Saudi Arabia and the United Arab Emirates: the two nations who broke with the rest of the oil-producing countries and agreed to raise prices by only 5 per cent, are cooperating to make sure the savings are passed onto the consumers, UAE oil minister mana otaiba said in an interview published here today.
He also announced his country will increase oil production by 1 million barrels a day - to 2.6 million barrles - to meet the expected increase in demand for the lower-priced oil. The 11 other members of the Organization of Petroleum Exporting Countries increased prices by 10 per cent Jan. 1 and plan another 5 per cent increase July 1.
Saudi Arabia already has announced an increase in production from 8.5 million barrels a day to 12 million barrels. Saudi Arabia is the world's largest oil exporter and a major foreign supplier of oil to the United States, which produces about half the oil it uses.
Stockpiling by oil companies in advance of the Jan. 1 price increases already has cut into the income of one major oil-producing state, Iran.
The government newspaper Rastakhiz announced in Teheran today that oil income in Iran fell by $200 million during the first nine days of January, and that oil exports from the state-owned National Iranian Oil Co. dropped by 35 per cent - 2 million barrels - during the first part of January.
Because of the loss of revenue, foreign minister Abbas Ali Khalatbart said Iran will not be able to undertake any new foreign aid rprojects, but he promised it fullfil Iran's present aid committments.
Saudi Arabia and the Emirates decided to hold down the price of the oil during last month's OPEC meeting to prevent further worldwide inflation.
Saudi Arabia also told the Western nations it expected tham to share "appreciation" by supporting the Arab nations' push for a Mideast peace settlement.
In an interview today with the Beirut daily Al Anwar, UAE oil minister Otaiba said he is working with Saudi oil minister Shiekh Zaki Yamani to make sure companies that buy oil from them will not raise prices by more than 5 per cent.
"They gave us guarantees they would not raise prices by more than 5 per cent," he told the London correspondent of Al Anwar.