Opec likely to leave oil production unchanged

Global oil cartel Opec looked set to leave production unchanged today as it juggled tensions in Iran and Nigeria.

Some of Opec’s most influential voices – including Nigerian oil minister and Opec president Edmund Daukoru and Saudi Arabian oil minister Ali al-Naimi – said there was no reason why members would vote for a cut in production at today’s meeting in Vienna.

The comments left analysts convinced any changes to production levels of 28 million barrels a day would not be considered until the next Opec meeting in March.

Speaking from Vienna, oil expert John Hall, of John Hall Associates, said it was “a done deal”.

“It would seem that there is going to be no change at all in terms of oil output,” he said.

But the decision may not lead to a softening of oil prices as conerns mount over supply levels from Iran and Nigeria.

Oil prices have climbed 12% this month to more than 68 US dollars a barrel amid mounting tensions over Iran’s nuclear programme and attacks by militants on Nigerian oil sites.

Foreign ministers from the UK, US, Russia, China and France today agreed that Iran should be reported to the United Nations Security Council over its nuclear ambitions.

Iran – Opec’s second largest oil producer – insists its programme is peaceful but others suspect that Iran is aiming to build nuclear weapons.

Libyan oil minister Fathi Hamed Ben Shatwan said Iran’s referral to the UN would probably cause further price increases as doubts lingered over future supply.

“Everybody (is) frightened that something will happen,” he said. “We’re going to meet and watch the market.”

It had been feared that Iran could use the Opec meeting to withhold all or part of its 2.4 million barrels a day of exports as a response to the criticism. But Iran’s oil minister Kazem Vaziri insisted it would not cut exports.

Any action taken by the UN against Iran would not happen until March after the Security Council receives a report from the International Atomic Energy Agency (IAEA).

Worries also surround supply levels from Nigeria, the world’s eighth oil producer. Attacks on platforms and pipelines in the oil-rich Niger Delta over the past month have killed dozens of soldiers and civilians and cut 10% of the nation’s daily output.

Four foreign oil workers were kidnapped and held for nearly three weeks until their release yesterday.