Every six months the oil ministers from OPEC’s 12 member petrostates come together to hash out the cartel’s strategy, so when this semiannual meeting once again came around today in Vienna it marked the fourth such summit since crude prices collapsed from their $110+ per barrel high in the summer of 2014, and for the fourth time in a row, OPEC elected to do nothing to address the market’s bargain prices.
So why wasn’t OPEC able to coordinate its production? Well, at this point we can put it down to what we’ll call the usual reasons: the Saudis don’t want to do the heavy lifting on cutting the cartel’s output, especially as Iran is boosting its own production to pre-sanctions levels, and there’s a healthy (or unhealthy, as the case may be) amount of distrust between OPEC members regarding how to monitor each petrostate’s actual output levels.
But the meeting wasn’t entirely for naught! The New York Times reports:
The group did select a new secretary general, Mohammed Barkindo, a Nigerian oil official. He replaces Abdalla Salem el-Badri of Libya, who had long served in an interim capacity. “We chose a new secretary general — that’s pretty good,” the Venezuelan oil minister, Eulogio Del Pino, said sarcastically. Venezuela is among the OPEC members urging the group to freeze or lower production levels, to shore up prices.
Daniel Yergin said months ago that “[t]he era of Opec as a decisive force in the world economy is over,” and with each successive month and each semiannual meeting that the cartel can’t agree to do what it’s set up to do—adjust its output to smooth out volatility in the oil market—that declaration is looking more and more on the money. Analysts were surprised when OPEC first chose this strategy of inaction, but at this point the only shocking thing the cartel could do would be, well, actually doing something.