Low oil price is not sustainable

Who decides the oil price? We commonly believe the OPEC has the power to choose the oil price. If this is true, then current low oil price should be beneficial to the oil export countries. However, this is not true. The Russian economy is in trouble, 40% of its economic outputs rely on its oil industry. The oil price reduces the value of its outputs. It has only one option: it can produce more in order to maintain its revenue, but this act can pull down the price further. Saudi Arabia was not benefitting from the oil price either. Many funds from Saudi Arabia withdraw their money from global markets, this is not a good sign. Now, if the countries do not start to cooperate again, the oil price could be pulled further down as the oil export countries need to supply more and more to maintain their income levels. Therefore, we can see a deflation in the oil market, as our money against oil becomes more expensive, we tend to save money on oil, and the oil price can decrease further. Overall, I think we can see the oil exporting countries uniting again or an oil market crash followed by bankrupt of many oil exporting countries.