AT THE OPENING CEREMONY of the 21st Nigeria Oil and Gas (NOG) Conference and Exhibition in Abuja, Nigeria, on July 5, 2022, then-secretary general of the Organization of the Petroleum Exporting Countries (OPEC) Mohammad Sanusi Barkindo deplored the current alarming situation in the world oil and gas market. “Our industry is now facing huge challenges along multiple fronts, and these threaten our investment potential now and in the longer term. To put it bluntly, the oil and gas industry is under siege!”1 he said.

“The evolving geopolitical developments in Eastern Europe, the ongoing war in Ukraine, the ongoing COVID-19 pandemic and inflationary pressures across the globe have come together in a perfect storm that is causing significant volatility and uncertainty in the commodity markets and, more importantly, in the world of energy,” Barkindo said in the same speech.

Various developments and many factors have led to the formation of this complicated and unfavorable situation in the global oil and gas market.

But this situation has been sharply aggravated by efforts by the US and the West in general to impose their rules of the game on the energy market as part of their aspirations for world domination.

An objective analysis of the global production and export of oil and gas, demand for various types of energy, and the world economy as a whole shows that this situation is artificial.

Stable trends and objective data show the falsity of the politicized alarmist forecasts that are propagated in the West with the aim of discrediting hydrocarbon fuels. The end of the oil age is still a long way off, and natural gas is and will remain for a long time to come an optimal form of energy.

Energy experts predict that between 2022 and 2045, general demand for primary energy will rise by 28%. It is expected that oil will retain the largest share in the energy mix and will account for about 28% in 2045, followed by gas, with a share of about 24%.

In other words, oil and gas would together satisfy more than half of the world’s total needs for energy for the next few decades.

But the West is consistently pursuing a coordinated hard line to undermine the positions of oil- and gas-producing countries and their associations.

The past few decades have seen a movement toward a more just and predictable energy market with a rational balance between the interests of producers and those of consumers, but this movement has been halted by the efforts of the West.

Decisions made by OPEC and OPEC+ over the last few years have aims beyond simply meeting the needs of their member countries. They have the goal of creating a scale of prices that would stimulate stable general economic growth worldwide.

Saudi Arabia and other veteran oil producers concluded a long time ago that inflated prices for oil and gas inevitably caused a slowdown in world economic growth that came back to bite oil and gas exporters in the form of lower demand and faster development of alternative energy.

Oil-producing countries have proposed building a market that would guarantee the stable production of oil and gas and harmonize the interests of producers and consumers.

The present-day oil market is a product of long evolution, conflicts of trends, and clashes of interests.

Many of today’s problems have evolved from processes that began many years ago.

For most of the 20th century, Western nations, primarily the US, were the world’s main oil producers. The “Seven Sisters” (seven transnational oil companies, most of them American and the rest European) formed a cartel and, around the 1960s, together controlled about 80% of world oil production and export. Even in the US, where heavy-handed and cowboy styles of doing business were regular practice, oil monopolies always had a reputation for their cynicism, unscrupulousness, iron grip on whatever they would get hold of, and close ties with the government and intelligence services.

Around the mid-20th century, the world oil industry began to change its geography, and eventually the Middle East and some Latin American and African countries became the main oil producers.

At the same time, the world oil market became an arena of frictions between producers lying “on the periphery of the civilized world” outside the Euro-Atlantic space and Western importers.

The US became the main importer, even though it possessed its own huge reserves of oil and would have been able to export much of it. So why did the Americans choose to import rather than export oil?

This was a calculated policy designed to save US oil reserves for future generations of Americans. As soon as signs emerged that the US’s oil resources were dwindling, the US administration and business elites concluded that the best option was to import unrenewable energy in return for something that was renewable – dollars printed in the US.

In 1973, the US government banned oil exports. Many of the country’s oil-extracting facilities were mothballed.

It was only in the 21st century, due to its production of shale oil, that the US resumed large-scale oil export, boosting it fivefold to about three million barrels a day between 2016 and 2020.

After the global oil production focus shifted to the developing world, the undisputed political, military, financial, and logistical dominance of industrialized countries guaranteed settlement formulas with oil-producing states that were beneficial to Western partners.

But the situation began to change after World War II due to mounting national liberation movements in Asia, Africa, and Latin America.

Venezuela was the first to seek a revision of the settlement practice. In the latter half of the 1940s, it proposed splitting oil revenues 50-50. Later, at negotiations in London in 1950, Saudi Arabia presented American and British officials with the unexpected demand that Western investors pay Riyadh a much larger share of the oil revenues they generated in the Arab country.2 In December 1950, Saudi Arabia and the Aramco company signed an agreement splitting oil revenues 50-50.3

Iran made a famous attempt in the early 1950s to gain full control of its oil resources. In 1951, the government of the charismatic Prime Minister Mohammad Mosaddegh nationalized Iran’s oil industry and changed the distribution terms for oil revenues. Though Mosaddegh was overthrown in 1953 in a US-British plot, the West was unable to restore the former terms for oil deals.

