Can OPEC Surprise? – BBH
Research Team at BBH, suggests that the OPEC ministers meet in Vienna today but the expectations could hardly be lower.
“Attempts to agree on an output freeze were stymied by the Saudi's insistence that is rival Iran participates as well. Iran cannot agree to limit its production yet, or it would have sacrificed (or postponed) it nuclear program for nought.
The basis for surprise is that Saudi Arabia has a new oil minister. Khalid Al-Faliah takes over the reins from Al-Naimi, who held the post for two decades. Al-Faliah may not pursue a conciliatory tone. Saudi Arabia cannot cede market share to Iran. However, the armed with higher oil prices, and some sign that its strategy is paying off, Al-Faliah may make his presence felt. This could be done, for example, by proposing to reinstate a cap on OPEC output. It is not quite the same thing as a freeze, but it is a step toward re-establishing order.
In addition to the Saudi's new oil minister, OPEC may (finally) agree on a new Secretary General. El-Badri formally headed OPEC for the past nine years. His term was extended due to lack of agreement on his successor. Hence agreeing on a new Secretary-General would also be a step toward re-establishing OPEC's credentials. There appears to be support for Nigeria's Barkindo. Venezuela's Rodriguez is a potential rival. However, Venezuela has consistently argued against the Saudi strategy, and the Saudi's role is arguably more important than the formal OPEC structure. Indonesia, which only recently rejoined OPEC, is unlikely to find much support for its candidate Siregar.”