OPEC Preaches Stability While Making Unstable Bets
The Organization of the Petroleum Exporting Countries (or, OPEC) Secretary General Abdullah al-Badri said the 12-member cartel could make room for an increase in oil from Iran, Iraq, and Libya. All three member states could be on the verge of a revival, and the OPEC boss says accommodations could be made when they return. Emerging trends, however, suggest his anticipation may be premature.
OPEC set a production target for its members of 30 million barrels of oil per day, but doesn’t have individual quotas in place. Saudi Arabia and OPEC’s top producers have been making up for shortages from Iran, Iraq and Libya, but now the secretary-general said it may be time to make accommodations. ”When they come, we will accommodate them, and OPEC will be as before,” he said following his speech at Chatham House, the London think tank.
The OPEC, in its January market report, said Iranian crude oil remains off limits for most European refiners because of sanctions pressure. In January, Iran managed to increase crude oil exports modestly after implementing the terms of multilateral nuclear deals. Shippers, however, said they’re confused by the wording of regulations that would lift the ban on insurance for vessels carrying Iranian crude.
For Iraqi oil, supplies were hampered by what OPEC described as “pipeline issues.” At the same event at Chatham House, Hussain al-Shahristani, Iraq’s deputy prime minister in charge of energy affairs, said oil from the Kurdish north should be exported through Iraq’s State Oil Marketing Organization as outlined in the national constitution. There was no word on the proposal this week from the Kurdish government, which is making preparations to export crude oil on its own through Turkey. National security challenges in Iraq, meanwhile, are complicating developments ahead of April elections.