InvestorQ : Does OPEC still control oil prices and how do they exercise control on oil prices?
Shreya Mashelkar made post

Does OPEC still control oil prices and how do they exercise control on oil prices?

Answer
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2 years ago


Frankly, the role of OPEC as the key determinant of oil prices has been reducing with its share going down from 50% to 35%. However, the OPEC still holds the largest wealth of proven oil reserves in the world. Over the next few years, the OPEC will be forced to sell oil at lower prices just to maintain its market share as crude oil will have a limited shelf life in the light of the Paris Accord. Additionally, the OPEC influence is waning. Effective January 2017, the OPEC and some friendly nations have cut daily oil production by nearly 1.8 million barrels. However, this has had little effect with the oil prices dipping below the $50/bbl mark as the supply gap has been made up by the US, Nigeria and Libya. Today, Saudi Arabia, Russia and the US are the major producer and Saudi and Russia have been working very closely with one another to set the direction of oil prices.