OPEC Chiefs Withstood the Test of Major Historical Events

Abdul Rahman al-Bazzaz, Subroto, Asharq Al-Awsat
Abdul Rahman al-Bazzaz, Subroto, Asharq Al-Awsat
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OPEC Chiefs Withstood the Test of Major Historical Events

Abdul Rahman al-Bazzaz, Subroto, Asharq Al-Awsat
Abdul Rahman al-Bazzaz, Subroto, Asharq Al-Awsat

Successive personalities have occupied the position of Secretary-General at the Organization of the Petroleum Exporting Countries (OPEC), a 13-country organization that underwent major pivotal historical events in the global arena.

Over the years, the organization dealt with these events with wisdom that allowed it to endure and achieve goals in unifying and developing oil policies and stabilizing oil markets globally.

Some of the biggest and most dangerous challenges that faced OPEC include the Carlos the Jackal incident in the mid-70s, the oil wells crisis in Kuwait during the Iraqi invasion in the early 90s, as well as the September 11 attacks at the beginning of the new millennium.

Lastly, the organization had to face the repercussions of the coronavirus pandemic.

The organization was exposed to a significant crisis in 1975 when its headquarters were raided by Ilich Ramírez Sánchez, also known as Carlos the Jackal. This was one of the strangest and most surprising operations.

At the time, OPEC was headed by Nigeria’s Meshach Otokiti Feyide. The crisis was dealt with professionally so that the markets would not be affected by this attack. Indeed, the organization succeeded in continuing its path after overcoming the problem.

During the era of the Indonesian Secretary-General Subroto, OPEC witnessed a major crisis when Kuwait - one of the largest producing countries – had its oil wells destroyed during the war launched by the regime of former Iraqi President Saddam Hussein in late February 1991.

It is estimated that the Iraqi dictator had blown up approximately 1,073 Kuwaiti oil wells.

The organization had a major role in pumping more oil to achieve international sufficiency and maintain market stability. Once again, OPEC was able to withstand and succeed in the face of challenges.

The next critical juncture came when the US fell victim to a terrorist attack in September 2001.

At that time, global markets witnessed a frightening decline, including oil. It even shook the organization during the reign of Secretary-General Alvaro Silva Calderon, exposing it to a real crisis.

As a result, OPEC was forced to temporarily reduce production due to the decline in demand.

Finally, the beginning of 2020 witnessed historical developments at the level of oil markets. They were exposed, alongside the entire world, to an unprecedented crisis caused by the outbreak of the coronavirus pandemic.

However, OPEC was able to restore the health of the markets once again.



OPEC Again Cuts 2024, 2025 Oil Demand Growth Forecasts

The OPEC logo. Reuters
The OPEC logo. Reuters
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OPEC Again Cuts 2024, 2025 Oil Demand Growth Forecasts

The OPEC logo. Reuters
The OPEC logo. Reuters

OPEC cut its forecast for global oil demand growth this year and next on Tuesday, highlighting weakness in China, India and other regions, marking the producer group's fourth consecutive downward revision in the 2024 outlook.

The weaker outlook highlights the challenge facing OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies such as Russia, which earlier this month postponed a plan to start raising output in December against a backdrop of falling prices.

In a monthly report on Tuesday, OPEC said world oil demand would rise by 1.82 million barrels per day in 2024, down from growth of 1.93 million bpd forecast last month. Until August, OPEC had kept the outlook unchanged since its first forecast in July 2023.

In the report, OPEC also cut its 2025 global demand growth estimate to 1.54 million bpd from 1.64 million bpd, Reuters.

China accounted for the bulk of the 2024 downgrade. OPEC trimmed its Chinese growth forecast to 450,000 bpd from 580,000 bpd and said diesel use in September fell year-on-year for a seventh consecutive month.

"Diesel has been under pressure from a slowdown in construction amid weak manufacturing activity, combined with the ongoing deployment of LNG-fuelled trucks," OPEC said with reference to China.

Oil pared gains after the report was issued, with Brent crude trading below $73 a barrel.

Forecasts on the strength of demand growth in 2024 vary widely, partly due to differences over demand from China and the pace of the world's switch to cleaner fuels.

OPEC is still at the top of industry estimates and has a long way to go to match the International Energy Agency's far lower view.

The IEA, which represents industrialised countries, sees demand growth of 860,000 bpd in 2024. The agency is scheduled to update its figures on Thursday.

- OUTPUT RISES

OPEC+ has implemented a series of output cuts since late 2022 to support prices, most of which are in place until the end of 2025.

The group was to start unwinding the most recent layer of cuts of 2.2 million bpd from December but said on Nov. 3 it will delay the plan for a month, as weak demand and rising supply outside the group maintain downward pressure on the market.

OPEC's output is also rising, the report showed, with Libyan production rebounding after being cut by unrest. OPEC+ pumped 40.34 million bpd in October, up 215,000 bpd from September. Iraq cut output to 4.07 million bpd, closer to its 4 million bpd quota.

As well as Iraq, OPEC has named Russia and Kazakhstan as among the OPEC+ countries which pumped above quotas.

Russia's output edged up in October by 9,000 bpd to about 9.01 million bpd, OPEC said, slightly above its quota.