I’m in Vienna, waiting for the outcome of the Opec oil ministers’ meeting which began at 10am today. Here’s what we know with reasonable certainty so far:
Saudi Arabia has yet to rally a consensus behind its proposal to increase Opec’s output quotas for the first time in almost four years. The kingdom will have the support of Kuwait and the United Arab Emirates. But the two leading “hawks” – Iran and Venezuela – remain unconvinced. Rafael Ramirez, the Venezuelan oil minister, said at the outset of the meeting that he regarded the oil market as being “in balance”. As for the proposed revision of output quotas, Ramirez was clear: “We don’t believe it’s necessary,” he said.
Iran’s acting oil minister, Mohammad Aliabadi, was not quite as explicit. As the current president of Opec, he delivered the meeting’s opening speech and took the opportunity to declare that the “fundamentals” of the oil market remain “sound”. The “world remains well-supplied with oil, with ample spare capacity and adequate stock levels”, he said. This happy situation was, naturally enough, “very much due to Opec’s efforts”.
If there were any problems with supply, Aliabadi thought they were down to a lack of “effective spare capacity in the downstream sector” – in other words, nothing to do with Opec. As for the recent price volatility, step forward Opec’s usual culprits – the global fraternity of speculators.
Aliabadi reckons these malign beings have been particularly active of late. “Speculative activity” has “reached record highs”, he said, and this alone accounted for the recent swings in oil prices.
Saudi Arabia’s vote is the only one that really counts in Opec, so the odds are that the kingdom will get its way today. But not everyone is convinced.
The future of Libya’s production quota will be a key item on the meeting’s agenda. Suleman Ademola Raji, Nigeria’s national representative, told me that it would be the “core activity of today”. He added: “Definitely, we are aware that Libyan production has gone down because of the crisis there. How that’s decided, we’ll have to wait for the conference.”
Libya’s national quota stands at 1.47m barrels per day. The ministers have two broad options. They could choose to reduce the quota to zero, reflecting the current absence of production, and reallocate Libya’s barrels to other Opec members. Alternatively, they might remove Libya from the quota system altogether, leaving it outside the club’s production constraints, a status presently held by Iraq.
But where is Libya’s representative? The meeting opened with three empty chairs beside the Libyan flag and no sign of Omran Abukraa, the obscure official whom Col Gaddafi apparently nominated to represent “The Socialist Arab People’s Republic”.
Raji said he believed that Libya’s man would show up eventually. I have just been told that Abukraa, international man of mystery, has crept in to the Opec secretariat building via the basement. Apparently he couldn’t bear to face we journalists, who were waiting for him at the entrance.
His qualifications for being here are pretty obscure. All that anyone knows about him is that he was once in charge of Libya’s notoriously unreliable electricity supplies. But Col Gaddafi has suffered the inconvenience of losing his oil minister, Shokri Ghanem, who defected to the rebels last week. So the bar for being chosen as Libya’s man at this meeting was not set very high. Abukraa has every reason to avoid showing his face in public.