OPEC oil ministers claimed today to be approaching agreement on how to distribute a production cut of 1.5 million barrels a day but doubts persisted over the willingness of some members to share the burden.
The conference chairman, Indonesia's Subroto, told reporters "everyone will participate in the cuts." But other ministers said privately there was a consensus that Nigeria, Iraq and Iran must be considered hardship cases requiring additional sacrifices by the rest of the 13-member Organization of Petroleum Exporting Countries.
Subroto said that several delegations needed to consult their governments before reconvening Wednesday in hopes of finalizing the accord.
He explained that the reductions in output would commence Thursday on a "temporary basis" until the price paid for oil on the open market moved up to match OPEC's benchmark price of $29 a barrel.
Iran's Mohammed Gharazi said the basic working formula called for quotas to be lowered by 8.5 percent with adjustments for hard-pressed countries.
He claimed that Iran could not make further cuts since it has been producing far below its quota in recent months because of its war with Iraq.
In addition to the three countries likely to be exempted as hardship cases, Gabon is insisting that it be granted at least a reduced share in the production cut because of its depressed economy.
The success of an accord now hinges on the agreement of more wealthy OPEC governments to compensate by assuming a larger share of the burden than previously planned.
But only Saudi Arabia, and perhaps Kuwait, is thought to be able to bear the brunt of sizable cuts in output for the next few months.
"If other countries want to be generous and cover for Nigeria and the others, that's fine with me, but in any case it will not be Algeria that does so," said Belkacem Nabi, Algeria's oil minister.
Nigeria, along with other populous OPEC states with heavy debts, has insisted that it cannot afford to sacrifice any revenues through lower output at this time.
OPEC delegates said that Nigeria's oil minister, Tamunoemi David-West, pressed the argument that his country's extreme economic difficulties, if not resolved, could lead to political upheaval that would jeopardize its membership in OPEC.
David-West defended Nigeria's decision to rupture OPEC's unified price structure by lowering the price of its own oil as much as $2 a barrel two weeks ago. He said such a drastic step was necessitated by the widespread cheating of some members, who have been offering secret discounts or exceeding their production quotas.
David-West came under intense pressure from his colleagues to make at least a token cut in production to maintain a facade of unity within the cartel, delegates said.
Later, it became evident that Iran and Iraq would have to be grouped with Nigeria as countries that deserve special consideration.
It was still unclear whether other large producers like Venezuela and Indonesia would overcome their reluctance to make extra sacrifices and join Saudi Arabia in making up the differences.
Oil analysts said the market response to OPEC's promised decision to cut production by 1.5 million barrels reflected the continuing surplus on the spot market and skepticism that all OPEC members will observe the accord.
Prices for North Sea oil, or Brent crude, dropped today by 35 cents a barrel, indicating that traders were not impressed by OPEC's behavior so far, industry sources said.
Earlier, OPEC delegates said a key obstacle to accord was removed when Mana Said Otaiba of the United Arab Emirates apparently agreed to accept the output cuts without a revision of OPEC's system of price differentials on its various grades of crude.