In a new energy bulletin, the Analytical Center experts examined the impact of OPEC and OPEC+ on the global oil market. "This impact is constantly debated with traditional exaggeration in two ways: the cartel nature of agreements on the establishment of output quotas for oil production and the forecast of a dramatic weakening of OPEC", the authors of the bulletin write.
Experts analyzed the history of establishment of the organization, which was a response to the actions of transnational companies that dominated the oil market at that time. Later on, the agreements on output quotas were violated several times by price wars between exporters, which was an important factor in the oil prices collapse.
In 2020, the Organization of Petroleum Exporting Countries will turn 60 years old. In anticipation of the anniversary in July this year, fourteen active OPEC members, which had provided 37% of world oil production, signed the historic OPEC+ Charter with ten countries, including Russia, the share of which accounted for another 19%. "The specificity of the OPEC + agreement is not so much in increasing the total share of the oil production of the participants, but in preventing domestic price wars", experts point out. They wrote that the new framework was able to reduce the swinging in production and demand and ensure not too high but more balanced oil prices in the last three years. This balanced the export revenues of OPEC + countries, increased the predictability of the price parameters of the world economy, reduced the fluctuations in the balance of payments of importers, and generally supported the sustainability of world economic growth.
Experts also have examined the role of news reports on commercial oil reserves in the United States in fluctuations in oil prices and concluded that it has a certain effect and may contribute to price shifts, but it is not decisive.
The authors of the bulletin also assessed the availability of energy resources in the regions of Russia. According to them, interregional differences in energy prices are less than the ones in incomes, so the result of such calculations is mainly determined by income. The most accessible energy resources are in the regions with high per capita income, such as Moscow, Yamalo-Nenets Autonomous Okrug and Khanty-Mansi Autonomous Okrug. Low price of the resources also positively affects the accessibility, as, for example, in the Irkutsk Region.
More details are in the bulletin “OPEC and OPEC+: Balancing the Global Oil Market".
Other energy bulletins can be found here.