OPEC : Opening address to the 124th Meeting of the OPEC Conference

Opening address to the 124th Meeting of the OPEC Conference

No 3/2003
Vienna, Austria
11 Mar 2003

by HE Abdullah bin Hamad Al Attiyah, President of the Conference, Minister of Energy & Industry, Qatar

Excellencies, ladies and gentlemen,

Welcome to the 124th Meeting of the OPEC Conference.

When we last met, at our Extraordinary Meeting here in Vienna two months ago, crude oil prices had risen above the upper limit of OPEC’s price band of $22–28 per barrel and were settling there. The reason for that was mainly tensions in the Middle East and Venezuela. The situation was out of line with market fundamentals. On the basis of regular patterns of supply and demand, the oil market was well-supplied with crude — something which remains true today.

However, in the light of the special market conditions, we decided in January to raise the OPEC-10 production ceiling by 1.5 million barrels a day, to 24.5 mb/d. The purpose of that was to ensure adequate supplies of crude to consumers in a balanced market.

Since then, the supply situation in Venezuela has eased a great deal, as that country’s oil production continues to increase steadily — although it may still be some time before it returns to its former levels.

However, the situation remains tense, with regard to Iraq. Oil prices are now at higher levels than before our January Meeting.

The international political tensions have, without any doubt, reduced OPEC’s influence on prices. Nevertheless, in broad economic terms, OPEC’s influence remains important. In other words, while some of the key factors affecting oil prices at the present time are out of OPEC’s control, we can still have an impact on the market.

This is what we have been actively seeking to do throughout this troubled period, by means of our production agreements. If we had not been doing this, then prices would be much higher than they are now.

At this point, let me remind you of OPEC’s central message. OPEC is committed to ensuring order and stability in the international oil market at all times, with secure oil supplies at reasonable prices that balance the needs of producers and consumers. This has always been our guiding principle.

At this Meeting, we shall carefully review the current situation in the market, and then decide on what measures to adopt, in the interests of order and stability.

This will, however, be more complicated than usual, because the near-term outlook is dominated by political factors over which OPEC has no control. Therefore, we must do two things. We must reach a decision that takes account of the present volatile market and high prices. We must also consider plans to handle — quickly and effectively — any radical change in market conditions which may result from developments in the Middle East.

Collectively, our Member Countries still have some additional production capacity to meet possible shortfalls in world supplies; we can bring this on-stream in a short time. We are also able to act, with similar effect, should the market become over-supplied, particularly in the second quarter, when demand is traditionally low.

But OPEC should not be expected to act alone. To be truly effective, our market-stabilising measures must receive the full support and cooperation of other parties, including non-OPEC producers, the international oil companies and consumers. We all benefit from market stability. Therefore, we must all contribute towards market stability. It is with this in mind that we are pleased to welcome, as observers, representatives from five non-OPEC oil-exporting nations — Angola, Egypt, Mexico, Oman and the Russian Federation.

Excellencies, ladies and gentlemen,

Let me close by saying that OPEC is deeply concerned by the present rise in international tensions, with the constant threat of war and the terrible threat that this poses to innocent lives, as well as its damaging impact in many other areas, including the health of the global economy.

We look forward to the day when there is lasting peace and harmony in the world, so that the global community can concentrate on tackling the deep-rooted problems of mankind, such as famine, poverty and disease. These problems affect developing countries with particular severity. The extent of this was brought home to us at the World Summit on Sustainable Development last year, together with the need to create a cleaner, greener and safer world.

As an Organization, we are doing our best within the energy sector — and will continue to do our best — since this sector is so vital in meeting the challenges of economic growth and sustainable development.

Thank you.