www.globeandmail.com Globe and Mail Update

— OPEC will increase its oil production and possibly even suspend its current output quotas to keep the world supplied with ample supplies of crude in the event of a war with Iraq, the group's president said Monday.

Members of the Organization of Petroleum Exporting Countries can pump an additional three million to four million barrels of oil a day, and they are prepared to exhaust this spare production capacity if a war seriously disrupts exports from the Persian Gulf, said OPEC President Abdullah bin Hamad al-Attiyah.

OPEC's secretary general and oil ministers from Iran, Algeria and Venezuela played down the possibility that the group might suspend its output ceiling, currently set at 24.5 million barrels a day. Mr. al-Attiyah indicated he favours a greater degree of flexibility, without actually endorsing a temporary suspension.

"OPEC will do the most it can to avoid any shock in the market," he told reporters ahead of a policy meeting Tuesday at OPEC headquarters in Vienna, Austria.

OPEC, which pumps about a third of the world's crude, is already exceeding its target as members cash in on prices that have soared to 12-year highs amid fears of a war-induced supply shortage from Iraq.

A conflict would almost certainly disrupt Iraq's daily shipments of two million barrels, but at least one OPEC member — the United Arab Emirates — expressed doubts about the group's ability to cover a larger shortfall if fighting spreads beyond Iraq's borders.

"OPEC should not be blamed," Mr. al-Attiyah said as he arrived at a Vienna hotel. "We will do whatever we can, but this is in accordance to our capacity. When we reach a level that we cannot exceed, then we cannot do anything."

Mr. al-Attiyah said the market was already well supplied with crude. Saudi Arabia's oil minister Ali Naimi, speaking to reporters upon his arrival at a different hotel, agreed but gave no further details.

However, the United Arab Emirates' oil minister, Obaid bin Saif al-Nasseri, warned it would be "very difficult" for OPEC to pump enough oil to cover a simultaneous shortfall in crude exports from Iraq and northern Kuwait.

Kuwait, which hosts most of the U.S. troops that are poised to attack Iraq, has said that in the event of war it would shut down its northern oil fields as a precaution against a possible Iraqi counterstrike. Such a step would reduce Kuwait's output by around 700,000 barrels a day, or about a third of its current production.

Mr. al-Nasseri's comments suggested that the United States and other major oil-importing countries would need to rely on their own strategic petroleum reserves as a cushion against a serious disruption in oil supply.

The United States and other major importing countries want OPEC to maximize production if a war threatens supplies and causes prices to spike. U.S. Energy Secretary Spencer Abraham, due in Vienna Tuesday on separate business, said in London that he might meet here with oil ministers from leading OPEC producers. Mr. al-Attiyah said Abraham had so far not requested to meet with him.

Some analysts have suggested that large importing countries and OPEC — two often opposing camps — might be trying to coordinate an increase in OPEC output with a release of crude from importers' strategic reserves in an effort to head off a war-induced disruption.

Despite Mr. al-Attiyah's claim that OPEC has " three to four million barrels" in daily spare capacity, it was not clear how much higher the cartel could go in satisfying U.S. demands. Mr. al-Nasseri said the United Arab Emirates' capacity of about 2.5 million barrels a day was already "about full." Aside from Saudi Arabia and perhaps Nigeria, most other OPEC members are already believed to be producing at their limits.

OPEC heavyweight Saudi Arabia, which by some estimates is pumping at a rate of nine million barrels a day, could raise its output to 9.5 million barrels a day within a month and 10.5 million barrels a day within three months.

Yet, not all of OPEC's extra capacity is likely to be available right away. Mr. al-Attiyah's figure for OPEC's production potential appeared to include Venezuela's nominal capacity of 2.35 million barrels a day, yet Venezuelan exports are still recovering from a crippling strike and analysts have suggested it could be months before that country resumed pumping at its earlier levels.

OPEC raised its output target by 6.5 per cent in January, in an unsuccessful effort to keep a lid on rising prices. Prices for U.S. light, sweet crude have since reached a post-1991 peak of $39.99 (U.S.).

April contracts of U.S. crude were tradin.g Monday at $37.25 a barrel in New York, down two cents from Friday's close. Brent crude futures for April delivery closed 35 cents lower at $33.75 US in London.

sg.biz.yahoo.com Tuesday March 11, 5:56 AM By Adam Smallman Of DOW JONES NEWSWIRES (This updates a story from 1253 GMT with additional comments from ministers and further diplomacy news.)

