There are many implications for the disputes that have marred the ministerial meeting of OPEC last Wednesday. While differences among OPEC member states are nothing new, failure to issue a joint statement after the meeting is a rare instance in the organization's history. It is indicative of the divide among member states at this juncture, especially after many years of accord. It also shows that an era that lasted nearly a decade has ended, an era where accord and harmony among the member states reigned, and an era during which OPEC succeeded in overcoming political and oil-related disputes among its members to ultimately arrive at a unified resolution agreed upon by all members, in the interests of all parties, to secure reasonable prices and stable markets. OPEC's past experience during the outbreak of this kind of disputes shows that a long waiting period will have to elapse before a settlement is reached. This time, the dispute is taking place at a politically and economically turbulent period. On the one hand, there is the Arab spring and the political transformations in the Middle East, and on the other hand, there is a violent escalation in the criticisms railed by Western industrialized countries against OPEC's policies, and repeated calls for increased production levels to meet the increase in global demand for oil, and to contribute to global economic recovery in the aftermath of the financial crisis. So what happened at the ministerial meeting? Saudi Arabia, along with the UAE and Kuwait, called for increasing OPEC's output by about 1.5 mb/day beyond the actual production levels of April, which amounted to 28.8 mb/day. This means that OPEC's production would approach the forecasts of OPEC's General Secretariat regarding demand for the organization's crude rising to about 30.5 mb/day in Q4 of this year. The reason behind the call for this high increase is the ongoing demand growth in China, the Middle East and Japan, where reconstruction has begun following the devastation caused by the earthquake and tsunami there. It is worth mentioning here that OPEC's production ceiling was cut to about 24.845 mb/day in the autumn of 2008, during the global financial crisis, to deal with decreased demand and avoid a downward spiral of prices which had deteriorated from their record level of 147 dollars per barrel to about 30 dollars. However, the organization continued to adopt this policy of reduced production, even when its actual output in recent months was about 5 mb/day higher than this declared ceiling. In other words, global demand is in actual increase, and there is an urgent need to modify the old production ceiling approved nearly four years ago. However, the problem not only lies in increased demand for oil in recent months, but there is also the issue of the steady increase of prices, which have reached levels that have started to harm the economies of many developing nations. People there have begun to complain of high fuel prices, and many countries are now failing to cover the actual value of oil imports, not to mention the negative impact of the lack of reasonable growth rate levels in the industrialized world. There is now also the issue of the Arab spring, and the turmoil caused as a result in the markets, from the disruptions in Libyan oil supplies to the disruption in Yemeni oil output recently, as well as the political disputes among OPEC member states themselves. However, the main contention during the ministerial meeting involved market trends in the foreseeable future. The question is: Will demand for OPEC crudes continue to grow during the second half of the year? And what is the extent of this growth? Are the commercial oil inventory levels in the industrialized countries sufficient to avoid any new supply disruptions? The data available to OPEC's General Secretariat indicates that demand will indeed increase, and that subsequently, there is a need to increase output to about 30 mb/day. In truth, the GCC countries cited the General Secretariat's figures to defend their point of view. However, the countries which had a different opinion, for many reasons, presented their own information, which ran contrary to the General Secretariat's data. Shortly after the meeting, the Saudi Oil Minister Ali al-Naimi declared that his country will supply the markets with the required quantities of crude oil, i.e. will not allow any supply shortages in the markets. However, the problem here is that the more Saudi Arabia increases its output – it can produce about 12.5 mb/day compared to about 9 mb/day at present -, its surplus production capacity will decrease. This is an important indicator for the markets. As such, the decrease in Saudi Arabia's surplus production capacity raises concern in the markets regarding the possibility of supply shortages should a certain country halt production, especially in this critical period in the Middle East, and this in turn would mean higher prices and increased speculation. Another reason for the failure [to reach an agreement] is that six new ministers had partaken in the meeting, as well as the approach of the new Iranian minister in running the meeting, and the unusual turbulent atmosphere that preceded the meeting, influencing the talks and discussions among the delegations. However, the question to which the answer remains unclear concerns the role of political disputes in thwarting an agreement at OPEC. Is the lack of agreement attributable to Iran's dispute with the GCC countries? Have OPEC and oil prices become instruments in the disputes beleaguering the Middle East? There was no clear answer to this from the oil ministers in Vienna, despite the fact that many media representatives asked them this question. What ultimately matters in this issue is this: Will political disputes continue to mar OPEC's decisions in the future? The markets were indeed affected by the disputes at OPEC, pushing the price of Brent crude oil to rise to about 119 dollars per barrel by the end of trading last week. * Mr. Khadduri is a consultant for MEES Oil & Gas (MeesEnergy)