Iraq Is the X-Factor at OPEC

WASHINGTON — The official invitation was sent to former Iraqi Oil Minister Amir Rashid, known to U.S. troops as the six of spades.

But Rashid, one of 52 "most-wanted" Iraqis whose faces festoon Pentagon-issued playing cards, is not expected to attend this week's emergency meeting of the Organization of the Petroleum Exporting Countries. Neither is anyone else representing the owners of the world's second-biggest oil reserves.

For the 11 nations of OPEC, the end of the war in Iraq is the beginning of the new petroleum order. Members may soon feel compelled to start cutting back their own production to make room for Iraq's return to the market. But when OPEC oil ministers gather Thursday in Vienna to try to keep oil prices from collapsing, the plans of the most talked-about member nation will likely remain a big unknown.

"It's chaos now in Iraq. The government is a vacuum," said Issam Al-Chalabi, who ran Iraq's state oil company and served as Saddam Hussein's oil minister in the 1980s. "No one would dare to go" to the OPEC gathering.

The lack of dialogue between postwar authorities in Iraq and the rest of the oil-producing world may fuel suspicions that the United States intends to use its influence to ratchet up production, flood the market and force prices down.

Crude oil prices already have come down from their prewar high of nearly $38 a barrel. But after falling to $27 after the war began, the price has climbed and was just under $31 in New York trading Monday. That's higher than the price has been for most of the last two years.

With the war's quick end, some OPEC members fear that the resumption of Iraqi exports could glut the market, driving prices below $20. But many economists argue that it's premature for OPEC to lower production, with the global economy in a fragile state and the summer driving season approaching in North America. In California, gasoline prices have just started declining after soaring above $2 a gallon recently.

Some in the petroleum industry think the Bush administration wants Iraq to abandon OPEC or become a second major swing producer, diminishing Saudi Arabia's market clout. Their anxiety has been heightened by the comments of some who advocate short-term U.S. control of Iraq's petroleum production and eventual privatization of its oil industry.

But those concerns will have to wait, experts say, because right now, the United States has more pressing priorities.


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