OPEC keeping the taps wide open, letting Saudi Arabia pick off many birds with one stone
OPEC’s masterminding of the world oil market is leaving Canada to wonder where exactly our reeling energy industry fits within the scheme of the cartel’s strategic thinking.
By leaving its production targets unchanged at its semi-annual meeting in Vienna this week, the Organization of the Petroleum Exporting Countries is sticking with a measure that will continue to bleed competitors around the world.
In Canada, the fallout of the oil shock is already something of a national preoccupation. The idea, then, that our oil industry, at least in the mind of OPEC kingpin Saudi Arabia, is just some happy collateral damage likely won’t do much for any lingering traces of our bygone global inferiority complex.
‘Here is a situation in which the Saudis, with one single chess move, are able to achieve multiple objectives’— OPEC watcher Atif Kubursi
“Obviously, we weren’t the main target, but anything that slows overall growth of non-OPEC production is good in the eyes of the Saudis,” said Vincent Lauerman, the director of energy and the environment at the Conference Board of Canada. “Taking us down a couple notches certainly supports their end goal.”
The rationale that OPEC’s move away from production quotas last November, which cratered global oil prices, was a cannon shot in the battle for market share is certainly valid.
Many birds with one stone
That said, squeezing the competition by keeping the oil market oversupplied is only one of the kingdom’s many objectives. For the Saudis — whose wants can be taken as synonymous with those of OPEC despite the fractious nature of its various factions — the real elegance of this latest oil price war is how it serves so many of its purposes with a single stroke.
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