“OIL AND INTERNATIONAL RELATIONS – THE ROLE OF OPEC” – GOCE GLIGOROV
6 June 2024
Video available on YouTube (in Slovenian): https://youtu.be/L6CyxGxAtl0
Opening Speech
Amb Marjan Šetinc
International relations in the world are largely determined by energy resources, especially the possession and control of these resources. One of the most important resources is undoubtedly petroleum. Those who control oil production and have a monopoly over its production can, as history has shown, significantly influence global political dynamics. OPEC (Organization of Petroleum Exporting Countries) is a cartel of some of the world’s most important oil producers. It is an international organisation that determines the quantities of oil produced globally and thus affects the price of everything dependent on this raw material. We constantly hear about oil, oil production, production limitations, and oil price. Every two weeks, the price of gasoline and diesel fluctuates… when the government announces a price increase or decrease, it is same more or less everywhere around the world.
Our panelist today, Mr. Goce Gligorov, a political scientist who works as an analyst for OPEC and has been closely monitoring developments in the field of oil production and the internal workings of the petroleum-exporting cartel for many years, will enlighten us on these matters and more.
Some of us still remember when OPEC imposed an oil embargo on the United States in 1973 as a response to the American decision to supply oil to the Israeli military. The embargo caused petrol price in the US to rise hourly, leading to unimaginable panic among people and frantic fuel buying. In 1979, during the Iranian Revolution, even a small reduction in oil production caused a significant price increase that lasted the entire year. The Iran-Iraq war at that time further reduced production of oil by 7%. We can also recall the significant rise in price of oil in 2008, partly as a result of the US invasion of Iraq, when the price reached nearly 140 USD per barrel, pushing much of Europe into an economic and financial recession.
Fluctuations in oil production has shaken the world multiple times. Is the current world safe against an energy crisis? What is the power of OPEC today? Is OPEC a factor of stability or instability in the world? Energy crises have led to different, alternative energy supply considerations, yet we will likely depend on oil for a long time to come.
OPEC currently comprises 12 petroleum-producing countries, making up about 38% – 40% of the world’s crude oil production. OPEC+, together with Russia it accounts for 50% of global production. Therefore, it is more than reasonable to ask: Can OPEC cause an economic and political crisis in the world? Can it do so without cooperation with one of the two largest crude oil producers, the USA or Russia? Does the reduction of production in OPEC member countries only serve to stabilise the price of oil, or does it also serve to maintain a monopoly or exert pressure on global energy conditions? How and who ensures the security of oil production and extraction to prevent unexpected supply issues? The USA has gradually spread a network of military bases in the Persian Gulf (currently 8 military bases in all Gulf states) that are supposed to guarantee the security of key petroleum-producing countries in the Middle East. And finally, how dependent is Slovenia on OPEC’s moves for its energy supply? What is the future of oil? Can the transition to other sources threaten oil production? Mr. Goce Gligorov, an analyst at OPEC, addressed all these questions and dilemmas.