VIENNA, Austria -- OPEC failed to reach even a basic agreement to extend oil production cuts, saying Thursday at the close of a testy year-end meeting that it would review the situation again in March.
With prices hovering near a 12-year low, analysts predicted before the meeting that the Organization of Petroleum Exporting Countries would extend the cuts until the end of next year.
But the secretary-general, Rilwanu Lukman, said OPEC will wait until March to make any moves.
"We have already got an agreement, you know," he said. OPEC decided in June to cut production by 2.6 million barrels per day -- or about 10 percent of its total output.
But the measure is set to expire in mid-1999, and the cuts haven't worked, partly because of overproduction by some members but also because of low worldwide demand.
OPEC's average oil price has been cut nearly in half over the past year because of a global oil glut brought on by its ill-timed decision last winter to boost production, coinciding with Asia's economic crisis and falling demand.
Many OPEC countries' economies have been hammered by drops in revenue and ballooning deficits and face tight budgets next year.
There was plenty of recrimination at the meeting, which was delayed by a day because of difference over extending the production cuts. Saudi Arabia criticized Venezuela and Iran for allegedly cheating on their production quotas. Iran denies it is overproducing.
Venezuela said it could not commit to an extension of the cuts because a new government is taking office in February.
Iran, the oil cartel's second-biggest producer, says the bulk of fresh cuts should be made by Saudi Arabia, OPEC's biggest producer.
Members complain that Saudi Arabia seized market share after Iraq's departure from the oil market in 1990.
Iraq has been barred from exporting crude since its 1990 invasion of fellow OPEC member Kuwait, but is now allowed to sell limited amounts of oil under U.N. supervision to purchase food and other humanitarian goods.
The Saudis say there is no point to adopt more cuts until there is full compliance with the June reductions.
The lack of agreement at the meeting raised questions about OPEC's future, said Mehdi Varzi, director of research at the London-based investment firm Dresdner Kleinwort Benson.
Varzi predicted continuing low oil prices will trigger privatization in OPEC's quota-oriented, state-controlled oil industries, with governments keen to shed costly state subsidies as prices slump.
"OPEC has become a backwater, because it is not looking at fundamental things," such as factoring in better technology that has made it cheaper and quicker to produce oil, narrowing profit margins, Varzi said from Vienna.
Others were somewhat more upbeat.
"They have the opportunity in March to do something. That's the positive side." said Leo Drollas, chief economist at London's Center for Global Energy Studies. "On the negative side, markets expected cuts to be extended and they haven't got that."
OPEC on Thursday elected Algerian oil minister Youcef Yousfi as the cartel's new president, replacing outgoing president Obaid bin Saif Al-Nasseri.
It also voted to change its regular meetings from June and November to March and September.
OPEC members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
© 2016. All Rights Reserved. | Contact Us