Riyadh, June 08: Iraq's return to the oil market is not expected to alter Opec's short-term policies on output and price, but the producers' cartel, which meets in the Gulf this week, should be ready for "painful" decisions in coming years, economists today warned. Oil ministers of the Organization of Petroleum Exporting Countries will discuss at their June 11 meeting in Doha, Qatar, the main issue of re-allocating output quotas once Iraq increases exports to effective levels.
"Opec will not cut its output levels now, because the price is high. They will mostly focus on discussing quota levels when Iraq returns," Abdulwahab Abu-Dahesh, senior economist at Riyad Bank, said.
"Iraq is not expected to return to its pre-1990 export levels before a couple of years ... A number of technical problems must be over come. That too requires huge investments," Abu-Dahesh said.
Oil prices inched upwards this week as the energy ministers of Saudi Arabia, Venezuela and Mexico met in Madrid and pledged to cooperate with other producers in ensuring a fair price for the crude to stabilize the world market.
The three countries stressed the need to "continue monitoring developments in the market during the coming few months in a bid to avoid factors that may destabilise it". Bureau Report