Date: 09 Mar 2000
Time: 08:36:48
Remote Name: 156.29.145.175
03/09/2000 Agence France-Presse (Copyright 2000)
TEHRAN, March 9 (AFP) - Iran may have accepted in principle to increase oil production during Wednesday's talks in the Saudi capital, but a Tehran analyst said Thursday it would remain firmly opposed to any significant hike in output.
"I don't think Tehran will throw its lot into backing a significant increase in production," the European petroleum industry analyst told AFP.
"Nothing has been firmly decided, and everything can still move in one direction or another" ahead of the OPEC summit on March 27, the source added.
"It is possible the Saudi- Iran meeting was a step in the direction of more flexibility from Iran , but of course nothing concrete has emerged," he added.
Iran 's Oil Minister Bijan Namdar Zangheneh and his Saudi counterpart Ali al-Nuaimi agreed in a joint statement on Wednesday to the need for "adequate and timely" supplies, but they gave no details on volume or timing for an increase.
OPEC ministers are to meet on March 27 in Vienna to decide on whether to roll over year-old production cuts which have sparked a tripling in prices.
Tehran and Riyadh "noted that the recent rising oil price levels and their continued volatility is not in the interests of producers or consumers." An earlier version of the statement on Iran 's news agency IRNA specified "long-term" interests.
"The ministers reiterated their countries' commitment to oil market stability and the security of supplies," in the Riyadh statement.
They "agreed that current market conditions and outlook necessitate that oil products from OPEC and non-OPEC provide adequate and timely oil supplies to balance the market in order to reach sustainable price levels conducive to world economic growth and market stability."
In London, oil prices at nine-year highs fell sharply in initial trading after the Saudi- Iranian statement.
Brent North Sea crude for April delivery, which had risen by almost two dollars to its highest level for more than nine years on Tuesday, fell back by 73 cents to 31.17 dollars a barrel on the International Petroleum Exchange (IPE).
The meeting followed a division within OPEC, pitting Saudi Arabia and Iran in opposing camps over whether to raise output.
Tehran had previously opposed any increase, arguing that the mounting US pressure to hike production was unjustified. It has been backed by fellow hardliners Libya, Iraq and Algeria.
But Saudi Arabia, the world's leading exporter with three million barrels of spare capacity, and Venezuela have come out in favour of an increase to bring prices down to the 20-25 dollars a barrel range.
"It would not be surprising if, in its desire to improve ties with Saudi Arabia ... Iran provided its backing to a production rise, albeit at a later date," the industry analyst said.
"Countries which like Iran oppose a rise are in the minority, and Saudi Arabia has thrown its weight against them."
In the wake of the Riyadh agreement, Zangheneh is also to visit Oman and the United Arab Emirates, where is expected on Saturday and Sunday respectively. Venezuelan Oil Minister Ali Rodriguez, meanwhile, is to travel to Algeria, Libya and Iran as part of OPEC's consultations.