Dubai: Brent crude price is expected to slide closer to $70 a barrel following Thursday’s decision by the 12-member Organisaiton of the Petroleum Exporting Countries (Opec) to not cut production.

The global benchmark, trading at $75.06 immediately following the announcement by Opec to maintain production at 30 million barrels per day, has slid more than 33 per cent sine June.

“There could be a short knee-jerk plunge below $70 a barrel [before settling] around low $70s,” said Arjuna Mahendran, chief investment officer at Emirates NBD, by phone.

Opec, which is responsible for around 40 per cent of the world’s oil price, met in Vienna on Thursday to discuss how it should respond to the price collapse.

Saudi Arabia, Opec’s largest producer, likely used the Vienna meet to reaffirm its position that it is unwilling to cut production in favour of other members whose national budgets rely on much higher per barrel prices.

“For Saudi Arabia it’s about market share, not about market price,” said Shwan Zulal, an associate fellow at King’s College and the director of London-based Carduchi Consulting, by phone.

Oil prices have fallen amid a global glut due to a combination of weak demand from China and Europe and an increase in North American shale production.

West Texas crude (WTI), the United States benchmark, is also expected to dip further in response to the Opec’s decision.

Gary Dugan, chief investment officer at the National Bank of Abu Dhabi (NBAD), said WTI will now test $70 a barrel before levelling between $60 and $65 over the new two weeks.

WTI traded at $72.30 following the Vienna meet.

Below $70 per barrel prices will put stress on the North American shale producers adding to the resolve of Saudi Arabia.

A further dip in prices will not have immediate adverse affects for the oil revenue dependent Gulf Cooperation Council (GCC) countries, including non-Opec members — Bahrain and Oman. This means that multibillion projects are likely to be unaffected.

“All the GCC economies have sufficient financial reserves to weather maybe two years of sub-$70 (Brent) prices,” Emirates NBD’s Mahendran said.

Other regional economies, however, will be impacted by the Opec’s decision.

“It’s going to be difficult for [Iraq]. They have a mountain of debt, they have to have oil prices above $100 a barrel,” NBAD’s Dugan said.

Iran will also be impacted but because it is still facing sanctions it is unlikely there will be “a drastic worsening because it is already pretty bad”, Mahendran added.