Can OPEC cut production without cutting their own throats?

Link.

We cut consumption, they cut production. Who blinks first? Is it possible for the US, India and China to restrict their demand for oil enough that OPEC will have to maintain production just to balance their books? Where will this game of chicken end? Short term? Long term we have to stop using Mideast oil, period. That’s the only way to reduce these people to irrelevance. But can we do it sooner? Has the last big price hike actually made people actively conserve?

Discuss. I’m interested to hear the opinions of people who study this stuff, because I’m borderline clueless here (among other places. :smiley: )

Right now OPEC holds the whip. It’s obvious that they don’t care about animosity and ill will, and why should they? They’ve been taking it from the West for around 40 years.

They intend to milk every last cent they can out of everybody they can until some other fuel/energy source matures. There’s nothing inherently wrong with that business model except that eventually it will fail. But for right now they are fat, dumb and happy. Good for them.

Actually, a better way is to use up all of their oil and then have the Western countries collectively devalue currency, leaving them depleted and broke. When they glom on to that strategy they’ll cut production even more to try to preserve their stocks and wait us out, but that in turn will lead to further use of alternative energy, so it’s a no-win situation for them.

Of course, that depends upon whether you see them as mortal enemies or valuable allies. I tend to think it lies somewhere in the middle.

Until we actually have alternatives OPEC can do whatever they want. They have the oil.