CONANT SEES GROWING SPLIT AMONG MEMBERS OF OPEC
The Organization of Petroleum Exporting Countries could become a thing of the past in a Persian Gulf postwar era, says Melvin A. Conant, president of Conant & Associates Ltd., Washington, D.C., and editor of Geopolitics of Energy.
Conant contends OPEC cohesion will further weaken if the group's members increase downstream investments in major consuming markets.
He noted that the organization is being split between members focusing on crude oil prices-notably Iran-and those focusing on products prices-notably Saudi Arabia.
Conant said, "The split is almost bound to grow as cartel members look for 'guaranteed' market shares through their overseas downstream refineries and marketing outlets, especially in anticipation of a long term world crude surplus."
Conant also sees a second split emerging in OPEC as a result of the Persian Gulf war. That would entail formation of an Islamic oil bloc in which Moslem producers Algeria, Bahrain, Egypt, Indonesia, Iran, Iraq, Kuwait, Libya, Malaysia, Oman, Qatar, Saudi Arabia, Syria, Tunisia, and the United Arab Emirates will find their oil interests linked more solidly through the politics of the Islamic revival.
"While there will be no one leader," Conant said, "there will be a greater readiness to use oil as an instrument against the policies of the West, especially those of the U.S., particularly in a tight oil market the Islamic oil bloc could create through production constraints.
"War damage and large numbers of Moslem casualties in Iraq and among Arabs in the allied coalition will have their political effects as well through the increase in Islamic fundamentalism and Islamic political activism occurring through the region."
Conant sees constant competition for leadership of an Islamic oil bloc between Iran and Saudi Arabia, with the U.S. seeking leverage via Saudi ties.
He advised:
"Watch Iran as it begins to signal its interest in playing a leading role in gulf mediation while emphasizing its objective to keep the U.S. out of Islamic affairs."
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