Egyptian billionaire Naguib Sawiris said the price war between de facto OPEC leader Saudi Arabia and Russia was a "calculated" effort to kill the shale industry in the United States, and that the Saudis "got it right" on oil in the long term.
In March, OPEC and other major producers aligned with it failed to reach a deal to cut production, just as the coronavirus began to stifle demand for crude. Prices hit 18-year lows before the alliance reached an agreement to cut 9.7 million barrels a day in April, equaling 10% of world production and the biggest output cut in history.
When asked if oil would have hit the same levels if a March OPEC+ deal had been reached, Sawiris explained that prices would have plunged anyway because of the reduction in consumption, "but it would have not fallen to this level."
"I think it was calculated," he said. "I think they knew that this was going to happen and they still wanted to do it because, by killing a competitor, the price will rise beyond 50 or 60 dollars. So I actually believe that 18 months from now oil will hit $100."
Oil jumped 20% on Tuesday as global economies begin to slowly reopen after months of forced shutdown and optimism about a potential recovery in demand.
Source: Press From
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