The Mosaddegh story taught oil-producing countries the lesson that they needed to unify to advance their interests. Lengthy talks resulted in the emergence of the Organization of the Petroleum Exporting Countries (OPEC) in September 1960.

At first, OPEC brought together five countries – its founding members Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Then other nations, mainly Arab and African, joined. Today, 13 states are members of the organization.

OPEC seeks to coordinate the policies of its members to ensure fair and stable prices for crude oil and oil products.

The first test of strength for the Arab states forming the core of OPEC was the oil war that broke out after the Arab-Israeli military conflict in 1973.

This was seemingly clear evidence of the increasing role of oil-producing countries in the energy market. OPEC member countries expected that this would be a stable trend, while developing countries exporting other commodities (cocoa beans, etc.) began thinking of setting up their own cartels to press their demands in trade with Western states. Thus, OPEC became the initiator of a movement for an international economic order that duly considered the interests of African, Asian, and Latin American countries.

But events took a completely different path. This is important to remember today, when a new crisis is emerging in relations between oil-producing and Western countries and new calls are being made for a new international economic order.

Admittedly, between the mid-1970s and early 1980s, the West responded swiftly and on a large scale to the oil war that had been declared against it – which was, more broadly speaking, a war for a new world order in finance, economics, and trade.

The US-led West launched carefully designed measures to block the plans of OPEC and producers of other strategic commodities.

It came up with a program to save energy and reduce its dependence on Arab oil, and it set up an organization to counterbalance OPEC – the International Energy Agency (IEA). The West took action, mainly secret measures such as financial pressure, military threats, and plots against patriotic politicians, to prevent the emergence of new associations of commodity-exporting developing countries. The West also increased pressure on the Soviet Union and other Eastern bloc countries. It simultaneously took steps to get the USSR involved with the World Bank and International Monetary Fund, a policy that in the early 1990s resulted in large-scale cooperation between the Soviet Union and those organizations. The West still pursues all these financial, economic, trade, and energy activities.

The IEA’s members are 29 leading Western countries that simultaneously are members of the Organization for Economic Cooperation and Development (OECD).

The IEA is a dangerous, systemic adversary of OPEC. It is constantly devising new sophisticated schemes for action against energy-exporting countries. In addition, a pricing system alternative to that of OPEC – spot markets – has come into being that is based on Western principles and is largely under Western financial control.

Oil-producing countries made a major attempt to seize the pricing initiative from the West through the establishment in 2016 of OPEC+, a group that, in addition to OPEC members, brings together 10 other oil-exporting countries: Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan.

For Russia, the emergence of OPEC+ ended the period when our country was closely following the activities of OPEC without entering into any formal cooperation with it, although it had received many invitations to join the organization. The time that has passed since we joined OPEC+ has made it clear that being a member of the group is a more stable source of state revenue. It is also clear that membership in OPEC+ means greater market predictability.

Today, countries producing and exporting oil and gas get drawn into complicated Western maneuvers. The so-called climate agenda has been a source of a lot of scheming, especially over the past two to three years. The West would like to make oil and gas producers pay a kind of collective fine for allegedly causing major environmental damage through their energy production. One can clearly see political discriminatory action behind this, even though oil and gas production does involve environmental problems.

OPEC leaders have repeatedly stressed that efforts are currently being made that threaten to undo years of progress achieved in building a more stable and harmonious energy system. Oil- and gas-producing countries have emphasized that decisions made at the 26th UN Climate Change Conference in Glasgow in 2021 (COP26) grossly misrepresented the world oil and gas industry and disregarded global energy needs.

OPEC leaders have said that, by its recommendation to end allegedly ineffectual subsidizing of the production of fossil fuels, COP26 was effectively telling developing countries to turn their backs on their hydrocarbon assets, even though the 2015 UN Framework Convention on Climate Change enshrines their sovereignty over hydrocarbon resources.

OPEC has been criticizing such unreasonable and increasingly insistent attempts to curtail investment in oil and gas production.

