14 September 2010

Welt am Sonntag and DPA interview GPPi fellows on the history and influence of OPEC

With OPEC’s 50th anniversary approaching, GPPi fellows Jan Martin Witte and Andreas Goldthau were interviewed by news outlets on the cartel’s history and contemporary influence in the international oil market. Their comments have been used recently in:

• Deutschlandfunk (Die Herren des Erdöls)
• Financial Times Deutschland (Opec - Die Mutter aller Kartelle)
• Tagesanzeiger (Einstiger Ölpreismacher blickt in unbestimmte Zukunft)
• Welt Online (Spekulanten entmachten die Opec-Scheichs)
• Welt Online (Ein glückliches Kartell)
• ZEIT Online (Das Öl-Kartell wird 50)

The articles trace the development of the world’s largest cartel of oil-producing countries and discuss its influence on oil prices throughout the 50 years of its existence. Witte and Goldthau argue that the creation of the cartel in 1960 was a reaction to the “Seven Sisters’” control over oil production, exports and markets at that point; at the time, the big western companies earned most of the benefits and left producer countries with only marginal gains. Yet, even after OPEC was created, the oil producers' club was never able to fully control the market. "OPEC claims to be a cartel, in reality, however, the organization is a pretty toothless tiger,” said Witte.  In fact, OPEC was itself subject to market phases. Whenever the oil market turned soft, OPEC had a problem and was faced with internal struggles over quotas and resource rents. "In such times OPEC had only little to say,” said Goldthau.

Witte and Goldthau also argue that climate change policies could have a profound impact on OPEC's future, as the world starts to decarbonize its energy systems.

Witte and Goldthau present these arguments in more detail in their recently published book OPEC: Between Power and Impotence (Die OPEC: Macht und Ohnmacht des Öl-Kartells). It reviews the history of OPEC, from its nascence in Baghdad in 1960 to today. The objective of the book is to understand and explain OPEC’s history as well as to develop an understanding of its role and potential in the 21st century. In particular, the book analyzes to what extent OPEC has been able to effectively function as a cartel and what level of influence it will yield in the years ahead. Witte and Goldthau also discuss possible scenarios for the future of the oil cartel against the backdrop of a consumer shift to renewable energy and climate change.

To order the book (in German), please click here.

For more information, please contact Jan Martin Witte and Andreas Goldthau

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