Yesterday I was reading about OPEC wanting to cut production by
550 million* barrels a day and wherever I was reading that commented that the cuts would amount to more oil than the US could produce if they drilled all US land and territories. Not sure if I believe that. But the point is that OPEC is powerful. Er, was.
Saudi Arabia walked out on OPEC yesterday. It said it would not honor the cartel’s production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.
As the world’s largest crude exporter, the kingdom in the desert took its ball and went home.
OPEC has made no announcement to the effect that it is dissolving, but the process is already over.
Of course, I’m not an economist so I have no idea if this is a good or bad thing.
Update: A friend explains that this is good for the United States in that gas prices will go down but bad for the world because greenhouse gases will go up.
Update: *Thanks to Brian Arner for the correction!