OPEC in a Shale Oil World

"OPEC is dead. Long live OPEC ". The organization is now going through a mid life crisis in its 54 years of existence trying to figure out where it goes next in a world where OPEC has been relegated from being the energy swing producer, and Saudi Arabia as the 'Sultan of the Swing,' to one where it now faces competition from both non- OPEC traditional as well as non-conventional shale producers. The Authors examine how OPEC has had to come to terms with the reality that the earlier decades 'call on OPEC' has now been replaced by a 'call on non-OPEC' and that a new 'swing' has been identified- the producers of shale oil.§§For market analysts however, OPEC was always the 'supplier of last resort' and the last line of defense for oil prices, and that the organization would obediently continue with past practices of either curtailing or increasing production to support certain oil price ranges. To many, OPEC was still the 'swing producer' despite the many signs that the role of OPEC was now changing.§§Drawing upon the Authors combined academic and practical first hand insights on OPEC, the book discusses how a new OPEC paradigm has emerged following the oil price rout of 2014, whereby the organization's principal concern is now protecting market share, without being in charge unlike earlier fleeting periods of the late 1970's, which brought with it a lasting myth of the OPEC cartel. The volume further examines:§§· The myths and realities of OPEC's current pricing power and how it never really conformed to being a true cartel,§§· The rise of the shale oil revolution and the impact and limits of technology advances,§§· The fiscal stress and oil price breakeven levels faced by different OPEC members, putting the organization's unity under increased strain,§§· The power and influence of Saudi Arabia over OPEC's collective decision making process and the internal challenges OPEC faces in accommodating Iraqi and Iranian production comebacks, §§· The impact of climate change policies on fossil fuel producers .§§The Authors also assess key challenges facing OPEC and how it can re-invent itself to survive current challenges by having to make fundamental changes in both its operating structure, while recognizing that not all OPEC members are equal, as well as embracing a new model of non-OPEC producer cooperation and international oil company relationship to ensure that the organization's brand remains relevant.§§Mohammed Ramady is Visiting Associate Professor, King Fahd University of Petroleum and Minerals, Saudi Arabia; Wael Mahdi is Senior Gulf Energy Correspondent with Bloomberg.§§