Wednesday, November 14, 2001

OPEC warns of oil price war




By Bruce Stanley
The Associated Press

        VIENNA, Austria — With oil prices sagging, OPEC members Tuesday challenged oil-producing nations outside the cartel to join them in sharply cutting output — and warned of a possible price war if they failed to cooperate.

        Oil ministers of the Organization of the Petroleum Exporting Countries displayed a growing impatience at the refusal of other oil producers to close ranks with OPEC and commit to meaningful cuts ahead of a crucial meeting of OPEC delegates today.

        Except for Russia, which has pledged token support, no major non-OPEC producer seems willing to rein in production at a time when their oil revenues are already suffering from plummeting prices.

        “I believe that (any) OPEC cut should be subject to real non-OPEC contribution, and we expect our friends in non-OPEC producers to help us in these circumstances,” Iran's oil minister Bijan Namdar Zangeneh told reporters as he arrived at a hotel in the Austrian capital.

        Mr. Zangeneh refused to specify how much oil he wanted non-OPEC producers such as Russia and Mexico to remove from the market, but he stressed that he was looking for “serious cuts.”

        Iran, OPEC's second-largest producer, has been among the most outspoken of the group's 11 members in calling for corresponding cuts from non-OPEC countries.

        Their efforts have met with little success. Russia has pledged to curtail its daily output of 7.1 million barrels of oil by just 30,000 barrels, or 0.4 percent.

        OPEC members have recommended slashing their production targets by as much as 1.5 million barrels a day, or 6 percent, but they fear that their efforts could be undone if non-OPEC producers keep pumping at current levels or even boost their output.

        “I am afraid that this cut — without them — will not help and will be useless,” said Qatar's oil minister, Abdullah Al Attiyah.

        OPEC delegates expect to decide on a course of action when they meet today at the group's headquarters in Vienna.

       



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