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Iranian Oil official says Iraqi crisis primary factor in higher prices

Beirut, June 3, IRNA -- Iran's representative to OPEC Executive Board Hossein Kazempour-Ardebili said here Wednesday that instability and political crisis in Iraq is the primary factor for higher oil prices.

Speaking to IRNA, Hossein Kazempour-Ardebili said any political or military measures that causes instability in oil producing nations could raise oil prices.

On the question of effects of US pressure pushing for higher OPEC production and its effect on oil prices, he said consuming nations view the current prices as exceeding market expectations and leading to adverse effect on the economic growth in both consuming and producing nations.

"It is the US and many consumer nations' desire for higher oil output by OPEC in order to mitigate prices."

Political instability, speculation, excessive market demand and limits on refinery capacity in the US are all factors putting pressure on oil prices.

Kazempour-Ardebili further said "the Saudi proposal for oil price band of dlrs 22-28 is an OPEC policy."

Currently there is no decision by OPEC to alter the price band, Kazempour-Ardebili said adding "the OPEC ministerial session will deal with the issue on Thursday."

However, he said it is doubtful that as long as prices remain at current levels, any reduction of prices can be incorporated in the session's agenda.

"The price band was decided at the time when the dollar value was not at these levels and with the drop in the dollar value it is imperative to review the OPEC price ceiling targets."

He also said Iran agrees with OPEC production increases commensurate with the each member's assigned quota.

Kazempour-Adrebili and Oil Minister Bjian Namdar-Zanganeh arrived in Beirut to participate in the emergency session of the OPEC ministers.

The Organization of the Petroleum Exporting Countries (OPEC) Saturday expressed concern about the recent increase in world oil prices but postponed a decision on oil output increase till June.

OPEC President Purnomo Yusgiantoro told a press conference here Saturday afternoon that OPEC was 'deeply concerned' about the rise oil prices in recent weeks.

Speaking to reporters ahead of the start of an international energy forum, Yusgiantoro said OPEC ministers held an informal discussion on a proposal by some OPEC members to increase production.

"Being an informal consultative meeting no decision was expected to come ... the decision will be made in Beirut on June 3," he said referring to the formal OPEC meeting in the Lebanese capital.

Yusigantoro said OPEC will do whatever it can to ensure the market stability and ensure adequate supply of oil for world economic growth.

The OPEC head said the rise in oil prices was due to combination of many factors, main among them are gasoline bottleneck in some of the regions, geopolitical tensions, and increase in global demand.

"Bringing order and stability to the oil market is the responsibility of all stakeholders," he stressed.

Saudi Arabia has proposed a big increase in output to bring down current oil prices at 40 dpb.

... Payvand News - 6/3/04 ... --

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