The members of the Organization of Petroleum Exporting Countries seemed close to a production agreement late Thursday when Iran’s representative agreed to take compromise proposals back to Tehran.
Iranian Oil Minister Gholamreza Aghazadeh said after a round of late-night talks that he would accept almost all of the proposals made to him in an effort to find a compromise with Iraq over oil production quotas.
All 13 member nations had agreed to keep the cartel’s oil output at 18.5 million barrels a day for six months starting Jan. 1 and that production would maintain the group’s target price of $18 a barrel, he said.
He repeated that he could not accept full “parity"--giving Iraq the same oil pumping quota as Iran--but indicated in an impromptu interview in the lobby of the Marriott Hotel that even this sticking point could be resolved.
“As for (the) Iraqi quota,” he said, “11 members have agreed to donate part of their share to that country. Insofar as this particular issue is concerned, I find it necessary to consult with my government.
“But other issues,” he added, “I have agreed to.”
Aghazadeh said that Iran’s main goal is to maintain its 14.27% share of the organization’s overall production. And he indicated that Tehran might accept a formula by which Iraq could produce even more crude than Iran even though, officially, Iran would maintain a slight edge on OPEC-stated quotas.
In the past year, almost all 13 member nations have been disregarding the official OPEC quotas in an effort to maintain market share and income. This has contributed to worldwide oversupply of oil and consequent lower prices for the commodity.
The main goal of the cartel’s current meeting has been to regulate production in the hopes of raising prices on the world oil markets.
Iraq’s last official quota was only 1.5 million barrels a day, while Iran’s was 2.4 million barrels.
However, Iraq has, in the past year, been pumping close to 3 million barrels a day, earning as much income as possible to pay the expenses of its eight-year war with Iran, which ended in a cease-fire Aug. 20.
Iran, equally needy of income, has had difficulty pumping as much as its official allotment because of war damage to its oil facilities.
So observers here say that Iraq has been in a much stronger position to insist on a higher production quota, while Iran has had a hard time persuading other members to deny Baghdad an increase.
Thus, Aghazadeh has found himself under heavy pressure from the other oil ministers to compromise.
The Iranian said late Thursday that he would depart for Tehran today and might return to Vienna on Monday.
The late-night statement left the conference up in the air as to whether to hold a scheduled 13-member meeting this morning.
OPEC observers said that it was unlikely that the Iranian oil minister would actually return from Tehran during the current conference.
“He has done this at meetings before,” said one OPEC source. “If the Iranian government wants to sign an agreement, they can simply tell the deputy delegate here to do so.
“That gets the oil minister off the hook on an agreement that could be perceived back home as a setback to their political posturing against Iraq--no matter how economically justified.”
Earlier in the day, the apparent lack of agreement had caused oil prices in Europe to slide by as much as 35 cents, with benchmark North Sea Brent crude oil for January delivery down to $12.80 per barrel. The New York Mercantile Exchange, on which oil is traded, is closed until Monday because of the Thanksgiving holiday.