OPEC + US: Fantasy or Reality - News Stream

You couldn’t make it up. The US joining hands with Russia and Mexico? The States having a vote on the direction in which the 14 largest oil-producing nations move? Surely this is a fantasy?

Well, potentially.

The full transcript of this week's episode of News Stream is available below.

Between them, the 14 member nations of OPEC control 35 per cent of current world oil supply, and up to around 80 per cent of proven reserves, although estimates vary wildly. As of 2018, they have been bolstered by the addition of 10 non-oil producing countries under the banner of OPEC+, including Mexico, Russia, and Kazakhstan, and their shares of worldwide oil now cover 55 per cent of supply, and up to 90 per cent of reserves.

So, will the US tip the balance further? Well, maybe.

If the United States seriously wants to consider joining OPEC+, then it will have to alter its current laws surrounding market manipulation. This is not to say that the American presence in the market is any more or less legally justifiable than the OPEC member states, but in order to join a group that operates by coordinating production to alter market value, the US trust laws would need to change.

Another major barrier to US membership is the lack of a state-owned oil company, something most other members rely on to help them control oil production. With a deeply-ingrained free market ideology, the US is highly unlikely to turn against the philosophy that has positioned it as a global superpower in order to join OPEC+.

That’s our take on events, but what do you think? Will the allure of market power eventually cause a further expansion of OPEC+ - and will this expansion include the States? Or will the free-market giant continue to resist the power centred in the East?

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