Can Int'l Oil Companies Help Lift Crude Prices?

(MENAFN- Arab Times) Oil prices are not getting better and there are no indications that it will improve in the near future. The price of crude oil is hovering around $50 per barrel and the market situation does not seem optimistic even though the winter season is nearing.

Bad news is coming from all corners of the world particularly with Iraq pushing more oil into the market and Iran waiting to grab more market share irrespective of the level of oil prices. On top of all that, the biggest oil producer Russia has stated that it will not hold any talks with OPEC concerning reduction in oil production or coordinate with it in this regard. It seems the oil industry is waiting for more bad news.

This has led us to ask - who else can help in stabilizing the oil prices at this time. It seems many of the players in this domain just do not care. Iran has declared that it will continue to push more oil into the market irrespective of how low the oil prices fall.

Who can help? Can the international oil companies like ExxonMobil, Chevron, Shell, BP and Total do something to increase the oil prices, as they are equally losing their asset value with lower share value of their stock in the open market and lower value of their shareholders?

It seems they are taking advantage of the low oil prices by stocking up cheap oil as they have almost used up all their expensive stock.

In the past, oil companies used to coordinate and manage the oil supply to ensure stability and security in the market and avoid any oil surplus in order to gain maximum benefits and profits. This role was later taken over by the OPEC.

However, with the absence of the 'maestro' Saudi Arabia to coordinate the global oil supply, oil prices are falling on a daily basis and the speculators are maximizing their profits at the expense of the oil producing countries, resulting in loss of stability of the market.

Due to lack of discipline in oil supply, oil companies seem to be confronted with a situation similar to that of the oil producing countries, as these companies are facing the risk of reduced value and consequent vulnerability to hostile takeover. Even though they are not short of basic stock, the value of their assets are lower than what it was one year ago, due to which they are prone to a possible takeover.

On the other hand, these companies could manage through consolidation, cost cutting and reducing overheads mainly by reducing the number of employees in every sector in order to achieve profits at the end of the year and ensure benefit for their shareholders.

The threat of acquisition or takeover is high these days due to the low oil prices. It is an opportune time to buy cheap, as oil price will certainly and eventually become higher than what it is today. So why not take this opportunity now, knowing that the oil prices will certainly improve sooner or later?

In the meantime, the oil industry is in dire need of a miracle for the oil prices to be stabilized for the sake of everyone involved in the oil industry.