VIENNA (Dow Jones)--There is no consensus among OPEC ministers gathering in Vienna ahead of Tuesday's policy meeting, because there appears to be no big idea on the table.

Ali Naimi, the oil minister for the Organization of Petroleum Exporting Countries' de facto leader Saudi Arabia, was tightlipped on arrival, in sharp contrast to the two meetings since December, at which members signed off on output hikes.

That increased production was intended to cool prices, but it failed.

This time, the world seems a little more complex. A conflict in Iraq may now only be a week away, OPEC's spare capacity - normally used to assuage oil price fears - is wafer thin and ministers fear an oil glut within weeks that could see prices tank.

OPEC Secretary General Alvaro Silva and oil ministers from Iran, Algeria and Venezuela have also dismissed talk that a suspension of the group's output ceiling, currently set at 24.5 million barrels a day divided among 10 OPEC members, excluding Iraq, might make it onto the agenda of the meeting.

It was left to Algeria's Oil Minister Chakib Khelil to give shape to the oil price fears sliding to the front of delegates' minds, even if OPEC's public front may be to issue soothing words over the security of crude flows on the cusp of war.

In an interview with Dow Jones Newswires, Khelil - who thinks OPEC should leave things unchanged at Tuesday's meeting - said oil prices will rise on the start of war, though he believes there's a possibility of a collapse to below $22/bbl thereafter.

Concerns "might last a week or two weeks, but the prices will go down even without...the use of (strategic) stockpiles," Khelil said.

With OPEC's failure to manage prices, the market is fixated on government-held oil stockpiles and whether they will be released to cover any disruption to oil flows.

A man with a hand on the taps of those stocks is U.S. Energy Secretary Spencer Abraham, due in Vienna late Monday. He's likely to meet with some OPEC ministers, though he's ostensibly here to attend an International Atomic Energy Agency meeting.

Doubts Growing Over Spare Capacity

With a deadline for OPEC member Iraq to comply fully on weapons inspections or risk war just a week away, there are serious doubts over the amount of spare capacity OPEC can bring to bear.

United Arab Emirates Oil Minister Obaid bin Saif al-Nasseri said most members of OPEC are currently producing at maximum capacity.

Al-Nasseri added the UAE, previously considered to be one of the few members with significant spare capacity, actually has a "limited" ability to produce more and that additional capacity from Saudi Arabia will take "some time" to be readied for export - by which time the seasonal fall in consumption may have happened and a clearer picture of the progress of war in Iraq emerged.

OPEC President Abdullah bin Hamad al-Attiyah said "around 3 million barrels a day," could be added to the market to ease supply concerns.

Mike Fitzpatrick, energy analyst at New York-based Fimat USA Inc., said: "I'm guessing they won't be adjusting quotas, because of the (opinion on the) Arab street." But additional Saudi oil would help take the sting out of a price spike. Fitzpatrick also predicts a release of IEA reserves.

Arab newspaper al Hayat reported Monday that a Gulf source said a proposal to suspend production quotas will be submitted to OPEC members Tuesday, "but if it faces strong opposition from some countries it will be delayed until there is an actual halt of supply."

But Iran's Oil Minister Bijan Namdar Zangeneh said OPEC shouldn't adopt any decision that would look as if it supported a U.S. invasion of Iraq, Iran's state-run IRNA news agency reported.

The 11 members of OPEC account for a third of global oil production and the world would normally look to the group to keep sufficient oil flowing in the event of war in Iraq.

The price of the April Brent futures contract on London's International Petroleum Exchange was $33.69/bbl, down 41 cents from Friday's close. The April Nymex contract was down 51 cents at $37.27/bbl.

International diplomacy continued Monday. The split within the U.N. Security Council has widened, with Russian Foreign Minster Igor Ivanov warning Monday that Russia will vote against the current U.S. and U.K. resolution that gives Iraqi President Saddam Hussein a March 17 deadline to disarm. French President Jacques Chirac also said France would veto it.

France also lobbied undecided council members - Guinea, Angola and Cameroon - to vote against the second resolution that may trigger conflict.

U.K. Prime Minister Tony Blair also faced internal dissent when a senior member of his government, International Development Secretary Clare Short, said she would quit if the U.K. goes to war without U.N. backing. Blair, she said, was being deeply reckless.

In Vienna, Tuesday begins with the arrival of the Iranian oil minister, to be followed by a breakfast meeting between OPEC and non-OPEC countries such as Angola, Mexico, Russia and Egypt.

