OPEC Picks Kuwait’s Al-Ghais as Next Top Diplomat

(Bloomberg) -- OPEC chose veteran Kuwaiti oil executive Haitham al-Ghais to become the organization's top diplomat, as the group and its allies navigate a delicate recovery from the pandemic.

Al-Ghais -- a multilingual technocrat whose three-decade oil industry career includes stints in Beijing and London -- will become Secretary-General in August, taking over from Mohammad Barkindo, according to a statement from the Organization of Petroleum Exporting Countries on Monday.

His appointment comes at time when OPEC and its partners tread a narrow path, seeking to satisfy the recovery in oil consumption without tipping markets back into oversupply. Al-Ghais signaled that he would maintain this approach.

“Our role in OPEC+ is to continue supplying the market to achieve balance,” Al-Ghais said in an interview with Al Arabiya. “The group is keen on matching the rise in demand so that the market is not undersupplied.”

The OPEC+ coalition is expected to approve another modest revival of supplies when it meets on Tuesday.

Public Face

While the secretaries-general don't set OPEC production policy, they do act as the group's public face -- and as an intermediary seeking compromise between often-fractious members.

It's a sensitive task now as oil's return to almost $80 a barrel stirs fears over inflation in major consumers like the U.S. -- where lawmakers occasionally invoke threats of anti-competition legislation -- and as climate change accelerates a transition away from fossil fuels.

“He knows OPEC inside and out,” said Johannes Benigni, chairman of consultant JBC Energy Group in Vienna. “At the same time, he knows the ins and outs of the market. He's very smart and a good analyst.”

Internal tensions within the group also need to be managed. Last year saw strains emerge between two of OPEC's longstanding allies, group leader Saudi Arabia and the United Arab Emirates, as the smaller nation pursues an ever-more independent set of energy and foreign policies.

Balancing Act

The diplomatic balancing act is a mission to which Al-Ghais brings a number of strengths.

Having previously served as a diplomat, he subsequently held a number of positions at state-run Kuwait Petroleum Corp., most recently as deputy managing director for international marketing. Al-Ghais also acted as the country's liaison to OPEC from 2017 until last year.

The appointment of a Kuwaiti as OPEC chief marks a shift for the group, which has typically awarded the post to candidates from smaller producers to offset the concentration held by its Gulf heavyweights. Smaller members will likely monitor whether he can act as a counterbalance to the group's most influential nation, Saudi Arabia. Al-Ghais was the only candidate, and was appointed by acclamation rather than a ballot on Monday.

“I would like to offer my cordial congratulations to HE Haitham Al-Ghais on his appointment, by acclamation, as the next Secretary General of OPEC,” Saudi Energy Minister Prince Abdulaziz bin Salman Prince Abdulaziz said in a statement.

As incumbent secretary-general, Barkindo steps down in July after completing the full six years permitted by the cartel's rules, having played a pivotal role in the creation of OPEC+ in late 2016. Prince Abdulaziz has proposed a farewell party with ministers in Vienna before he leaves, according to a person familiar with the situation. Ministers have been meeting virtually throughout the pandemic.