OPEC has become much more political and the last three failed meetings highlight the cartel’s inability to agree on much, says Ole Hansen, head of the Commodity Strategy at Saxo Bank.
“Considering the market share that OPEC controls, a different organization, including other countries, would not have much success either,” Hansen added speaking to Trend Apr. 20.
The Organization of the Petroleum Exporting Countries, shortly known as OPEC, is a permanent intergovernmental organization created in 1960 to coordinate and to unify oil prices among member countries with a view to secure fair and stable prices for oil producers.
The organization has 13 members, which control about 2/3 of the global oil reserves.
The cartel’s total oil output was 32.25 million barrels a day in March 2016, which is by 15,000 barrels more than in February, according to OPEC’s recent report. The official quota for the OPEC oil output is 30 million barrels per day.
The April 17 meeting of the OPEC and non-OPEC countries in Qatar’s Doha, which were to agree on freezing the oil output with a view to stabilize the falling oil prices, ended without any agreement.
“OPEC is finished as a price setting mechanism,” Sam Barden, the director of SBI Markets, an international commodity trading and advisory company, told Trend.
“Doha’s meeting on the weekend confirmed this belief,” he added.
However, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, told Trend that the current situation is that OPEC is regaining its eminence in the market again.
“The growing cooperation between OPEC and Russia, and the fact that more former OPEC members again want to join the group only show that there is restructuring of the market,” believes Widdershoven.
“OPEC is still on top. I can’t see any other alternative for OPEC,” he added.