Oil & Gas Editorial: OPEC - Force-feeding The World A Multi-Trillion Dollar Cake

Add bookmark

Tim Haïdar

“The kitchen oven is reliable, but it's made us lazy.” - Jamie Oliver (1975 - )

Tomorrow, the Organisation of Petroleum Exporting Countries (OPEC) will convene for their 171st (Ordinary) OPEC Meeting in the Vienna, to discuss a potential production cut. Now where have we heard that before? Ah, that’s right, before every extraordinary and ordinary and common-or-garden and run-of-the-mill and off-the-cuff meeting of the 14-member combine for the last 18 months. 

The upcoming instalment of the “Greatest No-show on Earth” will seek to push through an accord outlined in September to slash OPEC’s current output by more than 1.1 million barrels per day (bpd), from its October output of 33.8 million bpd. Whilst this looked to be on the cards last week, recent comments from the Saudi Arabian Minister of Energy, Industry and Mineral Resources, Khalid Al-Falih, have dampened the prospects of this happening. 

Speaking on Sunday, Al-Falih stated: "I don't think that we have one path only in OPEC meetings, which is cutting production - I think maintaining production at current levels is justifiable, taking into consideration the recovery of consumption and growth in developing markets and the United States." With no reading between the lines required, this looks like more than just lip-service to maintenance of the status quo.  

A chart of the rise and fall of oil prices in 2016 is tightly vinculated to statements made before, and left undelivered after, OPEC gatherings. Markets are jittery by their nature, but the stranglehold that the world’s most powerful cartel has over the price of crude oil, and the power that crude oil has over the entire sphere of human endeavour means that any declaration attributable to this four-letter acronym holds remarkable sway.

Yet it is a hegemony that is constantly on the verge of fracture.

An agglomeration of the haves and have nots drawn together across, linguistic, social, racial and sectarian poles by a sole interest, the 14 segments of this multi-trillion dollar cake are a taste the world has had to acquire. After 24 months of consuming it, has humanity lost its taste for baked goods? And does president-elect of the United States even have a sweet tooth? Will we even be cooking in an oven at all in 2017?...