Oil quota increases Gulf dominance
Saudi Arabia supplies more than half of Bangladesh’s crude imports, but Dhaka has been hit hard by a global surge in energy and food prices.—Reuters photo
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman earlier this month outlined one of the biggest reforms at OPEC in recent years and presented it as a reward for countries that invest in their oil industry.
The change clears the way for giving larger production quotas to OPEC Gulf members such as Saudi Arabia, the United Arab Emirates and Kuwait at the expense of African nations such as Nigeria and Angola.
Production quotas and baselines, from which production cuts are calculated, have been a sensitive subject within OPEC for decades as most producers want a higher quota so they can earn more from oil exports.
The shake-up is likely to become more extreme in the next few years as Middle Eastern state oil majors ramp up investments while production falls in African nations that have struggled to attract foreign investment. Gulf producers, the holders of the little spare capacity in the global oil market, have long dominated OPEC.
Published in The Express Tribune, June 28th, 2023.
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