Who really affects the price of oil?
Opec, the Organization for Petroleum Exporting Countries, has certainly had its share of criticism over many years.
President Trump recently accused the group of "ripping the rest of the world" and keeping oil prices "artificially high".
Sometimes it has been committed to keeping the world at ransom ̵[ads1]1; especially in the mid 1970s when it cut supplies and the triple price.
But when the Opec Energy Ministers meet in Vienna, does the group really have so much influence?
Check production
They are connected by some non-oil producing countries, especially Russia.
The group wants to stabilize or increase crude oil prices, which fell sharply in the beginning of October.
The main tool is to control their own production levels – either by cutting whether prices will increase or increase supplies if they want them to fall, at least to a point that will not cause prices to collapse. [19659003] Opec's presence in the market is certainly big enough to affect.
It accounts for more than 40% of global crude oil production.
It was higher – more than half in the early 1970s – but current figures are still a significant proportion.
But the other 60% of the industry is also important.
Two non-Opec countries are particularly important in different ways: Russia and the United States.
Russia's influence
Russia has contributed to Opec's current efforts to move prices higher.
It began in 2016 with an Opec decision "to implement a production adjustment", which means a cut of 1.2 million barrels per day.
Most importantly, Russia and a number of other non-Opec members joined work on their own commitments to limit production.
Following this, prices with the biggest international award, Brent Crude, reached $ 86 (£ 67) at the beginning of October – it was under $ 50 a barrel in the period before that decision.
It is not to say that the decision of Opec and partners was the only factor.
Political unrest in the Opec countries Venezuela, Libya and Nigeria has made it impossible for them to produce the amount of oil as in theory they could.
Iran's sanctions
Iran has been hit by the repository of US sanctions over its nuclear power program.
The possibility that Iran's oil could be unavailable to the global market – or it would be less of it – has been an important factor that pushes prices higher this year.
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AFP
Iran continues to sell oil to any country
However, some of Iran's largest customers – China, India and Japan – have had temporary exceptions and can continue to buy Iranian oil for now without being affected by American action.
As a result, prices were actually reduced as there was less demand for oil from other manufacturers than expected.
Having said that, the rise in prices since the end of 2016 is due to something in the agreement between Opec, Russia and others.
In Opec, Saudi Arabia has been the key.
According to estimates from the International Energy Agency, Saudi Arabia accounts for more than a third of Opec's total production capacity and more than half of the group's savings capacity.
It is an indicator of the extent to which production is limited.
Important, even if Saudi Arabia is, it was reluctant to trade over prices alone.
So, as usual, other Opec members expected to make a sacrifice, but it also wanted Russia to be involved.
USA's largest producer
It is a third very big player in the global business; USA, currently the largest manufacturer of all.
The United States is a completely different animal from the others.
Oil is produced by private business that makes decisions on the basis of what is profitable.
Russia's major oil companies are close to the government and the dominant company in Saudi Arabia – Saudi Aramco – is state owned.
US oil companies do not cooperate with Opec to handle prices because it would be illegal under US antitrust or competition law.
But something has happened in the United States in the last decade or what has changed The global industry – the rise of slate oil.
There are two important aspects to this.
Shell oil impact
The utilization of a relatively new type of resource has reversed a long-term decline in US oil extraction.
The country must still import oil. But now it can meet two thirds of its own needs, while it was just over a decade ago, a third.
Slate can also react faster in a changing market.
It does not need such big investments as conventional oil. The investor can get the money back much faster, so that the slate exit can increase faster when prices begin to rise.
Slate was one of the reasons why oil prices fell sharply after mid-2014.
One reason why Opec did not react faster than it did was a wish from some members, especially Saudi Arabia, to see the United States slate Manufacturers pressured by lower prices.
Opec remains important, but it is far from being fully responsible for the global oil market.
And in the long term, whose global effort to cope with climate change, we become less dependent on oil – a major if perhaps – Opec will mean much less.
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