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Oil Minister returns from Vienna meeting, unhappy with OPEC decision Amir Mohammed Rashid says Iraq, other countries, plan to counter any sharp drop in oil prices Waiel Faleh Associated Press Writer
Iraq and other oil producers will reduce their outputs to deal with any undue fall in prices, Iraqi Oil Minister Amir Mohammed Rashid said March 31.
Iraq had opposed the recent decision by the Organization of Petroleum Exporting Countries to increase production, saying it came under U.S. pressure rather than as a result of market demands.
“Our position was, and still is, there is no problem in the international oil market from the point of supply and demand,” Rashid told The Associated Press.
“The problem is with the United States. As this year is the election year, they want to weaken OPEC and they want sharp oil price reductions,” said Rashid, who returned from the OPEC meeting in Vienna March 30.
Soaring prices for gas and home heating oil have become a political issue in the United States, where the presidential campaign is in full swing.
OPEC decided March 28 to raise production by 1.7 million barrels per day, a step toward filling a 2-million-barrel-a-day shortfall that has tripled crude prices over the last 14 months.
Iraq not part of quota system Iraq is a member of OPEC, but does not belong to the quota system by which the cartel attempts to control production and thereby prices. Even before the meeting, Iraq had announced it would soon increase its production by 700,000 barrels a day.
Oil is Iraq’s sole source of foreign exchange under a U.N. deal that allows it to skirt international trade sanctions imposed for its 1990 invasion of Kuwait.
“Iraq and some other producing countries have set up a plan to counter any sharp fall in prices,” Rashid said.
He said the other countries included some inside and outside OPEC, but refused to name them or say what price would trigger production cuts.
He said OPEC would hold an exceptional meeting, in addition to the one scheduled for June, if prices fell too sharply.
At Vienna, unnamed producers threatened to flood the market with oil if an agreement was not reached, he said, adding that the decision to increase output by a daily 1.7 million barrels was a compromise.
Rashid also discussed the recent U.N. moves to release spare parts for Iraq’s oil industry. Iraq can buy spare parts with its oil proceeds under the so-called U.N. oil-for-food deal, but millions of dollars in parts have been held up because of U.S. concerns they could be used for weapons.
“When good insists ..., evil backs down,” Rashid said, calling the U.N. action a victory for Iraq.
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