DOHA, 12 June 2003 — OPEC ministers decided yesterday to maintain current production levels until they meet again in September, with an option to revise them in July, the president of the oil group said.
Abdullah ibn Hamad Al-Attiyah said the 11-nation group would hold an extraordinary meeting on July 31 to reassess the situation.
“Then we will have some options — either to cut production or not. That is what we need to decide,” Attiyah said.
He said the July meeting would look at the impact of Iraq’s return to the oil market.
In a statement released at the end of the meeting, OPEC said: “Stability had been maintained in the market following the decision taken by the (OPEC) conference in April 2003 to reduce actual production to 25.4 million barrels per day (bpd), with prices remaining within agreed levels.
“Despite the fact that the market remains well-supplied, prices displayed an upward trend recently due to the slower-than-anticipated recovery in Iraqi production, coupled with unusually low stock levels,” it said.
“However, with low stock levels anticipated to be replenished during the third quarter, the conference decided to maintain currently agreed production levels, with strict compliance, and emphasized that continued vigilance in monitoring market developments is imperative over the coming period.”
OPEC added that it “welcomed the return of Iraq to the oil market and looks forward to the country’s resumption of its role in the organization.
“The conference again made its standing call on other oil producers exporters to continue to cooperate with OPEC in its endeavors to maintain market stability in the interests of all concerned.
Before the decision was made, Venezuelan Deputy Oil Minister Luis Vierma had said he thought OPEC might be able to keep its current output levels for the rest of the year.
And the Nigerian delegate, Rilwanu Lukman, a former OPEC secretary-general, said: “I tend to agree with that.”
Other delegates had also said they saw little reason to change OPEC’s target production ceiling of 25.4 million barrels a day.
An aide to Iran’s oil minister said the OPEC monitoring committee — which groups Iran, Nigeria, Kuwait and OPEC Secretary-General Alvaro Silva Calderon — would advise the meeting that member states had to stop exceeding their quotas and comply with the production schedule.
Attracted by high prices, members of the Organization of Petroleum Exporting Countries have been exceeding their designated quotas and have oversupplied the market by about 1.5 million barrels a day.
The oil minister of the United Arab Emirates, Obaid ibn Saif Al-Nasseri, called for member states to respect their quotas.
“The market is comfortable, but we should think ahead to the third quarter,” which begins July 1, Al-Nasseri said Tuesday.
He estimated overproduction by the 10 OPEC nations, excluding Iraq, at 1.5 million barrels a day. That means the group is pumping 26.9 million barrels a day onto the market.
“We should look into reducing actual production of member states” rather than adjust the ceiling, Nasseri said.
“OPEC must be very careful in handling Iraq’s return,” Iranian Oil Minister Bijan Namdar Zanganeh told reporters earlier yesterday.
Iraq, which was excluded from OPEC’s quota schedule during the 12 years of UN sanctions, says it hopes to export 1 million barrels a day by the end of June and 2 million barrels a day by the end of the year.
Analysts say that is too optimistic in view of the state of Iraq’s oil industry, which suffered war damage, postwar looting, a chronic shortage of spare parts during the sanctions period. Before the war began in March, Iraq pumped around 2.5 million barrels a day.
Members of the 11-nation group differed over when Iraq was expected to resume oil exports, and when the OPEC would need to curb production in order to accommodate Iraqi supplies.
“The pace and the extent of the return of Iraqi crude to the market remain unclear,” Attiyah said in his opening speech to yesterday’s meeting, at which Iraq was not represented.
