OPEC Could Tighten Its Grip, Economist Says
OPEC will regain control of half the world oil market within a decade if it sticks to its policy of restrained production for a few more years, the Gulf International Bank predicted Sunday.
Bank economist Henry Azzam said in a monthly report that growing demand for oil and declining supplies from non-OPEC states would help the cartel boost its current share of the oil market, estimated at less than 40%.
“If OPEC continues to follow a policy of restrained production, targeting a certain market share and maintaining oil prices moderately low for a few more years, the structural changes . . . taking place will not be choked off,” Azzam said.
“In about six to seven years from now, OPEC will be able to capture once again 50% of the world market with every incremental barrel consumed as a result of increased world demand in effect being produced by OPEC,” he said.
As the 13-member Organization of Petroleum Exporting Countries gained larger chunks of the market, Azzam said, it would be able to exert more control over prices, boosting them to $24 a barrel by 1995 and $30 by the year 2000.