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Iraq Accuses Saudis of Succumbing to U.S. Pressure with Increased Oil ProductionAired September 7, 2000 - 2:01 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU WATERS, CNN ANCHOR: If you thought the summertime sticker shock at the gas pumps had hit the brakes, hold on. Oil prices briefly shot toward $35 a barrel today. That's a 10-year high, one not seen since the days of the Gulf War. Whether there's a second summer gas squeeze before fall rolls in may hinge on this weekend's OPEC meeting in Vienna.
Rumors began circulating today that the Saudis will push the cartel to pump more crude to ease the near-record prices, and that caused prices to retreat a bit.
Crude has more than tripled since December of 1998, when OPEC tightened the spigot. Back then, a barrel of oil fetched a bargain- basement price of $10 a barrel. Reduced supply caused U.S. oil reserves to sink to a 24-year low in August, and that doesn't bode well for home heating oil prices this winter.
Iraq is urging OPEC to hold the line on production at this weekend's summit. It accuses the Saudis of catering to the Americans.
CNN's Ben Wedeman reports from Baghdad.
BEN WEDEMAN, CNN CORRESPONDENT (voice-over): Iraq is floating on the world's second largest proven oil reserves, after Saudi Arabia; reserves that become ever more valuable as the price of a barrel of oil climbs steadily on world markets.
Iraq will take part in Sunday's meeting of OPEC oil ministers in Vienna, at a time when industrialized countries are being squeezed by rising energy prices. Iraq, a founding member of OPEC, is opposed to increasing production, seeking to strike a balance between consumers' needs and producers' interests.
GENERAL AMER RASHID, IRAQI OIL MINISTER: We want a stable market, we want stable prices, which are fair for producing countries and also fair for consuming countries. We have been very responsible in this respect.
WEDEMAN: And as the U.S. urges OPEC member states to boost production, Iraq accuses Saudi Arabia, a traditional U.S. ally, of giving in. RASHID: They have increased 600,000 barrels a day, which is total violation of the statute of OPEC, violation and challenge to OPEC integrity. Why? because they are under pressure, it is clear.
WEDEMAN: In Baghdad's view, the latest jump in oil prices is not OPEC's fault, but largely the result of external factors.
RASHID: Without interfering in the United States' affairs, I think this is mismanagement of energy policy within the United States, and it is not OPEC who should pay for this.
WEDEMAN: Iraq wants to modernize its decaying oil industry, but under international sanctions is hobbled by a lack of spare parts. With oil exports limited by sanctions, Iraq's wealth remains largely untapped, while the people of Iraq slide further into poverty.
(on camera): At the Vienna meeting, Iraq will be pushing its candidate to head OPEC after the current secretary general steps down. Officials here say: No country has more experience than Iraq when it comes to resisting U.S. pressure.
Ben Wedeman, CNN, Baghdad.
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