Kuwait, UAE oppose S. Arabia on oil cut

Published March 31, 2004

VIENNA, March 30: Leading OPEC producer Saudi Arabia on Tuesday faced opposition from Kuwait and the UAE for plans to forge ahead with supply curbs next month.

Saudi Oil Minister Ali al Naimi made a strong case ahead of Wednesday's meeting of the Organization of the Petroleum Exporting Countries to push through output cuts, agreed last month for implementation from April 1.

But he faces an unexpectedly robust challenge from the United Arab Emirates and Kuwait, fellow Gulf Arab producers who normally share Riyadh's line on oil policy. Kuwaiti Oil Minister Sheikh Ahmad al Fahd al Sabah told reporters he backed a UAE proposal for postponing the reductions.

In Washington, the White House said it is having talks with OPEC members about a freer market for oil as the United States faces record gasoline prices at the pump.

"We continue to engage in ongoing discussions with major producers around the world about the importance of letting the market determine the prices," White House spokesman Scott McClellan told reporters while travelling with President George Bush in Wisconsin.

"I think most Americans share the president's concern about rising gas prices, absolutely. And that's why we will continue to act," he said. Analysts said the rare split across OPEC's core Gulf Arab membership suggests the United States, having failed to budge the Saudis, is focusing diplomatic efforts aimed at securing lower prices on Kuwait and the UAE.

"The UAE and Kuwait are the guys that the US can count on now," said Roger Diwan of Washington consultancy PFC Energy. The Gulf pair appear to back Washington's view that oil prices, recently at a 13-year high, should be allowed to ease to avert damage to US and world economic growth. -Reuters