​It's difficult to see what purpose the once-mighty OPEC serves following Sunday's spectacular flop of much-anticipated talks to freeze oil production and drive up prices.  

This was the first substantial effort in a decade and a half to co-ordinate both OPEC and non-OPEC countries in a freeze that would boost prices, yet it ended in only more confusion across energy markets.

Prices have been battered since late 2014 after OPEC rejected calls to rein in an oversupply of 1.3 million barrels a day — but they began rising sharply in recent weeks on rumours that top producers Saudi Arabia and non-OPEC Russia would push for the freeze.

A freeze seemed logical enough but, having risen on the hype, prices tumbled again after the talks in Doha, as OPEC again seemed to be floating directionless on a sea of excess oil.

This is highly significant, as even OPEC debacles like this can reveal much about the current fragmented and disordered state of our globe. Giants stumble for a reason. 

"This is the new world of oil," said Jim Burkhard, a market analyst observing the talks in the Qatar capital. "The oil market is a reflection of the world. Power is more decentralized."

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Russia's President Vladimir Putin went out on a limb trying to bring Iran and Saudi Arabia together ahead of the talks in Doha. (Alexei Nikoskyi/Reuters)

Distrust and rivalry

Without firm leadership, major oil-producing nations want others to cut production without doing so themselves, which tends to make meetings rancorous, directionless and ultimately incoherent.

Add to this the distrust factor. Because there is no central regulator of oil output, members can never be sure other countries, like Russia say, won't cheat on any global agreement by simply falsifying production figures.  

Still, the major cause for failure this time is the intense geopolitical rivalry pitting Saudi Arabia and its Gulf allies against Iran, a power showdown heightened by ancient religious rivalry that isn't likely to fade anytime soon.

To the surprise of many, Russia has been diplomatically embarrassed by the Doha collapse after it risked major credibility capital by assuming the role of honest broker to bring Iran and Saudi Arabia together on the freeze. 

Russia has close relations with Iran and success would have added fuel to its attempts to emerge as a key player and dealmaker in the Middle East at a time when U.S. influence has weakened. Moscow also wanted to heal its past rifts with OPEC, enhancing still further its clout in global energy markets.

The stakes were high, higher still the risks. President Vladimir Putin went out on a limb backing the effort, and Foreign Minister Sergei Lavrov "confirmed" that Iran would attend and the talks would succeed. 

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Saudi Arabia's veteran Oil Minister Ali al-Naimi, seen here in February, wanted to reach an agreement at Doha only to see it scuppered by chief policy maker and Deputy Crown Prince Mohammed bin Salman. (Naseem Zeitoon/Reuters)

Uncharacteristic naiveté

Diplomats are still trying to unravel the failure, but Moscow appears to have believed it had firm commitments from both Tehran and Riyadh that a satisfactory deal could be reached despite deep-seated animosities.  

For Moscow, this was uncharacteristic naiveté. Moscow kept trumpeting its confidence in an agreement even as Saudi Arabia announced, on the very eve of Doha, that it would reject a freeze unless Iran signed on, which Iran dismissed as a "ridiculous" notion. 

Iran, after years of suffering international embargoes and sanctions before it signed the nuclear agreement last fall, is determined to dramatically boost oil production, now at 3.2 million barrels a day and heading for over four million by next year.  

Russia seems to have misread not only Iran, but failed to grasp how unpredictable Saudi Arabia has become under its younger and more divided leadership. The veteran oil minister wanted an agreement, but chief policy maker and Deputy Crown Prince Mohammed bin Salman scuppered the deal.  

These are stressful times for the Saudis and Russians — both are desperately in need of more oil revenue to cover rising deficits, growing military budgets and pressing needs to reshape their whole economic structures at home.  

This makes them more competitors — guided more by urgent, raw self-interest — than plausible energy allies.  

Saudi Arabia seems to feel Russia is actively poaching some of its energy customers and, to counter a perception it's losing ground, reportedly intends to soon boost exports to Europe and Asia, which makes a freeze unlikely.

The Saudis also are rumoured to suspect — there's that distrust factor again — that, despite any agreement, the Russians would not be able to resist pumping oil on the sly at maximum capacity.  

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After years of suffering international embargos and sanctions, Iran is determined to dramatically boost oil production, now at 3.2 million barrels a day and heading for over four million by next year. (Raheb Homavandi/Reuters)

Questioning the future

It's too soon to gauge how much Russia lost at Doha, but analysts with the energy market publication Oil and Company News predict it will have "a chilling effect on future Russia-OPEC cooperation and weaken regional perceptions of Russian influence."

The more immediate effects of Doha, however, will be damage to OPEC's own credibility as it can no longer be seen as the main and mighty driver of oil prices.

There's even speculation OPEC's lead powerhouse Saudi Arabia is questioning the organization's future usefulness when so many big non-OPEC producers follow their own paths.

To Saudi leaders like Prince Mohammed, OPEC seems increasingly unable to protect its basic market share, the critical concern in a country where most of the budget still rests on oil revenue.  

Even if OPEC convinced others to join in a freeze it might only backfire if higher prices revived the U.S. shale oil production phenomenon as a major competitor. U.S. companies, of course, are not government owned and could take advantage of a freeze with new production that might capture Saudi markets.  

This new oil world is forcing even Saudi Arabia to start charting a more independent future for their oil industry. There's open talk of even selling off to private investors parts of government-owned Saudi Aramco, world's largest oil producer.

At the bottom seems the realization that neither Saudi Arabia nor OPEC and all its members, can really control oil prices any longer.  

It's far too complex a world for that now, and most will be grateful.