Once it was among of the most influential forces in the world economy. Like some kind of modern-day Caesar, it would preside over our economic affairs in a manner that reduced domestic policymakers to despair, casually condemning nations to recession one moment only to lift them out again a few years later.
Such was the power of Opec. Yet something remarkable – and very welcome – has happened. Market forces are re-establishing themselves. The old world order in oil is fast disappearing, rearranging geopolitical and economic power in the process.
To its critics, the Organisation of the Petroleum Exporting Countries has always been a monstrous cartel of corrupt, self-serving and largely despotic regimes wreaking economic havoc on the global stage.
To its defenders, it is a moderating force which strives to reconcile the divergent needs of producers and consumers. Its stated purpose is “to secure fair and stable prices for petroleum producers, an efficient, economic and regular supply of petroleum to consuming nations, and a fair return on capital to those investing in the industry”. What could be more benign than that?
Right now, however, it is none of these things; rather, its position is one of growing irrelevance. For all the pomp and self-importance of its members, it might as well not exist at all. This week’s meeting in Vienna drew the usual media circus, but it was scarcely worth the expense of fielding one. There was no story. For the second time in two months, members failed to agree measures to underpin the oil price and thereby ease the economic pain of major oil producers. They couldn’t even agree an overall cap, let alone individual quotas. Opec has lost control of oil markets and shows no sign of the collective discipline necessary to get it back.