In a speech in April marking the 50th anniversary of the founding of the Organization of Petroleum Exporting Countries, its secretary general Abdalla el Badri reminded the 12 member states of Opec's initial purposes: "To safeguard their legitimate national interests and to ensure order and stability in the international oil market."
This week's meeting suggests that the two goals are increasingly difficult to reconcile. The "national interests" of some states, notably Iran, Venezuela and Libya, often diverge sharply from what many consider to be the best interests of the rest of the world. And the deadlock over production plans has only reduced the order and stability of an already-volatile world oil market.
Almost everyone agrees that the fragile global economic recovery cannot withstand an "oil shock" just now - and yet prices have been hovering above $110 per barrel. Both economics and common sense suggest that it is time for Opec to increase supply, thus easing prices, which among other benefits would help to rein in speculation.
No comments:
Post a Comment