OPEC+ Silence on Russia War Deepens Rift With Consuming Nations
(Bloomberg) -- As the OPEC+ coalition tries to ignore an oil shock unleashed by one of its leading members, relations with consumers are deteriorating.
The 23-nation group led by Saudi Arabia faced a yawning gap in supplies when it gathered on Wednesday, as the market shuns supplies from member nation Russia. The International Energy Agency had already tried to calm the rally by deploying emergency stockpiles, to little avail. Yet Riyadh and its partners offered nothing new to slow oil's surge toward $120 a barrel, wrapping up their meeting in just 13 minutes.
On Thursday, the head of the IEA -- which represents the U.S. and other major economies -- offered a terse and unusually critical response.
“In a word, it was disappointing,” IEA Executive Director Fatih Birol said in a call with reporters. “I think we'll leave it at that.”
The cordial rapport established between the Organization of Petroleum Exporting Countries, its allies and Western governments during the pandemic, when the group rescued the global oil industry by slashing production, was already fraying.
Last summer, Saudi Energy Minister Prince Abdulaziz bin Salman dismissed the agency's recommendation to meet climate goals by curbing hydrocarbon investments as a fantasy akin to the Hollywood musical, “La La Land.” In turn, the IEA's Birol criticized OPEC+ members in April for causing “artificial tightness” in oil markets by holding supplies back.
With the group apparently willing to let prices flare and the international community set on bringing them under control, it's hard to see the producing and consuming blocks getting back on the same page soon.
©2022 Bloomberg L.P.
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