As crude prices hit the 40 US Dollars a barrel and ahead of the meeting of the Organisation of Petroleum Producing Countries (OPEC) scheduled to meet here today to discuss the market situation in the heat of the US plan to wage war on Iraq, Iran said there was no justification for increasing the Organisation’s present out put of 24.5 millions barrels per day.
But Saudi Arabia and Kuwait have signalled their intention to head off supply fears by allowing cartel members to pump freely in the event of war.
"Facts and figures indicate that the oil market is not facing a shortage at the moment and the present prices do not at all reflect market fundamentals”, Iran’s Oil Minister Bizhan Namdar-Zanganeh told the official news agency IRNA on Monday, adding "if the current production level and the increment supply from Venezuela continue, there will be a daily 3.1 million barrel over-supply in the second quarter".
“There is the war premium due to uncertainty about future political developments in the Middle East and the Persian Gulf. If it were not for the prospect of war and the probable U.S. attack against Iraq, OPEC would need to cut production”, he added.
The Iranian position is likely to find support from others in OPEC with no spare capacity and no wish to be seen supporting a U.S. war on Iraq, oil analysts predicted.
“OPEC should avoid taking decisions, which would imply support for a US military assault against one of OPEC member states”, Mr. Namdar-Zanganeh said, adding that the Islamic Republic of Iran “will not endorse decisions of political connotations, and we are confident that OPEC will not take decisions regarded by the world Muslim and Arab public opinion as supportive of the United States' military invasion against an OPEC fellow member", he said in reference to Iraq, a founding member of the Organisation.
For his part, OPEC’s Venezuelan Secretary General Alvaro Silva Caldron said there is currently a supply and demand balance in the market and OPEC does not need to raise the output.
