OPEC Pledges to Do Its Best to Avoid Oil Shortage in Case of War

www.riyadhdaily.com.sa Sunday - 23 February 2003

OPEC Secretary-General Alvaro Silva said on Saturday the oil exporting cartel would do its best to avert a world oil shortage and secure adequate supplies in the event of a war in Iraq. "We don’t want any scarcity of oil in the world," Silva told Greek state TV NET on the sidelines of an informal meeting of European Union energy ministers in this northern Greek city. "At OPEC we are doing our best to put enough oil in the market. This is our position," he said. The secretary general of the 11-member Organisation of the Petroleum Exporting Countries said OPEC was participating in the ministers’ meeting to share its outlook on the world oil market and stress the need for cooperation. Oil prices have soared 50 percent in three months to $32 per barrel for international benchmark Brent as traders absorb the threat to the two million barrels per day of exports from Iraq, the world’s eighth largest oil exporter. Turning to supply disruptions, Silva said he expected strike-hit Venezuelan oil exports to return to normal. The world’s fifth largest oil exporter was supplying 2.7 million barrels of crude oil daily to world markets before a crippling strike in early December. "In Venezuela’s case, it is a transitory problem, it is going to be solved. OPEC acted quickly to the lack of oil from Venezuela and this one is coming to a normal quota," Silva said. OPEC, due to hold a policy meeting on March 11, has raised output quotas twice this year to cover for the unexpected strike in cartel member Venezuela. Oil traders fear military conflict in Iraq could upset flows from the Middle East, which pumps nearly a third of the world’s crude. OPEC, which has long experience in compensating for volatile exports from Baghdad since the Gulf War, could cover any interruption in Iraqi supplies. But talk of a possible suspension of output quotas was played down on Friday by Silva. On Saturday, he said: "We don’t foresee at this moment any scarcity and high prices. We...are also working for peace." Meanwhile, UAE Oil Minister Obaid bin Saif Al-Nasseri also assured 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. "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." A Gulf source said earlier this week that leading OPEC member Saudi Arabia would support a temporary suspension of quotas if an attack on Iraq halted supplies from the world’s eighth largest exporter. Meanwhile, a Kuwaiti economic expert warned on Saturday of disagreements among OPEC member countries over oil production quotas. Dr Waleed Al-Saif, professor of economics at Kuwait University, told KUNA that a number of OPEC member countries called during cartel’s last meeting for changing their oil quotas. However, the discussion of such a request has been put off to forthcoming meetings. Al-Saif called for a new and more suitable distribution of quotas to be implemented sooner or later, so as to bar any violations of the international organi-zation’s production policies. Al-Saif mentioned that distribution of oil quotas has been always a matter of controversy between OPEC members, asserting the fact that member countries with small populations usually keep bigger oil reserves than others with greater populations.