If OPEC Is To Survive, It Must Reinvent Itself – Analysis
The OPEC+ meetings of 4 October 2026 brought two concerns into focus: how much petroleum should enter the market, and how securely it can reach its destination. Seven participating countries, including Saudi Arabia and Russia, maintained September’s required production levels for November, with their next meeting scheduled for 1 November.
At its separate meeting, the Joint Ministerial Monitoring Committee stressed the importance of safeguarding international maritime routes and expressed concern about attacks on energy infrastructure. Restoring damaged facilities, it noted, is costly and takes considerable time. Such disruptions affect supply availability and undermine efforts to stabilise markets.
These concerns connect physical supply security with the preservation of petroleum value. Attacks on routes and facilities raise freight, insurance and repair costs, reducing the net proceeds available to the exporter. Rising prices for imported equipment and technology can then further erode what those proceeds can finance, including infrastructure protection and recovery. OPEC therefore needs to examine both the security of delivery and the purchasing power of the compensation received for a finite resource. Supply volumes alone cannot establish whether that exchange preserves national wealth.
Reform should build on OPEC’s achievements
OPEC’s achievements are substantial, despite the crises it has faced. As examined in “OPEC: Fifty Years of Crises and Achievements”, the organisation has defended member states’ resource rights, supported market stability and advanced producer-consumer cooperation. Its efforts to preserve the purchasing power of petroleum revenues relative to internationally traded manufactured goods remain particularly relevant.
Building on these achievements requires a fundamental change in how petroleum is understood. The conventional language of “production” should give way to “extraction”, recognising that each barrel is removed from a finite natural asset. Extraction generates economic value, but it also reduces the resource stock. The question therefore extends beyond output and revenue: does the wealth received compensate for the asset surrendered and help create productive capacity that will endure?
The distinction matters for fiscal policy and national accounting. Manufactured goods can be produced repeatedly; petroleum reserves cannot be replenished within a meaningful human timescale. Petroleum receipts cannot be evaluated as income without considering depletion. Financing recurrent expenditure without sufficient provision for replacing depleted wealth risks consuming the capital on which future prosperity depends.
The World Bank’s The Changing Wealth of Nations 2024 provides a relevant framework for distinguishing economic activity from the wealth that supports it. GDP growth alone does not establish that a country’s productive asset base has increased. For petroleum exporters, the national balance sheet must account for what is removed from the ground alongside what is acquired with the proceeds.
This concern predates the present debate. The 1984 master’s thesis, Oil and Industrialization in Arabia, treated petroleum as a depletable resource and examined how it could support economic capabilities enduring beyond the resource itself. Subsequent Al Eqtisadiah writings, including ‘Oil: A Game of Winners and Losers’, published in 2006, and ‘Relative Scarcity and Limited Production Capacity’, published in 2008, examined petroleum as finite national capital and the consequences of its depletion for future generations.
Sovereignty includes the terms of exchange
When OPEC was established in Baghdad in 1960, the central issue was sovereignty: who should determine how petroleum was extracted and priced, and how much of its value should accrue to the countries that owned it?
UN General Assembly Resolution 1803 (XVII), “Permanent Sovereignty over Natural Resources”, adopted on 14 December 1962, provides an important foundation for this discussion. It affirms the permanent sovereignty of peoples and nations over their natural wealth and resources, linking its exercise to national development and public well-being.
Applied to petroleum policy, that principle supports informed decisions about extraction, contractual terms and the use of proceeds. Ownership has limited practical value if the owner lacks the information or institutional capacity to assess the exchange being made.
Resolution 1803 does not prescribe petroleum prices, settlement currencies or valuation formulas. Drawing on its principle of permanent sovereignty, this article proposes two approaches, Petro-Gold and the Asset-Based Petroleum Real Value Index, APRVI, to help resource owners preserve petroleum value and exercise their sovereignty more effectively, subject to applicable international obligations and contractual commitments. They address different aspects of the same problem. Petro-Gold would establish a possible contractual reference and settlement asset. APRVI would measure the investment purchasing power of net petroleum receipts.
Petro-Gold: a contractual alternative
The monetary conditions of 1971 offer a useful illustration. Before the United States suspended the dollar’s convertibility into gold for official foreign monetary authorities, the official parity was $35 per troy ounce. Using an illustrative crude price of approximately $3.56, a barrel represented about 3.16 grams of gold at that rate.
