As the Organization of the Petroleum Exporting Countries prepares to meet this week, representatives say there is little mystery about the outcome of the gathering: Any coordinated action on cuts is unlikely.
Instead, the major questions are likely to concern the group’s future after the appointment of its newest representative— Khalid al-Falih, Saudi Arabia’s new energy minister.
Mr. Falih, appointed minister of energy, industry and mineral resources this month, joins a long line of powerful OPEC representatives from the kingdom, by far the group’s biggest producer. They include Sheikh Zaki Yamani, who orchestrated the oil embargoes of the 1970s; and Mr. Falih’s predecessor, Ali al-Naimi, who dominated OPEC decision making for a quarter-century.
But for those two ministers, managing OPEC and thus global oil markets was their main job. Mr. Falih has a full plate of other pressing responsibilities in Saudi Arabia’s increasingly complex energy economy.
Pressure to overhaul that economy, coupled with rising tensions between Saudi Arabia and Iran, also mean that Mr. Falih is operating with much less flexibility when OPEC’s ability to patch up internal differences to make coordinated decisions is already being tested.
“The Falih appointment is clearly about domestic policy more so than international oil policy,” said Yasser Elguindi, an oil analyst at U.S.-based consultancy Medley Global Advisors.
“The coming period is going to be a real test of whether or not OPEC is still alive,” said Mohammad al-Sabban, an independent oil analyst and former senior adviser to the Saudi oil ministry.
Rising prices in recent weeks have taken some of the pressure off OPEC to act at its biannual meeti
ng in Vienna on Thursday. After hitting three-year lows this winter, crude oil prices have nearly doubled and briefly traded above $50 last week, as the global glut that has weighed on the market since 2014 shows signs of unwinding.
Questions About New Saudi Energy Minister Likely to Dominate OPEC Meeting – WSJ