Saudi Arabia is trying to maintain its share of the global oil market rather than use its power in OPEC to curb US producers, according to David Petraeus, former director of the Central Intelligence Agency.
The Middle East nation understands that the US is becoming more efficient in generating oil and that there isn’t a set cost for production, Petraeus said in an interview for the television program “Wall Street Week” set to air June 14.
“I am very confident that what they are doing is trying to keep their market share, not trying to drive others out of the market,” Petraeus said. “Now if that happens, so be it.”
The Organisation of Petroleum Exporting Countries — led by Saudi Arabia, its largest member — decided on Friday to maintain its current output target. Historically, OPEC would curtail output to lift prices, which have plunged over the last year. The surge of U.S. shale oil output sparked a battle for market share.
Brent crude, the global benchmark, rose 2.1 per cent to $US63.31 a barrel on Friday, compared with $US108.79 a year ago. West Texas Intermediate crude, the US benchmark, rose 1.9 per cent to $US59.13.
Petraeus runs a division for public policy and economic research at KKR & Co, the private equity-firm led by billionaires Henry Kravis and George Roberts. Petraeus resigned from the CIA in 2012 after it was revealed that he was involved in an extramarital affair with Paula Broadwell, the author of a biography about the retired four-star Army general.
He agreed to plead guilty this year to the unauthorised possession of classified information, according to court papers, avoiding a trial.
“Wall Street Week” is produced by SkyBridge Media, an affiliate of SkyBridge Capital, the fund-of-funds business founded by Anthony Scaramucci, a host of the show. SkyBridge, which sometimes has other business relationships with the show’s participants, advertisers and sponsors, pays Fox stations in key markets to broadcast the show and also streams it online every Sunday at 11am in New York.