Why Is Saudi Arabia The Strongest Member Of The OPEC?

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Saudi Arabia was one of the founding members of the Organization of Petroleum Exporting Countries (OPEC) with about 267 billion barrels of proven oil reserves at the end of 2014. The Middle East country accounts for about 22% of the proven oil reserves held by the OPEC, which is the largest reserves held by a single member. The country produces more than 25% of the OPEC’s total oil supply and has a notable amount of spare capacity, which it can use to maneuver the dynamics of the oil markets. The country accounts for roughly 10% of the global oil production, and has historically altered its oil supply to manipulate oil prices. Further, Saudi Arabia contributes to more than a third of OPEC’s oil exports. Consequently, the country has held a dominant position within the organization and plays a crucial role in the determination of crude oil prices.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Anadarko Petroleum

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