Oil exporters, importers battle over OPEC decision on crude prices

Posted: Sunday, September 22, 2002

OSAKA, Japan (AP) -- OPEC's decision to the hold the line on crude output led the top U.S. energy official to push again for more oil from Alaska. Energy producers and consumers are meeting at a high-profile conference this weekend, officials said.

''We can produce more oil and gas in Alaska and do it in an environmentally safe fashion, and it makes sense for the United States to do so for our own reasons and for global energy reasons,'' U.S. Energy Secretary Spencer Abraham said.

The outcome of OPEC's latest meeting shows the need for America to seek out alternatives to oil imports, including a greater reliance on nuclear power and more drilling for domestic crude in Alaska.

''The one thing each of these deliberations demonstrates is that countries take action that is in their best interest, and that is what the United States must do,'' Abraham told The Associated Press following a luncheon speech in Tokyo.

A controversial element of President Bush's energy plan would involve opening Alaska's Arctic National Wildlife Refuge to oil drilling, an idea that faces massive opposition from environmental interests.

Other world leaders had more questions for OPEC ministers.

''We have heard from OPEC their position, but I think it's important that they explain a little bit more to us,'' European Union Energy and Transport Commissioner Loyola de Palacio said Friday.

OPEC finished a meeting on Thursday in Osaka by announcing it would keep output unchanged through the end of the year, despite fears among developed nations that their economies will suffer.

''In the last decades, every economic recession has been linked to dramatic increases in oil prices,'' de Palacio said in Tokyo, where she stopped en route to the International Energy Forum opening Saturday in Osaka.

The Osaka energy conference is intended to promote stability by opening a dialogue between buyers and sellers, but OPEC's unanimous decision Thursday to leave output unchanged, and the West's cool response, indicates a divide the two sides will not easily narrow.

While Abraham said America might start pumping more of its own oil, de Palacio said the European Union would talk to Russia about closer cooperation on oil sales.

Despite worries in the West that high oil prices could undermine economic recovery, OPEC ministers said the market seemed well supplied.

And even though their top customers might be talking about alternatives, OPEC continues to supply the bulk of the oil on the global market, and nothing is going to change that anytime soon.

Even Norway, the world's second-largest oil exporter after Saudi Arabia, said Friday that OPEC should boost output later this year if prices don't ease.

OPEC predicts only moderate economic growth for the rest of the year, and many of its ministers say the price has been pushed to around $30 a barrel only by fears the United States will attack Iraq.

''We believe so far, there's no shortage of supply,'' Qatari Oil Minister Abdullah bin Hamad al-Attiyah said Friday in defense of OPEC's decision. ''We won't act if prices are up based on political reasons.''

Earlier Friday, the International Energy Agency, a Paris-based industry watchdog group representing Western consuming nations, reiterated its view that OPEC should pump more.

''We hope we're all moving into a situation of an economic recovery, which could be helped by a lower oil price,'' IEA Executive Chairman Robert Priddle told Dow Jones Newswires.

Priddle predicted that OPEC's decision will stir up volatility in the oil markets, and added it won't do anything to assist the global economy.



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