Tehran tacitly approves call for 1.5 mbpd Opec hike

Key Opec producer Iran gave guarded support on Sunday to a Saudi call to raise Opec supplies by 1.5 million barrels daily to appease consumers, but said the hike would only legitimise leakage over official cartel limits.
Saudi Arabia, Opec's leading producer, last week called on the exporters' group to boost its output ceiling by a minimum 1.5 million barrels per day (bpd) to prevent oil prices, now at 21-year highs, from derailing world economic growth.
"A possible increase of Opec production by 1.5 million barrels per day would display the organisation's co-operation and understanding with consumers even though Opec is not responsible for the situation," Iran's Opec Governor Hossein Kazempour Ardebili said on the state oil company's Web site.
"Secondary sources" that regularly monitor output from the Organisation of the Petroleum Exporting Countries say the producers were pumping more than 1.5 million bpd over their official 23.5 million bpd output quotas, he said.
"Whatever agreement is reached on raising the Opec production ceiling, or quotas, would in practice be a formalisation of the presently available surplus in the market, fully evident in the consumer countries' rising level of stockpiling," said Kazempour.
Last week, in an interview with the reformist Sharq daily, Kazempour said Iran.
Opec's second biggest producer, would not oppose a supply increase of up to one million bpd but said such a rise would pander to US propaganda.
Washington fears high oil prices could harm economic growth and the Bush administration is worried about the impact of high prices at the pump in an election year.
Of the 11-member producers' group, only Venezuela, a top supplier of crude and products to the United States, has publicly rejected the Saudi call to raise production.
"When we compare prices, we can see that the price of oil has been very low in the last 20 years. We maintain the position...that it is not necessary to increase production," Venezuelan President Hugo Chavez said on Friday.
Opec is due to discuss Riyadh's proposal at the International Energy Forum in Amsterdam on May 22-24. Policy would be finalised at a cartel meeting set for June 3 in Beirut.
Assurances from Saudi Arabia have failed to ease prices due to concerns that Opec does not have enough spare production capacity to counter supply losses due to potential attacks on oil installations in the Middle East.