Iran, Saudi Arabia Urge OPEC Members to Cut Oil Output Further, IRNA Says
Iran, Saudi Urge OPEC to Cut Oil Output Further, IRNA Says
Riyadh, March 4 (Bloomberg) -- Iran and Saudi Arabia, the
Organization of Petroleum Exporting Countries' two biggest oil
producers, urged the 11-member group to cut output further to
reduce an oil glut and boost prices, Iran's news agency said.
OPEC in January made only 72 percent of the 2.6 million
barrel-per-day output cuts its members promised last June as part
of producers' efforts to reduce a world oil glut, according to an
OPEC document. Iran met just 1 percent of its promised cuts,
while Saudi Arabia fell 12 percent short of its target.
Iran's Foreign Minister Kamal Kharrazi and Saudi Arabia's
Crown Prince Abdullah bin Abdulaziz held talks in Riyadh
yesterday to try and resolve a dispute between the two countries
over how much oil each should be pumping, a disagreement that
could block further cuts to OPEC output.
''The two sides at the meeting stressed the need for
reducing production of oil by OPEC members and called on the non-
OPEC oil producers to help raise the oil prices,'' they said in a
joint-statement, reported by IRNA.
Iran refuses to recognize the level from which OPEC expects
it to cut production. In January, Iran cut a mere 4,000 barrels a
day from the official February baseline of 3.62 million barrels a
day. Iran says its baseline is 3.92 million barrels a day, so it
is meeting its promise to cut 305,000 barrels a day.
Brent crude oil for April delivery rose 25 cents to close at
$11.25 a barrel on London's International Petroleum Exchange
yesterday. Brent has fallen by a fifth in the last year.
Iraq's Return
The Iranian foreign minister ''called for a collective
measure to boost prices of oil especially in light of Iraq's
return to the oil market,'' reported IRNA.
Saudi Arabia increased its oil output by 3 million barrels a
day to about 8 million to meet the shortfall created after Iraq
invaded Kuwait in 1990, and Iraqi crude exports were banned from
the international market. Iran and Iraq have called on Saudi
Arabia to reduce its output now that Iraqi oil exports have risen
to about 2 million barrels a day.
While the joint Iranian-Saudi call for further production
cuts is one of the most positive steps to emerge since the break-
up of OPEC's November summit, a barely disguised feud between the
two Persian Gulf neighbors, there is still no evidence that they
are close to an agreement, said analysts.
''I think for Saudi to consider reducing output further,
there would have to be positive indications by Iran of compliance
to existing cuts,'' said Kevin Taecker, a Riyadh-based oil
analyst with Saudi American Bank.
Kharrazi's visit to Saudi Arabia was expected to clear the
way for a visit to the kingdom later this month by Iranian
President Mohammad Khatami, the first by a sitting Iranian
president since before Iran's Islamic Revolution in 1979.
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