Has OPEC learned anything from its past? The oil price collapse of 2014 and the events that ensued have projected a mixed picture. On one hand, it seems that the organization has improved to some extent and OPEC does its business in a new way; on the other hand, OPEC is often approaching its problems and challenges today in the same way it did three or four decades ago. To understand the evolution of OPEC, it’s better to go back to the words of one of its most prominent figures, Shaikh Ahmad Zaki Yamani. But why Yamani? First, he served as an oil minister for 26 years, more than most of the others. Second, he was among the most influential people of his time. Third, he has seen it all at OPEC, from its heyday in the late 1970s to its chaotic fall in mid-1980s. Fourth, he was very active for years in analyzing the behavior of the organization, even after he left the post through his Center of Global Energy Studies, which was based in London. This last treat puts Yamani at the forefront of his peers and successors who ceased to engage in OPEC’s affairs the moment they stepped outside their offices. The Center held annual conferences that hosted the most prominent figures in the oil industry and academia at the time to discuss the market and the challenges that lie ahead for OPEC. One of OPEC’s main faults is its blindness and inability to think long-term Wael Mahdi In 1994, in the fourth annual conference of the Center, which was known as CGES until it was closed down in 2014, Yamani delivered an interesting speech in which he addressed the past mistakes and the future challenges of OPEC. What’s more interesting is that the world in which OPEC operates hasn’t changed much and the behavior of Western consuming nations to the oil industry and OPEC has changed little throughout the years. One of OPEC’s main faults is its blindness and inability to think long-term. In many cases it is blind, or has blind spots that it can’t see. Yamani pointed out that OPEC in the 1980s didn’t realize “the shift in oil investments worldwide” toward the upstream sector. The situation hasn’t changed much today. OPEC in the years 2011-2014 failed to realize the astonishing technological developments in unconventional oil production, and treated it as a temporary phenomenon that posed no threat to their business. OPEC realized the significance later and since last year, the economic commission board of OPEC has obtained briefs on shale oil developments from major players or research centers at least once a year. Moreover, its current ministers and Secretary-General Mohammed Barkindo hold regular meetings at CERA Week with American shale oil companies to exchange views. Yamani pointed to another important issue: The burden exerted on Saudi Arabia within OPEC and at industry level. “Its position at that time has been likened to the apex of a gigantic inverted pyramid,” he said. Saudi Arabia became the de facto swing producer in the world because of that inverted pyramid where energy prices rested on oil prices, and oil prices rested on OPEC, and OPEC rested on Saudi Arabia. “No wonder the whole pyramid soon toppled over.” For OPEC to work, it must “swing down as a whole if it is to mean anything,” Yamani said. Otherwise there is no hope for the group. Unfortunately, the situation hasn’t changed much these days, no matter how hard Saudi Arabia tried to stop playing the role of swing producer. The Kingdom officially abandoned that role in the late 1980s and its ministers after Yamani never spoke of going back to that role. But the world is still pushing Saudi Arabia to play that. Very recently, US President Donald Trump has asked OPEC to be a cartel, and he wants Saudi Arabia to swing to the upside to cover for the declines in output from other members. Saudi Arabia played it smart. It took a new prince in charge of oil affairs, Crown Prince Mohammed bin Salman, and a new oil minister, Khalid Al-Falih, to think outside of the box and bring Russia and other non-OPEC producers to hold that inverted pyramid. Yet other global leaders are missing the point and they can’t see the danger of asking Saudi Arabia alone to play a role that doesn’t fit the current times. Another important feature of OPEC that still exists and hinders its development is the fault line between its members’ objectives. In his speech 24 years ago, Yamani said that there was a mismatch between those with spare capacity such as Saudi Arabia and Kuwait, and those who don’t have spare capacity such as Iran, Algeria and others. Therefore, the latter always seek higher oil prices because they don’t have volumes. This situation still exists and it manifested itself well in the last meeting between OPEC and non-OPEC allies in which the producers agreed to raise production by about one million barrels a day to cover the shortage in the market. Only a handful of countries were able to pump additional volumes, so they ended up increasing while Iran resisted seeing them having more market share. Moreover, Yamani pointed out that OPEC for decades lacked a “coherent policy” as it wasn’t able to obtain higher oil prices and higher volumes at the same time. So after all these years, what does OPEC lack? It lacks cohesion and vision. As for cohesion, things are better today. At least there is another big elephant in the room — Russia — which helps Saudi Arabia in putting everyone back in line. As for vision, that remains a contending issue. What’s really important in Yamani’s message is the policy of consuming nations. He said that the US encouraged the Shah of Iran in 1970s to push for higher prices to cut America’s dependence on imported oil. And the Western’s adversity toward OPEC and fossil fuel is still there. What’s keeping OPEC in place all these years? Yamani answers this simply. Because the alternative to not having OPEC is very ugly for all. Wael Mahdi is an energy reporter specializing on OPEC and a co-author of “OPEC in a Shale Oil World: Where to Next?” He can be reached on Twitter @waelmahdi Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News" point-of-view