Venezuela Calls for Gulf OPEC Nations to Cut Crude Oil Output

June 12, 2012
Cartel member worries about declining prices. 'We believe that the price has to be over $100 a barrel.'

OPEC members in the oil-rich Gulf need to slash their production to help keep crude prices above $100 per barrel, Venezuela's oil minister said here on Tuesday ahead of the cartel's meeting later this week.

"Some countries in the Gulf have an over production. We are going to discuss that," at the gathering on Thursday, Rafael Ramirez told reporters, cited by Dow Jones Newswires.

"It will have to be reduced... We estimate that we have an over production of three million barrels a day" above the ceiling of 30 mbpd that was decided in December.

He added: "We are worried about the stabilization of the price. The price has lost $30 in two months. We believe that the price has to be over $100 a barrel."

The comments mirror those from Iran, which has also complained that the group is currently pumping too much crude oil.

Oil prices have plunged by about 20% in value since March as the market has been shaken by concerns over the impact of the ongoing eurozone sovereign debt crisis and the fragile world economy.

Back in December, OPEC members agreed to hold actual output at 30 mbd, citing an uncertain demand outlook, with extra unofficial production coming from Saudi Arabia, Iraq, Kuwait, Libya and the United Arab Emirates.

The cartel has, however, frozen its official output ceiling at 24.84 million barrels per day (mbpd) for more than three years.

OPEC kingpin Saudi Arabia has meanwhile urged the cartel to lift output despite recent sharp price falls.

"Our analysis suggests that we will need a higher ceiling than currently exists," Saudi Oil Minister Ali Al-Naimi was quoted as saying by the Gulf Oil Review on Monday.

Sanctions-hit Iran had on Saturday blasted fellow OPEC members Saudi Arabia, Kuwait and the UAE as oil quota "violators," accusing them of depressing global crude prices by over-pumping.

Iran's OPEC representative, Mohammad Ali Khatibi, said Tehran had officially protested to the cartel that Saudi Arabia was "saturating the market" under pressure from the United States and the European Union, according to the official IRNA news agency.

"It is not right that two or three countries compensate for a country that is being sanctioned. OPEC members should not work against each other," Khatibi was quoted as saying.

Saudi Arabia is the biggest producer in the Organization of the Petroleum Exporting Countries, followed by Iran.

Copyright Agence France-Presse, 2012

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