Why does Saudi Arabia seem to think that OPEC is no longer relevant?

  • Saudi has built up huge excess capacity and has a very low extraction rate, hence has the ability to go it alone despite the wishes of other major OPEC members like Iran and other oil exporters like Russia (lower oil prices limit what Saudi believes are Russia and Iran's destructive geopolitical activities in the Middle East).
  • Saudi has huge foreign exchange reserves hence a big cushion to lost oil revenues when oil price falls.
  • Saudi putting national interests (maintaining market share and staying the world's top oil producer) ahead of OPEC interests (maximising oil revenues for all members).

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