Now That the United States Is Producing So Much Oil, Could We Join OPEC?

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Nov. 14 2012 3:51 PM

Could the United States Join OPEC?

We’ll be a net oil exporter in 20 years.

Saudi's Oil Minister Ali al-Nuaimi, right, sits next to Oman's Oil and Gas minister Mohammad bin Hamad bin Saif al-Romhi.
Saudi's Oil Minister Ali al-Nuaimi, right, sits next to Oman's Oil and Gas minister Mohammad bin Hamad bin Saif al-Romhi at the opening session of the Gulf Cooperation Council (GCC) Oil Ministers' meeting in Doha in 2003.

Photo by Karim Jaafar/AFP/Getty Images.

The United States will become the world’s biggest oil producer by 2020 and a net exporter of oil by 2030, according to a forecast released Monday by the International Energy Agency. Will the United State be able to join OPEC in 20 years?

Probably not. Countries seeking membership in the Organization of Petroleum Exporting Countries must have a “substantial net export of crude petroleum” and “fundamentally similar interests” to the current members. The United States won’t satisfy the second requirement. Even if it becomes the world’s largest oil producer, the country will still be among the largest consumers of petroleum and wouldn’t be as interested in propping up the price of crude as are countries like Qatar. The United States’ membership petition would also face a significant political obstacle. Applicants must obtain the blessing of three-quarters of the existing members and all of the founding states, which include Venezuela and Iran. There’s no telling what those countries’ political conditions will be like in 20 years, but no Chavez- or Ahmedinejad-like governments would accept an alliance with the United States. A vote on U.S. membership might hold the potential for some significant diplomatic embarrassment, as even Saudi Arabia and Iraq could oppose American accession to OPEC.

The United States would have a hard time complying with OPEC rules, anyway. The organization influences oil prices by dictating how much crude member states produce in a given year. For countries like Saudi Arabia, which has a state-owned oil company, it’s easy enough for the government to enforce production quotas. But it has been decades since the United States had a legal mechanism to control domestic oil production.

Joining OPEC also wouldn’t be in the United States’ interest. When OPEC cuts production, it affects global oil prices, not just the price of OPEC oil. (OPEC members currently produce 40 percent of world crude.) That means a country can benefit from the actions of the OPEC cartel without subjecting itself to production limits. Mexico, for example, has enjoyed inflated OPEC prices while still portraying itself to the United States as a reliable, independent producer. Russia, another OPEC abstainer, has used its vast energy resources and unfettered control over output as leverage in diplomatic relations with European countries. When China becomes the world’s largest consumer of oil, the United States might seek to leverage its oil reserves in a similar way.

At this point, the more pertinent question isn’t whether OPEC would accept a new member, but why a country would want to join. Membership means compromising national control over energy output, and it’s hard to imagine a major producer joining up in the foreseeable future. The organization has added only one new country in the past 40 years, when Angola joined in 2007. Angola probably sought membership to tighten ties with the wealthier members and signal greater independence from the United States, the largest buyer of the country’s oil. OPEC also agreed not to impose a quota on Angola for the first few years of its membership. The group has actually shrunk recently, with Gabon leaving in 1995 and Indonesia suspending its membership in 2009.

Got a question about today’s news? Ask the Explainer.

Explainer thanks Nathan Citino of Colorado State University and author of From Arab Nationalism to OPEC: Eisenhower, King Sa'ud, and the Making of U.S.-Saudi Relations, Charles Doran of the Johns Hopkins School of Advanced International Studies, and Benjamin Zycher of the American Enterprise Institute.



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