The next monthly meeting of the OPEC+ on March 4, is
going to be crucial for the oil price in particular and the economies of the
world regardless of their strength in general.
At present, the factors which are always in favour
of steady oil price are active: the inventory draws are significant; China has
been importing crude oil at an increased pace and so has India; Covid-19
vaccines bring in new hope for controlling the pandemic.
In this context, OPEC+ can play the decisive role in
the equation of crude oil price very soon.
According to Ihsan Abdul Jabbar, the Iraqi oil
minister, the OPEC+ will make sure oil supply is steady for the coming months;
whether he meant up until next month after March, i.e. April, or beyond that
remains to be the collective decision of the cartel.
Iraq may agree with the rest of OPEC+ in order to
maintain an output cut so that it can boost revenue to shore up its struggling
economy; the political unrest is at a critical point in the country, which
could easily take sectarian turns with the right spark.
Iraq is simultaneously keen on selling as much crude
oil as possible for the same end; the country, however, is not in a position to
wield the power that Saudi Arabia does, despite the former being the second
largest crude oil producer in the world.
In addition, Iraq has an oil-producing region with a
powerful regional government led by Kurds that blows hot and cold about the
separatism; the federal government to walk a tight rope without upsetting the
Kurds.
Mr Jabbar reflects the general mood in the OPEC+ -
about $58 - $60 a barrel this year; although the rise in price this year, 20%,
may indicate $100 a barrel providing that the trend continues, the cartel is
fully aware of the downside of such a hike.
All in all, the OPEC+ may maintain the current output
until the price stabilizes between $55 and $60 barrel and keep it that way with
production cuts or boost for most of this year, if the pandemic is under
control to some extent.
