(CNN) -- The dozen members of OPEC convened in a climate of highly charged politics, a war in a member state and with countries like the United States asking for some relief from $100 oil. It was one of the most interesting meetings in a decade because it is evidence that geo-politics and oil definitely mix and cause combustion.
In an unusual twist, ministers left Vienna without an agreement to increase their so-called production quota to match their current production. The market and perhaps more importantly the industrialised countries -- led by the U.S. and Europe -- were looking for a signal that more oil would be on the way.
This was a classic OPEC scenario that has not played out for years. In one corner the doves who wanted to maintain demand with reasonable pricing: OPEC heavyweight Saudi Arabia along with two other countries with spare oil to offer, the United Arab Emirates and Kuwait. In the other corner the price hawks: Venezuela, Iraq and Iran whom have traditionally pushed for higher prices.
At this meeting, the hawks won out. A senior delegate from a Persian Gulf state said he was stunned by the outcome. The tone behind closed doors was not one of cooperation, but of protecting their respective positions.
One source on the ground here said pressure from the International Energy Agency and from the U.S. ahead of the meeting actually played against the proceedings here. No one wanted to be seen helping the West while the Middle East remains in turmoil.
OPEC Secretary General Abdulla El Badri told CNN at the start of the meeting that "OPEC is always ready to act to make sure the market is well supplied," but in reality he could not convince others to make that official. He says the market continues to price in a 15-20 percent premium based on concerns around the Arab uprisings.
If one looks at the first half chart for North Sea Brent crude when prices averaged $109 a barrel, there was a spike every time an uprising began -- Egypt, Libya, Yemen and now Syria. In 2010, prices averaged $79 -- closer to what I like to call the "Goldilocks Scenario" a level that is not too high for importers and allows ample revenues for OPEC producers. Right now the market is out of kilter and wanted OPEC to raise a 2008 quota of 24.8 million barrels a day to match current production of 26.3 million barrels.
If life was only that simple. Coming into the meeting here in Vienna the presidents of Venezuela and Ecuador both said oil at the century mark is a fair price. Venezuela's oil minister Rafael Ramirez echoed that call at the meeting. To his right, was one of the more moderate price doves, the UAE minister Mohamed Al Hamli, a veteran of the energy business in Abu Dhabi. He told me the market is tight and more supplies would be needed in the second half. He added that he has spare capacity of a half million barrels a day on offer.
Beyond the pricing debate, there were plenty of other plot twists to highlight. Iran has the rotating presidency of OPEC and Mahmoud Ahmadinejad sent a former sports minister to be here and nominated him as oil minister. That raised a few eyebrows amongst peers. Moammar Gadhafi sent the former head of the country's power grid to come. He did not make the opening session and joined the session four hours late. Libya prior to the war was producing 1.6 million barrels a day. Most of that is off the market and it has been Saudi Arabia filling the void.
And that leaves the Kingdom's veteran oil minister, Ali Al Naimi. After 16 years within the OPEC community and a great track record of getting deals done before the meeting starts, this time he left empty handed and crude prices responded accordingly.
