Business | Oil & Gas
Opec should abide by output targets
Opec members should keep oil output within the group's agreed targets, Opec's President Chakib Khelil said in remarks published on day.
- Reuters
- Published: 23:22 August 11, 2008
Tehran: Opec members should keep oil output within the group's agreed targets, Opec's President Chakib Khelil said in remarks published on day.
Khelil, whose comments were carried by Iranian oil ministry news agency Shana, is on a visit to Opec price hawk Iran.
Opec is overshooting its informal output target, with Saudi Arabia leading the way after it pledged to meet rising demand and help tame runaway oil prices.
Opec's 12 members under the target output umbrella pumped at 30.2 million barrels per day (bpd) in July according to a Reuters survey, over 500,000 bpd above the informal target.
"Except for Iraq and new members who are outside the Opec quota, the rest of the members should produce in the framework of their committed quota," Iran's oil ministry news agency Shana quoted Khelil as saying.
Top oil exporter Saudi Arabia pumped at 9.7 million bpd in July, the fastest rate since 1981 and well above its target of 8.943 million bpd. As prices rallied in June, a source familiar with Saudi thinking said that Opec was taking its output cues from global demand rather than the group's targets.
Iran's Oil Minister Ghol-amhossein Nozari warned in early August that Opec members who have raised output "must bring it under control" if oil prices fall further.
He said Opec would discuss observance of targets at its next meeting in September if prices continued to fall.
Since then, the price has slipped to $116 a barrel from $125, well off the July peak of $147.
Iran, Opec's second largest producer, pumped at 3.9 million bpd in July, above its target of 3.817 million bpd.
Iran is a price hawk within the Organisation of Petroleum Exporting Countries (Opec). The producer group pumps more than a third of the world's oil supply.
The falling oil price will put pressure on projects to expand oil output, Shana quoted Nozari as saying yesterday.
Project costs rose with oil's rally, but will not decline in step with oil's fall, he said.
"This issue puts pressure on oil projects," he added.
Khelil met Nozari on Sunday. The Opec president, who is also Algeria's energy and mines minister, was accompanying Algerian President Abdul Aziz Bouteflika on an official visit to Iran.
The two ministers talked about the formation of a gas exporting organisation along the lines of Opec, Shana said.
Business Editor's choice
-
‘Wrong Way' Krugman
The source of our economic malfunction lies with government-mandated bank regulations
-
Greek exit could make Eurozone stronger
Departure will show limits of bailouts and allow remaining members to act much more like a unit
-
UAE upholds values of free trade
Recently released statistics confirm an established fact, namely that of the UAE embracing the free trade principle in general and imports in particular
