Saudi Arabia is trying to maintain its share of the global oil market rather than use its power in Opec to curb US producers, according to David Petraeus, the former director of the Central Intelligence Agency.
The country understands that the United States is becoming more efficient in generating oil and that there is not a set cost for production, Mr Petraeus said in an interview for the television programme Wall Street Week set to air on June 14.
“I am very confident that what they are doing is trying to keep their market share, not trying to drive others out of the market,” Mr Petraeus said. “Now if that happens, so be it.”
Opec – led by Saudi Arabia, its largest member – decided on Friday to maintain its current output target at 30 million barrels per day. Historically, Opec would curtail output to lift prices, which have plunged over the last year. The surge of US shale oil output sparked a battle for market share.
Brent crude, the global benchmark, rose 2.1 per cent to US$63.31 a barrel on Friday, compared with $108.79 a year ago. West Texas Intermediate crude, the US benchmark, rose 1.9 per cent to $59.13.
Mr Petraeus runs a division for public policy and economic research at KKR, the private equity company led by the billionaires Henry Kravis and George Roberts. Mr Petraeus resigned from the CIA in 2012 after it was revealed that he was involved in an extramarital affair with Paula Broadwell, the author of a biography about the retired four-star Army general.
He agreed to plead guilty this year to the unauthorised possession of classified information, according to court papers, avoiding a trial.
Wall Street Week is produced by SkyBridge Media, an affiliate of SkyBridge Capital, the fund-of-funds business founded by Anthony Scaramucci, a host of the show.
business@thenational.ae
Follow The National's Business section on Twitter
