OPEC awaits UN backing over Iraq

OPEC has reasserted that it will only welcome Iraq back to the oil cartel's meetings after the United Nations recognises Baghdad's post-war government.

    Al-Attiyah: Too early to chart out OPEC output policy for the fourth quarter

    OPEC President Abd Allah al-Attiyah told Dubai’s pan-Arab al-Hayat daily the producers' group would ask Iraq's new oil minister, Ibrahim Bahr al-Uloum, to its 24 September session only "if the United Nations recognises the Iraqi government."

     

    Al-Attiyah said it was too early to say what output policy OPEC would chart for the fourth quarter.

       

    But he said world markets were full of oil.

     

    "The world oil market is saturated with oil right now and the current rise in prices reflects tension resulting from speculation on the market and from the sequence of events in Iraq," said the OPEC chief.

     

    Agreement

     

    Attiyah's remarks, reported on Wednesday, underscore an agreement by the Organisation of the Petroleum Exporting Countries (OPEC) to exclude Iraq from output-policy conferences until Washington transfers power to a UN-recognised government.

       

    Although the Iraqi Governing Council named a cabinet on Monday, there is no prime minister and overall authority remains with US occupation governor, Paul Bremer, until an elected government is installed.

       

    "We would like to be part of OPEC again, but they are making it more difficult than it should be," senior Iraqi oil official, Shamkhi Faraj said on Wednesday.

       

    Iraq, aiming for September exports of 800,000 barrels per day (bpd), just under half its prewar rate, has missed three OPEC meetings since the US invasion in March.

     

    "We would like to be part of OPEC again, but they are making it more difficult than it should be" 

    Shamkhi Faraj            Senior Iraqi oil official

    Oil traders are concerned that an isolated Baghdad under Washington's control could quit the organisation it helped create over 40 years ago.

       

    Under UN sanctions, Iraq was exempt from cartel output limits and exported just under two million bpd before the US-led invasion toppled Saddam Hussein. But now, a breakdown in security and oilfield sabotage have left Baghdad pumping only 650,000 bpd.

       

    Iraq's slower-than-expected recovery in pumping rates has helped push oil prices beyond the top end of OPEC's $22-$28 target range. 

    SOURCE: Reuters


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