Two Oil Deals Lay Bare the OPEC+ Problem
While the oil exporters’ club is focused on influencing prices, other actors are working to reduce their exposure to them.
Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman.
Photographer: Karim Sahib/AFP
OPEC+ is mystified that the oil market somehow misread the latest tweaks to its lattice of oil production targets, carve outs and claw-backs that now have all the clarity of a tax form. Brent crude hiccupped after the oil exporters’ club met and indicated it wants to unwind some output cuts. That prompted several ministers to chide bearish analysts and reporters, and reiterate the group’s stabilizing effect — from the stage at an economic conference in Russia, the de facto co-head of OPEC+ currently engaged in a less-than-stabilizing invasion of its neighbor. Oil prices ticked up a bit.
The likes of Saudi Arabian Energy Minister Prince Abdulaziz bin Salman seem to be focused on a distraction, perhaps even whistling past the graveyard. Two transactions show why. A few days before OPEC+ met, ConocoPhillips, the largest US exploration and production company, announced a $23 billion deal, including assumed debt, to acquire Marathon Oil Corp. A day later, Riyadh announced a secondary offering of shares in Saudi Arabian Oil Co., or Saudi Aramco, which raised just over $11 billion.