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Saudis could face an open revolt at next OPEC meeting

By Dalan McEndree - posted Wednesday, 26 August 2015


The Saudis and their Gulf Arab allies would seem to have three possible approaches, should a revolt occur:

Reconciliation, as Saudi Arabia acquiesces in the wishes of OPEC's weaker members to bring price increases forward through OPEC production cuts, Saudi Arabia bearing the brunt;

Separation, as the Saudis and their Gulf Arab allies ignore their fellow members' entreaties and force them to wait for "market" forces to balance supply and demand; or

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Divorce, as the Saudis and their Gulf Arab allies decide to exploit their financial wealth and go their own way, therefore forcing their fellow OPEC members, unable to finance their domestic oil industries, unwillingly to bear the brunt of global production cuts.

In October 2014, the Saudis began signaling their intention to abandon their role as guarantor. It is unlikely however, that whatever Saudi decision makers are now considering, they will show their hand in advance of the December meeting, since this would reduce pressure on the non-OPEC producers that the Saudis claim to be targeting, before necessary.
 

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This article was first published on OilPrice.com.



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Dalan McEndree writes for OilPrice.com.

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