Oil price rout continues
Tuba oil field, Iraq. Oil prices have continued to plunge so far this year, bringing many grades of crude close to their operating cost breakeven price. (PA)
North Sea Brent, the international benchmark grade for crude oil, has dropped below $30 per barrel. This is the lowest Brent has fallen to since 2004, and it has led to a fresh round of predictions that prices could drop as low as $10/bbl – the nadir reached during previous collapses in 1998 and 1986. It also tees up the prospect of a price rebound later in the year as political tensions appear once again on the oil market’s radar.
Oil prices have dropped by 74% from their mid-2014 high of more than $110/bbl, and they have halved over the past six months. The price collapse followed Saudi Arabia’s decision to abandon its traditional role as OPEC’s ‘swing producer’, effectively leading to a production free-for-all among the organisation’s members.