131st (Extraordinary) Meeting of the OPEC Conference

No 10/2004
Beirut, Lebanon
03 Jun 2004

The 131st (Extraordinary) Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) convened in Beirut, Lebanon, on June 3, 2004, under the Chairmanship of its President, HE Dr Purnomo Yusgiantoro, Minister of Energy Mineral Resources of Indonesia and Head of its Delegation.

The Conference extended its sincere congratulations to HE Thamir Ghadhban, following his appointment as Minister of Oil of Iraq.

The Conference was honoured by the presence of its Special Guest, HE Ayoub Hmayed, Minister of Energy and Water Resources of the Republic of Lebanon, and welcomed the Minister of Petroleum of the Arab Republic of Egypt; the Minister of Petroleum & Mineral Resources of the Syrian Arab Republic; the Vice-Minister of Petroleum of the Republic of Angola; and the representative of the Sultanate of Oman to Lebanon, whose presence at the Meeting is seen as renewed evidence of these countries’ willingness to enter into concrete and constructive dialogue with the Organization. In this regard, the Conference emphasized the value of closer co-operation from all oil producers in ensuring market stability.

The Conference considered the report of the Ministerial Monitoring Sub-Committee and, once again, thanked the Sub-Committee Members for their untiring efforts on behalf of OPEC and its Member Countries.

Having reviewed market developments since its 130th Meeting, held on March 31, 2004, as well as the supply/demand outlook, the Conference noted with concern that, as a result of several factors, prices have continued to escalate, despite the efforts by OPEC Member Countries to meet market requirements. These factors are mainly the robust growth in demand in the USA and China, which had not been fully anticipated; geopolitical tensions; and refining and distribution industry bottlenecks in some major consuming regions, coupled with more stringent product specifications. Combined, these factors have led to unwarranted fear of a possible future supply shortage of crude oil, which has, in turn, resulted in increased speculation in the futures markets with substantial upward pressure on crude oil prices.

Given current high and volatile prices and prevailing concerns regarding supply security, and in order to ensure continued, robust, global economic growth, especially in the economies of fellow Developing Countries, the Conference decided to increase the OPEC production ceiling (excluding Iraq) to 25.5 mb/d, with effect from July 1, 2004, and to 26 mb/d, with effect from August 1, 2004, in order to ensure adequate supply and give a clear signal of OPEC’s commitment to market stability and to maintaining prices at acceptable levels to both producers and consumers. The Conference also decided to convene an Extraordinary Meeting in Vienna, Austria, on July 21, 2004 to review market developments.

The Conference again called on all other parties, including non-OPEC producers and consumers, to take appropriate measures to address the challenges facing the industry, including the structural changes.

The Conference expressed its sincere gratitude to HE General Emil Lahoud, President of the Lebanese Republic, HE Rafic Hariri, President of the Council of Ministers, as well as the Government and the People of Lebanon for having hosted the Meeting and for the warm hospitality extended to the Conference participants and the excellent arrangements made for the Meeting.