Posted on 09/24/2003 3:22:42 AM PDT by Cincinatus' Wife
VIENNA, Austria - OPEC members struggled Tuesday to prevent a dispute over Iraq's participation in their oil policy talks from causing a damaging rift and impeding their plan to set production targets for the coming months.
Cartel members, excluding Iraq, failed to resolve an impasse between Venezuela and Iraq during a late Tuesday meeting, OPEC sources said. The 10 members of the Organization of Petroleum Exporting Countries heard Venezuela's position that Iraq, a cartel founding member, should not attend the group's formal meeting Wednesday because its government has no U.N. recognition.
Iraq is attending OPEC talks for the first time since the toppling of Saddam Hussein, and its presence was seen as a sign of growing international acceptance of its U.S.-backed interim government.
However, Venezuela's minister of energy and mines, Rafael Ramirez, said Iraq could only attend on an informal basis. Iraqi oil minister Ibrahim Bahr al-Uloum countered that he and his delegation expected to represent Iraq as a full, voting member of the group.
The 10 members were unable to agree.
The differences threatened to flare into a major dispute and interfere with OPEC's need to set output policy for the year's busy fourth quarter.
Despite a recent slide in crude prices, OPEC should hold oil output steady for the next few months and meet again in December to consider cutting production ahead of a seasonal downturn in spring demand, Kuwait's oil minister said.
Kuwait is "very worried" about the 14 percent decline in prices so far this month, but its oil minister, Sheik Ahmed Fahd al-Ahmed Al-Sabah, joined several other OPEC delegates in calling for the group to leave output unchanged for now.
Al-Sabah said he believed Iraq would be allowed to attend Wednesday's formal meeting as a full member because Venezuela was the only one demurring.
Wednesday's OPEC meeting is at the group's Vienna headquarters.
OPEC secretary-general Alvaro Silva predicted that OPEC, which supplies about a third of the world's crude, would hold its output ceiling steady at 25.4 million barrels a day for the rest of the year. Some members, including Saudi Arabia and Indonesia, have expressed a similar view.
"I think we have to continue with the same production that we have now" and monitor the oil market closely in coming months, al-Sabah said upon his arrival at a hotel in the Austrian capital. December would be "a good time" to reassess supply and demand for crude, he said.
United Arab Emirates' Oil Minister Obaid Al-Nasseri, speaking earlier, said there appeared to be "no big reason" for OPEC to adjust its output at this meeting.
Earlier fears that Iraq might quickly restore its prewar output and glut the market with crude have all but disappeared. Sabotage of Iraq's oil pipelines continues to crimp its exports, and with Iraq's recovery taking much longer than expected, several OPEC members have said the group should continue pumping at current levels leading into the peak winter heating oil season.
Given the large number of oil ministers who have already stated a preference for not changing output, a decision by OPEC to do anything different would be "irresponsible," said Yasser Elguindi of Medley Global Advisors, a New York-based consultancy.
"It would take something dramatic at this point for them to change their position, and the market would not appreciate it," Elguindi said.
OPEC's benchmark crude price stood at $24.82, the lowest since May 8. Despite falling, prices remain within OPEC's target $22-$28 price range.
Iraq hasn't attended an OPEC meeting since Saddam's defeat. It hasn't participated in OPEC quota agreements since the United Nations imposed sanctions in 1990 to punish Baghdad for invading Kuwait.
Chávez also has alarmed neighboring Colombia with his sympathetic attitude for that nation's murderous Marxist narco-guerrillas, whose members admitted murdering in 1999 three U.S. citizens who had worked as activists for indigenous Colombians. Their bodies were dumped across the border in Venezuela.***
Pope Worries About Venezuela's New Communist Leader***Pope John Paul II and some of his closest aides expressed their concern Friday to Venezuelan President Hugo Chávez about the Catholic Church in that country, and advocated cooperation between the civil and religious authorities.
The Venezuelan leader arrived in the Vatican accompanied by a small entourage, according to a Vatican press statement.
