Iran fighting U.S. appeal for increased oil production
SPECIAL TO WORLD TRIBUNE.COM
Thursday, February 24, 2000
LONDON5 -- Iran and Saudi Arabia are preparing for a conflict over
future oil production by OPEC members.
Saudi Arabia appears ready to respond to U.S. appeals for an increase in
production to ensure stabilization of prices. Iran said an increase in
production would harm the revised forecasts of increased revenues and damage
the market.
The price of the crude basket of OPEC producers has risen from below $10
a barrel in 1998 to around $25 today. The price of North Sea crude oil for
April dropped on the Singapore exchange to $25.85, a 50 cent decrease.
The two countries are staking their positions as ministers from the Gulf
Cooperation Council meet in Riyad on Wednesday to decide on what to
recommend to an OPEC meeting next month. U.S. Energy Secretary Bill
Richardson is scheduled to arrive in Riyad over the weekend to discuss the
issue.
"My message is going to be that there should be increased production --
that it's important that there be stability in the markets," Richardson said
in Cairo on Wednesday. "We're concerned about low inventories. The United
States is concerned about the volatility in oil prices, and we think that
it's important that the market dictate what the oil prices should be."
"Ten dollars is too low, and 30 is too high," Richardson said. "I'm not
going to get into figures, because we think markets should dictate those
prices."
Iran, however, is trying to recruit Gulf countries to oppose any hike in
oil production. Iran's OPEC governor Hussein Kazempour said any increase
would hurt the market. But Kazempour did not rule out the prospect of a
supply increase in the fourth quarter of 2000.
"I don't think there is a justification for an increase in output
because demand will fall by 2.8 million barrels per day in the second
quarter," Kazempour told the English-language Iran Daily on Tuesday. "An
increase in output could lead to a very destabilized market."
Sources in OPEC said the cartel might decide on a supply increase
starting from April 1.
Thursday, February 24, 2000
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