This report from Stratfor looks like the beginning of a US psywar campaign to disrupt OPEC unity. Stratofor is known to have many connections to US intelligence.
Iran/Nigeria
GLOBAL INTELLIGENCE UPDATE
Iran and Nigeria Team Up to Oppose OPEC
13 January 2000
SUMMARY
Iran has invited Nigeria?s president to visit soon, suggesting
that the two countries could be coordinating their positions so
that they can oppose the extension of oil production cuts agreed
to by the Organization of Petroleum Exporting Countries (OPEC)
last year. Both Iran and Nigeria have good reason to cash in on
current high oil prices and both have histories of cheating on
OPEC quotas. If this occurs again, not only will oil prices drop,
but the warming relations between Iran and Saudi Arabia could
cool as well.
ANALYSIS
Iran?s Foreign Ministry announced Jan. 11 that Nigerian
President Olusegun Obasanjo accepted an invitation to visit
Iran soon. The invitation was extended to Obasanjo by Iran?s
ambassador to Nigeria, on behalf of Iranian President
Mohammad Khatami. The Iranian Foreign Ministry?s press
statement added that a date for the visit had not yet been fixed.
The proposed visit will most likely involve some discussion of
the upcoming OPEC meeting in March, at which the 11
members will discuss extending the current production cuts.
Saudi Arabia and Venezuela first discussed the possibility of
extending oil cuts during a Nov. 20-21 conference on foreign
involvement in developing Kuwait?s oil fields. Since then, Riyadh
and Caracas have been strong advocates of extending OPEC
quotas. Saudi Arabia?s economy is vastly dependent on the
price of oil, so naturally Riyadh wants prices to remain high
throughout 2000. Venezuelan President Hugo Chavez wants oil
prices to remain high because he needs to have reliable
revenues to fund his populist social agenda.
Enacted in March 1999, the production cuts are officially set to
expire at the end of March. Several other member nations have
voiced support for extending the cuts past the March deadline.
According to a report by Platt?s Oilgram news, on Dec. 2
Algerian Oil Minister Youcef Yousfi said he saw no reason for
OPEC to raise crude oil output in March. He added that he
hoped OPEC would be able to formulate a mechanism to
?control? the quota system in 2000 and achieve a ?real? balance
in the market. Also on Dec. 2, Kuwaiti oil minister Sheikh Saud
Nasser al-Sabah said an extension of the cuts beyond March
was a strong possibility.
On the other hand, Iran and Nigeria have pledged to maintain
production cuts until the March 2000 deadline ? but they have
remained curiously silent on extending the cuts. Qatar?s oil
minister has indicated that OPEC is privately divided. He told
OPEC?s official news agency that, ?most OPEC countries prefer
to extend the current production cut agreement beyond March.?
Except for Indonesia, Iran and Nigeria have the most to gain by
breaking free of OPEC?s limits and boosting production. Both
Iran and Nigeria were brought grudgingly into production cuts,
in a deal driven by Saudi Arabia and Venezuela. Both Iran and
Nigeria have a history of cheating on OPEC quotas. The
Paris-based International Energy Agency (IEA) reported that
OPEC supply cuts fell from 91 percent to 87 percent in
September, and that notable gains took place in Nigeria. In April
1999, Iran only made 79 percent of its promised cut, according
to the energy newsletter Petroleum Argus.
Most importantly, both countries have discovered new oil
reserves and need the revenues with which to develop
infrastructure in these fields. Iran, which is breaking out of its
international isolation, is trying to attract foreign investment to
develop new fields in the south. The current high oil prices ?
hovering around $24 per barrel ? make this an ideal time to
boost production and grab a quick windfall of cash. In Nigeria,
ethnic unrest has hindered production and helped keep the
country?s production in line with OPEC?s quotas. The strife can
be resolved by the use of force, and Obasanjo has recently
indicated he will do so if necessary.
Considering Iran and Nigeria?s current state of affairs, it is
logical that Khatami?s invitation to Obasanjo was actually
extended so that the two can forge a joint front in the upcoming
negotiations on OPEC quotas. This would pit Iran and Nigeria
against Saudi Arabia and Venezuela. In March, if Iran and
Nigeria decide to capitalize on high prices and flood the market
despite an extension of OPEC quotas, the price of oil will fall
significantly.
As significantly, such an event will have an impact on political
relationships in the Persian Gulf. Relations have warmed
recently between the Gulf?s two most important regional
powers, Iran and Saudi Arabia. But over-production by Iran and
falling oil prices would strike a significant blow against Saudi
Arabia?s oil dependent economy. Riyadh might perceive this as
an Iranian attempt to gain leverage in the relationship and ties
would promptly cool. |
