Stories by Amy Myers Jaffe

Expert Voices

Iran's militarized oil blackmail exposes failure of deterrence

Saudi defense minister on stage with weapons remnants from the weekend's attack on its oil facilities
Pieces of cruise missiles and drones recovered from the attack and identified by Saudi Arabia as Iranian. Photo: Fayez Nureldine/AFP/Getty Images

This past weekend's strikes on critical infrastructure at Saudi Arabia's second largest oil field at Khurais and its vital crude oil stabilization center at Abqaiq virtually eliminated the cushion of spare oil field capacity that typically prevents market panics during large supply disruptions.

Why it matters: The attack marks a major escalation of the proxy war between regional rivals Saudi Arabia and Iran that has raged since 2015, though there have been previous acts of sabotage on oil facilities. Its success shakes confidence in Saudi Arabia's status as the global swing producer of spare oil supply, a role that has afforded Riyadh substantial influence.

Expert Voices

New energy technologies are disrupting the power of OPEC

Mohammed Barkindo speaking from a lectern
OPEC Secretary General Mohammed Barkindo. Photo: Karim Sahib/AFP/Getty Images

The convergence of automation, artificial intelligence, advanced manufacturing and big data analytics is poised to remake the transportation, electricity and manufacturing sectors in ways that could eliminate oil use. This comes just as the same energy innovations are making it easier and cheaper to extract oil and gas.

Why it matters: These technological changes mark an end to the psychology of oil scarcity that made Western democracies more tolerant of erratic actions by OPEC and other oil-producing states.

Expert Voices

Despite rise in U.S. oil production, OPEC still steers global prices

A general view shows oil pumping jacks and drilling pads at the Kern River Oil Field
The Kern River Oil Field in Bakersfield, Calif. Photo: Mark Ralston/AFP via Getty Images

Saudi Arabia announced an oil production cut of 500,000 barrels per day on Tuesday, just weeks after Treasury Secretary Steven Mnuchin said "U.S. friends in the Middle East" would compensate for the drastic decline in Venezuelan oil production driven by U.S. sanctions.

Why it matters: Although U.S. production continues to rise, it still accounts for only 11% of global consumption, compared to OPEC’s 32%. The recent supply cuts illustrate that sudden disruptions and U.S. sanctions that take oil out of the market can put OPEC, and Saudi Arabia specifically, back in charge of global oil prices.