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Total oil production by the OPEC cartel dropped 212,000 barrels per day to 26.69 million bpd in May, the Middle East Economic Survey reports in its Monday edition.

The industry newsletter said without Iraqi production, output fell 362,000 bpd to 26.39 million bpd last month.

Barring Iraq, Nigeria and Venezuela, all members of the Organisation of Petroleum Exporting Countries saw a small decline.

Iraq's production, recovering from war, doubled to 300,000 bpd in May, but supplied only the domestic market, awaiting the resumption of exports, the Cyprus-based specialists say.

Caracas and Lagos both continue to boost production to normal levels of before the Venezuelan general strike and ethnic fighting in Nigeria, MEES says.

"MEES sources indicate that Iran's output comprised 2.11 million bpd of exports and deliveries of 1.45 million bpd to domestic refineries," the weekly adds.

On Friday, oil prices topped US$30 a barrel in New York, as traders reacted to an earlier report showing lower OPEC production.

New York's benchmark light sweet crude contract for July delivery was up 86 cents to US$30.82 a barrel in late deals.

June 17, 2003 By <a href=www.busrep.co.za>Reuters Doha - Opec could be forgiven for feeling a touch of paranoia.

Iraq, where it was born in 1960, has been invaded and occupied by the US, and Washington hawks are now calling for "regime change" in Iran, another founder member.

Venezuela blames America for backing a failed coup last year, and some in the Pentagon question the US alliance with Saudi Arabia, the linchpin of the oil cartel.

Opec has remained silent in the face of the growing threat to its members, confining debate to the price of its oil.

Until now, that is.

Venezuela, under the leadership of President Hugo Chavez, has put sovereignty back on the agenda at a recently revived, long-term strategy meeting.

"We need to emphasise that the world has left behind the colonial era, when one power could take by force another country's resources," Venezuelan energy minister Rafael Ramirez told reporters after last week's ministerial meeting in Doha, Qatar.

"There are several countries which could feel threatened."

The proposal is some way from becoming policy of the group that supplies half of world oil exports, and is unlikely to lead to any immediate threat to supplies. But the idea of tightening Opec's grip over two-thirds of the world's oil reserves, and seeking to avoid military attack, has awakened interest from members.

"It is a serious concern that Opec members will become occupied by foreign powers," said a delegate from another member of the 11-country group.

Opec made its name in the 1970s by nationalising Western-controlled oil firms in their countries and forcing the industrialised world to pay more for oil.

But Western capital has been creeping back into Opec since the 1980s, while the US, anxious to secure cheap supply, has increased its military and political influence in key members Saudi Arabia, Kuwait and recently Iraq .

Under Saudi leadership Opec has traded revolutionary rhetoric for talk of partnership with the West, but some in the cartel think the scale has tipped too far in favour of Washington and see the war on Iraq as a bad omen.

"The US can't continue to invent wars. We want a deal with the world powers - we will supply oil and gas, but you can't invade my country. After Iraq, who is next?" said an Opec delegate, asking not to be named.

Venezuela's proposal is to link the Opec principle of security of oil supply to the national security of Opec nations.

If approved by Opec ministers, it would be tabled at a heads of state summit in 2005.

Some delegates believe that unless Opec reasserts sovereignty over its natural resources, it could be destroyed by a resurgent US foreign agenda, combined with the financial power of four "supermajor" oil firms.

The discussion could be welcomed by Iran and Libya, which are under US sanctions, but Saudi Arabia excludes politics from Opec debates.

Given the Washington climate, a more political Opec agenda could fuel critics who see the cartel as an instrument of economic warfare against the only superpower.

"We are trying not to let this get too political," said a delegate from a pro-US member.

Venezuelan Opec officials believe that country's foreign investment experience in the 1990s, and what it sees as a US hand behind last year's coup attempt, could be repeated all over Opec.

South America's leading oil producer, which has hiked its royalty rate to 30 percent, has proposed that Opec establish a minimum royalty rate across the group, but many Opec states have agreed to discounts to attract Western capital. - Reuters

<a href=www.khilafah.com>khilafah.com uploaded 14 Jun 2003

The OPEC oil cartel could be forgiven for feeling a touch of paranoia. Iraq, where it was born in 1960, has been invaded and occupied by the United States, and now Washington hawks call for "regime change" in Iran , another founder member.

Venezuela blames America for backing a failed coup attempt last year, and some in the Pentagon question the US alliance with Saudi Arabia, linchpin of the cartel.

The Organization of the Petroleum Exporting Countries has remained silent in the face of the threat to a growing number of its members, confining debate to the price of its oil.

