OPEC Tries Again

Members approve production cuts, but they may not be able to hold the line.

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VIENNA, Austria: OPEC is going to give it another try. The once-fearsome cartel of 11 oil-producing nations Tuesday formally approved cuts in crude oil production by 2.1 million barrels a day and vowed to maintain lower levels of output for a full year starting April 1. But TIME senior economics reporter Bernard Baumohl wonders whether they can make it stick. "OPEC's problem isn't agreeing on cuts, but making members abide by them," he said. "Even if OPEC stands together, there is also the question of whether non-members like Mexico won't step up their own output to take up the slack."

Gas stations, of course, have already chosen the optimistic view. "It's funny how even before the cuts went into effect, prices at the pump have been going up for weeks," Baumohl says. "They're taking advantage of the psychological climate even before the oil glut has actually eased." OPEC would love for its plan to push per-barrel crude prices up as high as $21 from their current low-teens level. "But it won't happen," says Baumohl, not least because OPEC's grip on the oil-producing world -- or even on its own members -- just isn't what it was in the '70s. Still, at this point, members will gladly take whatever increase they can get.