OPEC will meet in the afternoon to decide on its policy.

Meanwhile, U.S. Energy Secretary Abraham will speak at an IAEA conference Tuesday morning and will hold a press conference around 1300 GMT.

-By Adam Smallman, Dow Jones Newswires; 44-20-7842-9343; adam.smallman@dowjones.com

www.wilmingtonstar.com Last changed: March 10. 2003 5:34PM

The Associated Press Crude oil futures fell on both sides of the Atlantic on Monday, as supply concerns eased somewhat ahead of a looming war in Iraq. The Organization of Petroleum Exporting Countries said the market is adequately supplied and that the group will ensure supply availability in the event of war in Iraq. "We will raise whatever we can to satisfy demand if there is a shortage," said OPEC President Abdullah bin Hamad Al-Attiyah. OPEC ministers are meeting in Austria to discuss output policy and what action, if any, the group will consider in case of a supply disruption in Iraq. Al-Attiyah wouldn't say whether OPEC ministers will discuss contingency plans, such as a Saudi-Kuwaiti proposal to suspend the group's official output quotas. He said OPEC's customers - especially those in Asia - say there is no need for extra oil at the moment. OPEC can tap about 3 million barrels a day in spare capacity, Al-Attiyah said, adding that about $6 to $7 of the current price of crude reflects a "war premium." Algerian Oil Minister Chakib Khelil, meanwhile, said the price of the group's reference basket of crude - now hovering around $33 a barrel - could tumble below $22 a barrel after a war in Iraq. The comments "took some of the steam out of the market," said Tom Bentz, an analyst at BNP Paribas Futures. At the New York Mercantile Exchange nearby April crude oil futures fell 51 cents to close at $37.27 a barrel. April heating oil fell 2.28 cents to close at $1.0857 a gallon, while April gasoline futures dropped 2.85 cents to settle at $1.1282 a gallon. At the International Petroleum Exchange in London, April Brent fell 35 cents to close at $33.75 a barrel. Natural gas for April delivery plunged 47.8 cents to settle at $6.515 per 1,000 cubic feet. OPEC has sharply increased its output in recent months in response to a disruption in Venezuelan production and the potential loss of Iraqi oil. Despite the increase, however, U.S. crude oil inventories have shrunk because of the disruption in Venezuelan exports and cold weather. But with Saudi and Venezuelan output on the rise, analysts expect crude inventories to continue to build. Five of seven analysts surveyed by Dow Jones Newswires on Monday expect crude stocks to grow by 2.15 million barrels in weekly data from the Department of Energy after increasing by 1.7 million barrels in last week's report. "We have seen a huge increase in both Saudi and Venezuela production in February. Some of those barrels should start trickling in now," said Peter Beutel, an analyst at Cameron Hanover in Connecticut. The Bush administration is facing an uphill battle at the Security Council as it seeks a vote on a resolution that gives Iraq until March 17 to disarm or face war. The United States wants to bring the resolution to a vote later this week. Britain and Spain support the resolution, but France, Russia and Germany remain opposed. French President Jacques Chirac said France will vote against any resolution that contains an ultimatum "no matter what the circumstances." Russian Foreign Minister Igor Ivanov warned earlier Monday that Russia will block the resolution. It was the first time Russia has explicitly said it would use its veto.

www.nytimes.com By NEELA BANERJEE

VIENNA, March 10 — Facing the possibility of an imminent war in Iraq and the continued shortfall of oil exports from Venezuela, the Organization of the Petroleum Exporting Countries is expected to announce at its meeting here on Tuesday that it will continue to supply as much oil as the markets need, essentially affirming of what it has been doing for months now, although with limited success.

Most of the 10 voting OPEC members are now pumping as much oil as they can, but prices have stayed stubbornly high. Crude oil for April delivery fell 51 cents a barrel, to $37.27, on the New York Mercantile Exchange today, but oil traded as low as $25 a barrel as recently as last November. Late last month, oil prices flirted with $40 a barrel for the first time since October 1990, after Iraq invaded Kuwait.

Oil industry analysts here said that even if OPEC does nothing on Tuesday, the steps it has taken so far amount to an important political and economic victory for the group. They noted that prices would have been even higher had OPEC not ramped up production to compensate for the loss of Venezuelan oil output and then to calm a market jittery about a possible halt in Iraqi exports in the case of war.

Recently, oil-consuming countries, led by the United States and Europe, gave OPEC a vote of confidence by announcing that they would allow the organization make up for any possible shortfall in oil supplies if war broke out, before they themselves released oil from their strategic stockpiles.

