Oil sector heads into new world order

Houston

THE Saudis may go public, the Organization of the Petroleum Exporting Countries (Opec) in disarray, the United States is suddenly a global exporter, and shale drillers are seeking lifelines from investors as banks abandon them.

Welcome to oil's new world order - full of stresses, strains and fractures. For leaders gathering in Houston next week at the IHS CERAWeek conference - often dubbed the Davos of the energy industry - a key question is: What will break first? Will it be the balance sheets of big US shale companies? The treasuries of Venezuela and Nigeria? The resolve of Saudi Arabia, whose recent deal with Russia to freeze output levels offered the first hint of a rethink?

After watching prices crash through floor after floor in the worst slump for a generation, the industry is eager for answers. Insiders said that it is not too hard to visualise what markets might look like after the storm - say five years down the line, when today's cost-cutting creates a supply vacuum that will push up prices. But it is what happens in the meantime that has got them scratching their…