Syriana once again: speculations on the future of OPEC

Abstract

This paper deals with the complexities of crude oil geopolitics in the wake of recent escalating tensions between OPEC led by Saudi Arabia and OPEC plus members led by Russia. The paper traces the story of the Syrianic Dreams of global super powers in the Middle East and in the surrounds of the Caspian Sea prior to 1950s and afterwards. The paper proceeds to analyse the looming threat to the architecture of crude oil geopolitics in recent years caused by the decisive emergence of the US as the world’s largest oil producer since 2014 - a development that was entirely driven by galloping shale oil production in the country. It is argued that the shale oil shock has threatened the future of the OPEC and that of larger coalition bodies like OPEC+, that are led by Saudi Arabia and Russia respectively. As the world braces itself for a new oil price war in 2020, we take a look at what possible geopolitical configurations that could emerge from these extraordinary circumstances and the strategic elements surrounding crude oil pricing in the world. We also study the threat to the time tested instrument of petrodollars in the wake of increasing efforts to de-dollarize crude oil transactions through digital currency alternatives like the petro-yuan.