Organization of Islamic Cooperation
Mr. Peter Antonopoulos
Glenbrook South High School
Topic 2: Responding to the Worldwide Drop in Oil Prices
Islamic states in the Middle East, Africa, and Southeast Asia typically have a large stake in the international oil market. Brunei Darussalam is one the nations, in fact over 80% of our economy is based on oil exports with our largest customer be the United Kingdom. Like many other Islamic nations we have suffered from the recent oil drops, we used to be considered the 4th richest nation in terms of per person living, however now we are continually falling from the top towards the bottom. Naturally we would like to see some kind of rebound on the oil market while we attempt to diversify our economy. However, this will be difficult as well as we are nation with very limited land and population as the current population is under half a million.
As of right now Brunei is not in OPEC, but would like to join or become a member of some very large coalition to try and control the oil prices, we feel this is the best way to try and attempt to make the market rebound. We side with Saudi Arabia on the fact that limiting production. This is because setting prices may cause price wars until economic profit is 0. However, limiting output through collusion is a much easier way to avoid a price war, as long as no nation cheats on the deal, in which tit for tat would occur. Being in the best interest of everyone to rebound the market Brunei believes that no Islamic nation in the collusion agree would cheat. Through this agreement the oil market could rebound and while this occurs and our economies are at least somewhat healthy we could make a joint effort in diversifying our economies as the oil will forever been on a long term downward slope as the demand for the oil will decrease with the availability of cleaner energy increasing.
The new coalition Brunei proposes would be called the IOA, or the Islamic Oil Agreement. This would hopefully entail all predominantly Islamic nations whose economies are dependent on oil. Through this agreement we would set quarterly maximums, that would have to be reported in an annual checkup report by each nation in order to ensure no nations cheat. With this hopefully we can control the prices to be higher, but still be low enough to rule out some other methods of obtaining oil and fuel such as fracking. Also, in the agreement would be means in which all nations would support each other in diversifying each other's economies, helping with building other industry by sharing technology and techniques. Finally, this agreement would entail each nation member would be heard to make sure no nation feels cheated and is comfortable with deals made because every nation that supports the agreement will only make it stronger and more efficient.