Is there a price war within OPEC?

The Organization of the Petroleum Exporting Countries is supposed to act in a unified fashion to defend prices. Yet, as international oil futures have fallen by over 25% in recent months, its members have done the opposite, competing with price cuts in Asia as they seek to keep market share. That market has become overcrowded after OPEC countries’ exports to the U.S. shrank due to a shale production boom there.

More broadly, U.S. production, combined with returning Libyan oil production—which had been shut for a year—and uncertain economic prospects have led to a global oil glut.

Why did the Saudis cut their oil prices?

Saudi Arabia—the world’s largest oil exporter—cut its oil prices to Asia four months in a row between August and November, as it responded to aggressive price discounts from Angola and Libya.