Chávez came to power in 1998 and has quickly aligned himself with Fidel Castro, has imported thousands of Cuban "advisers" to help support his secret police, has been helping to arm Marxist guerrillas in Colombia, and has established ties with radical regimes from Saddam Hussein's Iraq to Khadafy's Libya.***
Fidel, Saddam and Hugo --An improbable but growing friendship of three military revolutionaries***Mr. Chávez is the most intriguing new leader to emerge in Latin America since Mr. Castro - and he is the lynchpin between Mr. Castro and Mr. Saddam. Although Cuba had been sending doctors and health workers to Iraq for years, there had not been any major contacts between the two countries until Mr. Chávez appeared on the scene. This fall, Mr. Chávez became the first democratically elected foreign head of state to visit Iraq since the Gulf War, ostensibly to invite Mr. Saddam to a summit of the Organization of Petroleum Exporting Countries. But it also was an in-your face gesture toward the United States.
With France and Russia, two of the five veto-wielding members of the Security Council, determined to see the sanctions against Iraq ended, the United States can do little to prevent them from withering away. Mr. Saddam has no intention of allowing UN weapons inspectors back into his country, and he knows that renewed bombing of Iraq is out of the question. Confident that the United States and the British would not risk shooting down a civilian airliner in the southern or northern "no-fly" zone, Mr. Saddam has resumed regular domestic commercial flights for the first time in a decade.
Iraq has the world's second-largest reserves of oil, after Saudi Arabia, which it exports legally under UN controls and smuggles out on a huge scale. Mr. Saddam is not short of cash for whatever adventure next occurs to him, and, with Mr. Chávez, he can influence the international oil supply and its prices.
As for Venezuela, a main source of U.S. imported oil, Mr. Chávez has been raising his profile within OPEC, having presided in Caracas in late September over a summit of that organization. Late in November, Mr. Saddam showed on two occasions what he can do to the oil market when he briefly threatened to halt the shipping of oil, a move Mr. Chávez knew about beforehand.
The Iraqi link is one aspect of Mr. Chávez's international involvements that the United States must not underestimate, with Cuba playing a central role. Since he took office in February 1999, Mr. Chávez has proclaimed his "identification" with the Cuban revolution. He visited Havana and entertained Mr. Castro in Caracas for five days last October. Mr. Castro treated Mr. Chávez as a son, an attitude seldom displayed by the Cuban leader toward any young people. During that same visit, Mr. Chávez granted Cuba large crude-oil price discounts, as he has done selectively elsewhere in the Caribbean, and agreed to help complete building a Cuban oil refinery.
Mr. Castro is Mr. Chávez's guide in the art of gently and gradually introducing authoritarian government to Venezuela. Mr. Chávez abolished the Senate and established a unicameral Parliament whose members support him. He has a new constitution, approved by a simple majority of voters in a referendum, that grants him considerable power.
To complicate matters and his relations with the United States, Mr. Chávez has been openly supporting leftist guerrilla movements in neighboring Colombia. The rebels control big swaths of Colombian territory, along with numerous coca plantations. Washington has already committed $1.3 billion, mainly in military aid, to the eradication of both guerrillas and coca plantations. This could foreshadow a big U.S. commitment in Colombia and an eventual conflict with Mr. Chávez that may interfere with the flow of oil north from Venezuela.***
Bahr al-Ulum, from the new government formed after Saddam Hussein was toppled by US-led forces in April, arrived Tuesday in Vienna at the invitation of the OPEC president, who is also Qatar's energy minister.
But Venezuelan Oil Minister Rafael Ramirez was still insisting Tuesday that the Iraqi government should be recognized internationally before being allowed to sit as a full member at a meeting of the cartel.
In an effort to avert an embarrassing snub to Iraq, the cartel held a late-night meeting Tuesday to try to reach an agreement over how the country, one of OPEC's founding members, should be represented at the conference.
Ramirez later confirmed that Venezuela would no longer oppose Iraq's sitting as a full member.***
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