JIDDAH, SAUDI ARABIA, AUG. 18 -- Saudi Arabia is ready to boost its oil production by 2 million barrels a day to help make up for the loss of Kuwaiti and Iraqi oil on the international market and to stem rising oil prices, Saudi Oil Minister Hisham Nazer said here today.
Nazer indicated that the kingdom, which has called for an emergency meeting of the Organization of Petroleum Exporting Countries (OPEC), would wait first to see whether its badly divided 13 members responded to the call to increase production. But if OPEC does not accept the Saudis' request to meet in the next few days, then Saudi Arabia is ready to take unilateral action to reduce the effect on oil prices. Asked how soon it would take such action, the oil minister replied, "We say immediately, and immediately means immediately."
He said Saudi Arabia has the ability to add 2 million barrels to its present daily OPEC production level of 5.38 million barrels and that it can do so "in days." But Nazer said the kingdom no longer has the capacity to make up on its own the total shortfall as it could have done in 1980 when its production exceeded 10 million barrels a day.
Nazer's warning to other OPEC members that Saudi Arabia intends to act alone if need be, came in a series of interviews with American television reporters and in a press conference with American newspaper and wire service correspondents visiting the kingdom.
It was the first time a senior Saudi government official has spelled out the kingdom's attitude toward the effect on the oil market of Iraq's annexation of neighboring Kuwait and the U.N. Security Council's decision to impose a trade embargo on Iraq in a bid to force its withdrawal.
Nazer's comments underscored the considerable capability the kingdom has to influence the oil market as well as its limits to make up for the shortfall on its own.
Both Nazer and the Saudi foreign minister, Prince Saud Faisal, who also gave interviews to American correspondents, took advantage of the occasion to lambaste American oil companies for current oil price increases. The oil minister said prices had reached $29.40 for Nigerian light crude and topped $28 in the United States and Britain. Crude oil prices averaged around $18 a barrel before the Aug. 2 Iraqi invasion.
Nazer said the increases were "panic pricing" that bore no relationship to "real market forces." Saud, in one interview, accused the companies of taking advantage of the crisis to raise prices, with no justification, and said any increase now was "a dangerous thing."
The Saudi warning of a possibly immediate oil production boost was clearly intended to put pressure on a number of OPEC members, including Iran, Nigeria, Indonesia and Libya, which have indicated that they oppose any production increase to make up for the loss of 4 million barrels a day previously exported by Kuwait and Iraq.
Those nations all favor higher oil prices and want to take advantage of the current shortfall to assure higher revenues for their governments.
Nazer attacked those governments without naming them, saying it was "illogical" and "not in good faith" for them to refuse to hold an emergency meeting at a time of crisis in the world oil market.
Nazer said Saudi Arabia wanted to work through OPEC to establish new quotas for its members in an orderly fashion and was not eager to take unilateral action to increase production.
"But if they refuse to meet, they leave us with no alternative," he said.
Nazer said the Saudi attitude was dictated not so much by the needs of Western countries, whose governments could release some of their reserves to curb price rises if they wanted to, but those of Third World nations that do not have the resources to cope with higher oil prices.
He said there were "lines and lines" of Third World countries, including Pakistan, India and Turkey, asking for Saudi oil. He added that the current total request amounts to 7.9 million barrels a day, about 2.5 million barrels above Saudi Arabia's OPEC quota.
Nazer said it was not clear what combination of oil producers could make up the 4 million-barrel shortfall. In addition to Saudi Arabia's ability to provide an extra 2 million barrels a day, Venezuela and the United Arab Emirates are each capable of providing another 500,000 barrels daily. The remainder would not necessarily have to come from OPEC's 13 members.