Kingdom, under pressure from U.S. and investors, researches possible impact of a breakup of oil producers’ group.
Saudi Arabia’s top government-funded think tank is studying the possible effects on oil markets of a breakup of OPEC, a remarkable research effort for a country that has dominated the oil cartel for nearly 60 years.
The effort coincides with new pressures on the Saudi government, including from the U.S., where President Trump has accused the cartel of pushing up oil prices, and from investors who distanced themselves from the kingdom after the brutal killing of a U.S.-based Saudi journalist.
While the think tank’s president, Adam Sieminski, said the study hadn’t been triggered by Mr. Trump’s statements, a senior adviser familiar with the project said it provided an opportunity to take into account the criticism from Washington. Depending on the findings, the study could offer a defense of the cartel and the Saudi role in it.
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WNU Editor: OPEC has a value to its members because it is the only tool that they have that can manipulate the market. And while times are tough now because of advancements in technology that make extraction of energy resources affordable (i.e. fracking), oil use and needs will continue to climb for the foreseeable future, thereby guaranteeing high prices for all oil producers. It is when demand for these energy resources start to go down that the power and influence of OPEC will decline .... but I do not see that happening for a very long time.
1 comment:
This tool is eroding: the two first producers are US and Russia.
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