Saudis’ Stance Surprises OPEC

OPEC ministers adjourned talks to plot their oil output strategy for the rest of the year Tuesday without confronting the thorniest issue--Saudi Arabia’s declaration that it would pump as much crude as it wanted.

Top officials from the Organization of Petroleum Exporting Countries closeted themselves in closed-door talks to try to coax Saudi Oil Minister Hisham Nazir into adopting a more moderate stance before the talks resume today.

Nazir surprised his fellow ministers by declaring the kingdom--the world’s biggest oil exporter--would pump as much as it wanted whether they liked it or not.

Giving his colleagues a taste of the Saudi’s uncompromising position just hours before they sat down together, Nazir told reporters, “Nobody has to approve what Saudi Arabia produces.”

Saudi Arabia wants to increase oil output to 8.5 million barrels a day--more than a third of OPEC’s total--in any production accord for the fourth quarter, he said.

One non-Arab OPEC delegate said he believed that Nazir’s comment should be viewed strictly as a bargaining position.

“We think he didn’t mean it that way,” he said. “Why are we meeting if we can all produce what we like?”

The 13-member group’s price hawks--Algeria, Iran and Libya--have so far failed to persuade the kingdom to help guide prices closer to the group’s nominal target of $21 a barrel.

In London trading, the benchmark Brent oil for November delivery was at $20.75 a barrel. On the New York Mercantile Exchange, light sweet crude oil for November delivery closed at $22.19 a barrel, up 12 cents. The OPEC benchmark includes lower-priced crudes in its calculation.

Most analysts said ministers were unlikely to risk a direct collision with Saudi Arabia and would rather try to reach a compromise.

Independent estimates put OPEC production in August at about 23.5 million barrels per day, well above the ceiling of 22.3 million barrels that the group set for the second and third quarters of the year.