Venezuela's Chavez sees postwar Iraq leaving OPEC

Forbes.com-Reuters, 04.12.03, 6:32 PM ET

CARACAS, Venezuela (Reuters) - Venezuelan President Hugo Chavez, who has condemned the U.S.-British invasion of Iraq, said Saturday he believed the future government of the oil-rich country would probably withdraw from the OPEC oil exporters' cartel.

Venezuela and Iraq are members of the 11-nation Organization of Petroleum Exporting Countries. U.S. officials have begun trying to set up a transitional government in Iraq after Saddam Hussein's rule collapsed before the onslaught of U.S. and British military forces.

"It's not clear exactly how it (the new Iraqi government) will be formed. It's very probable that Iraq will stop being part of OPEC," Chavez told reporters in Caracas.

"Iraq is one of the biggest (oil) producers in the world and, above all, it has some of the largest reserves of oil. With this, they will certainly try to influence (world oil) prices," he said.

The left-wing Venezuelan leader, who infuriated Washington three years ago by traveling to Baghdad to meet Saddam, is a leading supporter of OPEC and its coordinated price support policies in the world oil market.

Chavez said the U.S.-British invasion of Iraq had weakened OPEC and added the cartel would seek to defend oil prices at an upcoming emergency meeting.

Venezuela, the world's No. 5 oil exporter, faces a sharp economic recession following an opposition strike against Chavez in December and January that slashed petroleum production and exports and choked off vital oil revenues for the government.

Since the strike fizzled out in February, the government has restored output and export shipments.

Chavez said Venezuela was now producing around 3 million barrels per day of oil.

But he repeated his country's willingness to reduce oil output to support prices if OPEC decided on this course of action as a group.

Despite Chavez's opposition to the war in Iraq, his government has said it is guaranteeing oil shipments to clients in the United States, which normally receives more than 13 percent of its oil imports from Venezuela.