Until now, that is. Venezuela, under the fiercely nationalist leadership of Hugo Chavez, has put the issue of sovereignty back to the top of the agenda at a recently revived long-term strategy meeting.

"We need to emphasize the idea that the world has left behind the colonial era, when one power could take by force the resources of another country," Venezuelan Energy and Mines Minister Rafael Ramirez told reporters after Wednesday's ministerial meeting in the Qatari capital.

"There are several countries which could feel threatened. "The proposal is some way from becoming policy of the group that controls half of world oil exports, and is unlikely to lead to any immediate threat to supplies. But the idea of tightening OPEC's grip over two-thirds of the world's oil reserves, and seeking to avoid military attack, has awakened interest from other members. "Of course, it is a serious concern that OPEC members with big oil reserves will become occupied by foreign powers," said a delegate from another of the 11-member group.

CREEPING BACK: OPEC made its name in the 1970s by nationalizing the Western-controlled oil companies in their countries, and forcing the industrialized world to pay higher prices for oil imports. But western capital has been creeping back into OPEC since the 1980s, while the United States, anxious to secure cheap supplies, has increased its military and political influence in key members such as Saudi Arabia, Kuwait and recently Iraq.

Under the leadership of Saudi Arabia, OPEC has traded the revolutionary rhetoric of the 1970s for talk of partnership with consuming countries in the West. Some in the cartel think the scale has tipped too far in favour of Washington and see the Iraq war as a bad omen.

"The United States can't continue to invent wars. We want to have a deal with the world powers - we will supply oil and gas, but you can't invade my country - after Iraq, who is next?" said an OPEC delegate, asking not to be named.

The Venezuelan proposal is to link the long-held OPEC principle of security of oil supply to the national security of OPEC nations themselves. If approved by OPEC ministers, it would be tabled at the next summit of OPEC heads of state, due to be held in 2005.

Some delegates believe that unless OPEC rediscovers its ideological roots - asserting sovereignty over its natural resources - the cartel could be destroyed by a resurgent US foreign policy, combined with the financial power of four "supermajor" oil companies.

The discussion could be welcomed by some members such as Iran and Libya, which are already under US sanctions, but face opposition from Saudi Arabia, which excludes politics from OPEC debates, partly to make the group a more focused market manager.

ECONOMIC WARFARE: Given the current climate in Washington, any attempt to give OPEC a more political agenda could also give fuel to critics who see the cartel is an instrument of economic warfare against the world's only superpower.

"We are trying not to let this get too political," said a delegate from a pro-US member. Venezuelan OPEC officials believe that country's experience with foreign investment in the 1990s, and what it sees as Washington's hand behind last year's coup attempt, could be repeated all over OPEC.

"We said that the case of Venezuela could be repeated in other OPEC members with very negative results, destabilizing countries," said Luis Vierma, Venezuela's deputy oil minister, who presented the ideas earlier in June.

Venezuela has also proposed that OPEC reinforce its sovereign powers by establishing a minimum royalty rate across the group, which has two-thirds of the world's oil reserves.

Royalty, a tax on gross production, has been a largely academic issue in OPEC since nationalization, because the producing companies have became fully owned by the OPEC states.

But they have become a hot topic again as foreign investment grows, especially because royalties have been eroded or even abolished in non-OPEC producers like Britain.

Income tax, which taxes profit rather than production, are more popular outside OPEC. Venezuela under Chavez has hiked its royalty rate to 30 per cent, but many other OPEC states have agreed to discounts to attract Western capital.

BBC News Oil prices have fallen sharply after new figures suggested that world stockpiles are bigger than originally thought.

The International Energy Agency, a body which monitors global oil supplies, on Friday said it was upgrading by 79 million barrels its previous estimate of stockpiles held by major consuming countries.

The upgrade, which raised the IEA's global supply estimate to 2.4 billion barrels, helped push US light crude prices down by $1.18, or nearly 4%, to $30.33 on Friday.

The decline partly reversed a price rally earlier this week triggered by fears that producers' cartel OPEC was planning to cut production levels.

A fall in oil prices is usually welcomed by major consuming countries, as cheaper energy costs help curb inflation.

Tight market

However, the IEA said the overall supply situation remains uncertain.

"The market is obviously better supplied than we thought as little as two weeks ago, but stocks are still low and fundamentals are still tight," said Klaus Rehaag, editor of the IEA monthly oil market report.

Oil prices have been boosted this year by disruption to Iraqi supplies during the US-led campaign to topple Sadam Hussein's regime.

