For nearly half a century, the oil cartel kept a tight check on prices, keeping them from falling too low or rising to unsustainably-high levels. But OPEC’s power is being challenged by the surge in North American oil production.
“The end of OPEC” might be closer to reality now, according to Edward Morse, global head of commodities research at Citigroup. The shale revolution “has created a sort of existential threat to Saudi Arabia and OPEC,” he wrote in a report on Monday.
Founded in 1960, OPEC is led by some of the most influential oil-producing nations in the world, like Saudi Arabia, Qatar, Iran and UAE. But now, the United States is the largest producer of oil in the world and Canada has been ramping up output as well.