After weeks of warnings from his colleagues that OPEC was preparing to make output cuts at its upcoming conference in Vienna on January 17th, Saudi Oil Minister Ali Naimi on December 31st chimed in with his own expectation that a reduction is forthcoming.
Although he did not comment on how much of an overall cut the kingdom would support, Naimi said that: “The cut will be enough to bring [market] stability.”
The Saudi oil minister’s statement came on the heels of a two-day summit in Bahrain of the Gulf Cooperation Council (GCC) leaders that ended December 31st.
In its final communiqué, the GCC – which groups Gulf OPEC members Saudi Arabia, Kuwait, the UAE. and Qatar and non-OPEC members Bahrain and Oman – called on its oil ministers to “work on reducing production during the next OPEC meeting in order to preserve market stability and achieve targeted prices.”
With the recent price collapse that has resulted in a $10-a-barrel drop since mid-October, a number of price hawks in the oil cartel have been publicly pressing for a cut of as much as 1.5 million b/d when OPEC meets in two weeks’ time.
The GCC signed its first defense pact on December 31st, pooling together the defense resources of the six members. The pact will take effect after being ratified by each member state.
The group also discussed an early warning system for possible missiles fired from Iran or Iraq, the cost of which is estimated at $70 million.
The GCC also appeared to have toned down its rhetoric towards Iraq, by not including traditionally strong wording in its communiqué blaming Iraqi President Saddam Hussein and his regime for the 10-year-long sanctions that have politically and economically isolated Baghdad.
The GCC leaders called on Iraq to begin “a comprehensive dialogue” with the UN to eliminate Baghdad’s weapons of mass destruction in an effort to see sanctions lifted.
The final statement also said that the GCC would support any “humanitarian effort that would contribute to ease the sufferings of the brotherly Iraqi people.”
As for Iran, the council said it was reconsidering its approach towards Tehran after Iran refused to cooperate with a GCC committee attempting to mediate a territorial dispute between the large Gulf state and the UAE The dispute is now before the World Court in The Hague. - (oilnavigator)
© 2001 Mena Report (www.menareport.com)
