Bassam Fattouh, director of the Oxford Institute for Energy Studies, argues that while U.S. shale poses a threat to OPEC, the idea that the organization has no role in the oil market is unrealistic.
Fattouh was interviewed via email between Sept. 21-22. Comments have been edited and condensed.
Can OPEC still manage the market given shale’s strength?
There is no doubt that the context within which OPEC is operating has dramatically changed. Within OPEC, the output from some producers such as Nigeria and Libya has become more uncertain. The re-entry of Iraq with its massive reserve base, low production cost and ambitious plans to increase its productive capacity, and Iran’s plans to increase productive capacity after the lifting of sanctions, will complicate the management of OPEC output.