Iran, Iraq Balking at OPEC Call for Production Unity

The president of the Organization of Petroleum Exporting Countries opened a critical general meeting here Monday by calling on the cartel’s squabbling members to “bury their differences” and make “concessions.”

Nigeria’s Rulwanu Lukman warned that some of the 13 members’ “revenue-starved economies are under the threat of collapse.” And he added that “the past decade’s dreams of future prosperity for our peoples lie shattered in the morass of short-sighted activity which has characterized our industry during the 1980s.”

Lukman’s warning was designed to persuade member countries to agree to production quotas in order to raise the depressed price of crude oil, which has slipped beneath $10 a barrel for benchmark Dubai Middle East oil. But the Nigerian oil minister’s appeal appeared to fall on deaf ears as far as the two major antagonists here, Iran and Iraq, were concerned.

Iraq’s oil minister, Issam Abdul-Rahim Chalabi, said Baghdad is insisting on an equal production rate, or parity, with Iran, its opponent in the costly eight-year Persian Gulf war that ended with a cease-fire in August.

For the past two years, Iraq has ignored its OPEC quota and has pumped as much crude as its wells can lift, currently estimated at 2.7 million barrels a day, more than a million barrels over its old quota.

Sitting next to the Iraqis at the OPEC table here, Iranian Oil Minister Gholamreza Aghazadeh said: “We will not talk about parity. We can talk about other things.”

Later Monday, after the meeting was adjourned and ministers met in private discussions, Aghazadeh repeated that Iran would never accept an equal quota for Iraq.

He also said Iran is producing well above its quota of 2.4 million barrels a day and is prepared to pump about 3.5 million barrels within a few months.

Iran seemed to be serving notice on OPEC that it is prepared to produce at capacity--just as Iraq appears to be doing, with both nations ignoring guidelines.

Aghazadeh also declared that there would be no point in a face-to-face meeting with Iraq’s Chalabi because “he has no authority to make decisions.”

The Iranian said he has been entrusted by Tehran with making decisions in Vienna during negotiations. But the Iraqi delegate, sources here say, was told by President Saddam Hussein to accept no quota less than parity with Iran.

As to whether Iran bears any responsibility for the deadlock, Aghazadeh said: “It is not my problem.”

The Iranian said he does not oppose a raise in Iraq’s quota--as long as Iran maintains its 60% edge over Iraq in total production--and he suggested that he might even push for a higher percentage of the total OPEC quota.

Both countries want to increase production to make up for the war losses to their economies. But such increased production is resented by other members who have also suffered economic reverses during the oil price slump of recent years.

It is the political aspect of the confrontation that has discouraged some OPEC staff members.

“We are dealing with two countries which have just reached a cease-fire in a bloody war,” one said. “Even though accepting OPEC quotas would mean more oil income in the long run, they refuse to agree on a common policy.”

OPEC officials had hoped that two key committees, on pricing and on long-term strategy, would produce a formula for agreement when they began meeting last week. But over the weekend, officials reported that there had been no progress, and the problem was returned to the oil ministers of the member nations.

Despite the deadlock Monday, OPEC officials scheduled another general meeting for Wednesday at the organization’s international headquarters here. Today, the members are expected to hold bilateral meetings in various hotel rooms and restaurants trying to find some compromise acceptable to Iraq and Iran.

Meanwhile, oil prices edged higher on the New York Mercantile Exchange in light trading as the market awaited definitive news on the progress of the talks.