Thursday, 8 October 2009, 6 p.m., Edinburgh
Where Will OPEC Go from Here?
Julian Lee, Senior Energy Analyst, Centre for Global Energy Studies
Royal Scots Club, 29 Abercromby Place, Edinburgh EH3 6QE
This event occurred on: Thursday, 08 October 2009, 6 p.m.
Ever since OPEC first introduced output quotas in 1982, it has sought to influence oil prices through controlling the supply of crude oil to world markets. This policy has operated with varying degrees of success for nearly three decades. For much of its history, OPEC's quota system has been dogged by indiscipline among member-countries, but they have always seemed able to work together when it has really mattered, leading one OPEC observer to liken the organisation to a tea-bag ---working best when it is in hot water. Few thought that OPEC would be able to implement the 4.2 mbpd output cut announced in the wake of the oil price collapse in the second half of last year, by far the biggest output cut it had ever agreed. Indeed, implementation has been far from perfect, but the Organisation did enough to halt the price slide and engineer a remarkable recovery in the first half of 2009. Where will they go from here? The King of Saudi Arabia has called for a price of $75/bbl, others for an even higher target - prices that OPEC's members could only dream of just five years ago. Will OPEC member-countries ever be satisfied with the price of oil, or will they continue to seek ever-higher prices? Has the organisation learnt how to balance the need to hold spare capacity against the temptation to use it? Is resource nationalism among OPEC countries a 'flash in the pan' or here to stay? Does OPEC believe its time has come, as oil reserves are increasingly concentrated among its members, or is it fighting a rearguard action against consumers who are trying to force the commodity on which its members depend out of the fuel mix.
Julian joined the Centre for Global Energy Studies at its creation in 1989. He specialises in global oil market analysis and the oil industries of the former Soviet Union and sub-Saharan Africa, overseeing all the CGES? work in these latter areas. Mr Lee has written extensively on many aspects of the oil industry of the former Soviet Union, including the production prospects for both Russia and the Caspian region, the export options for oil and gas producers in both regions and the dynamics of and prospects for Russian oil demand. Mr Lee is a frequent commentator on global oil markets and on the oil industry in the former Soviet Union and the proposed export projects of Russia and the Caspian countries.Julian writes for the CGES on a wide range of subjects outside his areas of special interest, including the geopolitics of oil, the political and economic problems faced by major oil producers in the Middle East and general OPEC issues. Julian Lee is also responsible for the CGES? publication, ?Oil Market Prospects? and regularly contributes research-based articles and the oil market review and forecast section for the ?Global Oil Report?. Julian also writes much of the ?Monthly Oil Report? and produces the CGES? ?Annual Oil Market Forecast and Review?. Mr Lee is frequently interviewed for both recorded and live TV and radio broadcasts (BBC, ITN, CNN, Sky News, CNBC among others) on a wide variety of oil, gas and energy matters. Both the specialist and general print media also frequently seek his opinion on oil and gas matters. Mr Lee is a member of the Editorial Board for the Canadian Energy Research Institute?s ?Geopolitics of Energy? and is also a regular presenter at conferences organised by the CGES and others on a wide range of oil- and gas-related subjects. Julian Lee has lectured on energy matters at summer schools organised by the German Society for Foreign Affairs and the Central European University and at the Foreign and Commonwealth Office?s Chevening Fellowship Programme. Julian Lee is a graduate in Mathematics from the University of Warwick and received his Master Degree in Operational Research from the London School of Economics. After graduating, Mr Lee spent two years working for Scicon, a London-based consultancy, before taking up a post with Zambia Consolidated Copper Mines, where he was responsible for carrying out studies and making recommendations on all aspects of the company?s operations. While in Zambia, Mr Lee was responsible for the installation of the first personal computers in the company?s Luanshya Division