Venezuela Agrees not to Cut OPEC Production, Supports Iran

After initial reports that Venezuela would support production cutbacks in OPEC, it agreed to maintain current levels, while arguing high prices are not the result of insufficient supply. Instead, Venezuela argued that unjustified threats against Iran are one of the causes of high oil prices.

Caracas , Venezuela , 01 February 2006—Venezuelan Energy and Petroleum Minister Rafael Ramirez agreed not to cut oil production as Venezuelan officials had previously suggested. Also, Ramirez gave support to Iran in its nuclear disagreement with the UN Security Council. Ramirez said Venezuela supports “Iran in the dispute on the nuclear issue.”

The meeting of OPEC, the Organisation of Petroleum Exporting Countries, took place in Vienna on January 31. In a speech in Venezuela on January 30, Venezuelan President Hugo Chavez said, “We are producing at peak. Very few countries have the possibility of increasing their production.”

In Vienna on the same day, Ramirez went further than this, calling for an immediate cut in oil production of 1 million barrels per day. By the next day Ramirez had changed his position, saying that a cut in production could wait until March. All of the OPEC members in Vienna agreed to keep oil production at their current levels.

The reason for high oil prices was not under-production but “pressures on producer countries, specifically on Iran,” said Ramirez. The Energy Minister also said “there cannot be market stability if there is not stability in producer countries.”

Iran is currently involved in a dispute with the U.S. over its nuclear development program. The Iranian government claims its nuclear research is just for peaceful energy purposes. The US, and now the EU, say it could be for nuclear weapons.

The issue might soon be taken to the UN Security Council, with possible sanctions for Iran. Ramirez said Venezuela is “against Iran being taken to the UN Security Council because we believe people have the right to develop energy sources as Iran is doing.”

Venezuela is one of the top 5 oil producing countries in the world. It was one of the original countries that created OPEC. When President Hugo Chavez first came into office he led a campaign in the oil-producing organisation to keep world oil prices high.

Iran is OPEC’s second largest oil contributor. Venezuela is co-operating with it on a number of economic activities. These include Iran helping Venezuela with oil exploration and making tractors.

The Bush administration has called Iran part of an “Axis of Evil” and “a rogue State.” In a recent speech Chavez said if the US invaded Iran it would find the limits of its power. A US war in Iran would be “10 times worse than Iraq”, Chavez said.