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Like the oil market itself, the oil producing countries of the Gulf Cooperation Council (GCC) are at a crossroads. These countries – which include both members of the Organization of Petroleum Exporting Countries (OPEC) like Saudi Arabia, the United Arab Emirates, Kuwait and Qatar, and non-members like Bahrain and Oman – collectively account for the lion’s share of world crude oil and LNG exports. Rightly or wrongly, Saudi Arabia had long been seen as the “central bank of oil” – a predictable “swing producer” committed to using its vast spare capacity to smooth out the market’s ups and downs. The decision by OPEC in November 2014 not to reduce production to buttress oil prices in the midst of a precipitous price collapse caught many in the energy community off guard. Broadly perceived as a break from the policies of OPEC leader Saudi Arabia for the last 30 years, it was followed up by an increase in output by the producer group of 1.4 million barrels per day that helped send prices to below $30 a barrel, levels not seen for over a decade.

Whether the policy is actually new or a continuation of the stated but perhaps previously misunderstood policy of Riyadh is debatable. What has become more clear since the November 2014 decision was taken is that the oil market, and energy markets more generally, are in the midst of an upheaval wrought by new technologies and policies, new market and economic forces, and changing geopolitical and environmental factors. Equally clear is that the emerging landscape is creating incredible challenges for Saudi Arabia and the other GCC nations. The economic pressures come as the region struggles with ISIS and conflicts in Syria and Iraq, civil war in Yemen and Libya, and generational change. In Saudi Arabia itself, a new generation of political leaders is coming of age whose ascent coincides with an apparent shift in the Kingdom’s international and military posture and signs of newfound willingness to embark on economic and social reform of a type that had previously seemed unfathomable.

In January 2016, the Center on Global Energy Policy at Columbia University SIPA convened a roundtable of energy and regional experts under Chatham House Rule from academia, industry, finance and government to discuss the changes underway in oil markets and their implications for the GCC states, as well as the other forces at work in their decision-making. Given its outsized importance within the GCC and to global energy markets, there was a special focus on Saudi Arabia, and given the nature of some of the factors, the discussion frequently came back to questions of whether the forces at work were new or another version of older problems. This document provides a summary of the discussions of the roundtable without any attribution.

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