On the fiftieth anniversary of the OPEC establishment, it is appropriate to consider the future, and attempt to prospect the key features of the organization in both the short and the long run. During a press conference held in Vienna last Tuesday, OPEC's Secretary-General Abdullah al-Badri provided a comprehensive portrait of what one may expect of the organization in the next stage. He stressed that OPEC's key objective is to "support global economic stability and growth" through a stable and transparent market for crude oil. This means that the goal of the organization is not only to achieve the best possible prices, but also to achieve price stability at a reasonable range, while contributing to the stability of the global economy. In this regard, al-Badri said that there is a noticeable satisfaction among the member states regarding the current price range of 70 to 80 dollars per barrel. Moreover, the organization wishes the world to avert a "second economic relapse". In other words, its production policies will be moderate to avoid creating a further hurdle in front of the world economy during its current period of weakness. The organization is facing an uncertain situation during the current phase: Prices have been stable at a reasonable and acceptable range for some time now. But at the same time, the rate of commitment to the production quotas by member states, according to al-Badri, is about 53 percent, a rather low rate which, should it continue to be so, will lead among other things to the increase of commercial oil inventories kept by international companies. Indeed, these inventories in the United States have reached their highest level since the early nineties. This lack of commitment leads to profound differences among the member states. It is thus incumbent upon the ministers of OPEC to take the appropriate decision during their meeting on October 14, either to maintain the current production levels – this would mean further disputes, should some continue not to comply, as expected – or cutting production. In the latter case, concerns may arise in international markets, regarding the possibility of price increases and the subsequent impact on the world economy and future demand for oil. It is true that question is difficult and perplexing, but it is not a new one for the organization, which has dealt with such issues wisely in past years. There are some key and long-term challenges in the horizon: There is first, and foremost, the issue of the environment and climate change, and the global campaign to reduce the consumption of hydrocarbon fuels. This means increasing production of hybrid vehicles in both the medium and the long term, in addition to increased reliance on sustainable energy alternatives, including solar, nuclear and wind energy, as well as shale gas. The organization also faces a new and different kind of challenge. For all the talk about “peak oil”, i.e. the approaching depletion of oil reserves below the levels that meet global demand, there are now indications of significant increases in production capacity during the coming years in Iraq, Angola and Brazil. It should be mentioned here that the discoveries made in both Angola and Brazil were made in the Atlantic Ocean, and important oil discoveries were made in deep underwater areas in these two countries. Indeed, these proved to be some of the most important discoveries made in Brazilian waters for decades. This is while in Angola, (the newest member of OPEC), production capacity is constantly on the increase. Angola is one of the countries that are most incompliant with production quotas; its current production stands at approximately two million barrels a day, and is continuously on the rise. Meanwhile, the biggest challenge for OPEC is to continue focusing on defending oil markets and prices, as well as steering away from political disputes among the member states, i.e. not engaging in such disputes during the drafting of the organization's economic policies, as was the case in the sixties, seventies and eighties. It is hoped that the organization will continue its current path in defending prices, and keep clear of the previous path where political disputes prevailed over economic interests among its members, which led all the exporting countries to lose the opportunities to increase their oil revenues. *. Mr. Khadduri is an energy expert
