OPEC members contest call for crude oil price meeting
Iran has requested an emergency conference among OPEC members to resolve current crude oil price issues. However, Saudi Arabia and other Gulf members expressed disagreement over holding said conference after receiving advice from OPEC President Abdul Kareem Luaiby.
An OPEC member from the Gulf region intimated that the emergency meeting was intended to discuss the trend in crude oil prices, which may be a cause for alarm. At the moment, however, there’s nothing to be worried about because prices appear to have bounced back. The lingering conflict with Iran, coupled with the dismal state of the EU economies, may even trigger prices to take on an upward trend.
Falah Alamri, OPEC Governor of Iraq, disclosed that OPEC President Abdul Kareen Luaiby disseminated Iran’s request for OPEC to convene immediately to first assess how its members will respond to such request.
As oil prices plunged below $100 per barrel, Rostam Ghasemi, Oil Minister of Iran, requested OPEC members to convene immediately to discuss a possible cut in oil production.
Alamri confirmed that they have seen the letter from Ghasemi. He said Luaiby instructed the OPEC’s secretary general to send a copy of the letter to OPEC members to get initial feedback.
However, some delegates, especially those from the Gulf, disclosed that they have not yet seen the communication. They added that their respective oil ministers opine that the situation as regards crude oil prices seem to be stable now.
Other delegates also said that the emergency conference would have been timely in the past days when crude prices slumped. Right now, however, it isn’t sensible to meet and tackle the issue as prices (Brent) rose to $98.19 per barrel.
A few weeks from the last OPEC meeting, and amid declining crude prices, countries like Algeria and Iran had made attempts to call for an emergency conference among OPEC members.
Muhammed Ali Khatibi, OPEC governor of Iran, affirmed that oil prices have indeed made a rebound from a previous level below $90 per barrel. But he explained that some OPEC members remain anxious because, generally, prices have been on a downward trajectory.
During the most recent OPEC conference, the 12-member cartel decided to keep its total production ceiling at 30 million bpd. An OPEC member had also suggested that the entity should bring back its price band mechanism – a system put in place many years ago to keep crude oil price per barrel within a comfortable range, thereby averting excessive movement in prices. Said member proposed a price band of $80 to $120 (Brent North Sea) per barrel.
Another delegate, however, countered that even the system worked many years ago, it no longer applies at this time when oil market participants, investors, and other drivers are dictating price movements. He added that OPEC cannot successfully limit oil prices anymore.