MOSCOW, 4 September 2003 — Saudi Arabia said yesterday it saw no need for OPEC to change output limits when the group decides fourth quarter production policy later in September.

“If you look at the supply, inventories, price, you will conclude that the market is in balance and at least for a couple of months there is no threat for making the market unbalanced,” Saudi Oil Minister Ali Al-Naimi told reporters.

“There is probably no need to do very much at the next OPEC meeting,” added Naimi, OPEC’s most influential minister. OPEC price hawks were worrying earlier this year that crude markets would collapse under the weight of rising postwar Iraqi exports.

But Iraq’s deliveries are still less than half prewar capacity and a world economic recovery is feeding petroleum demand, supporting prices.

London Brent blend rose 28 cents to $27.80 a barrel yesterday, pricing a basket of OPEC crudes near the top of the group’s $22-$28 target range. Oil analysts expect no change in output from the Organization of the Petroleum Exporting Countries at its Sept. 24 meeting.

“Assuming that Iraq comes back slowly and looking at inventories now, Mr. Naimi is right to say there is no need to adjust output yet,” said Geoff Pyne, consultant to Sempra Energy. “Besides, OPEC’s preferred option is always to do nothing.”

Naimi’s view found backing yesterday from fellow OPEC member Venezuela. “As long as things are going the same as they are now, production will stay at the same level,” Deputy Venezuelan Oil Minister Luis Vierma told Reuters in Aberdeen, Scotland. “Iraq is probably going to take about a year to produce what they were producing before the war,” he said.

Naimi was talking to reporters a day after he signed the first formal oil market agreement with Russia, the world’s second largest oil exporter after Saudi Arabia. The pact calls for supply coordination between the two states, which account for one fifth of the world’s oil output. It is the first formal recognition of a fragile alliance between the two rivals, both heavily dependent on oil revenues.

But Russia made it clear on Thursday it had no intention of capping booming oil output, which alongside high oil prices was the main driving force behind its impressive economic growth. “Because we are the second largest oil exporter in the world, we feel responsible for stable oil prices, affordable for consumers... Russia will defend the interests of consumers and suppliers... We hope to find a reasonable balance,” said Russia’s Energy Minister Igor Yusufov.

Russia twice agreed to cut its oil exports alongside OPEC in 2001 and 2002, but kept boosting supplies instead. Naimi said he believed Russia would closely cooperate with OPEC as it supported a price target very similar to the group’s price corridor.