Has OPEC lost control on oil prices?

A hype is being created that both OPEC and non-OPEC oil producers will sit down once gain to work out the strategy to curtail supply. The need has been felt because faltering global economy fails in boosting consumption. It is widely anticipated that the meeting will not yield any result because of the Saudi stance.

The largest oil producing member of OPEC is not willing to cut its own production but trying to shift the blame to Iran for the prevailing glut. Saudi Arab has repeatedly expressed its unwillingness to curb production unless Iran responds in the similar manner.

Over the months it has become evident that Iran will not commit for any reduction in its production unless the country regains its lost market share, due to the imposition of economic sanctions. Therefore, Saudi Arabia must cut its production and set precedence for other countries.

One can easily understand unwillingness of Saudi Arabia to cut production because of its funding of proxy war in Yemen, Syria and various other countries. Though, Saudis will never accept this acquisition but just can’t deny the harsh reality that tolerating a prospering Iran is unbearable for it.

One has all the reasons to believe that Saudi Arabia needs more petrodollars for buying arms for the rebel groups. It has been feeding Syrian rebel groups for years, which has also forced Iran to support the oppressed groups in Yemen, Bahrain and Syria.

Therefore, one should abstain from believing that OPEC will agree on curtailing oil production. The situation can improve only if consumption improves. May be it is hoping against hope but that is the only silver lining.