OPEC to Press Rivals on Next Supply Cut

Sun June 8, 2003 11:47 AM ET By Richard Mably and Jonathan Leff

DOHA, Qatar (<a href=reuters.com>Reuters) - OPEC this week is set to pressure independent exporters to back the cartel's next supply cut to prevent the resumption of Iraqi exports undercutting oil prices. OPEC President Abdullah al-Attiyah made clear Sunday that major non-aligned producers Mexico, Russia and Norway would be called on to help the Organization of the Petroleum Exporting Countries defend its $25 a barrel price target.

"Yes. We require their support ... I feel we have their support," Attiyah, also oil minister of Qatar, told reporters in Doha ahead of Wednesday's meeting.

With oil prices at the top end of the group's $22-$28 preferred price range, ministers have said there is no need for any immediate cut from its 25.4 million barrel a day output limit.

But the cartel is preparing the ground should it need to reduce supply later this year by making sure non-OPEC countries are aware it requires their cooperation.

OPEC powers Saudi Arabia and Venezuela met with Mexico in Madrid Friday to discuss the reemergence of Iraq on the world market and Venezuelan Oil Minister Rafael Ramirez travels to Norway Monday.

Recovering from the U.S.-led war, Baghdad is preparing to resume international sales in about a week's time, but shipments are expected to stay well below pre-war levels for several months.

With U.S. crude now over $30 a barrel, alarm bells are ringing in Washington as summer gasoline demand puts upward pressure on import prices.

"We won't just cut for the sake of cutting," Attiyah said.

"I don't want to see my consumers angry, I believe the customer is always right but we have to be careful about the balance between demand and supply."

OPEC has not needed to reduce production limits since late 2001, when it slashed supplies on condition that independent producers contribute. They resisted until prices slumped and then fell into line.

Russia, Mexico, Syria, Oman, Egypt and Angola among non-OPEC will be represented officially in Doha, for the first time at an extraordinary OPEC meeting.

The main subject of oil market debate, Iraq, will not send a delegation, an issue which has rankled Iraqi officials.

Attiyah acknowledged there had been no contact between OPEC headquarters and Baghdad since the U.S. occupation, but urged Iraq to get in touch.

"I did not receive any request from Iraq, but personally I'd be happy to talk to them," he said, adding he hoped Baghdad would make OPEC's next scheduled meeting in September.