Venezuela's Energy and Mines Minister Humberto Calderon Berti says the greatest hazard over the middle term likely to be encountered by the Organization of Petroleum Exporting Countries (OPEC) is a future oil glut caused by a resurgence of petroleum production in Iran and Iraq after their war ends.
"The natural tendency for the two countries, which respectively produced 5.7 million barrels per day and 4 million barrels per day before the war, will be to produce more petroleum to refinance their war-damaged economies," Calderon Berti said at a news conference Friday.
If, as OPEC projects, demand for its oil is at a 20 million barrels-per-day level by the end of the year, the added production of from three-to-five million barrels per day by Iran and Iraq could bring a new "disequilibrium" between petroleum supply and demand and push prices lower, the minister added.
OPEC production is now estimated to be at about 17 million barrels per day, 500,000 barrels per day lower than the ceiling set in Vienna in March. Except for adding a "psychological" factor of uncertainty and worry, the Israeli invasion of Lebanon has not had a real effect on the petroleum market as yet, Calderon Berti said.
OPEC, for reasons of enlightened self-interest, should encourage an economic recovery in the industrialized world, Calderon Berti concluded, since a recovery would result in an increased demand for OPEC oil which, in turn, would cover the production increases expected when the Iran-Iraq war ends.
"The difficult economic situation in which the industrial world finds itself is not exclusively due to increases in petroleum prices, but maintaining price stability could provide 'oxygen' to those economies, helping them to recuperate," the minister said.
High interest rates, particularly in the United States, have adversely affected the Venezuelan economy and curtailed growth, Calderon Berti said. "If the economies of the industrialized world recuperate," he added, "ours will do the same."
He said OPEC's market monitoring committee will meet July 7 in Vienna to study the situation of the market and to make recommendations to the OPEC ministers. In an interview earlier in the week, he said that Venezuela favored maintaining production controls "at least through 1982, though that does not mean production levels should stay the same."