OPEC Quota A Mere 'Recommendation' To Members, Says Secretary General

As OPEC decided to maintain its official oil production quota at 30 million barrels per day on Friday, the organization’s Secretary General Abdalla Salem El-Badri said what the outside world chooses to describe as a production quota, was rather more of a “recommendation.”

No very many analysts were surprised when OPEC left its ‘official’ production quota where it was. It is an open secret that the cartel’s 12 members were in fact producing considerably more than that. In April, OPEC’s own figures put daily production at 30.93 million bpd.

Industry surveys since then have put OPEC oil production in the 31.5 to 32 million bpd range, with Saudi Arabia leading the charge.

While OPEC’s decision to maintain production had been widely factored in by the markets, El-Badri’s description that the quota was anything but drew bemused looks from the assembled media and analysts alike.

Abdalla Salem el-Badri, Secretary General of OPEC, at the 167th meeting of OPEC at its headquarters in Vienna, Austria on 5 June, 2015. Photo: Joe Klamar, AFP/Getty Images

“It is not a quota as such, but rather a recommendation given to members which we expect them to take,” said OPEC’s longstanding Secretary Generaland peacemaker-in-chief. The only problem is, when oil producers of all makes and stripes are involved in a war of attrition, recommendations often go out of the window.

As an analyst I have tremendous respect for El-Badri. Having witnessed and gone through the pain of civil strife in Libya, his homeland, the Secretary General has kept his country’s divided delegation to OPEC in check, which at one point rather bizarrely witnessed the prospect of sending two oil ministers from warring factions.

Above all he has been the ultimate compromise candidate as the Saudis and Iranians jostled for position within OPEC. So good is he as a consensus man, that internal dissensions mean finding another one would be an almighty task, says Jason Schenker, President of Prestige Economics, adding, “He is to OPEC, what Switzerland is to international diplomacy.”