RIYADH, 8 January 2003 — Saudi Arabia said yesterday it would decide whether to support a US-led war on Iraq once it has seen proof from the United Nations that Baghdad was developing weapons of mass destruction.
Foreign Minister Saud Al-Faisal said Riyadh wanted to avoid conflict and would seek a peaceful outcome even if the UN sanctioned war.
"If the United Nations asks Saudi Arabia to join, depending on the material breach that they show and depending on the proof that they show, Saudi Arabia will decide," Prince Saud told reporters.
"We are interested in peace and searching for a peaceful (solution) to this crisis and even if the United Nations decides on war, we want them to give us a last chance to exert efforts for peace," he said.
Iraq denies it has any weapons of mass destruction. UN arms inspectors are currently in Iraq and are due to report to the Security Council on Jan. 27.
Asked if the United States had requested military facilities, Prince Saud said: "Concerning Iraq, it has not asked."
Prince Saud has already questioned remarks by US defense officials who told Reuters last month that Riyadh had agreed to allow the United States to use its air bases and an important operations center in a possible war with Iraq.
Prince Saud said the Kingdom favors an increase in oil output to bring down prices. "The (oil) price has risen, and there should consequently be an increase in production," Prince Saud told reporters when asked to confirm reports that OPEC was ready to hike output by two million barrels per day (bpd) from Jan. 15.
The Organization of Petroleum Exporting Countries "has agreed on a specific formula to maintain price stability," he said.
OPEC agreed to a price band mechanism in March 2000 under which the group would raise output by 500,000 bpd if prices remain above the range of $22 to $28 a barrel for more than 20 consecutive trading days.
The group would cut output by the same quantity if prices fell below $22 for 10 consecutive days.
The remarks by Prince Saud, whose country is OPEC’s heavyweight, came amid growing signs that the group could hike its output.
However, a source close to OPEC told AFP he could not confirm a report in The Wall Street Journal Europe that the group planned a massive output increase of up to two million bpd to make up for a growing supply shortfall.
A strike in Venezuela, the threat of a US-led war on Iraq and a cold snap in North America have driven prices above $30 a barrel in London and New York.
Oil prices, meanwhile, fell heavily yesterday following Kingdom’s indication it will increase supply.
US light crude fell 69 cents to $31.34 a barrel, extending Monday’s 98-cent loss. London Brent blend by 1130 GMT had shed 76 cents to $29.51 a barrel.
"There is a plan being circulated now to increase production by between 1.5-2 million barrels per day," a senior OPEC delegate from a key producer told Reuters.
About the gas project, Prince Saud said the Kingdom expects to have a "very clear picture" on the fate of its mega gas projects after Jan. 25, setting a new deadline for foreign oil majors to submit their final positions.
"We have received positive answers from the first and third core ventures. All outstanding hurdles, except one major point, have been cleared," said Saud, who heads the ministerial committee conducting talks with foreign firms.
"We hope to clear the last hurdle. We must have a very clear picture about the projects after Jan. 25."
Prince Saud declined to say what the outstanding point was and gave no details about the second venture.