At a time when many in the United States are calling for greater imports of oil from outside the Middle East, OPEC's pre-emptive action has shown that in fact the Persian Gulf states, particularly Saudi Arabia, are the only ones with the spare production capacity that can be called upon in a pinch to dampen prices, analysts said.

"This is Saudi Arabia's crowning glory in its short-term relations with the United States," said Raad Alkadiri, a director at PFC Energy, a Washington consulting group.

"They have shown that they have the willingness to keep spare capacity that becomes of enormous strategic importance to Western markets," he said. "Despite the stresses and strains in their relations with the United States, they have shown that they are willing to act to keep prices under control."

www.kmsb.com 03/10/2003 By SUSAN GAIDOS / Special Contributor to The Dallas Morning News

Some call it sweet, a few develop a thirst for it. Virtually everybody has plotted ways to get it.

Now scientists, too, are seeking revenge. Digging through anthropological and archaeological data on tribal warfare, researchers are analyzing the role that payback plays in human relations.

"Revenge is a peculiar topic," says Pennsylvania State University anthropologist Stephen Beckerman. "Everyone knows what it is, or thinks he does. Though there's a vast literature in theology and pop psychology urging us to eschew revenge and love our enemies, serious scholarly literature on revenge is remarkably thin."

Research so far suggests that when it comes to revenge, human intelligence "gone mad," perhaps, can spur people to do stupid things. And even when reason intervenes, human nature may urge you to strike back. Researchers say reciprocity, the give-and-take interchange that prompts you to return a favor, may also provoke you to repay a blow.

Revenge is not, of course, unique to humans. Animals share a universal impulse to strike back when injured. Studies show that a number of creatures – blue-footed boobies, elephant seals and side-striped jackals to name a few – routinely retaliate by attacking in kind. Evolutionarily speaking, revenge served up in this tit-for-tat fashion may serve an adaptive role by deterring future attacks.

Humans often carry revenge to lethal extremes, killing enemies for past actions and fueling feuds that can last generations. Yet given a warrior's dismal chances of surviving ongoing wars, the long-term benefits of revenge aren't so obvious.

So to better understand the interplay among revenge, retaliation and human motives, scientists are analyzing oral and written records on past tribal wars in New Guinea and Ecuador. Those studies may help explain how humans view conflict and may identify circumstances under which people are more likely to return violence for violence, anthropologists said in Denver last month at the annual meeting of the American Association for the Advancement of Science.

Lawrence Keeley, an anthropologist at the University of Illinois at Chicago who has studied warfare in modern and prehistoric societies, says tribal warriors, unlike their contemporary counterparts, attack their enemies for personal, rather than political or economic, reasons. Without governments to press them into service, these warriors go to war because they want to, not because they have to.

"Revenge and retaliation are a component of warfare everywhere and at all times," Dr. Keeley says, noting that revenge is motivated by injury whereas retaliation is returning injury for injury.

Studies of tribes in eastern Ecuador show that warriors may seek revenge for a variety of grievances or goals: A death, an illness, a streak of bad luck, even a desire for mates or glory can spark an attack.

But the No. 1 motive for coalitional violence is vengeance for a previous killing, says James Boster, an anthropologist at the University of Connecticut who has extensively studied Ecuador's Waorani tribes.

"The problem with retaliatory violence is that once started down the path of an attack and counterattack, the same furious dynamic that might have protected against the initial assault perpetuates the violence," Dr. Boster says.

Though the threat of retaliatory violence may deter an initial assault, once a fight breaks out it can lock antagonists into an endless cycle of violence, he explains.

Dr. Keeley agrees, noting that in the short term, retaliation can bring peace, albeit an uncomfortable one. Facing down opponents sends a clear signal of strength and sometimes forestalls further aggression.

But over the long haul, societies that seek revenge and retaliate most fiercely are also the most war-torn, he says.

Reciprocity role

Striking back may just be part of human nature, he says, noting that reciprocity, an inclination to return like for like, plays a role in all types of human interactions. Returning a favor, acknowledging a smile, reciprocity is a relational glue that helps build successful connections among families, friends and business associates.

"Reciprocity expresses a deep feature of human decision-making in action, and we can see it across human affairs everywhere," Dr. Keeley says.

Reciprocity also plays out in warfare, he says, operating under the guise of retaliation: an eye for an eye, a life for a life.

