Since late 2016, the Organization of Petroleum Exporting Countries and other nations, including Russia, Kazakhstan and Mexico, have managed the oil market, giving birth to a group popularly known as OPEC+.
Yet the future of the bloc, which includes arch-enemies Saudi Arabia and Iran, is so uncertain that Rosneft PJSC, the Russian state-run oil company, told investors on Tuesday it didn’t know whether OPEC+ or some other combination of producers would be calling the shots in the near future.
Rosneft’s oil-output plans for late 2018 “will depend on what happens on the OPEC front,” said Eric Liron, the company’s top executive in charge of production, “Be it OPEC, OPEC plus, OPEC plus plus, OPEC minus, minus minus. Whatever!”
So far, none of the countries within OPEC+, which accounts for more than half of the world’s oil output, have signaled plans to leave the alliance. Yet, there are clear tensions between Saudi Arabia and Russia on one side, and Iran on the other. Tehran has accused Riyadh and Moscow of flooding the market in violation of their agreement.
Saudi Arabia and Russia have also considered forming a new body that could one day supplant OPEC. Mexico has recently elected a new government, opening the door to a change in oil policy.
Ultimately, the exact configuration of the group may not matter much. Saudi Arabia and Russia are already calling the shots, making the big decisions on oil output bilaterally. The most important word of Liron’s comment could be the last one: “Whatever!”