MercoPress. South Atlantic News Agency

OPEC keeps quota unchanged until next meeting

The Organization of the Petroleum Exporting Countries, (OPEC) oil ministers decided Tuesday in Vienna to keep the official quota of 28 million bpd while the group's second biggest producer Iran, locked in a dispute over its atomic program, gave assurances it would not halt its exports.

OPEC provides over a third of the world's oil but there are growing concerns over supply volatility from members Iran, Nigeria and independent producer Russia.

However OPEC said the market was well-supplied and reiterated that high prices have been due to refining bottlenecks and other factors.

One of those factors admittedly has been worry over Iran, which exports more than 2.6 million barrels of oil a day and is heading for a showdown with the United States and some European nations who fear its nuclear program could lead to weapons.

A special executive session of the International Atomic Energy Agency scheduled for Thursday is expected to send the Iranian nuclear program to the U.N. Security Council for possible sanctions. The United States and other countries suspect Iran is working on a secret weapons program, something strongly denied by Tehran.

OPEC President Edmund Daukoru of Nigeria confirmed Iran, one of the cartel's founders and its second-largest producer, had assured the group that it would not curtail its output.

"I wouldn't wish to jump to conclusions that by the mere fact of reference of the matter to the (United Nations) Security Council that we are bound to see disruptions in Iran," he said, adding that Iran assured him that it has never said it was going to cut production.

Speaking in Vienna with reporters Iran Oil minister Kazem Vaziri said that "we are not mixing politics with the economic decisions on this issue. We are not mixing oil with politics, Iran will not stop exports".

Daukoru said OPEC has about 2 million barrels a day of spare capacity in addition to its current quota of 28 million barrels a day should there be a need to produce more crude.

The cost of a barrel of oil has more than doubled in a two year rally fueled by demand from the United States and the rapidly growing economies of China and India. Supply worries have added impetus to the surge.

Attacks on Nigeria's oil industry have cut deep into its exports and once reliable energy supplier Russia has twice turned down its gas exports this year.

Recalling that OPEC is committed to continuing to play its role in maintaining a supply level conducive to economic growth, the Vienna Conference expressed its concern about the high degree of price volatility, and the impact this may have on the global economy, in particular for developing countries.

Saudi Oil minister Ali Al-Naimi tried to downplay the uncertainties: "All the member countries know one thing. They all want money and we are a business organization not a political organization. We are energy ministers not foreign ministers".

Earlier in the day Naimi stated that oil prices between 50 and 60 US dollars a barrel would be "satisfactory to all" but fluctuations between 50 and 70 were "detrimental".

OPEC's economists forecast demand in the world's 85 million barrels per day oil market will drop by two million bpd in the second quarter when peak winter consumption has passed.

The Conference reconfirmed that its next Ordinary Meeting will be held on 8 March 2006, in Vienna, Austria.