OPEC Source: Saudi Arabia Started to Pump Extra Oil
Saudi Arabia has started pumping the extra oil it had promised earlier this month in an effort to ease fuel prices, reported The Associated Press, quoting an official from an OPEC country.
Saudi Arabia's national oil company, Aramco, raised production this week, according to the official, who spoke on condition of anonymity.
He did not say how much more oil the kingdom was pumping, but the Saudis said early this month they would increase oil output by 500,000 barrels a day, said the AP.
Oil traders in Asia confirmed they had been told to expect more Saudi oil in August, when the additional oil would reach the markets.
The unilateral Saudi move comes despite criticism from the Organization of Petroleum Exporting Countries and a lack of consensus among members, the agency said.
On Friday, OPEC President Ali Rodriguez had said Saudi Arabia would not increase current output unless it got approval from OPEC partners. Rodriguez has said he and other OPEC counterparts felt the time was not ripe for an immediate increase.
Rodriguez, also Venezuela's oil minister, was in Iran on Saturday as part of a tour of OPEC countries. In the meetings, the Iranian president and other officials called for OPEC producers to restrain from pumping more oil, saying the cartel needs to remain united and firm if it is to remain effective.
"This is not possible unless all members look toward the interests of producing nations," Iranian President Mohammad Khatami told Rodriguez.
Khatami said all OPEC members must abide by the cartel's decisions.
"I believe there are hands at work to disrupt the balance between supply and demand and bring about a price collapse that will result in irreparable damages to producing nations," Khatami was quoted as saying.
OPEC producers agreed to bring an additional 708,000 barrels a day on the market starting this month, but the hike so far has not reduced prices.
Except for Saudi Arabia, Kuwait and the United Arab Emirates, OPEC producers do not have the spare capacity to join in an output increase.
Other OPEC producers fear that additional crude on the market could lead to a collapse in prices, similar to the one in 1998, when a barrel was selling for under $11, according to the agency.
OPEC's official overall output is 25.4 million barrels a day, about a third of which comes from Saudi Arabia.
OPEC is scheduled to meet in Vienna, Austria, on September 10th.
Saudi Arabia is believed to have been lobbying for an emergency OPEC meeting next week, but Iranian Oil Minister, Bijan Namdar Zanganeh, said Rodriguez and Iran oppose such a meeting, the AP added - Albawaba.com
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