Elevated geopolitical tension between Saudi Arabia and Iran could soon threaten the unity of an OPEC-led pact to keep oil prices in check, according to one commodity strategist.
“Saudi Arabia-Iran tensions appear to be intensifying. While this provides a geopolitical premium in oil for now, it could develop cracks in OPEC’s unity, which could end the pact prematurely,” Nitesh Shah, commodities strategist at ETF Securities, said in a research note Tuesday.
Saudi Arabia and Russia have led an ongoing effort by OPEC and other allied oil producers outside the cartel to try to clear a global supply overhang. The output cuts, expected to remain in place until at least the end of 2018, have helped to lift crude prices over the past 12 months. […]
Mike Black
Tensions between Saudi and Iran is not new. Russia will be a good go between to keep things calm. What will effect the OPEC deal is if the USA keep increasing their exports into OPEC member’s market.
Why should OPEC members hold back on their production and watch America steal their sales.