Although OPEC’s decision pulled the oil price back a few cents, it failed to bring it back into the organisation’s preferred price band of $22-28 a barrel. And within days of the decision, benchmark Brent crude was again trading at more than $30 a barrel.

Market concerns focus on the danger of military action in Iraq that could shut off the country’s oil production of more than 2 million b/d. That would leave the market significantly short of oil, even if Saudi Arabia increased production to its full capacity of 10.5 million b/d. In the event of a war in Iraq coinciding with the Venezuelan strike, oil consumers would be likely to release some of their strategic petroleum reserves – which have enough oil to satisfy basic energy needs for several months.

As the markets absorbed the OPEC decision, the organisation’s Secretary-General, Alvaro Silva Corderon, asked Russia, the largest non-OPEC producer, to help stabilise markets. ‘Russia can now play an extremely important role,’ he said in a 14 January interview with a Russian newspaper. ‘Moscow expresses a permanent wish for co-operation, with the goal of stabilising the world’s oil market.’ However, Russia is also believed to be pumping at full or near-full capacity.