Saudi Arabia is studying the scenario for the world without OPEC :: Investor



[ad_1]

Saudi Arabia is studying the scenario for the world without OPEC

Can OPEC end? Photo: Reuters

The state-funded Saudi Analytic Center is investigating possible effects on the oil market from the possibility of a breakdown of the Organization of Petroleum Exporting Countries (OPEC).

The study was under pressure from the country, which has been a cartel leader for almost 60 years, including US President Donald Trump. He accused OPEC of maintaining high prices for "black gold," the Wall Street Journal reported.

And although Adam Seiminski, president of the analyst center, claimed that this research was not related to Trump's statement, a senior adviser familiar with the project, he said this was an opportunity to consider Washington's criticism. Depending on the findings, this research can offer protection for the cartel and the Saudi role.

Also, newspaper sources said the project did not reflect active debate in the government about whether to leave the organization in the short term.

According to the report, the report is part of a broader rethinking of OPEC's role among top government officials in Riyadh. Authorities in the country – as well as more oil industry representatives, are considering options for when oil demand will peak.

In this context, this study is considered among statesmen as an exercise to play options on how the market can react if demand falls in such a way that OPEC will lose influence and disappear, a high-level advisor said.

For decades, Saudi Arabia and other states from the cartel argued that it was an important international economic institution – a forum where countries could adjust their production and maintain prices at a stable level.

Image: Wall Street Journal

At the same time, critics accused OPEC of manipulating prices at the expense of major oil users such as the United States, where a group of lawmakers proposed a law that defined the organization as an illegal cartel.

The study was part of another series and was compiled after previous reports found that OPEC's reserve capacity reduced price volatility and generated up to $ 200 billion in annual benefits for the global economy, according to Bloomberg.

[ad_2]

Source link