Can a buyers cartel challenge OPEC?

Oilprice.com reports:

– Western oil importers have been looking for many ways to lower crude prices in 2022.

– The idea of a buyers cartel for crude oil has been floated many times, but looks virtually impossible without the participation of India and China.

– For now, it seems that oil buyers in the U.S. and Europe, especially the latter, need OPEC oil more than OPEC needs to sell it to these specific buyers.

Italy’s former PM Mario Draghi suggested it first, then U.S. Treasury Secretary Janet Yellen took up the idea and built on it. What if, the idea was, large oil importers united against oil producers?

Many from the analytical field were skeptical. With oil demand where it is, the global oil market was effectively a sellers’ market, which meant producers had a greater say in where prices go than buyers.

Limitations to large producers’ spare capacity contributed to this greater say, putting oil buyers in a risky position. Some say, however, that a buyers’ cartel could work and that it did work last year, cushioning the blow that high oil prices would have served up to many large consumer countries.

Barron’s Avi Salzman, for instance, argued in a recent piece that the Biden administration’s massive180-million-barrel release from the strategic petroleum reserve of the United States had been just such a successful move, especially since it was combined with strategic oil reserve releases from other countries, mostly in Europe…

The full story can be read here.

Out today: “Oil Prices Climb As China Reopens Its Borders“.