UAE oil min says OPEC to act if war halts Iraqi oil

www.forbes.com Reuters, 02.22.03, 2:17 AM ET

ABU DHABI, Feb 22 (Reuters) - UAE Oil Minister Obaid bin Saif al-Nasseri said on Saturday that OPEC would act to cover any break in Iraqi supplies if war erupts, but said it was too early to say whether the cartel would suspend its output quotas. The Organisation of Petroleum Exporting Countries has repeatedly sought to assure jittery oil markets that it stands ready to fill any shortage resulting from an interruption of Iraq's two million barrels per day (bpd) of exports. "If something drastic happens, then we have to discuss that event and take necessary action," Nasseri told reporters after meeting his Russian counterpart Igor Yusufov in Abu Dhabi. "The producers will carry out their responsibility." OPEC, due to hold a policy meeting on March 11, has raised output limits twice this year to cover for an unexpected strike in Venezuela, with most members -- except Saudi Arabia and the UAE -- now pushed to full capacity. A Gulf source said earlier this week that OPEC kingpin Saudi Arabia would support a temporary suspension of quotas if an attack on Iraq halted supplies from the world's eighth largest exporter. OPEC Secretary General Alvaro Silva said on Friday that a suspension of the quota system had yet to be discussed. UAE's Nasseri also said it was too early to look into this option. "On March 11, we have to review the market situation... and the price," Nasseri said. "Then if we see there is no need to change the ceiling, we will be happy to continue with it." "But if there is a need to change the ceiling, whether to raise or reduce it, then we have to take that action which will help stabilise the market and get a fair price." OPEC agreed last month to raise its output ceiling by 1.5 million bpd to 24.5 million bpd to cover a shortage from strike-bound member Venezuela.