This was a monetary equivalence, not evidence that every petroleum transaction involved physical gold. Nor does it establish that 3.16 grams represented petroleum’s intrinsic value. It illustrates how a nominal price can be related to an asset reference, and why changes in the monetary system matter to resource owners.
A proposed Petro-Gold arrangement would allow willing exporters and buyers to negotiate contracts expressing petroleum value in a specified gold weight. Settlement could occur through physical gold, a verified claim on allocated gold or an agreed currency equivalent, according to contractual terms.
The gold quantity would itself require commercial negotiation. Historical equivalence cannot automatically determine a contemporary price, because petroleum markets, extraction costs and gold prices have changed.
A gradual approach could begin with a limited number of voluntary contracts. These would permit assessment of transaction costs, liquidity, custody and the exporter’s ability to convert receipts into the assets needed for development. Any preference for gold settlement would need to reflect commercial benefits rather than an assumed discount.
Gold-backed digital instruments could eventually facilitate transfers, but they would require credible ownership rights, independent reserve audits and enforceable redemption. Tokenisation would change the means of transferring a claim; it would not eliminate custody, legal or operational risk.
Petro-Gold could diversify the reference used in petroleum trade and reduce dependence on a single currency. It would not guarantee constant purchasing power. Gold prices fluctuate, and gold holdings do not automatically finance productive investment. Its merits must therefore be assessed against the exporter’s development objectives.
APRVI: measuring what petroleum receipts can buy
APRVI offers a different approach. Rather than requiring a change in contractual currency, it would measure the capacity of petroleum receipts to acquire productive assets. Three functions must be distinguished: the currency of quotation, the currency of settlement and the measure of real value. Under the APRVI option, the dollar could continue to perform the first two, while an investment basket supplied the third.
A higher dollar price does not necessarily improve the exporter’s position. If net petroleum receipts rise by 10 per cent while the relevant machinery and equipment become 20 per cent more expensive, investment purchasing power falls despite increased nominal revenue. The proposed core measure would adjust net receipts using an investment-price index. The resulting purchasing power could then be compared with an independently specified investment target per barrel, representing a disclosed quantity of productive goods rather than simply reproducing the prevailing petroleum price.
An initial basket could cover machinery and equipment, with comparable domestic goods added where reliable data permit. The IMF’s Export and Import Price Index Manual: Theory and Practice provides methodological guidance relevant to constructing such indices, including weighting and quality adjustment. It does not endorse APRVI, which would require its own design and testing.
Extraction and delivery costs would be deducted under transparent accounting boundaries. Freight, insurance and security expenses are particularly relevant to the October warning. An increase in the selling price can be partly absorbed by more expensive delivery. Expenses already included in freight or insurance should not be counted again as a separate security allowance.
APRVI would measure investment purchasing power, not the intrinsic value of petroleum or the success of investments subsequently undertaken. Its basket, benchmark and assumptions would need disclosure, historical testing and comparison with simpler measures.
Valuation must account for depletion
Neither a gold reference nor an investment index fully measures the finite asset surrendered. Depletion requires a related assessment. A Petroleum Reference Value could examine extraction and delivery costs, the investment objective and an allowance for depletion and opportunities forgone. That allowance should rest on evidence about recoverable reserves, future costs and alternative uses, with safeguards against counting the same component twice.
Such a reference would inform the seller’s decision without guaranteeing that buyers would accept the resulting terms. Sovereignty includes the authority to evaluate an offer; it does not create an unlimited ability to determine market prices.
A barrel left underground is not necessarily a barrel lost. It retains an option of later extraction, including for domestic industrial use. Future demand, competing technologies and reservoir conditions may reduce that option’s value. Retention must therefore be compared with the income and investment returns available from extraction today.
This approach is consistent with the Abanamay Sovereignty Spectrum Theory Formula, ASTF, which examines the practical exercise of sovereignty under interacting internal and external conditions. Petroleum ownership matters alongside the capacity to choose extraction timing and terms, supported by technology, information and effective institutions.
From OPEC to an advisory OEEC
OPEC could support these decisions through an independent petroleum-value and depletion observatory. It could publish gold comparisons, investment purchasing-power series and resource assessments alongside its market research. Members would retain authority over contracts, extraction and investment.
