Subroto Says Iraq Should Return to OPEC “With Reasonable Quota″
MEXICO CITY (AP) _ OPEC Secretary-General Subroto said Wednesday he expects a slight cut in oil output when Iraq returns to the cartel’s production ceiling after a cease- fire takes effect in its war with Iran.
For oil prices to stabilize, it ″would be desirable for Iran and Iraq to have a daily production of 2.3 million barrels,″ a cut of between 6,000 and 7,000 barrels a day, Subroto said in a news conference on arrival here.
″By adjusting production, in addition to remedying the situation, the prices of the fuel will be higher,″ said Subroto.
The cease-fire that is to take effect Saturday in the 8-year-old Persian Gulf war has raised speculation that the fractious cartel could make progress in its attempts to meet production limits aimed at boosting world oil prices.
The Organization of Petroleum Exporting Countries has a production ceiling of 15.06 million barrels per day in an attempt to support its benchmark price of $18 a barrel, but Iraqi production has not been counted under the ceiling.
Actual world market prices currently are $2 to $3 a barrel lower than the benchmark.
Subroto, who plans to visit Iran and Iraq after leaving Mexico, also said crude oil prices next winter may be as high as $15 a barrel.
″In the decade of the 90s, the prediction is that oil prices will be strengthened,″ he said.
Since he was elected secretary-general of the Organization of Petroleum Exporting Countries last June, Subroto has been seeking a consensus over the means to stabilize oil prices. As part of the effort, he has visited the United Arab Emirates, Ecuador and Venezuela and plans to visit all OPEC members and independent producers.
Mexico the world’s sixth-largest producer of crude, is not an OPEC member but follows the cartel’s pricing and production policies when it believes they contribute to stability in the market.
Subroto said he would meet here with President Miguel de la Madrid and Energy Secretary Fernando Hiriart.
Mexico produces about 2.5 million barrels of crude a day and exported 1.35 million barrels a day in July. About half the exports go to the United States.
Separately, in Caracas former Venezuela oil minister Humberto Calderon Berti said Wednesday that the OPEC price monitoring committee tentatively was scheduled to meet Sept. 20 in Jakarta, Indonesia.
The date and place of the committee’s meeting will be confirmed within the next few days, according to Calderon Berti, who said he consulted with Subroto privately Tuesday in Caracas.
Members of the price committee are Venezuela, Indonesia, Algeria, Nigeria and Saudi Arabia. The committee monitors factors, especially crude output, which affect OPEC’s to meet its benchmark price.
Calderon Berti also said Subroto said he supported raising OPEC’s production ceiling to between 17.5 million and 18 million barrels per day in a new production accord to be hammered out at the cartel’s regular conference in November.
The new ceiling would allow OPEC to incorporate Iraq’s output, currently around 2.5 million barrels a day, into a new accord without cutting the production of other member countries.