Kingdom, Russia to Coordinate in Keeping Oil Prices Stable

www.arabnews.com Agence France Presse

MOSCOW, 15 March 2003 — Saudi Arabia and Russia are coordinating their efforts to stabilize oil prices despite the Iraq crisis and maintain prices at levels desired by OPEC and Moscow, Minister of Petroleum and Mineral Resources Ali Al-Naimi said yesterday.

Riyadh and Moscow are both seeking “to ensure the stability of the world oil market and fair prices,” Al-Naimi said after talks with his Russian counterpart Igor Yusufov, as quoted by the Interfax news agency.

“We favor a fair level for oil prices, defined by OPEC (the Organization of Petroleum Exporting Countries) at 22 to 28 dollars a barrel, and that in no way contradicts the price level set by the Russian Federation of $20 to $25 per barrel for benchmark Ural,” Al-Naimi said.

Fears regarding the uncertainty surrounding a possible war in Iraq have seen oil prices rise sharply, with the current price standing at $33 a barrel.

“Halt the war situation and the prices will fall,” Al-Naimi said.

The minister hinted that Saudi Arabia might not be able to make up the market shortfall in supplies of crude if Iraqi production should be halted because of a war.

“Until now Saudi Arabia has been able to compensate for oil shortages on world markets, but I can only speak about hard facts,” he said.

“When there was a strike in Venezuela and oil supplies on the world market dropped, we were able to make up the difference. I can’t say what would happen in the hypothetical case” of a war in Iraq,” he stressed.

On Thursday, the first day of his visit, Al-Naimi noted that Saudi Arabia in February used 90 percent of its current 10.5 million barrels a day capacity.

Like Saudi Arabia, Russia is a major oil producer, but it is not a member of OPEC.