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| Wednesday, 18 September, 2002, 13:17 GMT 14:17 UK Iraqi politics freezes oil cartel action ![]() Opec ministers are under extreme pressure Ministers from the oil producers' cartel Opec are due to decide how to control the world oil price on Thursday. But the current political uncertainty surrounding Iraq is likely to render Opec members unable to take decisive action.
The likelihood of an imminent war with Iraq has been changing rapidly over the past days, with mixed messages coming from Baghdad and Washington. That, in turn, has caused wild swings in the oil price, which is highly sensitive to politics in the Middle East. Price concerns Opec ministers are now forced to guess whether US strikes against Iraq are imminent. And comments from both ministers and experts already gathered in Osaka, Japan suggest that such uncertainty will mean Opec's oil output will be left unchanged.
When the global economic slump caused a slump in oil prices last year, it cut back on production in order to lift the price. Since January this year, it has kept its quotas on hold, and watched the oil price creep steadily higher. Now, oil prices are ricocheting around between $27 and $30 a barrel, sometimes rising above the desired range. That, together with the threat of a war, has placed pressure on Opec to increase the amount of oil it produces and ease the price back down. Internal wrangling The political uncertainties have also led to disagreement between member countries as to the best course of action.
Nigeria also wants to increase production, but primarily because it is in desperate need of more revenue from oil in order to solve a budget squeeze. But other states are fiercely opposed to raising production at a time when the oil price is volatile and could quickly fall if there is no war. Expert believe the conflicting opinions within the cartel, together with the political situation, will cause the decision to be deferred, possibly to a new meeting in November. | See also: 13 Aug 02 | Business 13 Aug 02 | Business 17 Sep 02 | Business 16 Sep 02 | Business 17 Sep 02 | Middle East Top Business stories now: Links to more Business stories are at the foot of the page. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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