The first news about the contagion and risks of the omicron variant revived the fears of March 2020 and collapsed the price of oil, which in the blink of an eye went from $ 85 to $ 70 a barrel. A long month later, and despite the fact that things are gradually returning to their place – Brent crude, the benchmark in Europe, is trading around $ 80 again – the Organization of the Petroleum Exporting Countries (OPEC ) follows point by point the road map drawn up last summer. The expanded version of the cartel or OPEC +, which brings together Russia and other external powers, has decided this Tuesday to keep its roadmap unchanged, which involves gradually increasing pumping. Too slight an increase in supply to meet demand fueled by the rapid recovery in advanced economies.
“In view of the current fundamentals of the oil market and the consensus on its prospects,” the ministers certified “the decision to adjust the monthly global production upwards by 400,000 barrels per day in February 2022,” according to the statement. the final declaration of the virtual meeting held on Monday and Tuesday. The cartel of exporters thus remains in its thirteen, oblivious to the forecasts of its own study service, which projects an oil consumption of 100.6 million barrels per day this year, more than before the pandemic. The organization’s economists have also stripped the impact of omicron on market fundamentals in recent weeks. But the line to be followed by its members runs through another lane.
Given the reluctance of exporters to give their arm to twist – it will be like that until, at the earliest, February 2, when it will meet again – several of the world’s largest consumers (the United States, China, Japan, India and the United Kingdom) have chosen in recent months to release part of their strategic reserves to try to rebalance forces. The market response, however, has been very discreet: only the irruption of the omicron has allowed a temporary relaxation in the price of crude oil, and Brent closed last year with a revaluation of 50%.
Complaints and pressures from large oil consumers have also been transferred to the rhetorical plane. “The idea that Saudi Arabia [el líder de facto del grupo de exportadores], Russia and other large producers are not going to pump more so that people can come and go from work is not correct, “US President Joe Biden dropped in November. His right-hand man for energy issues, Jennifer Granholm, has also charged at the Vienna-based organization: “The price of gasoline depends on what happens in the world oil market. And that market is controlled by a cartel: OPEC. So that poster has more to say [que yo] about what is happening ”.
Relief in the general secretariat
Know in depth all the sides of the coin.
The summit held this Monday and Tuesday by telematic means has served, in addition to reviewing the production objectives, to elect a new secretary general of the cartel: after being appointed “by acclamation”, the Kuwaiti Haitham al-Ghais will replace the Nigerian Mohamed Barkindo at the top of OPEC – although without executive power – as of August 1.
Al-Ghais will be in office for the next three years and can only be re-elected – if the case arises – once, as has already happened in the case of his predecessor, who hastened the last months of his second term. The future secretary general has spent most of his professional career at the Kuwait Petroleum Corporation (KPC), the state oil company in the Asian country. He was also the representative of that emirate before OPEC itself and has led the coordination of OPEC +, the umbrella that brings together both the members of the cartel and their external allies, including Russia.
George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.