Posted by click at 1:55 AM
Tehran |Reuters | 22-03-2003
Opec price hawk Iran said yesterday any increase in the group's oil output would be a "violation" since no decision had been taken to raise its quota limits at Opec's meeting earlier this month.
After a dramatic oil price fall over the past week, many Opec states are now worried that recent output hikes above quota may have created a glut in the world market.
"Any increase in output limits by Opec members above the present quota of 24.5 million barrels per day would be considered a violation by its members," Hossein Kazempour Ardebili, an adviser to Iran's oil minister, told the official IRNA new agency.
Opec Secretary-General Alvaro Silva said on Thursday that members have been authorised to use their spare capacity to make up for the shortage of Iraq supply.
"Countries are authorised to use their spare capacity and they are ready to use it if necessary," Silva said.
But Kazempour Ardebili said Silva's comments were out of line with Opec's agreed policy. "The Opec general-secretary is not authorised to say this and it is Opec that could decide about it and none of the Opec ministers approved it," he told state television.
"It is giving a green light to America to launch an attack and none of the Opec members wants to give a green light to attack another Opec member," he said.
Silva also said markets were "more than well supplied" and other Opec officials have spoken of a possible big cut in production if the stoppage in Iraqi exports proves to be short-lived.
Opec President Abdullah Al Attiyah said on Thursday the exporter group saw no need to pump more oil into a saturated market.
"It would be economic suicide to increase output at this time... unless something drastic happens like oilfield sabotage, prices will continue to decline," an Opec source said.
Some Opec members, particularly Saudi Arabia, have increased output sharply in recent months to cover for a strike in Venezuela and cool an oil price spike ahead of the U.S.-led attack on Iraq.
Iranian Oil Minister Bijan Zanganeh at last week's Opec meeting led opposition to a proposal by some members to suspend quotas in the event of a war in Iraq. He argued that the group should resist decisions which gave implicit backing to the U.S.-led military attack.
The quota suspension proposal was not approved in the Vienna meeting, but all 11 members agreed to ensure that markets were well supplied.
Kazempour Ardebili said any decision to alter Opec's quota limits could only be taken at an emergency meeting of Opec ministers.
"In the recent (Opec) meeting the members extended the 24.5 million bpd quota and any other decision needs an emergency Opec meeting," he said.
"The present situation in the market shows that there is no shortage of oil and the fall in the price proves that," he added.
Oil has lost a quarter of its value in a week as the U.S.-led war on Iraq began, lifting uncertainty over the war.
Opec's reference price stood at $26.51 on Thursday, having dropped back into Opec's $22-$28 target range on Wednesday for the first time since December.
Nigerian Strife, Little Noticed, Is Latest Threat to Flow of Oil
Posted by click at 1:52 AM
<a href=www.nytimes.com>Invoking "force majeure"
By SOMINI SENGUPTA with NEELA BANERJEE
BIDJAN, Ivory Coast, March 21 — Though oil prices fell to a three-month low yesterday as United States-led forces advanced into Iraq, a new threat to supplies is building in West Africa: Ethnic conflict has begun to limit oil shipments from Nigeria and could complicate American refiners' efforts to produce more gasoline for the spring and summer driving season.
Royal Dutch/Shell, the largest oil producer in Nigeria, invoked "force majeure" this afternoon, effectively warning customers that events outside the company's control could delay oil deliveries by up to two weeks from its Bonny and Forcados terminals. ChevronTexaco made a similar announcement on Thursday, though the company did not specify the potential duration of the delays from its Escravos terminal.
In making the announcements, officials of both companies sought to play down the effect of the violence in the oil-rich, but volatile, Niger Delta, emphasizing that production continued in other parts of the area. Both companies have evacuated their employees from their facilities in the delta, however.
Simon Buerk, a Shell spokesman in London, said that the company had reduced production by 176,000 barrels of oil a day because of the clashes in the delta. Normally, Shell pumps an average of about 800,000 barrels a day from Nigeria.
ChevronTexaco, whose average production hovers around 460,000 to 470,000 barrels a day, has lost about 140,000 barrels a day, according to Sola Omole, a company spokesman in Lagos.
Nigeria was the fifth-largest exporter of oil to the United States in 2002, according to the Energy Information Administration, the analytical arm of the Energy Department.
While civil strife frequently disrupts exports from Nigeria, some oil industry analysts and traders cautioned that with so many problems bedeviling world oil markets, a prolonged reduction in Nigerian oil shipments could send prices higher once again.
"This has been building for months, but it has been tremendously overshadowed by events in Venezuela, then Iraq and the cold winter we've had," said John P. Kilduff, senior vice president for energy risk management at the New York office of Fimat USA, a unit of the French bank Société Générale. "Nigeria is a key source of supply, and in this kind of situation, we need every barrel."
Lately, oil markets have focused almost exclusively on Iraq, with prices falling as American and British forces advance with little resistance. The price of oil for May delivery fell $1.21, or 4.3 percent, to $26.91 a barrel at the end of trading today on the New York Mercantile Exchange. The near-month oil contract had not closed that low since Dec. 4.
