BP Boss: $80 Oil Unhealthy for World

Oil prices at $80 a barrel are too high and unhealthy for the world today, Bob Dudley, the chief executive of British multinational oil and gas company BP, said Friday.
“There’s a healthy price for oil and energy and I believe that (price) balances producing countries and consuming countries,” Dudley said on the sidelines of the conference One Young World in The Hague, Oil Price reported.
“In my mind, it’s somewhere between $60 and $65 a barrel. The world can live with this,” he noted.
Emerging and developing economies like India, South Africa, or Turkey are seeing their highest-ever prices of gasoline because their currencies have rapidly depreciated against the US dollar and because oil prices in dollars are high, BP’s chief executive asserted.
Currently, oil prices are “artificially high” due to Venezuela “defying gravity” and to the US sanctions on Iran, according to Dudley, who said that once those geopolitical events subside, fundamentals will return to rule the market and prices should return back to $60-$65 a barrel.
BP will not be joining any EU special purpose vehicle designed to keep trade with Iran flowing, Dudley stressed, noting “I think it’s full of risk.”
The concerns of BP’s chief executive that $80 oil is unhealthy for the world are shared by major international organizations such as the International Energy Agency and the International Monetary Fund.
Expensive energy is back and it is threatening global economic growth, the IEA said in its Oil Market Report last week.
Also last week, the IMF slightly downgraded its projection for global growth for this year and next—at 3.7%, growth is now expected 0.2 percentage point lower than IMF’s forecast from April this year. The key reasons for the downgrade included trade disputes, geopolitical tensions, and a weaker outlook for emerging economies due to higher oil import bills, among other factors, according to the IMF.
Last week, Brent fell 0.9%, while US crude lost 3.1%. Both contracts have fallen around $7 a barrel below four-year highs reached in early October.
An OPEC and non-OPEC monitoring committee found that oil producers’ compliance with a supply-reduction agreement fell to 111% in September from 129% in August, three sources familiar with the matter said. The Organization of the Petroleum Exporting Countries has led cuts from major oil producers since 2017 to shore up prices.