Barkindo’s exit: Political intrigues, regional consideration heightens at OPEC

Saudi Arabia, worlds top oil producer is playing the godfather role as the Organization of the Petroleum Exporting Countries, OPEC begins its first formal discussions over its next secretary general when it meets December 1.

Saudi Arabia thought to back a change as the producer group struggles to contain a volatile oil market and withstand energy transition pressures.

Sources told S&P Global Platts that Riyadh is supporting the candidacy of Kuwait’s former Number  two OPEC envoy, Haitham al-Ghais, to replace incumbent Mohammed Barkindo, who remains popular with several African countries. Barkindo, who has held his post for six years, cannot stand for another term but may be asked to remain if a successor cannot be agreed.

“The Saudis are pushing for a change,” one OPEC source said, asking not to be named.

Ghais declined to comment in advance of the OPEC meeting, and Saudi Arabia’s energy ministry did not respond to a request for comment.

Deliberation over a possible new secretary general comes at a difficult moment with OPEC and its main ally Russia being blamed by the US and other key customers for pushing up oil prices. Some US lawmakers are now seeking to revive so called “NOPEC” legislation that would subject the organization, which controls about a third of world oil supply, to anti-trust legislation.

Dated Brent has climbed almost 50 per cent to $74.95/b year-to-date.

Meanwhile, renewed concerns over COVID-19 have focused attention on demand, with S&P Global Platts Analytics expecting global consumption to reach 103.2 million b/d, 700,000 b/d above pre-pandemic levels in 2022.

“Political pressure on OPEC from oil consuming countries is nothing new, but has become particularly acute since oil prices reached multi-year highs in October,” said Paul Sheldon, Platts Analytics’ chief geopolitical advisor. “An historically rare, price-related SPR release from the US and others sets a

new precedent OPEC+ may need to incorporate into future production decisions.”

This week’s agenda includes time to canvass for other potential nominees. Iraq may present a candidate, sources have told S&P Global Platts.

Another term for Barkindo would require a change in the OPEC regulations, though past secretary generals have remained in office to give ministers and delegates time to resolve impasses over a successor.

The official who can serve up to two three-year terms is OPEC’s public face to international bodies and is responsible for convening meetings, including extraordinary summits when markets are under extreme pressure. The secretary general also oversees day-to-day affairs of the secretariat in Vienna.