OPEC needs to change policy

May 26, 1997 02:00 AM

May 10, 1997 Kuwaiti Oil Minister Issa Mohammad al-Mazidi has called on OPEC member countries to abide by their production quotas in order to stabilise world oil price. The Kuwaiti minister said that "Members of the Organisation of Petroleum Exporting Countries should honour the decisions to be made at the upcoming session of the OPEC oil ministers and try not to be swayed in the direction of sudden surge of demand and supply on the oil market."
Al-Mazidi made the statement while attending a seminar in the ancient city of Isfahan on Middle East oil and gas on the threshold of the third millennium. The Iranian, Nigerian, Libyan, Qatar, Kuwait and Venezuelan oil ministers were attending the seminar.
On the upcoming session of OPEC oil ministers in Vienna, he said possible higher ceiling is a subject to be discussed at the session and it is hard to predict what would turn out in the end. He said the fluctuation of oil prices is likely to continue, and Kuwait is keen on attaining a definite level of oil price, which would be favoured both by producers and consumers.
Iran's official news agency IRNA reported that based on facts and figures aired at the OPEC production supervisory committee session, many OPEC members do not observe their official production quota and violate the devised limit.
Mehdi Vazri, director of Kleinworth Benson, predicted that under normal oil market conditions, oil price would be forced down in the next two years in view of the overproduction both by OPEC and non-OPEC oil producers. He warned that the Middle East might not be capable of maintaining its status by the next 10 or 15 years, unless changes were seen in its policies. He underlined that OPEC should pay attention to such issues as absorption of domestic and foreign investments, speedy growth of demand in East Asia and contribution to world's dynamic economy. The financial condition and regulations in the Middle East region need improvement so as to attract foreign investment and import related technology, he said.

Source: not available
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