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Opec agrees to keep oil output steady as war looms

VIENNA Opec members have decided to stick with their current crude oil production quotas but are committed to keeping supplies flowing in case of any disruption such as what might result from a war in Iraq.

Representatives of the Organization of Petroleum Exporting Countries dismissed suggestions that they should formally boost production now as a way of reassuring nervous markets before a US-led attack on Iraq. Despite sharply higher oil prices, Opec members argued that the world has enough crude to meet demand and blamed the threat of war for causing fears of a possible shortage.

Opec delegates reached their consensus on production plans during informal talks at a Vienna hotel.

Opec members, which pump a third of the world's crude, were to ratify their informal decision later Tuesday at the group's headquarters in the Austrian capital.

"There is no disagreement over any of the issues. Shall we put it into two words? Status quo," said Nabeela Abdulla Al-Mulla, Kuwait's senior representative and the emirate's ambassador to Austria.

"We're not discussing war. We're discussing stability of the market and that there should be no disruption," said Al Mulla.

Algeria's oil minister confirmed that there would be no change in Opec's output target of 24.5 million barrels a day. He added that delegates have made no specific plan for action in case a conflict in the Gulf blocks Iraqi oil exports. One Opec delegate said the group would meet again in June to review output. However, a conflict in Iraq that disrupted supplies could force Opec to call an emergency meeting before then.

Markets worry that a conflict with Iraq would halt that country's 2 million barrels in daily exports. The impact could be more severe if fighting spread beyond Iraq's borders. Opec president Abdullah bin Hamad Al Attiyah said on Monday that the group could produce an additional 3-4 million barrels a day.

However, many Opec members are already pumping all they can to profit from prices that are near 12-year highs, and it is unclear how much more oil Opec could produce even if it wanted to.

April contracts of US light, sweet crude were trading at US$37.29 a barrel in New York, up 2 cents from Monday's close. Brent crude futures for April delivery were 6 cents higher at US$33.75 in London.