The other ‘war’ between OPEC + and IEA

By Costas Raptis

At a time when all eyes are on the “cold war” of Russia and the West (which, of course, is quite warm in terms of the territory of long-suffering Ukraine), a different “cold war” brings the big exporters into conflict with the large oil consumers. In other words, again the West with the informal bloc of Russia and Arab monarchies.

The crowned ones of the Persian Gulf are covered behind the pretext of … No politica. As UAE Energy Minister Suhaal al-Mazrouei put it at the end of March, speaking at the Atlantic Council Energy Forum in Dubai, “We always believe that whatever we do as a country, the [πετρελαϊκή] production must be left out of politics ”.

Both Mazrouei and OPEC Secretary-General Mohamed Barquido insist that Russian oil exports are irreplaceable and should be sanctioned unless one has the means to find 10 million barrels from another source.

In doing so, they are defending the decisions of the enlarged OPEC + group (in which Russia also participates) to increase its exports in April by only 400,000 barrels per day, a quantity that is inconsistent with the calls of the US and its allies to support the tested oil market. , where prices are around $ 100 per barrel.

This peculiar “solidarity” of the Arab monarchies with Russia is certainly a way of defending their own particular interests, of recalling the objective limits of oil production, but also of negotiating parallel political issues with their big “clients”. Eg the suspicion of the powerful man of Saudi Arabia, Prince Mohammed bin Salman (and not only him) towards the Biden government regarding its stance on the war in Yemen, the negotiations with Iran over its nuclear program, but also the the Saudi royal succession itself, is a given.

But this side “cold war” reached the point of opening the file of … petro-statistics.

According to Reuters, the OPEC + technical committee, which met for six hours in late March in Vienna, co-chaired by Saudi Arabia and Russia, with the participation of Algeria, Iraq, Kazakhstan, Kuwait, Nigeria, the United Arab Emirates and the United Arab Emirates. in the unanimous decision to no longer take into account the data of the International Energy Agency (IEA) in order to assess the state of the oil market. Instead, the cartel will selectively use data from six different non-OPEC sources.

Founded in 1974, the International Energy Agency brings together 31 US-led industrialized nations and serves as the main energy consumer advisory body.

Its relationship with OPEC + had already been tested after the IEA issued a report ahead of the UN Climate Conference in Glasgow, which argued that in order to meet international targets for zero carbon emissions by 2050 respectively, investments in the oil sector had to be zeroed. Oil-producing countries argue that this degrades the medium-term maintenance of high oil demand to meet the world’s energy needs.

Now, the people of OPEC + are blaming the IEA, according to sources cited by Reuters, for lack of sufficient independence, which undermines the credibility of its data.

The scapegoat was the IEA’s surprise estimate in February that the world market needed to increase exports by 800,000 barrels per day, combined with an estimate of 2-3 million barrels as a result of the Russian issue as a result of the Ukrainian issue. . (On the Russian side, the reduction was estimated at one million barrels in early April).

The IEA cites the fact that post-pandemic conditions make any assessment of demand levels extremely precarious. But the attitude of OPEC + suggests that the big producers have decided to move at their own pace.