The $200 Billion Annual Value of OPEC’s Spare Capacity to the Global Economy

By Adam Sieminski, CFA, President, King Abdullah Petroleum Studies and Research Center (KAPSARC), Saudi Arabia

This commentary is based on a KAPSARC research project that resulted in the April 2018 publication of the paper, “OPEC’s Impact on Oil Price Volatility: The Role of Spare Capacity,” in the Energy Journal. This study finds that OPEC’s spare capacity reduces oil price volatility and generates between $170 and $200 billion of annual economic benefits for the global economy.