Wither Opec

摘要

After a very public failure to agree an output freeze in Doha last month, Opec delegates will be hoping for a more positive outcome to their ministerial meeting in Vienna on 2 June. There may be relief that oil prices have recovered to almost $50/bl, and not a little self-congratulation that the market could soon be back in balance as non-Opec supply is squeezed out. Some ministers will no doubt assert that their strategy is working and that nothing more needs to be done. But the strategy of forcing out higher-cost production is not Opec’s. It is the brainchild of a Saudi government that is no longer prepared to play the role of swing producer. Most other Opec members have gained little from the search for market share, and for some, the fall in oil revenues has been catastrophic. At the opposite end of the Opec spectrum from Saudi Arabia, Venezuela’s badly managed economy was struggling when oil prices were high. Now it is on the verge of collapse, with power cuts and minimal investment threatening its oil output.