Officials expect to be vindicated in 1-2 years
Saudi Arabian officials remain steadfast in their commitment to maintaining market share rather than lowering production. The FT spoke with influential Saudis who showed no panic despite oil prices that are hurting the nation's finances.
"The only thing to do now is to let the market do its job," said Khalid al-Falih, chairman of the state-owned Saudi Arabian Oil Company (Saudi Aramco). "There have been no conversations here that say we should cut production now that we've seen the pain."
They believe rising demand will eventually boost prices but there are problems with the logic in that thinking. If US producers are sidelined now because of low prices, why wouldn't they come back online when prices rise due to better demand?
So long as there is spare production capacity, there's no realistic path to higher oil prices except for some type 3-6 month bump before wells can be tapped.
