Last week’s virtual meeting of oil ministers from the OPEC+ alliance was a fascinating insight into the exercise of power by Saudi oil minister Prince Abdulaziz Bin Salman. It opened with ABS, as he’s referred to, lecturing his counterparts about the importance of honoring the oil output cuts they agree to, not as an act of charity but as a vital commitment to maximizing each member country’s profits.
The only person sitting at the table with him in Riyadh was the oil minister of the United Arab Emirates — the latest country to blatantly ignore its production goal. It can’t have been a particularly comfortable place to be.
It turns out that the new OPEC — where members are meant to be in it all together, sticking to output targets and making up for any shortfalls with deeper compensatory reductions — is starting to show some similarities to the old OPEC, which was marred by rampant cheating.
During the first four months of the deal OPEC+ struck in April implementing record output cuts, the 10 OPEC countries bound by the pact — plus 10 more from outside the group — pumped just 12.7 million barrels more than they agreed. That puts the overall compliance rate at just over 98%, an astonishingly high figure for a group with a reputation for missing its targets by a wide margin.
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