The Organization of the Petroleum Exporting Countries (OPEC)has been operating without formal output limits since December 2008 and this year Gulf producers decided unilaterally to increase production to compensate for the loss of Libyan supplies.
That followed a failure to reach a formal OPEC decision on higher output levels in June, despite pressure from consuming nations, when a majority group of countries led by Iran declined to support the Gulf proposal.
The pressure is beginning to build up again ahead of the December meeting as consumers say prices above $100 per barrel are hurting the global economic recovery.
However, those warnings are unlikely to be the main concern for Libya, which needs to maximize oil revenues to get fresh cash injections to rebuild infrastructure damaged by seven months of civil war.
“I would think it is the logical thing (for the Gulf states to cut production). They had promised to increase production when Libya’s production was disrupted. Now that our production is coming back, they should cut back so we would have our own share,” the head of Libya’s National Oil Corporation (NOC) said.
“I believe it will be discussed in the next OPEC meeting,” Nuri Berruien said on the sidelines of a gas summit in Doha.
“We have to first prove that some countries have increased their production,” he said.
Libya is producing more than 500,000 barrels per day at the moment or a third of its pre-war levels. Production is expected to grow to half of pre-war levels next month and return to full capacity by the end of 2012 or early 2013..
Iran, holder of OPEC’s rotating presidency, has called on the Gulf Arab producers to cut back. Those countries would prefer oil prices below $100 a barrel to help support global economic growth and demand for their oil.
