IRAN CONFUSES OIL MARKETS TO STOP PRICE DROP
TEHRAN 11TH March (IPS) In an concerted effort to stop further decline in oil prices, Iranian officials denied that Tehran had agreed to increase crude output by OPEC, blaming foreign news agencies for any "wrong appreciation" from last meeting between Iranian and Saudi Oil Ministers.
Iranian Oil Ministry's supreme advisor Hossein Kazempour Ardebili described as "false" foreign agencies reports that Tehran and Riyadh have reached agreement to increase oil production, the English-language daily Tehran Times said Saturday.
The paper that is controlled by hard line institutions quoted Mr. Kazempour Aredebili as having denied that Tehran has accepted a Saudi proposal to increase the present level of output by the Organisation of Petroleum Exporting Countries (OPEC), saying this was based on "personal interpretations made by news agencies".
The Iranian Oil Minister Bizhan Namdar-Zangeneh and his Saudi counterpart Ali ibn Ibrahim al-Na'imi met in Riyadh on Wednesday and agreed that current market conditions necessitate that the 11 member OPEC and non-OPEC oil producers should provide "adequate and timely oil supplies" to balance the market in order to reach "sustainable price levels conductive to world economic growth and market stability".
"Iran has not issued any statement about increase or decrease of oil production. The joint statement issued by Iran and Saudi Arabia has only emphasised the need for sufficient and timely supply of oil and apart from this principal, Iran has not agreed with any increase or decrease in the production of oil and any decision about this matter would be left to an OPEC meeting due in Vienna in March", Mr. Kazempour Ardebili has told Tehran Times Ms. Zahra Abdi.
Confirming this point of view, the Foreign Ministry's senior spokesman Hamid Reza Asefi has reiterated that increase in oil production "is not the policy of the Islamic Republic of Iran", Tehran Times added.
Though Iran and Saudi Arabia had "noted that the recent rising oil price levels and their continued volatility is not in the interests of producers or consumers", yet they had not fixed any date or amount of an eventual increase in oil production.
Following the announcement in Riyadh, oil prices dropped under US$ 30.
Deputy Oil Minister Mehdi Husseini, meanwhile, told Iran News, "From the studies that we have made, March is not a suitable time for changing the situation or the production level because the seasonal demand at the beginning of spring drops about three million barrels a day".
"We can decide on increasing our capacity at the September meeting" of OPEC, he said.
Another Iranian English-language newspaper quoted an "informed source" at the Iranian Oil Ministry saying the members of the OPEC have not yet decided to increase output.
"Any change in the output depends on the march 27 meeting in Vienna to decide on whether to roll over year-old production cuts or to keep the present output", "Iran Daily quoted the unidentified Head of OPEC affairs at the Oil Ministry.
OPEC is split on whether to increase production from April, and if so by how much. Iran, the second largest exporter, is generally counted among the hard liners, along with Libya, Iraq and Algeria.
But Saudi Arabia, the world's leading exporter with three million barrels of spare capacity, Venezuela and Mexico, a non-OPEC producer have come out in favour of an increase of at least 1.2 million barrels per day to bring prices down.
According to international oil experts, to bring the prices down to between 20 to 25 dollars a barrel and answer world's demand, producers must increase production by at least 2 millions barrels per day.
Warning the OPEC against a hasty increase of its output, an international oil expert in Vienna also exhorted the Organisation "not to be easily impressed by the emotional waves created by those involved in the oil markets".
In an interview with the official news agency IRNA, Mr. Fereydoun Berkeshli has explained that due to seasonal fluctuations in the market, the international demand for oil will decrease from 77.5 million bpd in the first quarter of 2000, to approximately 74.3 million bpd in the second quarter, "causing a natural decline of 3.2 million bpd.''
"Since the OPEC members are well aware of this fact, any decision to raise the output will be illogical under the current circumstances", he stressed.
According to Mr. Berkeshli, statistics on oil stocks of these countries are not reliable and statistics issued by the Paris-based International Energy Organisation are ''ridden with flaws and send misleading signals to the international oil market leading to confusion in the market''. ENDS OIL AND OPEC 11300