OPEC’s Existential Sucker Punch

1 Aug 2017   OPEC

You wait decades for an existential crisis, then two come along at once. At least that’s how it must feel for OPEC’s beleaguered ministers. In the short term the market for their oil is being eroded by rising production outside their control. Looking further ahead, oil demand itself is under threat from the electrification of road transport. OPEC may not yet be dead, but its days are surely numbered. The most obvious short-term threat to the group comes from the rapid rise in U.S. shale oil, but the risks have expanded to include other areas like Brazil’s prolific sub-salt discoveries and more recent finds further north along the east coast of South America. An increasing volume of U.S. crude is finding its way to markets in Asia that used to be the preserve of the group’s Middle Eastern powerhouses. China was the biggest foreign buyer of U.S. crude in […]

Comments are closed.