Over time, this could support an advisory Organisation of Energy Extracting Countries, OEEC. Its purpose would extend attention beyond exports to the management of finite natural assets. A change of name would have a meaning only if accompanied by a substantive change in institutional responsibilities. An advisory mandate should concentrate on transparent research and valuation standards. It should avoid confidential future prices or sales plans, prescribe no common selling price and organise no extraction restrictions to enforce its benchmarks.
Regular dialogue with consuming countries would be another responsibility. The 2008 article “Oil Price Stability: The Exporters’ Perspective” called for an international meeting involving producers, consumers, major oil companies and international organisations. The October warning supplies a current reason for continuing cooperation on maritime protection, emergency repair and delivery costs.
That dialogue should also examine the terms of exchange. Paragraph 4(j) of UN General Assembly Resolution 3201 (S-VI), adopted in 1974, calls for an equitable relationship between developing countries’ export prices and the goods and capital equipment they import. APRVI could help examine one aspect of that relationship, without implying that the resolution establishes a petroleum price or endorses the proposed index.
The October 4 meetings show why OPEC’s task must extend beyond deciding how many barrels enter the market. Its members need secure delivery and a clearer account of what their petroleum receipts can purchase. Petro-Gold and APRVI offer distinct options for examination, but their value must be judged against the same objective: converting a finite resource into wealth capable of sustaining future generations.
About Dr. Rashed M. Aba-Namay
Dr. Rashed M. Aba-Namay is a legal scholar specializing in institutional resilience and coercive statecraft. He developed the Abanamay Sovereignty Spectrum Theory and its analytical formula, which examines how authority is distributed in complex states and how external pressure produces divergent socio-political and legal outcomes. He is president of the National Law Center, a Riyadh-based legal firm specializing in energy security, maritime law, and strategic infrastructure analysis.
View all posts by Dr. Rashed M. Aba-Namay →
Key Takeaways:On Oct. 4, 2026, seven OPEC+ countries, including Saudi Arabia and Russia, kept September output levels for November and set the next meeting for Nov. 1; the monitoring committee flagged attacks on shipping and energy sites as costly to repair and as a drag on net export proceeds.The author wants “extraction” accounting for a finite asset, citing World Bank wealth methods and UN Resolution 1803, and floats Petro-Gold contracts and an investment-basket index (APRVI) so a higher dollar price is not mistaken for more buying power.An advisory Organisation of Energy Extracting Countries is proposed for research and depletion data, not a com
The OPEC+ meetings of 4 October 2026 brought two concerns into focus: how much petroleum should enter the market, and how securely it can reach its destination. Seven participating countries, including Saudi Arabia and Russia, maintained September’s required production levels for November, with their next meeting scheduled for 1 November.
At its separate meeting, the Joint Ministerial Monitoring Committee stressed the importance of safeguarding international maritime routes and expressed concern about attacks on energy infrastructure. Restoring damaged facilities, it noted, is costly and takes considerable time. Such disruptions affect supply availability and undermine efforts to stabilise markets.
These concerns connect physical supply security with the preservation of petroleum value. Attacks on routes and facilities raise freight, insurance and repair costs, reducing the net proceeds available to the exporter. Rising prices for imported equipment and technology can then further erode what those proceeds can finance, including infrastructure protection and recovery. OPEC therefore needs to examine both the security of delivery and the purchasing power of the compensation received for a finite resource. Supply volumes alone cannot establish whether that exchange preserves national wealth.
Reform should build on OPEC’s achievements
OPEC’s achievements are substantial, despite the crises it has faced. As examined in “OPEC: Fifty Years of Crises and Achievements”, the organisation has defended member states’ resource rights, supported market stability and advanced producer-consumer cooperation. Its efforts to preserve the purchasing power of petroleum revenues relative to internationally traded manufactured goods remain particularly relevant.
Building on these achievements requires a fundamental change in how petroleum is understood. The conventional language of “production” should give way to “extraction”, recognising that each barrel is removed from a finite natural asset. Extraction generates economic value, but it also reduces the resource stock. The question therefore extends beyond output and revenue: does the wealth received compensate for the asset surrendered and help create productive capacity that will endure?
