Arab Today, arab today opec threatened by shale oil revolution
Last Updated : GMT 06:27:32
Arab Today, arab today
Arab Today, arab today

OPEC threatened by shale oil revolution

Arab Today, arab today

Arab Today, arab today OPEC threatened by shale oil revolution

Dubai - UPI

The Organization of Petroleum Exporting Countries, which in its heyday could trigger global economic crises by turning off the oil taps, faces an uncertain future as the shale oil revolution transforms the energy business. OPEC\'s plight is deepened by a growing confrontation between oil price hawks, like Iran and Algeria, and the so-called doves led by Saudi Arabia, long the dominant member of the cartel, over slumping prices. An emerging alliance between Iran and its traditional rival Iraq, now increasingly under the influence of Tehran following the withdrawal of U.S. forces in December, is also jolting OPEC. Outwardly, the cartel\'s latest summit in Vienna earlier this month seemed to be low key but British energy specialist Terry Macalister observed that \"behind closed doors there was a huge split over who will lead this volatile organization when the secretary-general\'s post comes up for grabs at the end of this year. Abdullah al-Badri of Libya has led the 12-member cartel since 2007. The two declared contenders for the post mirror the divisions within OPEC -- Saudi Arabia\'s longtime OPEC Gov. Majid al-Moneef, and Thamir Ghadhban, energy adviser to Iraqi Prime Minister Nouri al-Maliki who wants to challenge the Saudis as the world\'s top oil producer. \"Also, OPEC was forced to confront the major threat presented by the development of shale and other \'conventional\' oil,\" Macalister wrote in the Guardian newspaper of London. The global energy industry has been shaken by the slump in Iranian exports because of ever-tightening economic sanctions imposed by the United States and the European Union to force Tehran to abandon its contentious nuclear program. Concerns have heightened over Iranian threats to close the strategic Strait of Hormuz, gateway to the Persian Gulf through which one-fifth of the world\'s oil supplies pass. But, says former U.S. Treasury Deputy Secretary Roger Altman, \"the threat of disruptions is actually diminishing, given new finds of unconventional oil and gas in the Western Hemisphere. \"These discoveries will reduce price and supply volatility. They will also reset and profoundly improve international relations,\" he wrote in the Financial Times. \"The days of OPEC, the oil producers\' cartel, are numbered. Unstable oil states, from Iraq to Venezuela, will be marginalized.\" Advanced technology has given the United States, Canada and other countries dependent on oil flows from the highly volatile Middle East new sources of supply from deposits once considered inaccessible. \"As a result the United States now has a 100-year supply of natural gas. On the oil side, production in the U.S., Canada, Brazil and possibly Mexico is projected to grow sharply,\" Altman observed. \"Oil production could match consumption across the Western world for the first time since 1952. \"This will provide for more stable oil and gas markets … This supply resolution will also realign the global political order for the better,\" Altman wrote. \"The geopolitical centrality of the Middle East will wane. That\'s because the power and the relevance of its oil producers have peaked and are heading down. \"Whether Iraq\'s producing a million barrels of oil more or less is not going to mean much in 10 or 20 years. Only Saudi Arabia\'s output will be indispensable. \"The idea of OPEC as a cartel, already fading, will be over,\" Altman said. \"This will lead to very different security arrangements in the region.\" But for now, OPEC\'s hawks and doves are fighting over production quotas which determine oil prices. These have been steadily dropping for weeks, in part because Riyadh insists on producing around 10 million barrels a day, their highest level in decades. That, and a slump in demand because of global economic woes, has pushed prices down, which keeps the industrialized consumers happy. This doesn\'t suit Iran. It needs high prices to compensate for dwindling exports and wants OPEC production cut. Iraq, which wants to boost production to around 10 million bpd by 2018, also wants high prices to fund its energy development program on which its future depends. U.S. oil prices have slumped from more than $100 per barrel in March to less than $80, bolstering America\'s economic recovery. If any at the OPEC meeting doubted the travails ahead, Ryan Lance, chief executive officer of U.S. oil titan Exxon Mobil, pulled no punches. He told them bluntly: \"North America could become self-sufficient in oil as well as gas by 2025.\"

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Arab Today, arab today opec threatened by shale oil revolution Arab Today, arab today opec threatened by shale oil revolution

 



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