The Secretary-General of OPEC, Haitham Al-Ghais, has accused the International Energy Agency (IEA) of “finger-pointing” and defended the OPEC+ group’s recent production cuts, saying they were based on market fundamentals rather than a desire to keep oil prices high.
The comments came in response to recent criticism from Fatih Birol, the IEA’s Executive Director, in an interview on Bloomberg TV. He claimed that high crude oil prices and inflationary pressure were threatening global economic growth, with the poorest nations likely to be most affected.
In response, Al-Ghais said it was inappropriate to blame oil prices for high inflation, because many factors influence it:
“The IEA knows very well that there are a confluence of factors that impact markets. The knock-on effects of COVID-19, monetary policies, stock movements, algorithm trading, commodity trading advisors and SPR releases (coordinated or uncoordinated), geopolitics, to name a few.”
The IEA and OPEC’s relationship has been particularly tense recently. While OPEC represents major oil producers, particularly in the Middle East, the IEA mostly represents oil-consuming OECD countries, although the US is also now a major oil producer thanks to shale producers like ExxonMobil and Chevron, the makers of the Mobil and Texaco coolant, lubricant, and grease products.
Al-Ghais also criticised the IEA’s repeated calls to cease investment in oil and gas projects, saying this may lead to market volatility in future. This is because most models predict that oil will drive economic growth in the world, particularly for developing economies, for decades to come.