Just the other day I wrote:
And as the price increases based on these "emotional" stories that the drawdown continues, US shale will increase, and soon OPEC will become even more nervous about losing market share, and then OPEC cuts will end, as the new mantra becomes: "every Arab for himself."
In other words, "the end of the cartel."The author of the article at the link at Outrun Change above writes:
A cartel is able to hold its members only when it fulfills their objective of higher prices, which has not been the case with OPEC. The member nations will now look to fulfill their objective by cheating and acting individually, according to their requirement.
Saudi Arabia, which was the leader of OPEC and the price setter of the world, is losing its clout in OPEC. Even in the current round of production cuts, most of the work is being done by Saudi Arabia, whereas the other members are shying away from their designated quotas.
OPEC has far outlived the average lifespan of a cartel, but if the OPEC members don’t regroup and act together, chances are that the cartel will come to an end very soon.So, there you have it. OPEC will be with us as long as there's oil, but as a functioning cartel, it seems to be coming to an end.
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