• Thursday, June 13, 2024
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Barkindo’s exit: Political intrigues, regional concerns heighten at OPEC’s Jan 4 meeting

OBITUARY: Barkindo, ex-NNPC boss who died with ‘OPEC in his blood’

There is a growing wave of politicking among major stakeholders as the Organization of the Petroleum Exporting Countries (OPEC) prepares to elect its next secretary-general when the oil cartel meets for the first time this year on January 4.

Apart from discussing monthly policy on modest increases in oil output, OPEC’s current secretary-general Mohammad Barkindo is expected to step down at the end of next July, after taking OPEC’s top job in mid-2016 and was granted a second three-year term in 2019.

Sources told S&P Global Platts that Riyadh is supporting the candidacy of Kuwait’s former Number two OPEC envoy, Haitham al-Ghais, to replace incumbent Mohammed Barkindo, who remains popular with several African countries. Barkindo, who has held his post for six years, cannot stand for another term but may be asked to remain if a successor cannot be agreed.

“The Saudis are pushing for a change,” one OPEC source said, asking not to be named.

Ghais declined to comment in advance of the OPEC meeting, and Saudi Arabia’s energy ministry did not respond to a request for comment.

Deliberation over a possible new secretary general comes at a difficult moment with OPEC and its main ally Russia being blamed by the US and other key customers for pushing up oil prices.

Some US lawmakers are now seeking to revive so called “NOPEC” legislation that would subject the organization, which controls about a third of world oil supply, to anti-trust legislation.

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Convening every month, OPEC, Russia and several other allies have been gradually rolling back the record production cuts they instated when the market crashed in spring 2020, and hopes to regain its pre-pandemic output levels by late 2022.

But a roaring comeback by the global economy throughout 2021 had demand outpacing supply for much of the second half of the year, drawing fierce complaints from the US and other consuming nations grappling with soaring energy costs and heightened inflation.

Absent pressure from the White House, OPEC+ ministers might have very well paused their scheduled output increase for January to head off expected seasonal weakness in the first quarter.

“Political pressure on OPEC from oil consuming countries is nothing new, but has become particularly acute since oil prices reached multi-year highs in October,” said Paul Sheldon, Platts Analytics’ chief geopolitical advisor. “An historically rare, price-related SPR release from the US and others sets a new precedent OPEC+ may need to incorporate into future production decisions.”

This week’s agenda includes time to canvass for other potential nominees. Iraq may present a candidate, sources have told S&P Global Platts.

Another term for Barkindo would require a change in the OPEC regulations, though past secretary generals have remained in office to give ministers and delegates time to resolve impasses over a successor.

The official who can serve up to two three-year terms is OPEC’s public face to international bodies and is responsible for convening meetings, including extraordinary summits when markets are under extreme pressure. The secretary general also oversees day-to-day affairs of the secretariat in Vienna.

The position must be confirmed by a vote of the 13 member states — a politically fraught exercise that has often exposed geopolitical rifts.

Congolese oil minister Bruno Jean-Richard Itoua, whose country joined the organization in 2018, will hold the rotating OPEC presidency for 2022 and thus will chair all of its meetings and oversee the secretary general vote.