There were some negative reactions to statements by UN Secretary-General António Guterres at the presentation in May 2022 of State of the Global Climate 2021, a report by the World Meteorological Organization. Guterres accused the world oil industry of undermining the global climate policy. He claimed that the world energy system was dysfunctional and pushing us toward a catastrophe, that relying on fossil fuels was an environmental and economic impasse, and that the war in Ukraine and its direct impact on energy prices was an alarm bell. The secretary-general expressed confidence that renewable energy alone can be the basis for a sustainable future. “We must end fossil fuel pollution and accelerate the renewable transition, before we incinerate our only home,” he said.4

Many energy experts claim that Guterres made a huge mistake by effectively siding with one specific group of countries and neglecting what the rest of the world thinks. Oil-producing countries warn that such one-sided, biased judgments are misleading and expect that the development of events will compel the West to revise its position.

OPEC sees it as the beginning of a U-turn by the West that in August 2022, the Group of Seven (G7) openly called on oil-exporting countries to boost their oil production, recognized the decisive role of OPEC in the world oil industry, and insisted on new investment in fossil fuel production.

It is now becoming clear that the sovereign right of states to own, manage, and supply their natural oil and gas resources to the market can only be ensured if the interests of energy producers and exporters are taken into account when addressing specific issues of energy delivery, a nondiscriminatory approach to insurance, protection from possible attacks on the sea, etc.

This is an increasing problem because of the West’s large-scale coordinated policy to block Russian oil and gas exports to Europe and to slap sanctions on Russia affecting energy transportation and insurance.

Naturally, this range and scale of concerns is too big for any nation, even a large and powerful one, to cope with on its own. Oil and gas producers need to unite.

On a practical level, one might suggest broadening the mandate of OPEC+ and setting up specialized bodies such as financing, transportation, logistical, and insurance units in the group. This would be the first step in implementing a goal set at the 2022 St. Petersburg International Economic Forum – creating an essentially new world energy market where everything from production to delivery would be under the control of producers and sellers.

“Our products are our rules,” said Gazprom chief executive Alexey Miller. “We don’t play games where somebody else has made the rules.”5

Today, the West is trying hard to win over Arab and Middle Eastern countries in its conflict with Russia. Naturally, the stance of Saudi Arabia, the key country in OPEC, will have special, largely symbolic significance.

The Saudis say openly in conversations that their country would feel uncomfortable about having to pick a side in the West-Russia conflict and that the Arab nation would prefer to stay on good terms with Russia, the US, and Europe.

But it is hard for Riyadh to avoid making a choice because of American pressure, primarily the insistence that Saudi Arabia increase exports to Europe to replace Russian supplies. Information from Saudi Arabia suggests that the latter will base its policy on the group interests of OPEC and OPEC+ members and seek to preserve OPEC and OPEC+ mechanisms that took so much effort to build. And only within the framework of general approaches are they ready to consider, to one degree or another, the wishes of other players.

According to Saudi Arabia, the policies of OPEC and OPEC+ already adequately consider the interests of other countries, and the US need not seek more exports to Europe. But the Saudis are talking about genuine economic interests rather than political demands stemming from attempts to make energy a geopolitical weapon.

Even the US is starting to realize that.

An article in The Washington Post said that Saudi Arabia had spent years seeking to strengthen the dwindling influence of OPEC by trying to lure Russia and countries such as Kazakhstan into the organization and that there is plenty of evidence that the Saudis have no desire to loosen their ties with Russia. In the eyes of the West, Russia may have become an international pariah because of the war in Ukraine, but in the eyes of Saudi Arabia, Russia remains one of the world’s two biggest oil exporters, the article argues.6

Over the past few months, Washington has been pressing Saudi Arabia and other, mainly Arab, OPEC countries to boost oil production to prevent further increases in oil prices in the US and to help its European allies that have been harmed by the sanctions they imposed on Russia under US pressure.

That was the purpose of US President Joe Biden’s visit to Saudi Arabia in July 2022, during which he met with King Salman and Crown Prince Mohammed bin Salman. The Saudis responded with a minimal increase that was little more than a courtesy gesture supported by the other OPEC members.

But in fact, neither Saudi Arabia nor any other OPEC member currently has the potential to significantly boost oil output. The total extra amount they could put on the market would be equivalent to a little less than 1% of world oil consumption.

Bloomberg journalist Javier Blas said ironically that Biden, during his talks in Saudi Arabia, pulled off an increase of 100,000 barrels per day for September from OPEC+. This “translates in an extra 26,000 b/d for Riyadh and 8,000 b/d for Abu Dhabi,” Blas tweeted. “Let’s put the 26,000 b/d into context: the kingdom’s quota for September is 11.006m b/d. That’s ~7,650 barrels per minute. So Riyadh would produce the extra oil in about three minutes and a half. A bit longer than a fist bump greeting, but not a lot longer.” Blas quipped that September’s increase might be smaller than the amount of fuel that Air Force One expended to take Biden to the Gulf Cooperation Council (GCC) summit in Jeddah, Saudi Arabia, in July 2022.7

There is currently a growing trend in the Middle East toward more predictable and productive relations among all countries in the region.

