What Oil Export Levels Should We Expect From OPEC?

We analyze the levels of oil exports that should be expected from OPEC over the next 25 years. We search for a long-term, market-adaptive, robustly optimal strategy that best serves OPEC's interests, and conclude that OPEC export profits will be higher if OPEC expands its oil exports by enough to maintain OPEC exports' share of non-OPEC demand. Yet the incentives for this export expansion are relatively small - only a few percent in terms of discounted export profits - and it requires that OPEC be farsighted, because the higher export profits from faster export growth won’t be significant within the next decade. Moreover, if OPEC does maintain its exports' share of non-OPEC demand, the continued rapid growth of OPEC’s own oil consumption will require that OPEC oil output will have to increase 60% by 2030, which will be a major challenge.