OPEC Declares Emergency; Saudis Yawn

Posted by: Stanley Reed on October 10

It is too early to know for sure what will happen at the emergency meeting that OPEC has called for Nov. 18 in Vienna. But the fault lines are predictable. The Saudis and their Gulf allies will resist calls for drastic production cuts while Iran, Venezuela and other hardliners will argue for curbs to bolster the price—despite the damage that expensive oil has already done to the world economy and to their customers.

At the last meeting on Sept. 9 the Saudis agreed to vague language that seemed to spell out a cut and then said they didn’t feel bound by it. The next meeting might be a rerun or variation on that theme. Says a Saudi source: “It is all BS. If the Iranians and Venezuelans want it, we will go and do the exact same thing we did last time!” Meanwhile, Brent crude, the North Sea benchmark, fell through the important $80 per barrel level. And the International Energy Agency sharply lowered its forecast for world demand.