The Dark Art Of Assessing OPEC Oil Production Cuts

FINANCIAL TIMES - When the OPEC oil cartel met in Cairo last week, some of its most powerful members argued that the key action the group must take is to keep strictly to the 1.5m barrel a day cuts that it has already announced. Verifying whether OPEC’s countries do just that is far from simple. Knowing how much each country produces is mired in politically motivated dishonesty, secrecy and, in many cases, incompetence.

The most reliable data, used even by OPEC countries themselves, come not from the cartel member’s energy ministries, but from so-called secondary sources - a network of spies watching, binoculars in hand, the movement of tankers in and out of the world’s biggest export terminals.

Conrad Geber, head of Petro-Logistics, one of the tanker-trackers, says gathering the information is a painstaking exercise. Mr Geber relies on multiple sources - from “spies” at oil ports to “friendly” officials at oil companies leaking data. But even so, he concedes the information is never 100% accurate.

The confusion and distrust about production is so deep that OPEC members regularly request data about fellow members’ production from the International Energy Agency. This is ironic because the IEA, created after the 1970s oil shocks as the western countries’ oil watchdog, is basically to OPEC what Nato was to the Warsaw Pact.

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