It was about then that long-building tensions in Venezuela touched off a nationwide strike that brought oil exports to a halt, surprising global markets. The concern among oil analysts is that events in Nigeria could similarly blindside traders.
The ostensible cause of the violence in the Niger Delta is the way political representation has been apportioned in advance of Nigeria's April 19 elections, when the country is trying its first peaceful transition from one civilian government to another since independence in 1960.
The fighting, which began March 12, pits two of the largest ethnic groups, the Ijaw and the Urhobo, against the government of President Olusegun Obasanjo, whom they accuse of favoring minority Itsekiris in the design of the election.
The violence has continued unabated between armed militias from those ethnic groups and the Nigerian military, killing at least 10 soldiers and an untold number of villagers from the region.
The Ijaw have long complained about political representation and limited access to the oil riches of the delta. This week, they threatened to disrupt oil facilities if the Nigerian military fired on them.
With elections approaching, bringing fears of escalating political violence, hundreds of civilians have fled the delta in recent days, some crowding into oil terminals in hopes of being airlifted by oil company helicopters.
Members of the Itsekiri tribe filled a ChevronTexaco terminal this week, after their villages were attacked. Helicopters hired by the multinationals to evacuate their own workers were also used to ferry villagers to the southern port city of Warri. Local leaders reported that a dozen villages had been raided. Officials at the Nigerian Army command center in Warri refused to comment tonight.
Nigerian crude oil is a coveted light sweet oil that yields more gasoline and diesel than sour grades of crude. While a great deal of oil is on its way to the United States from the Middle East now, it is nearly all sour crude.
"I think the loss of volume is interesting, but it's the quality of the crude that is more important," said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation in New York.
Refiners on the East Coast of the United States are significant importers of Nigerian crude oil, said Aaron Brady, senior oil analyst with Energy Security Analysis Inc. in Wakefield, Mass. Moreover, European countries import a lot of Nigerian crude to turn into diesel fuel, sending the excess gasoline to the United States, Mr. Goldstein said.
Inventories of crude oil and gasoline in the United States are at their lowest levels in several years, and analysts said that refiners need all the oil they can find to meet rising demand as people begin to drive more in the warm weather.
"It's a concern, though it's not a crisis yet by any means," Mr. Brady said of the situation in Nigeria. "But if the oil is off for a month, then you could have people getting very concerned."
Native Latins Are Astir and Thirsty for Power
<a href=www.nytimes.com>But the path is proving treacherous.
March 22, 2003
By JUAN FORERO with LARRY ROHTER
A PAZ, Bolivia, March 21 — Isabel Ortega, a full-blooded Aymara-Quechua Indian who dresses in the black bowler and heavily layered 19th-century dress common to her people, is one of Bolivia's newest members of Congress.
But that has not kept guards from trying to bar her from the ornate building where the halls of power have long been the exclusive domain of buttoned-down descendants of Europeans.
"The guards would say, How can you come in?' And then they pushed me out," said Ms. Ortega, 49. "They would say, An Indian is coming into the palace.' "
Such racism and resistance have not stopped Ms. Ortega, who is part of a new Congress with three times as many indigenous lawmakers as the last one. Nor have they deterred a growing number of other leaders from forgotten classes across Latin America who are promising a political and economic upheaval.
They and their supporters are organizing as never before and using new, more open democracies to take on the traditional, light-skinned ruling classes they blame for keeping their countries mired in poverty and their people on the sidelines of power for 500 years.
Whether filled with Indians in the Andes, blacks and mixed-race "caboclos" and "mulatos" in Brazil or the poor of Argentina's outlying provinces, the ranks of these new political movements are united by the dark color of their skin and their low economic station.
With popular protests and new political parties, they are challenging the orthodoxy of market reforms as the region faces its worst economic crisis in decades. In the process, Latin America's political landscape is being redrawn. Parties that have been the pillars of governments from Caracas to Quito to Buenos Aires are collapsing or fast losing influence.
"Latin America is undergoing a fundamental redefinition of identity," said Elisa Carrio, the leading antiestablishment candidate in the presidential election scheduled in Argentina in April.
"That identity is being tinkered with in different ways in each country," she said, "because we are all different and not a single package, but there is one thing in common: we are finally electing leaders who look like the people they represent."
In Bolivia and Peru, this change has been accompanied by violent protests. Elsewhere, it has meant the rise of new leaders like President Luiz Inácio Lula da Silva in Brazil, a former labor leader born a peasant, and Lucio Gutiérrez in Ecuador, a former army colonel who led the coup that overthrew President Jamil Mahuad, a Harvard-educated favorite of the International Monetary Fund, in January 2000.
Mr. Gutiérrez was elected president in November after railing against traditional politicians and promising to cut poverty and scale back market reforms. He was supported by a powerful indigenous movement, Pachakutik, and inspired in part by another former army colonel and coup plotter, President Hugo Chávez of Venezuela.
In Mr. Chávez, the many dark-skinned people of Caracas's poor barrios believe they have found a powerful spokesman — and the nation's traditional political and business class, a reviled antagonist. In the last year, Chávez supporters have defended his four-year-old presidency against weeks of strikes by an opposition whose leaders are mostly of European descent.
