Asset management Economy

Saudi think tank studies hypothetical world without OPEC

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The study comes at a fraught time for Saudi Arabia, the de facto leader of the organisation of the Petroleum Exporting Countries (OPEC), given the international outrage over the death of the Saudi journalist Jamal Khashoggi.

Sunday 11, November 2018

A Saudi think tank is studying what happens to oil markets in a world without OPEC.

“We’re looking at what happens if there is no spare capacity,” said Adam Sieminski, who heads up the King Abdullah Petroleum Studies and Research Centre in Riyadh. “One scenario to that is OPEC doesn’t exist.”

The study is the second in a series, after an earlier report found that OPEC’s spare capacity reduces oil price volatility and generates as much as $200 billion of annual economic benefits for the world economy.

US President Donald Trump also has repeatedly attacked the oil cartel for keeping oil prices too high.

Sieminski, who previously served as the head of the US Energy Information Administration, said he could not say whether the study reflects Saudi government thinking. He said the report was “internally generated” at the research centre.

“We’re looking at this because we think it’s important. I would be incredibly surprised if there aren’t 10 other analysts or institutions trying to understand the same question,” Sieminski said by phone Thursday.

The centre is based in Riyadh as an independent not-for-profit think tank. The Saudi government endowed the organisation 15 years ago, providing funding in perpetuity. It’s overseen by a board trustees chaired by the country’s energy minister.

 

TAGS : Khashoggi, OPEC

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