CAIRO, Dec 21: Opec will activate a mechanism to keep oil prices within the cartel’s 22 to 28 dollars a barrel target band if prices remain higher on world markets, Saudi Oil Minister Ali al-Nuaimi pledged on Saturday.

Nuaimi’s remarks, along with those from other Arab members of the Organization of Petroleum Exporting Countries (Opec) meeting here, tended to reassure a market nervous over events in Iraq and Venezuela.

“We are committed to a fair price,” the oil minister of the world’s largest producer of crude told journalists on the sidelines of the Arab oil ministers’ meeting here.

“We have a mechanism to be triggered when it is necessary. It is not yet in place. And should the price continue (to stay above 28 dollars), the price band mechanism will be implemented like we have done in the past,” he said.

Opec agreed to a price band mechanism in March 2000 under which the cartel would raise output by 500,000 barrels per day if prices remain above the range of 22 to 28 dollars for more than 20 consecutive trading days.

By the same token, Opec would cut output by the same quantity if prices fell below 22 dollars for 10 consecutive days.

Qatari Oil Minister Abdullah bin Hamad al-Attiyah promised that the 11-member cartel would review a new 23 million barrels per day production ceiling it set for its members earlier this month if there were a war in Iraq or a shortage.

“In case of war or in case of any shortage, Opec will have to take another decision,” he said ahead of the opening of Saturday’s meeting of the Organization of Arab Petroleum Exporting Countries (OAPEC).

Like other Arab oil ministers, Attiyah said that Opec would seek to make up the difference if the situation in either Iraq or Venezuela led to a production shortfall.

But he added that so far the 19-day-old strike which has largely paralyzed Venezuela’s oil industry did not appear to have created a supply shortage.

Both Iraq and Venezuela are members of Opec, though Iraq’s exports are limited by an oil-for-food deal with the United Nations aimed at easing the effect of UN sanctions imposed after Baghdad’s 1990 invasion of Kuwait.

Venezuelan government opponents have said they will continue their strike in defiance of a Supreme Court order to reopen the oil industry.

OAPEC, headquartered in Kuwait, comprises 10 Arab oil producers — Algeria, Bahrain, Egypt, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, Syria and the United Arab Emirates. Only Bahrain, Egypt and Syria are not also members of Opec.

Nuaimi and Attiyah issued similar reassuring comments on Friday which, combined with signs that no US invasion of Iraq was imminent, eased some of the worries in oil markets, analysts said.

Benchmark Brent North Sea crude oil for February delivery rose to 28.30 dollars a barrel in late trading from 28.22 at the previous close. In New York, light sweet crude January-dated futures dipped 14 cents a barrel to 30.05 dollars in early deals.

Meanwhile, the Iraqi oil ministry’s first undersecretary, Hussein Suleiman, told AFP here that Baghdad was reserving the West Qurna 2 oilfield for Moscow, despite scrapping a contract with Russian giant LUKoil to develop it.

Suleiman denied a report in the Middle East Economic Survey (MEES) newsletter that LUKoil had lost the contract after Baghdad discovered it had been in contact with the Iraqi opposition.

Russian officials had warned that Iraq’s decision to break off the deal might affect their readiness to oppose US pressure for military action against the Baghdad regime.—AFP