OPEC plans slight cut in oil production Saudis renew talks with Iran on quotas


GENEVA -- OPEC announced yesterday that its members had agreed to lower oil output to 24.5 million barrels a day in the third quarter from 24.7 million currently as a way to bolster sagging prices.

The cut in production is considered minimal, but OPEC officials said Oil Minister Hisham Nazer of Saudi Arabia had submitted proposals for further "voluntary" cuts that might reduce the overall output of OPEC below the new ceiling.

In promoting its proposals, Saudi Arabia took the extraordinary step of holding talks with Iran, with which it has been politically at odds since the Persian Gulf war.

Iran's government-owned radio network said yesterday that President Hashemi Rafsanjani had telephoned Saudi Arabia's King Fahd to seek support for higher world oil prices. It said the two leaders had agreed to cooperate on a policy that would push oil prices above their current average level of $15 a barrel.

Saudi officials said the conversation was wide-ranging and touched on other political issues as well.

The highly unusual telephone call reflects Iran's eagerness for larger revenues to alleviate a severe economic crisis.

But it is also seen as aiming to put public pressure on Saudi Arabia to shift its free-market oil pricing policies, which have favored lower prices.

That stance has earned the gratitude of the industrial countries but has led to hostility within OPEC.

Iran's radio said Mr. Rafsanjani, who has spoken directly to King Fahd only on one occasion before, stressed "the necessity of joint efforts and cooperation by the two countries to stabilize and raise oil prices to their real levels."

The radio said King Fahd had agreed with the goal of higher oil prices.

Senior Arab officials in Geneva minimized the importance of the Iranian announcement, suggesting it did not represent a fundamental change in Saudi-Iranian relations but an attempt to normalize a tense relationship.

OPEC oil ministers said they hoped the production accord would help arrest the drop of oil prices, which have fallen by 20 percent since early summer.

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