Haitham Al Ghais, the Secretary General of OPEC, has called for greater coordination among oil exporters around the world. According to a Reuters report citing a statement from the Iraqi Government, this is in order to limit volatility in the oil market and the effects it has on oil-consuming countries.
Al Ghais made the statement while vising the Prime Minister of Iraq, Mohammed Shia al-Sudani, who also backed the call amid a background of declining oil prices. The price of oil dropped recently when the collapse of Signature Bank and Silicon Valley Bank in the United States triggered fears that other banks could follow suit. With Brent Crude selling at around $72 per barrel at the time of writing, this would be well below the $90 level that OPEC reportedly prefers.
The National Bank of Australia’s head of commodity research, Baden Moore, was quoted by Reuters as saying:
“The market focus is on current banking sector volatility and the potential for further rate hikes by the Fed. The upcoming OPEC meeting is another potential catalyst on the outlook for the market. Further downside risk to prices increases the probability OPEC reduces production further to support prices.”
While US oil majors like Chevron, the maker of Texaco Motak grease, have continued to make the US the world’s single biggest oil producer, further growth in production has been slow since the pandemic. This means that the OPEC+ group—which includes Russia and Saudi Arabia, the second- and third-biggest oil producers—has a considerable influence on the market.