A strike by oil workers in Venezuela, and social unrest in Nigeria, have also pushed the market higher.

Iraq, which accounted for about 4% of world exports before the war, clinched its first major sale of oil since the conflict ended on Thursday, and is expected to get back to full capacity later this year.

The OPEC countries, which aim to keep oil prices within a range of $22 - $28, will meet again on 31 July to assess how the resumption of Iraqi supplies has affected prices.

They may cut their output levels if they decide that prices have fallen too low.

Reuters, 06.13.03, 9:41 AM ET By Tom Ashby DOHA, June 13 (Reuters) - The OPEC oil cartel could be forgiven for feeling a touch of paranoia. Iraq, where it was born in 1960, has been invaded and occupied by the United States, and now Washington hawks call for "regime change" in Iran, another founder member. Venezuela blames America for backing a failed coup attempt last year, and some in the Pentagon question the U.S. alliance with Saudi Arabia, linchpin of the cartel. The Organisation of the Petroleum Exporting Countries has remained silent in the face of the threat to a growing number of its members, confining debate to the price of its oil. Until now, that is. Venezuela, under the fiercely nationalist leadership of Hugo Chavez, has put the issue of sovereignty back to the top of the agenda at a recently revived long-term strategy meeting. "We need to emphasise the idea that the world has left behind the colonial era, when one power could take by force the resources of another country," Venezuelan Energy and Mines Minister Rafael Ramirez told reporters after Wednesday's ministerial meeting in the Qatari capital. "There are several countries which could feel threatened." The proposal is some way from becoming policy of the group that controls half of world oil exports, and is unlikely to lead to any immediate threat to supplies. But the idea of tightening OPEC's grip over two-thirds of the world's oil reserves, and seeking to avoid military attack, has awakened interest from other members. "Of course it is a serious concern that OPEC members with big oil reserves will become occupied by foreign powers," said a delegate from another of the 11-member group.

CREEPING BACK OPEC made its name in the 1970s by nationalising the Western-controlled oil companies in their countries, and forcing the industrialised world to pay higher prices for oil imports. But Western capital has been creeping back into OPEC since the 1980s, while the United States, anxious to secure cheap supplies, has increased its military and political influence in key members such as Saudi Arabia, Kuwait and recently Iraq. Under the leadership of Saudi Arabia, OPEC has traded the revolutionary rhetoric of the 1970s for talk of partnership with consuming countries in the West. Some in the cartel think the scale has tipped too far in favour of Washington and see the Iraq war as a bad omen. "The United States can't continue to invent wars. We want to have a deal with the world powers -- we will supply oil and gas, but you can't invade my country -- after Iraq, who is next?" said an OPEC delegate, asking not to be named. The Venezuelan proposal is to link the long-held OPEC principle of security of oil supply to the national security of OPEC nations themselves. If approved by OPEC ministers, it would be tabled at the next summit of OPEC heads of state, due to be held in 2005. Some delegates believe that unless OPEC rediscovers its ideological roots -- asserting sovereignty over its natural resources -- the cartel could be destroyed by a resurgent U.S. foreign policy, combined with the financial power of four "supermajor" oil companies. The discussion could be welcomed by some members such as Iran and Libya, which are already under U.S. sanctions, but face opposition from Saudi Arabia, which excludes politics from OPEC debates, partly to make the group a more focused market manager.

ECONOMIC WARFARE Given the current climate in Washington, any attempt to give OPEC a more political agenda could also give fuel to critics who see the cartel is an instrument of economic warfare against the world's only superpower. "We are trying not to let this get too political," said a delegate from a pro-U.S. member. Venezuelan OPEC officials believe that country's experience with foreign investment in the 1990s, and what it sees as Washington's hand behind last year's coup attempt, could be repeated all over OPEC. "We said that the case of Venezuela could be repeated in other OPEC members with very negative results, destabilising countries," said Luis Vierma, Venezuela's deputy oil minister, who presented the ideas earlier in June. Venezuela has also proposed that OPEC reinforce its sovereign powers by establishing a minimum royalty rate across the group, which has two-thirds of the world's oil reserves. Royalty, a tax on gross production, has been a largely academic issue in OPEC since nationalisation, because the producing companies have became fully owned by the OPEC states. But they have become a hot topic again as foreign investment grows, especially because royalties have been eroded or even abolished in non-OPEC producers like Britain. Income tax, which taxes profit rather than production, are more popular outside OPEC. Venezuela under Chavez has hiked its royalty rate to 30 percent, but many other OPEC states have agreed to discounts to attract Western capital.