One result of the Doha debacle is likely to be a slide towards cold war inside Opec.
Iran’s increase in exports after sanctions was always going to increase its power and influence, much as an intake of spinach boosted Popeye’s strength. And that increase was always going to be reflected in Opec’s machinations, as has been argued here before.
Before Doha, Tehran’s role as a counterbalance to Riyadh, a spokesman for the poorer producer countries and the price hawks, was likely to develop over time, with a campaign for strategic reorientation.
But the volte-face by Saudi Arabia in Doha — going to the meeting with a pre-agreed draft only to tear it up inside the conference chamber and leaving the Qataris to clear up the public relations mess — indicates a slide from phoney war to cold war within Opec. If Tehran is a spinach-strengthened Popeye, is Riyadh now a muscle-bound Bluto?
Attention has been focused on the Saudi insistence that Iran sign up to the production freeze proposal — something that was never going to happen. But, in addition, it seems that the dragooned Saudi delegation also demanded that civil war-ravaged Libya, producing just 25pc of peacetime capacity, should sign up to a freeze.
This is what an evidently critical Russian minister Alexander Novak said about what happened on the morning of the Doha meeting on 17 April: “Some Opec countries changed their position. Having expressed support for a freeze, they changed their conditions for joining the agreement. A condition emerged that not only 18 countries need to join the agreement, but also countries which were not present in Qatar today. This means all Opec countries — although two countries were not present, namely Iran and Libya — and a number of non-Opec countries that are large exporters and which did not come because they have a separate position on this issue. In our opinion, no one can say today if these countries would join or not. We were proposing that 18 countries should reach an agreement and the door should remain open for other countries that would like to join.”
A senior Mideast Gulf Arab official confirmed the Saudi insistence that every Opec country must join the freeze, or the deal was off. The reason that Riyadh insisted on including Libya may have been to disguise the main target of its policy. But in so doing, it has alienated the emergent Libyan national unity government.
More seriously, it may be stoking sympathy for Iran in Iraq, the Olive Oyl to Tehran’s Popeye. A senior Iraqi official said in the wake of Doha: “We believe that there should be a fair deal. Iran can’t go back to pre-the nuclear deal. They just started to breath.” More tellingly, he went on to cast Iraq and Libya as countries that, like Iran, might accuse Saudi Arabia of exploiting their misfortune — sanctions and war — by taking their oil market share to build its own. A “fair deal” would be one where “those who took Iran, Libya and Iraq’s shares cut — and for us to freeze after gaining back our shares”, he said.
Venezuela’s oil minister Eulogio Del Pino, the first mover in the process that led to Doha, saw his months of efforts at reconciliation and bridge-building wasted. He did not mince his words. In a reaction published on the website of state-owned PdV: “We were disappointed… we must persevere despite this disappointment.” He continued: “We cannot be dependent on last-minute decisions by someone who sabotages a meeting at this level and of this importance.”
The danger that confronts Opec members when they convene in June is that their deliberations will be overshadowed by geopolitical manoeuvrings in benighted Yemen, in the backstreets of Bahrain, the battlefields of Syria and Iraq, and the delicate balance of power in Lebanon. Subjecting Opec oil diplomacy to the wider geopolitical game in the Middle East is not something many delegates would welcome.