Cartel or talking shop? OPEC awaits Saudi ruling
By Rania El Gamal and Alex Lawler
DUBAI/LONDON (Reuters) - For those seeking guidance on Saudi Arabia's thinking regarding the future of OPEC, the last few weeks' agenda of the new Saudi energy minister, Khalid al-Falih, might offer a few clues.
Since his appointment on May 7 as head of a new mega-ministry - overseeing energy, industry, mining, atomic power and renewables - Falih has toured six state firms, met the South Korean premier, the Canadian foreign minister and Gulf industry ministers, and opened a gas turbine plant.
To fellow members of the Organization of the Petroleum Exporting Countries, that speaks volumes. Unlike his predecessor Ali al-Naimi, Falih may not have much time for OPEC. The group meets on June 2, its first talks with the new minister in attendance.
For oil-price hawks such as Iran, Algeria and Venezuela, fears are growing that the 56-year-old OPEC is losing its role as an output-setting cartel and turning into a talking shop.
"Saudi Arabia killed OPEC and buried it," a senior OPEC source from a non-Gulf producer said.
"In OPEC, they go for (including) Indonesia and Gabon to convert OPEC to a forum," the source said, referring to OPEC's decision, supported by Riyadh, to include minor producers.
As a historic reminder, OPEC last decided to change output in December 2008, when it cut supply amid slowing demand due to a global financial crisis. Between 1998 and 2008, OPEC made 27 changes to output.
For decades, Saudi Arabia, Vienna-based OPEC's largest producer and de facto leader, had a preferred range for oil prices and, if unhappy, would try to orchestrate a group-wide production cut or increase. Continued...