Commenting on the Brent Crude oil price dipping below US$40 a barrel, George Johnson, executive advisor in KPMG's oil and gas practice says:
“The apparent discord among OPEC members continues to influence sentiment and oil prices. As the oil price hovers around US$40 a barrel, we’re seeing the full effects of the OPEC decision to maintain the production quota; adding further pressure to the fiscal budgets of oil producing countries, whilst inflicting further misery on the upstream industry as a whole.
“Despite a prolonged period of depressed oil prices, OPEC's track record of meeting the 30 million barrels per day quota over the last 12 months has been poor, with both Saudi Arabia and Iraq enjoying periods of record-breaking production. Going forward, cooperation among OPEC members is critical. If the Iranian situation is handled poorly, and both camps (OPEC and Iran) operate independently, we could see further price erosion.”
Commenting on the potential consequences of a prolonged lower oil price on exploration and production firms, Mark Andrews, UK Head of Oil & Gas at KPMG says: