OPEC Renews Pledge to Boost Oil Supply in Case of Shortage

www.riyadhdaily.com.sa Monday - 03 February 2003

OPEC will deal with any unforeseen development such as war on Iraq, and increase supply to meet demand, the oil cartel’s president, Abdullah bin Hamad al-Attiyah, said Sunday. "If there is a shortage of supply, OPEC will balance demand and supply," Attiyah told reporters on the sidelines of an energy and environment conference in the Emirati capital. "We have learnt from history how to deal with these situations," he said, adding that the Organisation of Petroleum Exporting Countries (OPEC) had "learnt a lot of lessons" from the 199O Iraqi invasion of Kuwait and 1991 Gulf war. Attiyah said no OPEC meeting had been scheduled during the Abu Dhabi conference attended by at least 11 oil ministers. "Only bilateral talks are taking place but not any OPEC meetings because not all the oil ministers are present. "The next OPEC meeting is on March 11 and we will discuss all options taking into account the market situation. For sure we will take into account any surprise development in the market also." In the event of a US-led attack on Iraq, the cartel could convene a snap meeting, said Attiyah, who is Qatar’s energy and industry minister. "OPEC always has a tradition, can meet any time to discuss the markets, but I hope not to see a war," he said. Saudi Oil Minister Ali Al-Nuaimi had renewed Saturday the kingdom’s pledge to activate spare oil production capacity and make up for any loss in world petroleum supply if war breaks out. The world’s top oil exporter "does not hope that a strike on Iraq happens but, if it does, it is committed to cover the needs of the market in line with its capacity," Nuaimi said. Meanwhile, Libyan Oil Minister Abdulhafidh Zlitni said on Sunday that OPEC could reduce its oil output ceiling in March if prices were declining rapidly and demand for petrol was stable. "If there are signs in March that demand is stable and prices are falling sharply then OPEC will act to reduce production," Zlitni told reporters at an energy and environment conference in Abu Dhabi. Zlitni said the oil market was well supplied and global inventories were building up, setting the stage for a sharp decline in prices. "Supplies are sufficient...and the build up of stocks will have a negative impact on prices, certainly," he said. The Libyan oil minister said most cartel members were pumping at high rates in a bid to cool-off scorching oil prices which had blasted beyond $30 a barrel. "It seems everybody now is producing above the market requirements to make the market cool," he said. OPEC last month agreed to raise its supply limits by 1.5 million barrels per day (bpd) to 24.5 million bpd to cover the supply gap left by strike-bound member Venezuela. Influential Saudi oil minister Ali al-Naimi said on Saturday the kingdom would ensure that the producers group was pumping at 24.5 million bpd.