Despite the agreement of the members of the Organization of Petroleum Exporting Countries - OPEC, on the existence of common interests that unite them, internal differences appear from time to time, indicating the growing danger of the disintegration of this organization, which raises fears of repercussions.
What if that really happened?
The "Price Oil" website presented an analysis revealing what the world would look like without OPEC, and what would happen? Why is this organization important at this time?
The analysis prepared by Irina Slaf, a writer specializing in oil affairs, indicates that "OPEC is more important than ever," although "disagreements sometimes indicate the possibility of its disintegration, but the oil markets will not remain the same, and the reality of the situation will change."
The writer believes that in the first look at the world without OPEC, things may seem somewhat normal, as each country will maintain the reserves it deems appropriate, and competition in the oil market will become more intense, as each party will seek to obtain a larger market share than the other, But the security of oil supplies will be more volatile.
But even with the competition that may mean lower prices sometimes, the fluctuations in the oil market may be “severe”, which will make it a “blessing” for the new generation of traders in the oil markets, according to the analysis.
Adam Rosenkweg, a specialist in oil markets, says that "if OPEC is dissolved tomorrow, that means big volatility in the short term", and even in the long term the various parties will have much less surplus than they have now.
He adds that the fluctuations in the oil market may make investing in it in order to secure future supplies subject to lack of interest, which will mean insecurity in securing supply in the long run.
The Oxford Institute for Energy Studies had previously issued an analysis based on numbers, in which it talked about whether OPEC had not existed during the years 1990-2018.
This analysis concluded that oil production figures would have been greater than they were, and that the fluctuations in supplies that would be affected by geopolitical events would be more severe than what we witnessed during the past decades.
In terms of reserves, without the presence of OPEC, most countries would not have some kind of reserves, so competition in supply and demand became fierce in order to secure the countries' energy needs.
For example, what happened from the attacks that targeted Saudi oil facilities in 2019, if there was no organization like OPEC, prices would have risen very sharply, due to the impact on supply, but the need for oil was compensated by different supplies, or some would remain waiting for oil extracted from shale oil, which It will need longer periods to become available to international markets.
Despite the current differences in OPEC, and what is happening in the energy markets, if OPEC had not existed, the nature of the unity of the differences would have been greater, and things are much worse than they are now.
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