SHAFAQNA – OPEC as an organization is losing relevance and has long lost any pricing control in the market, Sam Barden, director of Wimpole International, an energy market development company believes.
“We are moving into an era of energy co-operation rather than energy competition. This means consumers and producers will work together to find energy savings and efficiencies in their economies as we move to energy economics rather than dollar economics,” Barden was quoting as saying by Trend on April 20.
“Simply, that is least energy input per output of energy, rather than least dollar input per output of energy,” he explained.
He believes that consumers will swap carbon-saving technologies and IP with oil and gas producers for carbon fuel supplied.
“So the game will be about mining for carbon energy savings in our economies, rather than just mining for new supply of carbon energy,” Barden said.
Also, expert believes that oil and gas will be traded in multiple currencies rather than just in USD, or the petrodollar system as we know it.
“So as the game changes from who can get the most dollars to who can get the most value out of their energy, OPEC will, like the petrodollar, become an historical instrument,” Barden said.
Currently OPEC controls 40 percent of the world’s oil supplies. All OPEC member-states are large oil exporters. Their economies are more dependent on oil revenues. So, to maintain the oil prices at an acceptable level, has always been the OPEC main objective.
However, the recent actions by OPEC on the production quota have been characterized by great differences among the Cartel member-states.
Nigeria, Iran, Venezuela and Libya have been pushing for the Cartel to cut output in a bid to reverse the more than 50-percent drop in prices since June last year.
At OPEC’s 166th meeting in Vienna on Nov. 27, the member countries decided to keep oil production quota unchanged at the level of 30 million barrels per day.
The next official meeting is scheduled for June 5.
The latest OPEC Monthly Oil Market Report said that cartel’s production rose sharply in March compared to the previous month. OPEC production increased in March by 810,000 barrels per day (bpd) to 30.79 million bpd, according to the report.