Washington: A Saudi think tank is studying what happens to oil markets in a world without Opec.
“We’re looking at what happens if there’s no spare capacity,” said Adam Sieminski, who heads up the King Abdullah Petroleum Studies and Research Centre in Riyadh. “One scenario to that is Opec doesn’t exist.”
The study is the second in a series, after an earlier report found that Opec’s spare capacity reduces oil price volatility and generates as much as $200 billion of annual economic benefits for the world economy.
It comes at a critical time for Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, given the widespread outrage over the death last month of the Saudi journalist Jamal Khashoggi. US President Donald Trump also has repeatedly attacked the oil group for keeping oil prices too high.
Sieminski, who previously served as the head of the US Energy Information Administration, said he couldn’t say whether the study reflects Saudi government thinking. He said the report was “internally generated” at the research centre.
“We’re looking at this because we think it’s important. I would be incredibly surprised if there aren’t 10 other analysts or institutions trying to understand the same question,” Sieminski said by phone Thursday.
The centre is based in Riyadh as an independent not-for-profit think tank. The Saudi government endowed the organisation 15 years ago, providing funding in perpetuity. It’s overseen by a board trustees chaired by the country’s energy minister.