OPEC should consider re-introducing individual output quotas, shuffled quietly to one side in 2008, an OPEC delegate says.
LONDON, April 17 (Reuters) - OPEC should consider re-introducing individual output quotas, shuffled quietly to one side in 2008, to prevent oversupply hitting prices should Iran increase its oil exports following a deal over its nuclear work, an OPEC delegate said.
A proposal to reintroduce quotas would spark a fierce debate in the Organization of the Petroleum Exporting Countries as national prestige and market share are at stake.
After refusing to cut output last year, OPEC is pumping much more than its overall output target of 30 million barrels per day (bpd) because of record Saudi Arabian output, higher Iraqi exports and a partial return of Libyan crude.
"Iraq is increasing each month and if that is so and if Iran is back, then either the price has to go down or there has to be some sort of arrangements," said a senior OPEC delegate from a non-Gulf OPEC member who declined to be identified.
"If the potential production of all member-countries exceeds the 30 million barrels, first there is a need to divide it among the members. That means to return to a quota."
On the one hand, quotas are the credible way to split and monitor production between members should the group decide to reduce output to support prices.
On the other, OPEC would have to decide what to base the quotas on - oil reserves, production, capacity growth or other metrics - and negotiate various countries' claims to be treated as an exception.
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