Transforming OAPEC into the Arab Energy Organization: A Step Toward Enhanced Collective Action

A group photo of OAPEC members. (SPA)
A group photo of OAPEC members. (SPA)
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Transforming OAPEC into the Arab Energy Organization: A Step Toward Enhanced Collective Action

A group photo of OAPEC members. (SPA)
A group photo of OAPEC members. (SPA)

The transformation of the Organization of Arab Petroleum Exporting Countries (OAPEC) into the Arab Energy Organization marks a strategic step toward reinforcing Arab cooperation in the energy sector.

The move supports collective efforts and contributes to sustainable development across the region. By broadening its scope to encompass all forms of energy—not just petroleum—the organization is adapting to modern demands and becoming more inclusive.

This shift provides an opportunity to enhance the efficiency of Arab collaboration in the energy field, keeping pace with the evolving global energy landscape, which now includes diversified energy sources and renewable energy. It also positions Arab nations to confront global challenges through unified policies and strategies, strengthening their presence in international markets while bolstering energy security within the region.

Foundation of OAPEC

OAPEC was established in 1968 with the aim of separating petroleum policy discussions from the political conflicts that often dominated the Arab League at the time. Membership was restricted to Arab petroleum-exporting countries, enabling the creation of shared Arab enterprises, such as the Arab Petroleum Investments Corporation (APICORP), headquartered in Dammam, Saudi Arabia.

Over the decades, OAPEC played a key role in shaping Arab petroleum policies and made impactful decisions, such as the 1973 oil embargo. However, calls have grown over the years to transform the organization into a more comprehensive entity that encompasses various energy sectors, boosting Arab cooperation in this critical area.

New Vision for Arab Energy Integration

In this context, Saudi Energy Minister Prince Abdulaziz bin Salman proposed transforming OAPEC into the Arab Energy Organization. The proposal, which has faced challenges due to complex Arab political dynamics, aims to expand cooperation to include renewable and nuclear energy alongside traditional energy sources.

The proposal outlines several strategic objectives, including fostering Arab integration in energy and economic sectors, unifying policies among member states to strengthen collective action, and contributing to sustainable development in the region.

Unlocking New Opportunities for Cooperation

If implemented, this transformation would signify a paradigm shift in Arab collective efforts. The organization would become a hub for coordinating policies and exchanging expertise among member states. It would also empower Arab nations to address global energy challenges while promoting sustainable economic development within the region.

While the success of this transformation depends on political consensus and collective determination to overcome obstacles, it presents a historic opportunity to strengthen Arab integration in one of the world’s most strategic sectors.

Coordinating Energy Initiatives

OAPEC recently announced its restructuring and renaming as the Arab Energy Organization (AEO). According to energy experts, the change allows for more comprehensive coordination of energy initiatives across the Arab world. Such efforts will support and enhance the export of oil and gas while aligning with the global trend of diversifying energy sources.

Dr. Mohammed Al-Sabban, an international economic and energy consultant, explained to Asharq Al-Awsat that the original name, OAPEC, was centered on petroleum exports. However, the current shift toward multiple energy sources and greater collaboration among Arab nations motivated Saudi Arabia to propose renaming the organization as the Arab Energy Organization.

Al-Sabban emphasized that the new name reflects a broader mandate, offering an opportunity for coordinated efforts in various energy sectors.

“Western nations claim they are moving away from oil and gas production, yet they continue to heavily support coal—a clear double standard,” he remarked.

He noted that Saudi Arabia is intensifying efforts to diversify energy sources, focusing on hydrogen development, renewable energy, and nuclear power. These steps align with the Kingdom’s larger vision of sustainability and global environmental commitments.

During its 113th ministerial meeting in December, OAPEC approved Saudi Arabia’s proposal to rename the organization as the Arab Energy Organization.

OAPEC, founded in 1968, includes 10 member states: Saudi Arabia, Kuwait, Libya, Algeria, Qatar, the UAE, Bahrain, Iraq, Egypt, and Syria. Of these, six are also members of OPEC.



Dollar Resumes Upward Trend, Euro Hits Lowest since Nov 2022

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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Dollar Resumes Upward Trend, Euro Hits Lowest since Nov 2022

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

The dollar hit new multi-month highs against the euro and the pound on Thursday, the first day of 2025 trading, as it built on last year's strong gains on expectations US interest rates will remain high relative to peers.

The euro fell to as low as $1.0314, its lowest since November 2022, down around 0.3% on the day. It is now down nearly 8% since its late September highs above $1.12, one major victim of the dollar's recent surge.

Traders anticipate deep interest rate cuts from the European Central Bank in 2025, with markets pricing in at least four 25 basis point cuts, while not being certain of even two such moves from the US Federal Reserve, Reuters reported.

The dollar was hitting milestones across the board and the pound was last down 0.65% at $1.2443, its lowest since April, with its fall accelerating after it broke through resistance around $1.2475.

"It's more of the same at the start of the new calendar year with the dollar continuing to extend its advances in anticipation of Trump putting in place friendly policies at the start of his term," said Lee Hardman, senior currency analyst at MUFG.

US President-elect Donald Trump's policies are widely expected to not only boost growth but also add to upward price pressure. That will lead to a Fed cautious about cutting rates too much further, in turn underpinning US Treasury yields and boost dollar demand.

A weaker growth outlook outside the US, conflict in the Middle East and the Russia-Ukraine war have also added to demand for the dollar.

The dollar also reversed an early loss on Thursday to climb against the Japanese yen, and was last up 0.17% at 157.26.

It reached a five-month high above 158 yen in late December, potentially putting pressure on the Bank of Japan, which is expected to raise interest rates early this year, but possibly not immediately.

"If dollar/yen were to break above 160 ahead of the next BOJ meeting, that could be a catalyst for the BOJ to hike in January rather than wait until March," said Hardman.

"Though for now markets are leaning towards March after the dovish comments from (governor Kazuo) Ueda at his last press conference."

Even those who are more cautious about sustained dollar strength think it could take a long time to play out.

"The dollar may be vulnerable – but only if the US data confound market expectations that the Fed doesn’t cut rates more than once in the first half of this year, and not by more than 50bp in the whole of 2025," said Kit Juckes chief FX strategist at Societe Generale in a note.

"There's a good chance of that happening, but it seems very unlikely that cracks in US growth will appear early in the year – hence my preference for taking any bearish dollar thoughts with me into hibernation until the weather improves."

China's yuan languished at 14-month lows as worries about the health of the world's second-biggest economy, the prospect of US import tariffs from the Trump administration and sliding local yields weighed on investor sentiment.

Elsewhere, the Swiss franc, another victim of the recent dollar strength, gave back early gains to last trade flat at 0.90755 per dollar.

The Australian and New Zealand dollars, however, managed to break away from two-year lows touched on Tuesday. The Aussie was 0.36% higher at $0.6215 having dropped 9% in 2024, its weakest yearly performance since 2018.

The kiwi rose 0.47% to $0.5614.