Times change and the influence of organizations, like OPEC may be waning. Since the 1970s oil embargoes rocked the world, OPEC has steadily seen its influence decline. Was the decline of OPEC discussed at the Texas Bankers Association Annual Strategic Opportunities Conference in November 2016?
OPEC Can’t Agree
OPEC is a consortium of Oil Producing Exporting Countries, which basically means nations with surplus production not needed for their domestic industry. It used to be that when OPEC spoke, the world listened. But some are predicting the End of Big Oil. Is this true?
For years, OPEC has struggled to maintain a consistent policy. Since the continual wars after 2002, the energy consortium has been dominated by internal struggles, chaos and loss of influence. The truth is that the United States and Russia (non-OPEC members) are actually two very influential energy producers.
The weakness of OPEC has led to a lower West Texas Intermediate (WTI) crude oil price. On the other hand, it has also led to increased American influence in the industry. How can Texas bankers profit from the demise of OPEC?
Texas Energy Prestige
As the energy industry changes, local Texas towns will be impacted. The proactive strategy of NexBank CEO John Holt, who spoke on the aforementioned conference panel, “Reinventing Community Banking: Perspectives on Competing by Innovation,” offers an answer. Texas bankers can continue to offer innovative financial products to anticipate energy sector changes.
Perhaps, this might include focusing more attention on low income housing. NexBank can provide the loans to the builders and home owners. This allows them to continue to have a healthy housing sector, even with energy industry changes. NexBank can also help Texas energy firms gain more traction, prestige and influence. As OPEC declines, Texas Big Oil should be able to fill the vacuum.