Yesterday under this series, we inferred that Saudi Arabia’s strategy to over produce in an already over-supplied market, push the prices lower, push out high cost producers from the market like shale oil and increase market share.

While it succeeded in doing the first two, it has failed latter two.

Instead High cost producers increased their efficiency and reduced cost. And on the last front, below is the full statistical report card……

Market -share increased (2013 to 2015) –

• Japan from 35% to 35.6%
• Belgium from 19.8% to 26.7%
• Brazil 18.1% to 22.6%
• India 18% to 19.7%
• France – 18.3% to 18.6%
• Canada – 12.1% to 13.2%

Market share decreased (2013-2015) –

• South Africa  from 52.9% to 21.9%
• Taiwan 35.8% to 32.2%
• South Korea  31.3% to 30%
• China 19.4% to 15.4%
• Thailand – 18.1% to 17.4%
• U.S. – 17.1% to 14.4%
• Spain – 14.1% to 10.5%
• Italy – 11.6% to 8.8%
• Netherlands – 11.3% to 7.9%

Recent freeze production move, through which it attempts to restore balances, is a move in right direction. Even if Saudi Arabia and Russia produces one million barrels lesser each, they would be more than compensated through rise in prices.