Dinosaur OPEC Still Roars

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Dinosaur OPEC Still Roars

11 December 2005 | 17:08 | UPI

By Martin Sieff, UPI Senior News Analyst

It was supposed to be an obsolete cartel in the new global free-market world, but OPEC still rules the roost.

The Vienna-based Organization of Petroleum Exporting Countries, which holds its 138th meeting in Kuwait City starting Monday, does not directly control even half of global oil production. But it still determines global oil prices with a clout it has not enjoyed for more than a quarter of a century.

The OPEC member nations combined are responsible for 36.1 percent of the global oil production of 83.5 million barrels a day. Their share of it amounted to 30.155 million barrels per day in November, a marginal increase of 50,000 barrels per day on their October production.
And with global oil prices spiking up to above $61 per barrel again on Friday amid fears of possible new al-Qaida attacks and the soaring demand for winter heating fuel in the United States, the organization is riding higher than ever.


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As a result, OPEC, despite directly controlling little more than one third of global oil production, now enjoys a global clout and financial resources greater than at any time since 1979.
This huge shift in the financial and oil resource global balance of power is already having profound repercussions on major nations around the world:


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And in an ironic positive development also unanticipated by the Bush administration and neo-conservative hawks who pushed the Iraq war, it has given Saudi Arabia renewed financial stability and the resources to pour an extra $1.2 billion into domestic security and infrastructure protection over the past two and a half years, stopping al-Qaida's strategic drive to destabilize the Desert Kingdom right in its tracks.


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