Is This The Beginning Of The End Of OPEC?

Saudi Arabia is a founding member of the Organization of the Petroleum Exporting Countries (OPEC) and its largest member. So why is the country hinting that it may pursue a future in which the organization is irrelevant? Saudi Arabia has indicated in the past that it no longer cares for OPEC's traditional role of managing supply and output levels for its member states. Instead, the country has adopted a strategy of boosting output to acquire a bigger piece of the market, even at the expense of its own profitability. According to
Bloomberg,
Saudi Arabia's Deputy Crown Prince Mohammed bin Salman has even gone on the record by stating, "we don't care about oil prices" and $30 oil or $70 oil is "all the same to us." Meanwhile, the country set out an economic plan called "Vision 2030" which calls for a move away from oil based revenue. "The main take-away from Saudi Vision 2030 is that there's just no role for OPEC," Seth Kleinman, head of European energy research at Citigroup Inc. in London previously told Bloomberg. "Or, you can have an OPEC without Saudi Arabia, which just isn't much of an OPEC." Meanwhile, Saudi Arabia's government also suggested it plans on opening up its behemeth oil producing company Saudi Aramco to private investors in the form of a potential IPO. By doing so, the country is essentially turning Saudi Aramco into a "giant oil company" that "OPEC was created to counteract." "The death of OPEC has been long foretold, but it looks like the Saudi 2030 Vision is really the obituary notice," Bloomberg also quoted Kleinman as saying. "The Saudi Aramco IPO, and the presumption that there's going to be a much higher degree of autonomy within Saudi Arabia -- there's no real role for OPEC."

Posted In: BloombergMohammed bin SalmanOPECSaudi ArabiaSeth KleinmanMedia

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