OPEC raises quota, cuts output

25 April 2003
OPEC ministers on 24 April decided to increase the group's production quota on a pro-rata basis to 25.4 million barrels a day (b/d) from 24.5 million b/d, surprising many analysts. The new quotas will take effect from 1 June, just before the next OPEC meeting scheduled for 11 June in Doha. Based on estimated March production of 27.4 million b/d, the new ceiling aims at cutting actual output by 2 million b/d. In the statement released following the meeting, ministers said that they expected oversupply in the second quarter because of typically weak seasonal demand exacerbated by economic slowdown and the effect of the SARS virus. Both OPEC President and Qatari Minister of Energy & Industry Abdullah bin Hamed al-Attiya, and Saudi Oil Minister Ali Naimi, raised the possibility of further cuts at the June meeting, by which time Iraq is expected to be coming back on stream. 'This is the first phase,' said Al-Attiya. 'In June, we may cut more.' Iraq was not represented at the meeting. Many analysts said that OPEC had exaggerated March production figures in order to prevent a larger quota cut, making the actual output reduction closer to 1 million b/d than 2 million b/d. Individual members were overstating output in preparation for the OPEC-10's need to cede overall market share when Iraq resumes exports. Indonesia, Venezuela, Nigeria and Iran were not producing at their estimated levels, analysts said.

Old quota New quota

Algeria 782 811

Indonesia 1,270 1,317

Iran 3,597 3,729

Kuwait 1,966 2,038

Libya 1,312 1,360

Nigeria 2,018 2,092

Qatar 635 658

Saudi Arabia 7,963 8,256

UAE 2,138 2,217

Venezuela 2,819 2,923

Total OPEC 10 24,500 25,400

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications