Oil ministers of the Organization of Petroleum Exporting Countries meeting here today failed to agree on a plan to claim a bigger share of the world market, amid signs of increasing discord within the 13-member cartel.
The meeting of a special five-nation subgroup, appointed in December to determine OPEC's "fair share" of the declining market, is due to meet again Tuesday.
Meanwhile, a rump meeting of hard-line OPEC dissidents Libya, Iran and Algeria gathered in Tripoli to protest the approach taken in December, which has sent world oil prices spiraling down 40 percent.
In the only official statement to emerge here today, Venezuela's oil minister and current OPEC president, Arturo Hernandez Grisanti, said the organization was "aware of its responsibility in the defense of market stability and in the interests of its members."
In December, all 13 OPEC members voted to "secure and defend a fair share" of the dwindling world market. The committee of five, from Kuwait, Venezuela, Indonesia, Iraq and the United Arab Emirates, was appointed to determine how to do so.
Technical experts were charged with doing the mathematics to back up a "fair share" figure. Last week, they reportedly concluded that OPEC's share should be 17 million to 17.5 million barrels a day -- about 40 percent of the world market. The ministerial committee is to decide on a firm figure, which is then to be submitted to a full OPEC ministerial meeting, probably by late February.
In the eight weeks since the December decision, however, events have moved quickly, and the resolve of some cartel members has slipped.
The prime mover behind the market strategy has been Saudi Arabia. By last summer, the Saudis had dropped their own production to as low as 2 million barrels a day to keep prices stable. The Saudis charge that non-OPEC member Britain has increased its North Sea production at OPEC's expense.
Since October, the Saudis have doubled their output in an effort to drive prices down to the point that Britain and other non-OPEC members will become convinced that they should share the burden of production controls for the good of all.
So far, however, Britain has not blinked, despite seeing its own oil income plummet along with spot market prices. But OPEC's less solvent members are starting to protest.
The result of what has become an international oil price war has been an extreme case of nerves among some OPEC members. During the past several days, oil ministers from Libya and Iran, with Algeria's apparent support, have visited the Persian Gulf states to try to persuade them to drop the production strategy, arguing that they stand to lose more than Britain.
Meanwhile, others have moved on their own. It was reported on the weekend that Nigeria intends to boost output to maximum levels to counteract the impact of lower prices on government revenues. Venezuela and non-OPEC member Mexico, two of Latin America's biggest debtors, agreed to join together in a "flexible pricing and sales policy." Mexico cut its price by $4 a barrel, and Venezuela by $3.