Cooperation from Russia is the key to stability: OPEC

OPEC President Abdullah bin-Hamad al-Attiyah warned crude oil prices may collapse next year because of increased flows of Iraqi oil unless Russia, the world's second-largest exporter, and other top producers cut output.

Al-Attiyah reminded non-OPEC members of the collapse in crude oil prices to almost US$10 a barrel in 1998 to 1999 after a recession in several Asian economies coincided with increased output from the world's top oil producers.

Subsequent cuts by OPEC and non-OPEC nations helped keep the price of oil traded in New York at an average of US$28 per barrel during the past four years, compared with US$19 in the previous four.

Russian Energy Minister Igor Yusufov rejected the demand on Friday, saying oil prices are too high and may harm global fuel demand.

"Without help, mainly from Russia, we expect oil markets to face a lot of difficulties in the future," al-Attiyah said in an interview in Tokyo on Friday. "Non-OPEC should understand that 1999 is only four years ago. We have to learn from the past."

OPEC, whose 11 members include Saudi Arabia, Iran, Iraq, Kuwait and Venezuela, decided last month to reduce the group's total crude oil production targets by 3.5 percent to 24.5 million barrels per day starting on Nov. 1. OPEC members pump a third of the world's oil.

Energy ministers of OPEC member nations have since urged top oil producers who are not members of OPEC, such as Russia, Norway, Mexico and Angola, to follow with their own cuts.

The group is seeking reduced output from members to accommodate increased production from Iraq.

Iraq, recovering from the US-led war in March, expects to increase output to 2.8 million barrels by March next year from 1 million barrels now, al-Attiyah said, citing Iraq's oil minister.

The rising Iraqi output is forcing OPEC and non-members to curtail their production against their wishes, al-Attiyah said.

"We don't just cut because we love to cut, we're not psychopaths," al-Attiyah said in the interview. "We don't want to kill barrels. This is related to markets. We're forced to cut."

Russia seeks an oil price of between US$20 and US$25 a barrel, Yusufov said on Friday. The country plans to gradually increase oil production and exports, he said.

Crude-oil-futures rose 3.1 percent to US$31.97 a barrel on the New York Mercantile Exchange on Friday. The prices have gained 16 percent in the past six months.

Russia, the world's largest oil exporter after Saudi Arabia, boosted oil production 11 percent to 8.73 million barrels a day last month as companies invested more to seize on higher crude prices.

"Our colleagues from OPEC consider US$28 a barrel normal," Yusufov said. "We think it's not. It's too high.

Low oil prices are bad for oil producers, but exceedingly high prices are bad for consumers in the US and Europe."

Al-Attiyah said it may be too late if oil producers waited until next year to review the markets after Iraqi oil output has risen to pre-war levels.