Energy

"The power shortage is a symptom of the inability or refusal of key actors to govern the territory."

The agreement to freeze production was geopolitical not economic, writes Meghan O’Sullivan in the Financial Times.

"Keep your eyes on the oil-fueled Gulf Cooperation Council (GCC) Arab states in the year ahead, because they are just starting to experience a genuinely novel, almost existential, challenge that will test the quality of their statehood and national integrity as these have never been tested before. The issue that sparks this historic reckoning of statehood and citizenship in the GCC is not Iran’s nuclear future, the fate of “Islamic State,” nor the wasteful war in Yemen. It is the sudden array of sharp fiscal adjustment measures that most GCC states have announced in the past three weeks..."

The Summer 2015 issue of the Middle East Initiative Mosaic newsletter features highlights of MEI programs and activities over the 2014-2015 academic year, along with research and analysis of critical global issues by members of our community. This issue includes Crisis of the Arab State, a report by spring 2015 Kuwait Foundation Visiting Scholar Michael C. Hudson's study group, a review of a selection of the 66 events MEI hosted, interviews with students and faculty, and more.

With a few exceptions, the consensus emerging from last week’s inconclusive Organization of Petroleum Exporting Countries meeting is that if OPEC is not dead, it is at least in a coma.  This may be a reasonable judgment based on the group’s ability to take collective action on a production cut to bolster the price of oil in the short run. 

Fears that events in Iraq will send global oil prices soaring have abated. Yet, the crisis has potentially huge implications for oil. Under any conceivable outcome to the current situation, oil production from Iraq will fail to meet recent expectations. The reason for this dire prognosis is that politics – not security or logistics – will be the biggest determinant of Iraq’s oil trajectory in the years ahead.

Saudi Arabia’s Prince Turki Al Faisal told a standing-room only audience at Harvard Kennedy School in April that his nation is investing huge sums in solar, wind, and nuclear energy to reduce domestic reliance on its oil reserves. Prince Turki said Saudi Arabia’s security depends on a healthy energy policy that uses oil to earn export revenues rather than for domestic consumption.