The distinction matters for fiscal policy and national accounting. Manufactured goods can be produced repeatedly; petroleum reserves cannot be replenished within a meaningful human timescale. Petroleum receipts cannot be evaluated as income without considering depletion. Financing recurrent expenditure without sufficient provision for replacing depleted wealth risks consuming the capital on which future prosperity depends.
The World Bank’s The Changing Wealth of Nations 2024 provides a relevant framework for distinguishing economic activity from the wealth that supports it. GDP growth alone does not establish that a country’s productive asset base has increased. For petroleum exporters, the national balance sheet must account for what is removed from the ground alongside what is acquired with the proceeds.
This concern predates the present debate. The 1984 master’s thesis, Oil and Industrialization in Arabia, treated petroleum as a depletable resource and examined how it could support economic capabilities enduring beyond the resource itself. Subsequent Al Eqtisadiah writings, including ‘Oil: A Game of Winners and Losers’, published in 2006, and ‘Relative Scarcity and Limited Production Capacity’, published in 2008, examined petroleum as finite national capital and the consequences of its depletion for future generations.
Sovereignty includes the terms of exchange
When OPEC was established in Baghdad in 1960, the central issue was sovereignty: who should determine how petroleum was extracted and priced, and how much of its value should accrue to the countries that owned it?
UN General Assembly Resolution 1803 (XVII), “Permanent Sovereignty over Natural Resources”, adopted on 14 December 1962, provides an important foundation for this discussion. It affirms the permanent sovereignty of peoples and nations over their natural wealth and resources, linking its exercise to national development and public well-being.
Applied to petroleum policy, that principle supports informed decisions about extraction, contractual terms and the use of proceeds. Ownership has limited practical value if the owner lacks the information or institutional capacity to assess the exchange being made.
Resolution 1803 does not prescribe petroleum prices, settlement currencies or valuation formulas. Drawing on its principle of permanent sovereignty, this article proposes two approaches, Petro-Gold and the Asset-Based Petroleum Real Value Index, APRVI, to help resource owners preserve petroleum value and exercise their sovereignty more effectively, subject to applicable international obligations and contractual commitments. They address different aspects of the same problem. Petro-Gold would establish a possible contractual reference and settlement asset. APRVI would measure the investment purchasing power of net petroleum receipts.
Petro-Gold: a contractual alternative
The monetary conditions of 1971 offer a useful illustration. Before the United States suspended the dollar’s convertibility into gold for official foreign monetary authorities, the official parity was $35 per troy ounce. Using an illustrative crude price of approximately $3.56, a barrel represented about 3.16 grams of gold at that rate.
This was a monetary equivalence, not evidence that every petroleum transaction involved physical gold. Nor does it establish that 3.16 grams represented petroleum’s intrinsic value. It illustrates how a nominal price can be related to an asset reference, and why changes in the monetary system matter to resource owners.
A proposed Petro-Gold arrangement would allow willing exporters and buyers to negotiate contracts expressing petroleum value in a specified gold weight. Settlement could occur through physical gold, a verified claim on allocated gold or an agreed currency equivalent, according to contractual terms.
The gold quantity would itself require commercial negotiation. Historical equivalence cannot automatically determine a contemporary price, because petroleum markets, extraction costs and gold prices have changed.
A gradual approach could begin with a limited number of voluntary contracts. These would permit assessment of transaction costs, liquidity, custody and the exporter’s ability to convert receipts into the assets needed for development. Any preference for gold settlement would need to reflect commercial benefits rather than an assumed discount.
Gold-backed digital instruments could eventually facilitate transfers, but they would require credible ownership rights, independent reserve audits and enforceable redemption. Tokenisation would change the means of transferring a claim; it would not eliminate custody, legal or operational risk.
Petro-Gold could diversify the reference used in petroleum trade and reduce dependence on a single currency. It would not guarantee constant purchasing power. Gold prices fluctuate, and gold holdings do not automatically finance productive investment. Its merits must therefore be assessed against the exporter’s development objectives.
APRVI: measuring what petroleum receipts can buy
APRVI offers a different approach. Rather than requiring a change in contractual currency, it would measure the capacity of petroleum receipts to acquire productive assets. Three functions must be distinguished: the currency of quotation, the currency of settlement and the measure of real value. Under the APRVI option, the dollar could continue to perform the first two, while an investment basket supplied the third.
