JOHN DEFTERIOS, CNN EMERGING EMERGING MARKETS EDITOR: There has been quite quite a shift in strategy, Michael, here. OPEC has always been the guarantor of the oil markets. When oil prices decide to fall, they usually usually cut production and lift prices up lift prices up higher. Complete about change in the strategy going forward, lead by Saudi Arabia, the 12 nations of OPEC decided to leave production where it is. 30 million barrels a day and this was a statement to global markets and a statement to the U.S. shale producers and the major producers like Russia, basically basically saying we're not going to step in anymore, we're going to let let the prices fall and where have we come from come from $115 a barrel back in June and Michael we broke through $70 a barrel today, a major correction in major correction in only five months time and a fall of $4 to $5 a barrel today alone after the announcement, quite quite a shock to the international markets.
LYNDA KINKADE, CNN CENTER: And John given that did fall as soon as that announcement was made, do you think we will continue to see these falls happen, the trend continues.
JOHN DEFTERIOS: Well, in fact Lynda, people are talking about a price war. It may be premature premature to call it just that, but what has happened in the last few years, it used to be Saudi Arabia dominating dominating the market, then the rise of Russia to nearly 10 million barrels a day. They are now joined by the United United States, so three major powers that are sharing the oil wealth around the world and Saudi Arabia sits on top of OPEC, they control above 40% of production even by their own expectations. That is dropping right now. So, instead of trying to step in and try to control everything, OPEC said today, we're not moving on moving on production. Look, we're not the only major players in major players in town. If you want to produce oil and not listen to the market at all, prices will drop and they sent that signal. Look, we're not going to touch the production.
If you want prices to go back go back up again, the U.S., U.K., Russia and some of the other non OPEC producers like Norway as well will see how this plays out in the market, but they see such a correction in a short period of time, it says something and also behind behind the scenes here, we had Russia, Venezuela and Mexico meet behind behind the scenes with Saudi Arabia. Many thought they would come together and cut production, that didn't happen, leading up to leading up to this meeting. That's why we saw quite quite a sharp correction in the market.
MICHAEL HOLMES, CNN CENTER: It really is it. There's a lot of politics apply in strategy as you say, I mean mean the Americans getting an increasing share and becoming more sufficient sufficient themselves. OPEC doesn't love that, but who gets hurt here. There are a lot of OPEC nations, as you know very well very well who need oil prices to be at a certain certain level, just to balance the budget and it means means a lot to them. Places like Venezuela, Iran, Algeria and Nigeria. I think I read that Russia loses 2 billion dollars in revenues for every $1 drop in drop in the price. Who is getting stung stung here?
JOHN DEFTERIOS: Well Michael, that's why this meeting was so contentious. contentious. All the countries you mentioned mentioned here need $100 a barrel or even more. Iran to balance their budget needs $140 a barrel, so they are pouring a lot of money into the budget in terms of subsidies. Nigeria needs $105 a barrel, the same thing with Russia. But the major Gulf producers from the Middle East have saved up saved up 2.5 trillion dollars over the last four or five years of record oil prices and they carried the day here at OPEC, lead by Saudi Arabia, suggesting we don't want to be the global policemen when it comes to energy prices right now and we're sending a statement, particularly particularly the U.S. Shale Producers. The shale producers need $75 a barrel or higher to make it very profitable. We broke through that level today.
One Texas oil man before the meeting said, John, if we get close to $60 a barrel, you will not see new production coming on stream in the United United States and to be candid, candid, this is geopolitical hardball with Saudi Arabia flexing its muscles in muscles in the market, but perhaps perhaps it could backfire if prices continue to go lower.
MICHAEL HOLMES: That will take a hit as long as the Americans take a bigger hit and may be then can't produce as much from the shale. Yeah, it's a Chess game.
John, great to get your expertise.
JOHN DEFTERIOS: A big one. Thanks.