OPEC To Keep Output Cuts in Place
OPEC has no plans to raise crude oil output in reaction to Iraq's decision to halt oil exports for 30 days or until Israel withdraws from Palestinian territories, the group's Secretary General Ali Rodriguez said Tuesday. He said OPEC has no plans to hold an emergency meeting at this time, and the group is opposed to an oil embargo.
An OPEC spokesman said Rodriguez has spoken with all OPEC ministers since Iraq announced Monday that it would cut oil exports to Turkish ports and the south. Rodriguez said that, based on his discussions with OPEC ministers, the group saw no reason to take any action at this time.
Following an announcement by President Saddam Hussein Monday that Iraq was cutting exports immediately, Rodriguez said that although Iraqi crude exports to the U.S. - which Rodriguez put at 600,000 barrels a day - will immediately be cut off, output from independent producers is increasing. Rodriguez also said global petroleum inventories are high and the U.S. Strategic Petroleum Reserve is well stocked.
Saudi Arabian Oil Minister Ali Naimi also rejected the use of oil as a political weapon in remarks published in the London-based Arabic newspaper Al Hayat Tuesday. Asked by Al Hayat whether Saudi Arabia, would use oil as a political weapon, Naimi said: "during many crises in the past, the kingdom and OPEC showed their commitment to and support for the world oil market." Naimi also said world oil supplies aren't under threat.
Iran and Libya have said in recent days that they would support the use of oil as a weapon in support of the Palestinian cause in concert with others. But so far only Iraq has made a concrete commitment to implement this. However, it doesn't appear that Iran, OPEC's second largest oil producer, is seriously considering a suspension of oil supplies.