OPEC attacks oil industry for loss of 100,000 Jobs

The Organisation of the Petroleum Exporting Countries (OPEC) says that unbridled competition within the oil industry has cost 100,000 jobs. However, that figure is not one OPEC has cited based on its own research. It comes from a Bloomberg report on analysis from one source Swift Worldwide Resources, which is a tiny energy industry recruiting firm. The cartel might have picked a more reliable source, because its decision to choose a single quote from Bloomberg undermines its entire argument.

The OPEC argument about the causes of falling prices favours it over other sources of supply. In the OPEC Bulletin Commentary March 2105, the group’s leaders write: “Yet, when it comes to the supply of petroleum, there is a stubborn willingness of some non-OPEC producers to adopt a go-italone attitude, with scant regard for the consequences. These parties consider producing to the maximum as being the norm. To them, rationalising the development of one’s precious natural resources in keeping with market demands appears to be an alien concept.”

OPEC’s multi-decade de facto control of worldwide oil prices does not make it into the analysis. The cartel has in the past been accused of setting oil prices in a manner that helps the treasuries of its members. A good example is when oil spiked over $120 in 2008. OPEC did not flood the market with supply to rapidly bring down those prices, which affected the global economy .

OPEC management also points out: “However, looking at developments over the past eight months, there is clearly still a lot to do. Whether one is a producer, consumer or investing oil major, planning for the future becomes a precarious, almost impossible task when having to factor in an oil reference price that is prone to wild fluctuations. The price of crude has been halving since the summer of last year. This has been brought about by a combination of factors led by oversupply and exacerbated by the actions of speculators.”