| Iraqi oil minister Ibrahim Bahr al-Uloum at the Opec meet on Wednesday. (Reuters)
Vienna, Sept. 24 (AFP): The Opec today shocked oil markets by signalling a cut in production, sending prices surging as Iraq returned to the table for the first time since the US-led war to topple Saddam Hussein and pledged to double oil exports by next March.
Iranian oil minister Bijan Namdar Zanghaneh confirmed to reporters that, “yes”, the grouping would change its official output ceiling of 25.4 million barrels per day (BPD).
A source close to Opec said the amount of the cut was 900,000 BPD, bringing the output ceiling down to 24.5 million BPD.
The 11 Opec oil ministers were expected to adopt the cut at a formal meeting later in the day.
News of the surprise move came as Iraqi interim oil minister Ibrahim Bahr al-Uloum announced that Iraq would remain a member of the Opec oil cartel, pouring cold water on speculation it might leave the fold.
He said Iraqi oil exports, currently at 900,000 BPD, were planned to double to 1.8 million BPD by the end of March.
Oil market traders were surprised too at the news of the Opec cut, who had widely expected the grouping to leave output levels unchanged in the fourth quarter of this year.
Consumer countries had called for an output increase to help rebuild their low stocks as winter looms in the northern hemisphere.
Oil prices shot higher in London, with benchmark Brent North Sea crude oil for November delivery showing a gain of 83 cents a barrel to $26.35 within minutes of the news.
World oil prices had fallen by about 15 per cent in around a month ahead of the meeting, taking Opec’s basket price of seven crudes back into its target range of $22 to $28 per barrel.
Prices stable in India
India today reacted cautiously to the Opec decision. The country has enough stocks to withstand any immediate surge in prices, said B. K. Chaturvedi, petroleum secretary.