OPEC chief sees no halt in Iran oil exports
OPEC's president says the 11-member group would be best advised to steer clear of politics when it meets on Jan 31.india Updated: Jan 27, 2006 12:51 IST
OPEC producer Iran is unlikely to halt oil supplies to world markets in response to mounting Western pressure over its nuclear programme, OPEC President Edmund Daukoru said on Thursday.
The mere threat of a disruption in Iran's daily sales of 2.4 million barrels has pushed prices towards $70 and is likely to prevent the Organisation of the Petroleum Exporting Countries from cutting output when it meets on Tuesday in Vienna.
"I would not think that production would completely come to a halt in any member country," said Daukoru, also Nigerian oil minister.
"Even in the blackest days of the Iran-Iraq War, when shipping was harassed, some production went on and also during the embargo against Iraq."
Top world oil exporter Saudi Arabia said on Thursday thatit stood ready to pump extra crude to fill any supply gap left by Iran or from Nigeria, where militant attacks have cut production by just over 200,000 barrels per day (bpd).
"We will do what we have done always... Whenever there is a shortage we come into the market and alleviate the shortage," said Oil Minister Ali al-Naimi.
OPEC's president said the 11-member producer group would be best advised to steer clear of politics when it meets on January 31 to chart policy for the second quarter.
"We are trying to provide for natural disasters, for things that are not foreseen. But for OPEC to be in any manner or for dragged into what is essentially a political issue is to expect too much from OPEC."
What analysts do expect is for the cartel to keep pumping nearly full throttle at close to 30 million barrels per day (bpd).
Daukoru said that would likely prove the case. Oil ministers from Saudi Arabia and Libya also support that view.
But the OPEC chief said the group could agree to a future supply cut for the second quarter when the winter season of peak demand has passed.
"If we decide that that is the way to go so that we can address our perception of the second quarter, we will take that decision now," said Daukoru.
He said demand historically falls by up to 2 million bpd in the second quarter although, in recent years, the drop has been less.
But OPEC will have to tread carefully next week, as demand is expected to rebound during the second half of the year.
"Even as we address Q2 slack, we have to think of the potential high rebound for Q3 and Q4 for which stocks have to be built," Daukoru said.
OPEC expected robust demand growth this year due to strong economic growth, Daukoru said.
Nigeria will not take steps to address security concerns in its oil producing southern delta region until four hostages being held by militants are released, Daukoru said.
He said talks continued with oil companies, and that Nigeria had always in the past guaranteed security in the region.
A five-week campaign of sabotage and kidnapping by the Movement for the Emancipation of the Niger Delta has pushed world oil prices to four-month highs and shut in 221,000 barrels per day of Royal Dutch Shell's output in Nigeria.
Shell Chief Executive Jeroen van de Veer said on Thursday that repairs could not start on damaged oil infrastructure until discussions about ensuring security had taken place.
First Published: Jan 27, 2006 12:51 IST