This type of exchange may account for the instinct to strike back when attacked, but it falls short of explaining why humans fail to put the brakes on lethal confrontation in the first place.

Paul Roscoe, an anthropologist at the University of Maine who has studied warfare in tribal societies of New Guinea, argues that human intelligence may be a conspirator, enabling man to play out his outrage. The same part of the brain that separates man from beast can be used to plan and organize attacks, he says.

Animals, lacking this "higher" intelligence, are too smart to carry revenge to such extremes.

Most animals are hard-wired to respond in kind to escalating aggressions, Dr. Roscoe notes, but they break off the confrontation – by withdrawing or submitting – when outmatched. Two male red deer, for example, will first roar at each other, and then walk back and forth to size each other up. Even if they lock horns and fight, the match is generally not lethal.

"The problem, in looking for a Darwinian theory of revenge, is to explain why humans, unlike most other species, don't stop short of lethality in their conflicts," Dr. Roscoe says.

"In the perfect case, a single retaliatory homicide would pay the blood debt and end the matter. At most, one or two reciprocal homicides would suffice for both sides to get the message and either cease hostilities or for one side to withdraw."

Anthropological data from New Guinea show, however, that revenge and retaliation are seldom this efficient. A fracas that results in a single death can set into motion a seemingly endless cycle of attacks and counterattacks. Because warring parties often disagree on what constitutes a balance of killings, feuds may endure for years or generations once started.

In describing their motives for killing, the tribal members expressed a desire to "even the score." One tribe, for example, said, "The clan has been weakened, thus the clan of the murderer must be weakened, too." Another said it would fight until the number of the dead ones was fairly even, to "keep the enemy balanced in terms of manpower."

Fear factor

New Guinea warriors also killed out of fear for their own well-being. Believing failure to vindicate a homicide would bring sickness and death to its members, the Iatmul tribe would promptly avenge a killing.

Similarly, the Melpa were quick to take vengeance, believing that the spirit of a murdered man would "pester his own clan until he was avenged."

Dr. Roscoe concludes that blood revenge is probably not a useful evolutionary adaptation. It frequently fuels more killing rather than deterring it, he says.

He argues that war is a "byproduct of human intelligence," an outgrowth of man's highly developed neocortex. The neocortex, a region of the brain known for intellectual thought and creativity, enables humans to develop tools, communicate through language and plan and carry out group action for war.

"Humans developed the ability to model actions before they happen. This means we can plan collective violence. It explains why we have warfare," Dr. Roscoe says. Research on chimps confirms that once you can gang up and launch a surprise attack on outnumbered victims, killing becomes a dramatically more attractive option.

Neocortical prowess also allows humans to dehumanize their enemies and manipulate their emotional states, says Dr. Roscoe. Warriors, for example, can whip themselves into an angered frenzy by recalling slain kin and engaging in repetitive, war-mongering chants.

But if tribal warriors sometimes use their intelligence to incite war, evidence shows they also use it in ways to forestall aggression and set limits on reciprocal violence.

Dr. Beckerman, of Penn State, notes that tribes in many places develop elaborate rules outlining who, where, when and how revenge may be carried out. Kin, for example, are forbidden to retaliate against each other.

"The general rule is that you are prohibited from taking blood revenge on those who would be obliged to avenge you, if you were killed," Dr. Beckerman says.

Groups with ongoing relations – such as different clans within the same tribe or different villages within the same precinct – often share ideas on what kind of injury calls for blood revenge, who should carry it out and who the acceptable target of revenge ought to be, he says.

And reciprocity, the same relational rationalization used to return violence for violence, is sometimes used to build truces and contain unbridled violence. Food, labor, wives and other goods are often traded among members of tribes or between groups in attempts to keep losses and gains in balance or to bring an end to bloodshed.

"A life for a life, an eye for an eye, a tooth for a tooth was not, for the tribal people who codified this rule, a recipe for unbridled violence, but rather an attempt to contain it," Dr. Beckerman says.

Scientists note that these are not the only factors that play into war. Brian Ferguson, an anthropology professor at Rutgers University in Newark, N.J., who has studied the Yanomami Indians of Venezuela and Brazil, notes that revenge as a concept differs from one society to another, and no one revenge model fits all.

Ultimately, such studies may provide insights on warfare among larger societies and states, Dr. Roscoe says. "Personally, I think we have an awful lot to learn from areas like New Guinea, because we're not looking back in the past, but we're looking at ourselves in the present, stripped of our thermonuclear weapons."

Susan Gaidos is a free-lance writer in Maine.