To: frankw1900 who wrote (4286 ) 4/25/2002 10:11:15 PM From: ahhaha Read Replies (1) | Respond to Thanks for the reference. I'm glad to see I'm not alone. That gives the idea credence.Despite the truce, however, the battle is not over. When it comes to compliance in preventing overproduction, Moscow and Riyadh remain suspicious of each other. Moscow knows that Saudi Arabia has been exceeding its export quotas over the past year far more egregiously than anyone else has. Recriminations will fly from both sides in the months ahead. In the long term, Moscow may have far more going for it than Riyadh. Yukos, Lukoil, and other companies are dynamic and growing, and they are now poised to recapture and expand on the production base of the former Soviet Union. Furthermore, they are highly integrated and are forming alliances with international companies, and so they can sell their growing output to enlarging networks in Europe, Asia, and the Americas. Through their joint ventures, they can tap the technology and capital of Western firms in developing new resources, especially in the Far East and the Arctic Ocean. Riyadh, on the other hand, might have vast known reserves, but it also has a closed state monopoly. Most alarming, Saudi Arabia has been unable for 20 years to increase its production capacity. Nor is its position unique: few OPEC countries in 2002 have more production capacity than they did in 1990 or 1980. The exceptions are countries such as Algeria and Nigeria, whose governments have encouraged foreign investment in the petroleum sector. History does not look kindly on monopoly-company countries. Riyadh has only one clear weapon left: the spare capacity that can be unleashed whenever it chooses to punish those who would challenge its oil supremacy.