That trend found reflection in a joint statement issued at Jeddah’s GCC on July 6, 2022. The summit, besides bringing together the GCC members – Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates – was attended by Egypt, Iraq, and Jordan. That statement called for stability and security in the region.

The US was also present at the summit, but as little more than a guest, despite a 2015 agreement between the GCC and the US that prescribes regular meetings between them and stipulates full-scale US participation in such events.

Turkey has begun to play an increasing role alongside OPEC and OPEC+ members in stabilizing the hydrocarbon market. The country has shown that it can think strategically, making sure that its economy has the energy it needs.

In collaboration with Russia, Turkey has built a network of gas pipelines. In 2021, Gazprom increased its gas supplies to Turkey by 63% compared to 2020.

During a meeting with Turkish President Recep Tayyip Erdoğan, Russian President Vladimir Putin said that the TurkStream gas pipeline “is today one of the most important routes for supplying Europe with Russian gas” and, “unlike all other directions of our hydrocarbon supplies to Europe, is operating well, smoothly, and without failure.”8

It seems that Russia could utilize Turkey’s willingness to be a bridge between the West and Moscow and thus have an additional channel of communication with Europe despite Russia’s soured relations with member countries of the European Union and NATO.

Transportation, insurance, and other logistical aspects of oil and gas trade have come to the fore, and this means that OPEC+ should put them on its agenda. Obviously, the production and export of energy can be regulated only if problems of its delivery to consumer countries are solved.

OPEC+ evidently needs to move from merely regulating oil production volumes to a broader system that would include other elements of ensuring the functioning of mechanisms of delivery to wholesale customers.

Russia could make a proposal to that effect.

Today, it would be important to revive a sensible idea that Saudi Arabia proposed back in 2000 to establish an “Energy UN” – an association of countries producing and consuming energy and all other states seeking a harmonious, mutually respectful world energy system. The International Energy Forum (IEF), an organization established in 1991 and headquartered in Riyadh, has failed to create a balanced market and provide all instruments for creating a reliable, stable and unpoliticized international system for producing and exporting oil and gas and delivering it to the end consumer. This is apparently achievable by creating additional international interaction formats on the basis of present-day OPEC+ mechanisms.

Over the past five to seven years, largely under the pressure of Western anti-fossil fuel propaganda, GCC member countries and other oil-producing nations have slashed investment in oil production in favor of alternative energy.

Obviously, the simplest way to fill the production gap is to lift the Western sanctions on Iran, which possesses sufficient oil reserves to quickly increase output and export.

Iran has been able to provide enough oil for its own economy. It has some of the world’s lowest domestic prices for fuel. Gasoline in Iran costs the equivalent of five US cents per liter, or about 20 cents per gallon. Prices in other oil-producing countries are between 10 and 20 times that, while in Europe, prices are nearly 40 times higher. Iran provides subsidies for fuel production that reach $60 billion a year. Remarkably, this is larger than the country’s annual oil export revenue.

It is estimated that if sanctions were lifted, Iran would be able to export an additional 1.2 million barrels of oil [per day] within a year, an amount that exceeds the total resources of all other OPEC members combined.

Of course, the situation is more complicated. Decades of sanctions have hampered the financing and development of Iran’s energy sector. The Iranian Petroleum Ministry estimates that Iran’s oil and gas industry needs at least $160 million in investment to achieve the desired results.

OPEC regards Iran, Libya, and Venezuela as hostages to geopolitics and insists on the development of their oil production capacity and their full return to the oil market.

This means little support for Western hopes that OPEC would oppose plugging oil shortages with supplies from Iran and other sanctioned countries. The main concern of the OPEC+ countries is to stay united, and if they are, they will be able to solve market regulation problems even if the number of exporters increases. This reflects the maturity and experience of the leaders of OPEC+ countries.

The world oil and gas market is in a dire situation. It may deteriorate further if the West pursues its destructive policy. But new opportunities are emerging to break the deadlocks facing exporters. Normalization of the situation will depend on the OPEC+ countries remaining united and expanding their range of action. Turkey’s transit resources must continue to be used. To stabilize supply, the sanctions on Iran should be lifted, and the country should be given a prominent role in market regulation.



2 Yergin Deniyel. Dobycha. Vsemirnaya istoriya borby za neft, dengi i vlast. Moscow: 2018, p. 465.

3 Nawwab Ismail I., Speers Peter C., Hoye Paul F. Saudi Aramco and Its World: Arabia and the Middle East. Saudi Aramco, 1995, p. 250.



6 The Washington Post, June 30, 2022.