If the Organization of Petroleum Exporting Companies (OPEC) is able to pull off a freeze on oil output, crude prices could creep up to as much as $60 (£44.75).
There is real hope that OPEC will be able to reach an agreement, as the Russian President, Vladimir Putin has finally expressed that he is eager to reach an agreement with the organization. In recent times, OPEC has increased its oil production due to the U.S. boom in shale, which has seen most of the USA and Canada supplied with shale. This has led to huge price reductions, which has put many OPEC countries at a loss.
Just a couple of years ago, crude oil was fetching an average of $100 (£74.59) per barrel, but at today’s prices, a barrel can be picked up at under $50 (£37.29).
As Russia is a world leader in oil and energy exports, which make up 40% of the country’s revenue, it has been struggling to prop up its economy, and at the point of considering the shutdown of some old wells – something which would lead to many job losses. As a result, Putin is driven to repair the economy of his country.
However, his ability to do so could hinge on whether Iran is willing to back down and agree to a freeze on output, which it has so far been unwilling to do. If it does, it could help companies like Mobil, which makes Mobil 1 Racing 4T, as well as several world economies.