Predicting oil prices is a million dollar question, and literally, a billion dollar game. This is one of the most difficult challenges, given that there are too many economic and political variables. The recent developments in the oil market are undoubtedly more determined by the political component.
Although the economic importance of oil is also not worth noting. The development of most sectors of the economy is based on the use of petroleum products, including various brands of gasoline, high-quality kerosene , lubricating oils, fuel oil and other derivatives. In addition, for many oil-producing countries, oil is the main source of income.
In any case, the movement of oil prices largely depends on global politics. It is undeniable that the United States is conducting world politics and its future actions will affect prices. The United States has sufficient cash reserves and economic and financial strength to withstand any losses while maintaining a good balance between oil prices and global politics.
On the other hand, OPEC, Saudi Arabia and Russia are certainly putting pressure on oil prices. At the same time, Iran remains a free instrument in the entire equation. Iran has a long-awaited opportunity to capture a larger market share. Iran certainly has a location advantage, with at least four of the world's five largest oil importers tied in closer geographic proximity to Iran than any other Middle East exporter.
Russia and Saudi Arabia seek to control the exit. However, until now, this duo has not been successful. Russia has recently been hit by a significant drop in oil prices, but Saudi Arabia's budget deficit was 21.6 percent last year and 15 percent is projected in 2016.
Based on this, world oil prices in 2016 should be at the level of $ 40-45 per barrel. Oil prices may start to rise further in 2017 and beyond, but there are too many driving forces that could affect the global oil market.
