In what could be a significant development the biggest contributor of global oil supplies – Saudi Arabia walked out of the OPEC.This development came at the close of the negotiation session held by OPEC.The oil cartel is in midst of one of the biggest crisis in the recent times,which has been further aggravated by a fall in global prices(30 percent drop in prices since July).OPEC is trying to find a solution to a profitable oil price in midst of slowing demand , weakening economic progress and of course the development of alternative energy sources.
OPEC feels that the present drop in prices could create a glut in the market leading to a downward spiral.Abdalla Salem el-Badri, the OPECs secretary general says “ We are oversupplying the market, and we are cutting that oversupply.We don’t want to see these prices decline dramatically “ .Saudis however wisely opted out of such a policy as endorsing such a decision would essentially imply a negative public sentiment which might go a long way determining its geopolitical muscle.
