The Organization of Petroleum Exporting Countries (OPEC) has been reviewing candidates to replace Libya's Abdalla el-Badri as secretary general of the organization. A panel comprised of junior OPEC officials has been meeting to review candidates for the position in advance of the cartel's December meeting, but no recommendation will be forthcoming.
OPEC has never been the well-oiled machine it has often been depicted as. The Saudis and the Iranians have often clashed over policy, including production quotas. The Iranians, along with the Venezuelans and some others, have consistently called for lower quotas in order to keep prices high. The Saudis, who control virtually all of the group's - and the world's - spare capacity, prefer to keep supply at a level that doesn't cannibalize sales. Most of the cartel's members have sided with Saudi Arabia in the past.
The compromise candidate, according to a report in The Wall Street Journal, is Iraq's Thamir Ghadhban. An Iraqi has not been secretary general of OPEC since 1965, the year the group was founded. One analyst told the WSJ that "Iraq is now acceptable to everybody" now that Saddam Hussein is gone.
Kuwait, which currently holds OPEC's rotating presidency, could appoint an acting secretary general at the December meeting or it could extend el-Badri's tenure for another year. Love it or hate it, OPEC continues to wield significant weight in the world's oil markets and even something as nearly symbolic as the secretary generalship can significantly influence the volatile market for oil.
Filed under: 24/7 Wall St. Wire, Commodities, International Markets, Oil & Gas