In more very bad news for Alaska, not to mention Russia and Venezuela, The Financial Times is reporting that the Saudi oil minister, Ali al-Naimi, says that Opec won’t cut production even if oil drops to $20 a barrel.
“It is not in the interest of Opec producers to cut their production, whatever the price is,” al-Naimi is quoted in the FT as saying. “Whether it goes down to $20, $40, $50, $60, it is irrelevant.”
Opec has traditionally tried to keep prices high and the fact that it’s willing to let oil drop so low is a “dramatic policy shift” that hasn’t been seen since the 1970s, when OPEC leveraged its oil for political reasons by raising prices and causing an energy crisis.
Alaska needs oil to be at about $117 a barrel to balance the budget.