuts and push down prices.
Nothing will change materially in the oil market until there’s a significant stock draw, a development that appears doubtful, which could ultimately force OPEC to change strategy once again.