October 8th, 2007
Thirteen at Opec’s feast
Opec is to have a new member, it seems; or rather, an old one back again. Ecuador’s oil minister Galo Chiriboga said on Monday that after a 15-year absence his country intends to rejoin as soon as possible. Because Ecuador never formally quit, just let its membership lapse, all it has to do is pay a couple of years of fees that it owes: about $5m.
Ecuador, it must be remembered, is a minnow in oil terms, with output of a little over 0.5m barrels a day about half that of Opec’s lowest-producing members, Qatar and Indonesia. But getting a thirteenth member on board, following Angola last year, is another sign of Opec’s growing prestige and influence. After Ecuador, it is suggested, Sudan could be next.
We should not get carried away about the all-mighty Opec, however. Its attempt to curb oil prices that were heading towards $80 a barrel failed dismally. It seems Opec has the power to raise the price of oil, but not to cut it.
