OPEC Cancels Session in Bid to End Snag : Iran, Iraq Deadlock Stalls Quota Accord

The oil ministers of the Organization of Petroleum Exporting Countries canceled a joint meeting here Wednesday, continuing instead their efforts to find a solution on the deadlock over a pricing policy for 1989.

OPEC sources here said the meeting was postponed to allow more time to resolve the difference between Iraq and Iran over production quotas. That difference has held up an agreement among the 13 members on petroleum quotas and prices for the coming year.

The meeting was originally scheduled for 3 p.m., then delayed until 7 p.m. and finally put over until 11 a.m. today.

Customarily, OPEC officials said, the joint meeting is not held until there is a real chance of forcing an accord or a final announcement that compromise efforts have been exhausted.

The oil ministers were generally noncommittal Wednesday, and some oil experts here said they may have agreed to refrain from making the kind of comments that sent oil prices soaring and then diving Tuesday.

Oil futures, which jumped by more than 60 cents initially Wednesday morning, slashed their gain to 9 cents a barrel on the New York Mercantile Exchange after the delay was announced. The January West Texas Intermediate crude contract was trading at $13.95 a barrel. The energy futures had opened sharply higher in New York, adding to Tuesday’s 88-cent gain, on expectations that the OPEC meeting would agree soon on a new production pact. Prices also were sharply higher in European trading.

Iran Opposes Demand

During the talks here, Iraq has demanded that its official quota of 1.5 million barrels a day be sharply increased to almost 3 million barrels. Iraq has insisted on production parity with its neighbor and opponent in an eight-year-long Persian Gulf war, Iran.

This demand has been rigorously opposed by Iran, which wants to keep a higher share of the production quota than Iraq.

Other members of the organization have been trying to work out a formula by which both nations can save face. Both Iraq and Iran have been exceeding their quotas, leading to similar action by other Persian Gulf producers wanting to maintain market share and income, and this has caused oil prices to drop.

Most of the other OPEC nations have been pressuring Iran to accept parity with Iraq, sources here say, since the Baghdad regime will, in any event, keep pumping a high amount of oil to make up for war losses.

Could Devise Quota

“It looks as if it’s 12 against one--Iran--on the parity issue,” said an OPEC observer Wednesday night.

The majority’s argument suggests that if Iran allowed Iraq to reach parity, a new overall quota could be devised that would raise the price of oil and still leave both countries better off economically.

“I think that is why they are meeting Thursday--if they meet,” said one OPEC analyst, “to convince Iran that it is in the nation’s interest to allow Iraq an equal production quota.

“If they can’t, it looks as if the meeting will break up, everyone will go home and watch the price of oil drop.

“Then we will all come back in January and start talking again.”