It is hard to overestimate OPEC policy as the most influential driver of global energy pricing and energy industry success.
Even when OPEC does not actively manage its oil supply – even when OPEC does not set production quotas – the mere announcement of a continued hands-off approach has meaning and impact on the market.
Why does OPEC continue to influence the global markets so heavily when the majority of crude oil produced globally is non-OPEC? The only reason that the majority of crude produced is non-OPEC is because OPEC chooses to pump conservatively. (Yes, even with the deregulated OPEC policies of the last year, OPEC nations still exploit their reserves at rates far below the international average). OPEC nations still control 80% of the world’s reserves. That means that 80% of the known oil deposits under the ground and ocean are controlled by the OPEC cartel.
Since last November, OPEC has uncapped oil production. It has allowed member nations to produce oil at essentially unlimited rates. Saudi Arabia is leading this production, at times reaching up to 10 million barrels a day. There is no indication that OPEC will change its policy and reinstitute quotas at its meeting this week. However, some member nations will make a show of dissenting.
Here is a look at what we can expect from the key players in this diverse group of nations.