OPEC’s secretary-general rebuked the International Energy Agency, saying the production cuts were designed to manipulate the price of crude oil. File photo by Mohamed Messara/EPA-EFE
April 27 (UPI) — The secretary general of OPEC on Thursday rebuked the head of the Western-backed International Energy Agency, saying the producer group is trying to prop up crude oil prices by cutting output.
Haitham al-Ghais, secretary-general of the Organization of the Petroleum Exporting Countries, said neither OPEC nor OPEC+, the main group, and non-EU allies such as Russia were defending a certain crude price point.
His comments on Thursday followed an interview with Fatih Birolis, the IEA’s executive director, who told Bloomberg news agency that OPEC must be “very careful” about its production policy so that it does not contribute to global inflation.
However, OPEC’s secretary general said that the price of oil is influenced not only by OPEC’s policies, but also by stock movements, algorithms that determine some global transactions, geopolitics and other factors.
“The IEA is very aware that there is a confluence of factors affecting markets,” he said.
Elsewhere, Birol said production cuts could backfire on OPEC. If the 1.6 mln. barrel per day reduction would result in a longer crude oil price scenario, OPEC oil consumers may seriously look to renewable energy resources.
But what Al Ghais countered were calls from the IEA for an accelerated energy transition, which has led to less investment in oil and gas and subsequently fewer products on the market.
When OPEC+ made a surprise decision to cut production in early April, although the group defended its position, saying it was a “precautionary measure to maintain the stability of the oil market.”
This was seen as a tacit indication of continued economic instability that could limit demand for crude oil.
Market analysts at the time expected crude oil prices to rise to $100 a barrel in response to production cuts, although a steady stream of data showing a weakening global economy pushed prices below their pre-announcement levels.
The price of global benchmark Brent crude reached $87.33 about a week after the OPEC announcement, down from $79.77 at the end of March. It was trading closer to $78 a barrel at midday on Thursday.
