LONDON, Mar 5 (AFP): The powerful OPEC cartel will likely decide against cutting oil production in Vienna Wednesday owing to stubbornly high prices and simmering international tensions over Iran and Nigeria.
Prior to recent violence in Nigeria, analysts had predicted that OPEC, which pumps about 40 per cent of the world's oil, would cut output when it meets on March 8.
"There is clearly going to be some caution because of the political situation in Iran and the lost production in Nigeria, so the chances of OPEC cutting production is very, very slim," said Barclays Capital analyst Kevin Norrish ahead of Wednesday's meeting in the Austrian capital.
OPEC is expected to keep its production quota of 28.0 million barrels per day (bpd), where it has remained for the past eight months, despite some disagreement amongst member nations.
The threat of UN sanctions against Iran, the second-biggest member of the Organisation of the Petroleum Exporting Countries, is likely to dominate output talks amid an ongoing nuclear crisis.
By coincidence, the International Atomic Energy Agency meets in Vienna next week to make an assessment of Iran's nuclear programme that will be sent to the UN Security Council, which could then impose sanctions against Tehran.
The market fears that Iran, fourth-biggest crude producer in the world, might slash its crude exports in retaliation to such a move.
January's OPEC meeting was also held within two days of an IAEA meeting over the Iranian nuclear issue in Vienna.
Another factor for OPEC to consider will be unrest in Nigeria where militants have forced a 20-per cent cut to the country's production and have threatened more strikes on energy installations in the Niger Delta.
Nigeria is Africa's biggest producer and the world's sixth largest exporter of crude.
Meanwhile, Venezuela will ask fellow OPEC ministers to cut oil production by between 500,000 and one million barrels per day, the country's energy minister Rafael Ramirez was quoted as saying last Thursday ahead of the meeting.
"Our position is that we must evaluate a cut of between 500,000 and one million barrels per day (bpd)," Ramirez said.
He added that the "fundamentals of the market bring us to a production cut."
Last week, OPEC president Edmund Daukoru said that the market was well supplied and expressed worry over falling prices during the second quarter, when the end of the northern hemisphere winter may herald a surplus of some 2.0 million bpd.
That appears to have convinced certain members, including Venezuela, Qatar and Kuwait, that a reduction of up to 1.0 million bpd is needed.
But OPEC kingpin Saudi Arabia and Indonesia lean towards keeping the production status quo due to the high price of crude.