Wednesday, June 29, 2011

IEA move won't stop Saudis from boosting production

Despite hints of retaliation from some members of the Organization of Petroleum Exporting Countries over the International Energy Agency's decision to tap strategic oil stockpiles, the Saudi Arabia-led wing of OPEC indicated yesterday that it intends to go ahead with plans to boost output.

"Saudi Arabia will still increase its output to meet any expected demand in the market regardless of the IEA release of emergency stocks," a Gulf official said yesterday.

The Saudi move suggests that even though criticism of the IEA decision came from all corners of OPEC, the producers organization remains split on critical oil policy questions (Greenwire, June 24).

Nearly three weeks ago, an OPEC meeting ended in a hostile stalemate, after which Saudi Arabia, Kuwait and the United Arab Emirates split from the group and said they would increase production by about 1.5 million barrels a day later in the summer.

Some leading figures in OPEC have attacked the move by IEA last week as one intended to influence oil prices, rather than a response to a true shortage (Herron/Said/Faucon, Wall Street Journal, June 28). -- AS
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