Oil prices have climbed more than 80% from their lows in February and currently, looking to challenge $50/barrel area, after a brief breach last week. But that is not good news for many, whose cost of production is much higher.

Oil production cost historically has been lowest for OPEC producers, more so, for producers in the Middle East and Russia. It is estimated that for Saudi Arabia, Iran, Iraq and Russia oil production cost is around $20-30/barrel, whereas it is maximum for producers in Canada and shale oil. For vast majority of the OPEC countries, it is around $40-50.barrel and for some countries like Venezuela, Nigeria, Libya and Algeria it is above $50/barrel, even after some improvement in efficiency.

Naturally, a slow recovery in oil price, which keeps hovering around $50/barrel is not enough to cover the cost of production and not enough for key OPEC and non-OPEC members to act together to push up oil prices. What countries in despair like Nigeria, venezuela need is, not just rise in oil price, a faster one.

Rising oil prices, has been one of the key reasons, which led to the failure of Doha talks, among world’s top producers to freeze production at January level.

Today OPEC members are meeting in Vienna and vast majority of them, led by Gulf countries are in favoring of maintaining the status quo, that market will fix itself.

So, low cost producers will keep ruling the market at the expense of others.