Saudi Arabia evaluates future without OPEC

Saudi Arabia evaluates future without OPEC

Saudi Arabia’s top government-funded think tank is studying the possible effects on oil markets of a breakup of OPEC, the Wall Street Journal reported, citing people familiar with the matter.

The OPEC study aims to “assess the short/medium-term consequences of a dissolution of OPEC,” It is intended to determine how the global oil market, and Saudi finances, would look “if coordination between oil producing countries disappear,” according to the overview.

"The kingdom knows demand for oil won’t last forever … So you need to think past OPEC … You also have a NOPEC act being considered," a senior adviser familiar with the project said referring to a draft bill aiming to designate OPEC as an illegal organization, which was introduced by U.S. lawmakers who oppose the cartel.

Adam Sieminski, the KAPSARC’s president, told the outlet that the research was based on the previous study suggesting that the absence of measures on the part of OPEC to stabilize oil markets would negatively impact the global economy.

Sieminski noted that the research had not been launched in relation to U.S. President Donald Trump’s criticism of the cartel. However, the senior adviser suggested that the study provided an opportunity to take the U.S. statements into consideration.

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