The Organization of Petroleum Exporting Countries will meet soon to consider possible steps to minimize the impact of Middle East tension on international oil markets, the Saudi ambassador to the United States said today.
The envoy, Prince Bandar Bin Sultan, told a news conference that consultations were already under way among OPEC members on holding an early meeting.
Saudi Arabia, he said, hopes the meeting will "minimize the impact on the economies of friendly countries," but any decision on pricing or production would be a collective OPEC decision.
Oil prices rose today because of deepening Middle East tension, and Iraq issued a stern warning to its OPEC partners to avoid production increases that might offset shortages caused by U.N. sanctions against it.
London September futures for the world benchmark crude oil, North Sea Brent Blend, rose in European trading to $26.02 per barrel, up 55 cents from Friday's close. The New York futures market scored similar gains, with the benchmark West Texas Intermediate crude for September delivery up 45 cents to $26.68 a barrel.
The threat issued by Iraq to its fellow OPEC members 11 days after the Iraqi occupation of Kuwait underscored the disunity of the Organization of Petroleum Exporting Countries, whose very existence could be threatened by the Persian Gulf oil war.
Francisco Parra of Venezuela, a former secretary-general of OPEC, in an article for a specialist industry publication joined those asking if the cartel, founded in Baghdad 30 years ago next month, can survive the current crisis.
Iraqi Foreign Minister Tarik Aziz on Sunday told other members of OPEC "they may pay hard in the future" if they raise output above cartel-mandated quotas to offset volume shut off by the U.N. boycott of Iraqi oil.
Iraq is banking on high crude prices weakening the West's resolve in the crisis, Western oil executives say.
Saudi Arabia, the world's biggest oil exporter, has yet to confirm Western reports that it will defy Iraq and raise its output.