OPEC : Consultative Meeting of the OPEC Conference

Consultative Meeting of the OPEC Conference

No 7/2003
Vienna, Austria
24 Apr 2003

A Consultative Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) convened in Vienna, Austria, on April 24, 2003, under the Chairmanship of the President of the Conference, HE Abdullah bin Hamad Al-Attiyah, Minister of Energy and Industry of Qatar and Head of its Delegation.

The Conference reviewed the report of the Ministerial Monitoring Sub-Committee (MMSC), and again thanked its Members for their efforts on OPEC’s behalf.

The Conference, having reflected on the oil market situation, noted with satisfaction that actions taken by OPEC in recent years, especially since the introduction of the price band mechanism, have increased stability in the oil market, to the benefit of producers and consumers alike, with prices remaining, for the most part, within the targeted price band. The Heads of Delegation further observed that the decisions taken by the Conference during the preceding five months had succeeded in calming the market, clearly demonstrating OPEC’s success in overcoming supply disruptions by assuring adequate supplies to consumers. Consequently, the OPEC Reference Basket price has dropped towards the lower end of the price band in recent weeks. Nevertheless, the market remains volatile, reflecting continued high levels of economic, as well as a degree of political, uncertainty.

The Conference further reviewed estimated supply/demand levels for the second quarter 2003, which indicate that over-supply is expected in view of the seasonal fall in demand during this quarter, and the impact of the continued sluggishness in the world economy and SARS on demand for oil.

In the light of the foregoing factors, reiterating its commitment to market stability and to keeping prices within the price band, the Conference decided, as a first step, to reduce actual OPEC production by 2 mb/d to 25.4 mb/d, effective June 1, 2003. This decision will be reviewed at the Extraordinary Meeting of the Conference, scheduled to convene in Doha, Qatar, on June 11, 2003. In the interim, the Conference also requested the Secretariat to continue closely monitoring the market, in particular the timing and level of the expected recovery in Iraqi oil production and its impact on the overall supply/demand balance in the market, in general, and OPEC production levels, in particular.

The Heads of Delegation re-emphasized the Organization’s firm commitment to providing adequate supplies of petroleum to consuming nations, as well as its commitment to stabilize the market and realize its objective of maintaining crude oil prices at fair and equitable levels, within the OPEC price band, for the benefit of the world economy and the wellbeing of the market. To this effect, the Conference repeated its call on non-OPEC producers/exporters to continue co-operation to support oil market stabilization.

The Conference expressed its appreciation to the Government of the Republic of Austria and the authorities of the City of Vienna for their warm hospitality and the excellent arrangements made for the Meeting.

Agreement

In light of the situation in the current oil market and the expected seasonal downward turn in demand during the remainder of the second quarter 2003, as well as the third quarter 2003, OPEC Member Countries (excluding Iraq, which is not a party to this Agreement due to its special circumstances), have decided to reduce actual OPEC production by 2 mb/d to 25.4 mb/d, effective June 1, 2003, making individual production levels of those Member Countries, parties to this. Agreement, as of that date, as follows:

Country Production(tb/d)
Algeria 811
Indonesia 1,317
I.R Iran 3,729
Kuwait 2,038
SP Libyan AJ 1,360
Nigeria 2,092
Qatar 658
Saudi Arabia 8,256
United Arab Emirates 2,217
Venezuela 2,923
Total 25,400

NB: Totals may not add up due to rounding.