Opec deal can't hide decline of Saudi power as cartel loses clout

New Haven, United States

MORE than two years after the crash in oil prices, the cartel that unites several of the world's biggest oil producers has at last finalised a deal to cut production levels to boost prices. In decades past, the Organization of the Petroleum Exporting Countries (Opec) dominated world oil markets, with Saudi Arabia in particular able to dictate prices by increasing or decreasing oil production.

Over the course of the 1970s, the price quadrupled, thanks to Opec-induced supply cuts. This time, prices jumped 10 per cent on news of the deal. The main takeaway from the negotiations is that Opec is less influential than ever before.

Opec's leaders first agreed in principle to reduce supply to the level of 32.5 million barrels per day (bpd) - a 3.5 per cent decrease from current production - with the details to be worked out. Yet some analysts suspected that Opec would not manage to negotiate details of a supply cut among its diverse 13 members - Algeria, Angola, Ecuador, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emir…