First Published: 2003-09-24

 
Iran: OPEC to cut oil production quotas
 

Oil prices surge on news of OPEC's decision to cut its production quotas as Iraq will remain member of cartel.

 

Middle East Online

A shocking decision to the oil market

VIENNA - The OPEC oil cartel plans to cut its production quotas, Iranian Oil Minister Bijan Namdar Zanghaneh said Wednesday after talks with fellow ministers, sending oil prices surging on world markets.

"Yes," he told reporters at OPEC's headquarters when asked whether the grouping was going to change its official output ceiling of 25.4 million barrels per day at a formal conference scheduled for 3:00 pm (13H00 GMT).

When asked whether it would be a cut, he nodded his head.

If confirmed, such a decision would come as a surprise to oil market traders, who had widely expected the grouping to leave output levels unchanged in the fourth quarter of the year.

Oil prices shot higher in London on news of the planned reduction.

Benchmark Brent North Sea crude oil for November delivery rallied 83 cents a barrel to 26.35 dollars within minutes of the news.

Meanwhile, Iraqi interim Oil Minister Ibrahim Bahr al-Ulum said Wednesday Iraq will remain a member of the OPEC oil cartel while at the same time significantly boosting output by the end of this decade.

"Iraq is a founding member of OPEC. It will stay and remain in OPEC," he told reporters through an interpreter at the first meeting of the 11-member cartel attended by Iraq since the US-led war to topple Saddam Hussein.

Iraq also hoped to boost its oil output to six million barrels per day (bpd) by the end of this decade, he added at a press conference at the cartel's headquarters.

"We intend to develop fast our huge resources with the help of the oil industry and other investors."

Iraq was producing up to 2.8 million bpd in February before the US-led war began.

But Iraq was only exporting 900,000 bpd at the end of August, officials in Baghdad said.

OPEC is keen to see Iraq, sitting atop the world's second-biggest known crude oil reserves, remain in the fold of the grouping, which produces about one third of the world's oil.

Bahr al-Ulum arrived Tuesday in Vienna at the invitation of OPEC President Abdallah ben Hamad Al-Attiyah, who is also Qatar's energy minister.

The invitation followed a decision by the 22-member Arab League on September 9 to allow the Governing Council in Baghdad to take the seat of Iraq, boosting efforts by the US-sponsored authorities to win international credibility.

 

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