Opec (Organisation of the Petroleum Exporting Countries) ministers will this week call for help from non-members such as Russia to prevent prices plunging when Iraqi oil floods back on to the market.
The oil producers’ cartel will hold an extraordinary meeting in Qatar this week, but it is expected to hold output quotas steady at 25,4-million barrels a day, postponing a decision about whether to make further cuts to put a floor under prices.
”We won’t just cut for the sake of cutting,” said Opec president Abdullah al-Attiyah yesterday. But he admitted the cartel would need the co-operation of non-member countries to hold prices within its $22-$28 a barrel target price range.
”Yes. We require their support. I feel we have their support.”
Non-member producers including Russia, Mexico and Syria will attend this week’s meeting. Iraq is expected to resume oil exports in as little as a week — although volumes are expected to remain well below pre-war levels for some time.
Al-Attiyah, who is also the Qatari oil minister, admitted yesterday that even before Iraqi exports hit the market, the slide in the dollar in recent months has already begun hurting Opec countries by eating into their revenues.
”We are facing a very difficult situation with the dollar,” he said. ”[It] has lost 20% of its value against the euro. The customer is receiving a discount from us.”
But he denied speculation that the cartel might consider switching to pricing its output in euros, to protect it against the dollar’s decline.
”We will stick with the dollar. It is very difficult to change. Assume we changed to the euro and six months later the euro fell, we would have to switch back.” – Guardian Unlimited Â