DOHA, May 26: Opec can be expected to agree to slash production at a ministerial meeting in Qatar on June 11 to avoid a price collapse, Opec President Abdullah bin Hamad al-Attiyah told AFP on Monday, strongly defending Iraq’s position within the oil cartel.
“The cut will be the topic that will be very carefully” discussed, Attiyah said, noting that confusion about Iraq’s return to the market and inventories made it difficult to set a figure.
“I believe maybe we will cut it because we believe that in all earnestness there will be more oil in the market and the market cannot accept it.
“We don’t want to see this huge floating of oil, collecting dramatically and putting pressure on the oil price. We don’t want to see ourselves in the position of 1999,” when prices collapsed to 10 dollars a barrel on oversupply.
“Personally I believe 25 dollars is a very reasonable price,” said Attiyah, who is also Qatar’s energy minister, reiterating the 11-member cartel’s target rate.
Iraq’s return to the market after the US-led war is predicted to come around the end of June, but Attiyah said it was difficult to read.
The Organization of Petroleum Exporting Countries would “also treat very carefully the re-entry of Iraq to the market,” at the June talks in Doha.
“This also we have to study very carefully,” he said. “The analysis is very confused now about when Iraq is coming.”
He took strong issue with US suggestions that Baghdad may pull out of Opec.
Washington’s chief executive officer of Iraq’s oil advisory board, Philip Carroll, told the Washington Post on May 17 Iraq may be best served by ignoring Opec quotas and producing as much oil as it can.
“I believe personally that Iraq needs Opec and Opec needs Iraq and Iraq is one of the founders of Opec,” Attiyah riposted in reference to the establishment of the cartel in Baghdad in 1960.
“Anyone can say ignore” the producers’ cartel, Attiyah said, raising his voice.
“Anybody can walk out of Opec, this is a sovereign decision, but is it of benefit to Iraq? My answer is no,” Attiyah.
Attiyah has already said that for oil-related matters Opec would not recognise the United States as a representative of Iraq, which boasts the world’s second largest oil reserves, and would await a new government in Baghdad.—AFP