Opec is more united than ever: chief

The Organization of Petroleum Exporting Countries (Opec) has become more united than ever following its decision to slash supplies and save prices from the clutches of the global fiscal crisis, its chief was quoted on Tuesday as saying.

Abdullah Salim Al-Badri, Secretary General of the 12-nation oil exporting cartel, said crude prices have been strong because of OPEC’s agreement to trim production quotas by 4.2 million barrels per day in late 2008.

In an interview with the London-based Saudi Arabic language daily Alsharqalawsat, Badri was asked if the 50-year-old Cartel wants new members.

“We are not seeking new members now but if new members want to join OPEC, they must be oil exporters and their objectives must conform to those of OPEC,” said Badri, former Chairman of Libya’s National Oil Corporation.

“But not too many countries can meet the requirements needed to join OPEC because the present members control massive oil resources and are abiding by the assigned production quotas….OPEC is also witnessing more cohesion than ever and its members have interests in staying within the Organization’s walls…Iraq is a good example of this.”

Badri did not say how far OPEC members are going in complying with the 2008 accord to slash output by 4.2 million bpd but independent reports have shown the rate of compliance ranged between 60 and 70 per cent in the past few months.

Gulf oil heavyweights—Saudi Arabia, UAE, Kuwait and Iran—account for the bulk of the cuts given their high production, with Saudi Arabia alone trimming supplies by at least one million bpd. Kuwait and the UAE are pumping around 200,000 below their pre-crisis output levels.

“Oil prices started to respond to OPEC’s decision to cut output in the first three months of 2009 by rising to $50 then to $60 a barrel,” Badri said.

“Prices are now hovering between $75 and $80 a barrel and I would like to say that prices are stabilizing at this level as a result of OPEC’s decisions.”
 

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