OPEC should realize the reality that higher oil prices are unnatural and the result of geopolitical issues including imposing sanctions on Iran, a situation that will not be helpful to the organization.
Former Iran’s governor for OPEC, Javad Yarjani, made the remarks in an interview with Shana adding tight oil and shale oil and shale gas boom are playing an important role in energy markets.
He said gas shale in the U.S market is very important, because it is going to be exported to Europe and Japan which will weigh on gas market. He continued rising oil prices and maintaining them above 100 dollars per barrel by OPEC has made a great help to cost-effectiveness of shale oil production, the resources which have a huge [negative] impact on environment.
Falling oil prices will make production of oil shale uneconomical due to the sophisticated technology it needs for withdrawal, high cost of production and necessity of drilling various wells, Yarjani told Shana. ‘The course of the time will tell us about whether shale oil is a long term or a short term phenomenon.
Furthermore we should wait and see whether in will be confined to the U.S market or it will enter into the Chinese market as well. In the meantime European countries have resisted tapping their shale resources due to its destructive impact on environment’, Yarjani said.
He noted that OPEC has conducted some studies about the issue and has prepared some reports about the subject.
‘Some OPEC members believe that shale oil should be accepted as a newcomer that plays a role in rising oil supply’ former Iran’s governor for OPEC said adding ‘at the same time, OPEC knows that rising oil prices has nothing to do with fundamentals but it is related to non-fundamental factors which in turn have made new methods of oil production economical, the methods that their application were costly in the past,.’
He said that oil industry was a ‘peace industry’, it should be safe and ideal and the impact of geopolitics on it should be reduced to the least.
