OPEC dismisses Iraqi threat of oil exports
OPEC oil ministers gathered here Monday, June 4, to discuss production levels under a cloud of uncertainty with Iraq's deadline to halt UN-supervised oil exports was scheduled to take effect. Organization of Petroleum Exporting Countries (OPEC) president Chakib Khelil vowed Sunday to raise oil production to meet any shortfall if Iraq halts exports Monday as threatened.
Khelil said he saw no need for the oil cartel to increase production because Iraq is not set to immediately stop its UN regime oil-for-food oil exports. "I understand there's no cut in production from Iraq," Khelil, Algeria's oil minister, told reporters as he arrived at a hotel for an OPEC meeting which gets under way Tuesday.
"The Iraqis have said they are going to meet all their contracts that they have entered into for the next month," he said. "I don't expect... any change in supply from Iraq," he added.
Asked whether OPEC was prepared to step in to make up the shortfall if Iraq makes good on its promise to halt UN-supervised oil exports from Monday, Khelil replied: "Of course. We always meet demand in the market... whatever the reason may be."
Baghdad announced Saturday it would stop its exports of 2.2 million barrels per day in the UN food-for-oil sanctions to protest a US-British proposal of a new regime of "smart" sanctions.
Khelil said that prices at current output levels were satisfactory. "There is no need for OPEC to really increase production because the prices are stable at 25 dollars," in the OPEC target range, he said.
OPEC oil ministers last week were practically unanimous in saying that production levels would be maintained at Tuesday's meeting of the 11-nation cartel, which produces 40 percent of the world's crude.
But the Iraqi announcement of an export suspension Saturday, a day after the UN Security Council extended the current sanctions regime for a month, cast a cloud of uncertainty over the meeting.
Iraqi Oil Minister Amer Rashid announced he was staying away from the OPEC meeting because he did not expect it "to take any important decisions".
Iraq, because of the UN sanctions, does not participate in OPEC production quotas. OPEC Secretary General Ali Rodriguez of Venezuela, speaking informally Sunday to reporters, said there would be "no speculation" over what OPEC would do if Iraq carries through its threat.
But he hinted there was a "possibility" that the organization would raise its output to counter the Iraqi decision. Leo Drollas, an oil expert at the Center for Global Energy Studies, said that Saudi Arabia, the world's leading oil producer, appears to have "already raised their output a little bit". "I heard they told their customers," he said.
Iraq bluntly laid down Sunday the terms of its suspension of exports under the UN oil-for-food program implemented after the 1991 Gulf War.
It said it will halt exports Monday for at least one month, apart from tanker-truck deliveries to Jordan and Turkey, and only resume exports under a regular six-month renewal of the UN oil-for-food program. — (AFP)
© Agence France Presse
© 2001 Mena Report (www.menareport.com)