These new Latin American leaders do not offer a uniform solution to region's problems. But their political base is decidedly anchored on the left, and all have toyed with the populism that has been a staple of Latin American politics since the 1930's.
What they have in common is the promise to replace the policies pushed by the International Monetary Fund with a return to a system of state-owned companies and protected markets.
"It is not very well thought out, but it is the opposite of the status quo," said Amy Chua, author of a new book, "The World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability." "The problem with these policies is they are more anti- than affirmative anything."
Mr. Chávez, who introduced a new Constitution in Venezuela and is redirecting oil profits toward social programs, has taken the most aggressive tack. Others, like Evo Morales, the head of Bolivia's main opposition movement, emphasize the traditions of indigenous people who have organized their communities collectively for generations.
More moderate leaders have begun groping for a middle ground between appeasing the powerful financial and capital markets of a global economy and addressing the complaints of those who feel excluded from the benefits of more than a decade of market-driven economic reforms.
But the path is proving treacherous.
In Peru, a host of independent movements, several with strong indigenous representation, swept recent regional elections and are eroding the standing of the market-friendly government of President Alejandro Toledo.
In Brazil and Ecuador, the new governments have leaned toward fiscal prudence rather than following through immediately on promises to redistribute wealth. Disappointed followers are already criticizing both Mr. Gutiérrez and Mr. da Silva, who assumed Brazil's presidency on Jan. 1.
But even absent clear answers, these new leaders have been helped by the disintegration of traditional political parties, whose ranks have been thinned by the defection of those who feel past reforms have not helped them.
Venezuela's two main established parties are in disarray. Peru's long-dominant parties have lost ground to an amalgam of independent parties. The two parties that have ruled Colombia for more than a century suddenly face new challengers, as is also the case in Uruguay.
In Argentina, the Peronists, long the country's dominant party, have split into three warring factions, and their rivals in the Radical Party have been equally discredited by the worst economic crisis in the country's history.
None of the five leading candidates in the presidential election on April 27 have been able to win the support of more than 19 percent of voters. But a recent poll showed that if Brazil's president, Mr. da Silva, were allowed to run, more than 50 percent of Argentines would vote for him.
In no other country is the gap between the traditional ruling classes and the majority of the population as wide as in Bolivia. One Western diplomat described the country as Latin America's South Africa — a land of virtual apartheid — dominated for centuries by the descendants of Spanish colonists, while most of its eight million people, indigenous and desperately poor, remained disenfranchised.
Here, the experiment with market reforms has come full circle. President Gonzalo Sánchez de Lozada was the architect of the government's free-market reforms in the 1980's. For a while they tamed inflation and restored growth. But today Bolivia — much like the rest of the region — is mired in recession, unable to create enough jobs for the 100,000 people who join the work force each year.
In February Mr. Sánchez de Lozada was forced to escape from a bullet-riddled presidential palace in a heavily armed motorcade. At the time, nearly 30 people died during a protest against his plans for a payroll tax to close government deficits and meet I.M.F. demands.
His government, just seven months old, is now badly hobbled and its indigenous opponents are energized, foreshadowing what some political analysts say will be the eventual rise to power of an Indian government, Latin America's first in centuries. "After 500 years, the Quechua and Aymara are preparing to recover political power," said Mr. Morales, the leader of the opposition Movement Toward Socialism.
Many of Bolivia's indigenous people see hope in the populist message of Mr. Morales and that of Felipe Quispe, a former rebel who is known here as El Mallku, or the condor.
Mr. Morales, who finished second in presidential elections last year, leads a congressional delegation with 22 Indians among its 35 members. Those allied with him do not control Congress, but they are nearly half of its 157 members and have demonstrated that they can organize potent, economically disastrous street protests.
In their view, Bolivia must take back state companies sold into private hands, end food imports, and reject Washington's efforts for a hemisphere-wide free-trade treaty.
In essence, the idea is to end the vestiges of a modern, free-market-oriented state and return to an agricultural society, with a smattering of mining, that would "regain the philosophy of the Andean soul," as Hernán Vargas, a member of Mr. Morales's congressional delegation, put it.
"The indigenous are looking to take political power, to govern ourselves, not to be governed by whites who have robbed and stolen our natural resources," said Mr. Quispe, who leads a confederation of rural workers.
The idea that Latin America must make a sharp break from American-inspired market orthodoxy percolates among several indigenous movements in the Andes. Mr. Chávez in Venezuela has used similar appeals recently, as have all but one of the five main presidential aspirants in Argentina.
The message is poison to the region's elites, and to the United States, since the indigenous movements oppose Washington's policies to try to end coca growing in Bolivia. Mr. Morales, in fact, began his political career as head of the coca growers' union.
Critics say the nontraditional leaders fail to take note of Bolivia's dependence on foreign loans and trade, as well as the importance of foreign investment in developing the country's most important industry, mining.
"Taking power is fine," Bolivia's president, Mr. Sánchez de Lozada, said in an interview. "But what do you do when you are in power? I do not know how long the economic engine will last exporting just dried potatoes."