Saudi think tank mulls a world without OPEC

King Abdullah Petroleum Studies and Research Centre carries out study looking at what would happen to oil markets in OPEC's absence
Saudi think tank mulls a world without OPEC
US President Donald Trump has repeatedly attacked the oil cartel for keeping oil prices too high.
By Bloomberg
Fri 09 Nov 2018 10:27 AM

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

“We’re looking at what happens if there’s 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.

It comes at a difficult time for Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, given the widespread criticism over the death last month of the Saudi journalist Jamal Khashoggi.

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 couldn’t 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.

The centre is based in Riyadh as an independent not-for-profit think tank.

The Saudi government endowed the organization 15 years ago, providing funding in perpetuity. It’s overseen by a board trustees chaired by the country’s energy minister.

For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.