A higher dollar price does not necessarily improve the exporter’s position. If net petroleum receipts rise by 10 per cent while the relevant machinery and equipment become 20 per cent more expensive, investment purchasing power falls despite increased nominal revenue. The proposed core measure would adjust net receipts using an investment-price index. The resulting purchasing power could then be compared with an independently specified investment target per barrel, representing a disclosed quantity of productive goods rather than simply reproducing the prevailing petroleum price.
An initial basket could cover machinery and equipment, with comparable domestic goods added where reliable data permit. The IMF’s Export and Import Price Index Manual: Theory and Practice provides methodological guidance relevant to constructing such indices, including weighting and quality adjustment. It does not endorse APRVI, which would require its own design and testing.
Extraction and delivery costs would be deducted under transparent accounting boundaries. Freight, insurance and security expenses are particularly relevant to the October warning. An increase in the selling price can be partly absorbed by more expensive delivery. Expenses already included in freight or insurance should not be counted again as a separate security allowance.
APRVI would measure investment purchasing power, not the intrinsic value of petroleum or the success of investments subsequently undertaken. Its basket, benchmark and assumptions would need disclosure, historical testing and comparison with simpler measures.
Valuation must account for depletion
Neither a gold reference nor an investment index fully measures the finite asset surrendered. Depletion requires a related assessment. A Petroleum Reference Value could examine extraction and delivery costs, the investment objective and an allowance for depletion and opportunities forgone. That allowance should rest on evidence about recoverable reserves, future costs and alternative uses, with safeguards against counting the same component twice.
Such a reference would inform the seller’s decision without guaranteeing that buyers would accept the resulting terms. Sovereignty includes the authority to evaluate an offer; it does not create an unlimited ability to determine market prices.
A barrel left underground is not necessarily a barrel lost. It retains an option of later extraction, including for domestic industrial use. Future demand, competing technologies and reservoir conditions may reduce that option’s value. Retention must therefore be compared with the income and investment returns available from extraction today.
This approach is consistent with the Abanamay Sovereignty Spectrum Theory Formula, ASTF, which examines the practical exercise of sovereignty under interacting internal and external conditions. Petroleum ownership matters alongside the capacity to choose extraction timing and terms, supported by technology, information and effective institutions.
From OPEC to an advisory OEEC
OPEC could support these decisions through an independent petroleum-value and depletion observatory. It could publish gold comparisons, investment purchasing-power series and resource assessments alongside its market research. Members would retain authority over contracts, extraction and investment.
Over time, this could support an advisory Organisation of Energy Extracting Countries, OEEC. Its purpose would extend attention beyond exports to the management of finite natural assets. A change of name would have a meaning only if accompanied by a substantive change in institutional responsibilities. An advisory mandate should concentrate on transparent research and valuation standards. It should avoid confidential future prices or sales plans, prescribe no common selling price and organise no extraction restrictions to enforce its benchmarks.
Regular dialogue with consuming countries would be another responsibility. The 2008 article “Oil Price Stability: The Exporters’ Perspective” called for an international meeting involving producers, consumers, major oil companies and international organisations. The October warning supplies a current reason for continuing cooperation on maritime protection, emergency repair and delivery costs.
That dialogue should also examine the terms of exchange. Paragraph 4(j) of UN General Assembly Resolution 3201 (S-VI), adopted in 1974, calls for an equitable relationship between developing countries’ export prices and the goods and capital equipment they import. APRVI could help examine one aspect of that relationship, without implying that the resolution establishes a petroleum price or endorses the proposed index.
The October 4 meetings show why OPEC’s task must extend beyond deciding how many barrels enter the market. Its members need secure delivery and a clearer account of what their petroleum receipts can purchase. Petro-Gold and APRVI offer distinct options for examination, but their value must be judged against the same objective: converting a finite resource into wealth capable of sustaining future generations.
About Dr. Rashed M. Aba-Namay
Dr. Rashed M. Aba-Namay is a legal scholar specializing in institutional resilience and coercive statecraft. He developed the Abanamay Sovereignty Spectrum Theory and its analytical formula, which examines how authority is distributed in complex states and how external pressure produces divergent socio-political and legal outcomes. He is president of the National Law Center, a Riyadh-based legal firm specializing in energy security, maritime law, and strategic infrastructure analysis.
View all posts by Dr. Rashed M. Aba-Namay →
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