Purnomo Yusgiantoro said on Monday production by the OPEC 10 – all members excluding Iraq – was nearing the 30 million bpd mark, with up to another 1.0 million bpd on standby and plans afoot for further capacity increases within the next 18 months.
However, for prices to stabilise “there must be a significant reduction in geopolitical tensions”, Yusgiantoro said.
He did not specify which tensions he was referring to, but his comments came after a weekend attack on an oil pipeline in southern Iraq helped raise prices in Asian trade early on Monday.
He said that in July, OPEC oil production was already well above 29 million bpd, with the OPEC 10 accounting for 27.5 million bpd and Iraq the remainder.
“OPEC 10 production is expected to approach 30 million barrels per day in August,” Yusgiantoro said in comments released by his office here.
“Member countries have plans in place to further increase production capacity by around one million barrels per day towards the end of this year and into 2005,” said Yusgiantoro, who is also Indonesia’s energy minister.
“OPEC is doing everything it can to restore order and stability to the market, with reasonable prices that are acceptable to producers and consumers alike.”
“There must be a significant reduction in geopolitical tensions”
Yusgiantoro, who has said any decisions over extending capacity and quotas would not be taken until a 14 September OPEC meeting in Vienna, added that the organisation was willing to take suggestions on easing the troubled oil market.
He said the group was “very receptive to any learned input” about oil market matters and pricing, blaming high prices on several factors, including higher than expected demand in the United States and China.
Yusgiantoro also cited geopolitical tensions, refining and distribution bottlenecks and increased speculation in the futures markets.
“The rapid rise in demand has taken major forecasters by surprise and growth projections for 2004 have more than doubled since this time last year to around two million barrels per day, which represents a 16-year high,” Yusgiantoro said.
He said it was up to both OPEC and non-OPEC producers together with consumers to try reduce the fear factor and reassure the marketplace that supplies were secure and sustainable.