Wrong oil price is really a problem for OPEC+

THE BEST SCANDALS are those that start when someone, somewhere, decides to say something utterly shocking: the truth! A senior official of the OPEC+ oil cartel has said publicly what many thought privately – the group has been keeping oil prices too high, effectively subsidising its rivals.

- Bloomberg

The result? It cannot increase production and instead relies on ever-increasing output cuts.

Afshin Javan, the No. 2 official in the Iranian delegation to OPEC+, published a commentary on his country's state-run news agency Shana on November 26. The group, he argued, faced a "supply glut" largely of its own making following several years of production cuts. "This strategy in support of prices has effectively encouraged higher supply outside the group, particularly on the part of the US," he said. "That would leave a limited room for manoeuvring by OPEC+ to ease its restrictions."

Within hours, the op-ed was deleted without explanation. But the damage, in the run-up to the cartel's next meeting, was done. The commentary echoes the child in Hans Christian Andersen's fable The Emperor's New Clothes, who proclaims "but he hasn't got anything on!" Yup; the king is in the altogether.