OPEC Is Dead

Since it's inception OPEC has been the global power in oil. The handful of countries that make it up account for almost half of all global production and more than two thirds of the alleged oil reserves. It's problem is that the two most important members hate each other. Saudi Arabia and Iran have been at each other's throuts for decades. Since the Iranian Revolution the Sauds have been piling on Iran. First by funding a proxy war through Iraq, then influencing the US into continuing to sanction them. This has now come to a head, and has broken OPEC. Since it was first required in the seventies, OPEC has functioned as a swing producer. They have increased and decreased production as required to maintain a steady supply and a reasonable price. That ended in 2008. When the global financial crisis happened, the price of oil tanked by a hundred dollars a barrel. OPEC cut production, and the price rebounded. But not all member countries cut production, it was mostly the Sauds. And this pissed them right off. They bore all the responsibility, and all other member countries were rewarded. So when the price tanked again in 2014 and OPEC was expected to have a production cut, the Sauds raised production. That was a complete disaster that has maintained low price of oil to the current date. The Sauds say this was to drive out the US frackers, but a lot of this is to piss off Iran. The frackers are all small operators that can bounce back relatively quickly. Keeping investment dollars out of Iran hurts them for years. And as long as the Sauds are petty and working to undermine Iran, OPEC will not function as required. It is an organization with untold power, but is too busy bickering to wield it.