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What Oil Export Levels Should We Expect From OPEC?

We analyze the levels of oil exports that should be expected from OPEC over the next 25 years. We search for a long-term, market-adaptive, robustly optimal strategy that best serves OPEC's interests, and conclude that OPEC export profits will be higher if OPEC expands its oil exports by enough to maintain OPEC exports share of non-OPEC demand. Yet the incentives for this export expansion are relatively small only a few percent in terms of discounted export profits and it requires that OPEC be farsighted, because the higher export profits from faster export growth wonot be significant within the next decade. Moreover, if OPEC does maintain its exports share of non-OPEC demand, the continued rapid growth of OPEC's own oil consumption will require that OPEC oil output will have to increase 60% by 2030, which will be a major challenge.

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Energy Specializations: Petroleum – Markets and Prices for Crude Oil and Products; Energy Security and Geopolitics – International Energy Organizations; Energy Modeling – Forecasting and Market Analysis

JEL Codes:
L13 - Oligopoly and Other Imperfect Markets
O19 - International Linkages to Development; Role of International Organizations
D4 -

Keywords: OPEC oil exports, oil price projections, oil demand, uncertainty

DOI: 10.5547/ISSN0195-6574-EJ-Vol28-No2-7

Published in Volume 28, Number 2 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.