How much longer can Opec hold out?

THE Organisation of Petroleum Exporting Countries (Opec) has been the most talked about international organisation among investors, analysts and international political lobbies in the last few months.

When Opec speaks, the world listens in rapt attention as it accounts for nearly 40 per cent of the world's total crude output. With its headquarters in Vienna, Austria, one of the mandates of the 12-member Opec is to "ensure the stabilisation of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry".

However, Opec has been in the line of fire from the western world in light of its stance of not reducing the production levels of its member nations (excluding Iran). Most view this as a strategy to squeeze the American shale production and production from other non-Opec nations.