Saudi Arabia is expected to push for measures to boost oil prices ahead of the upcoming initial public offering (IPO) of Saudi Aramco, the country’s state-owned oil company, which is also the largest oil company in the world. It is anticipated that the IPO will be worth around $25bn.
Of course, the profitability of an oil company is affected by oil prices, so moves to shore up oil and keep them above $65 will benefit the Aramco IPO. The Kingdom is expected, as the largest producer in OPEC, to apply pressure to ensure other countries remain fully compliant. According to the Guardian, it is also prepared to voluntarily deepen its own cuts.
This view was echoed by Thamer Ghadhban, the Iraqi oil minister, as he spoke to reporters in Baghdad on Sunday. He said the OPEC+ countries may consider deepening the cuts from 1.2 million barrels per day (bpd) to 1.6 million bpd. He added that Iraq will achieve more than a 100% compliance with the current deal following a deal with the semi-autonomous Kurdistan Regional Government to cap production in the northern oil fields.
The production cuts implemented by OPEC and its partners has helped to restore a degree of stability to the oil markets, but the effects have been tempered somewhat by booming production in the US shale industry, such as the case of ExxonMobil, as it capitalises on its shale assets by turning them into premium products like Mobil-brand hydraulic oil.