OPEC Feels Strain Over Saudi Output

The impending return of Iraq and Kuwait to world oil markets has strained relations among OPEC members, prompting Saudi Arabia, the world’s biggest oil exporter, reportedly threatening to leave the oil cartel.

Saudi Arabia--OPEC’s biggest producer--declared this week that the kingdom would produce 8.5 million barrels a day for the rest of the year, regardless of whether Iraq resumes exports.

Saudi Arabia’s declaration this week that it will produce whatever it wants has intensified anxiety in the group. Members are wondering whether the kingdom will be committed to a $21 a barrel OPEC target price.

During the tense final hours of this week’s meeting here of the Organization of Petroleum Exporting Countries, Saudi Arabia even threatened to quit, one OPEC source said. The Saudis have denied any intentions of leaving the cartel.