OPEC Will Ask Iran to Let Iraq Have an Equal Quota

CARACAS, Venezuela — OPEC Secretary General Subroto said Monday that he will ask Iran to allow its war foe Iraq to have an oil output quota equal to its own in a bid to restore order to the cartel.

Subroto said he will fly to Iran in the final week of August, after a scheduled cease-fire in the eight-year war is due to take effect, to ask for Iran’s support in allowing a higher quota.

Iran has refused to let Iraq have a quota equal to its own of 2.37 million barrels daily. This forced OPEC to leave Iraq out of the current production agreement adopted in 1986, which has allowed the country to produce as much oil as it wanted.

Subroto said Iraq is producing about 3 million barrels daily. Overproduction by OPEC is seen by industry analysts as the main reason that oil prices have fallen steeply this year and are nearly $3 below OPEC’s benchmark of $18 a barrel.

Price Rise Predicted

West Texas Intermediate, the benchmark U.S. crude, closed Monday at $15.61 a barrel, while North Sea Brent oil for October delivery ended at $15.10 a barrel.

Subroto said oil prices would rise if OPEC could secure an output pact and that an agreement on a quota for Iraq would take 600,000 to 700,000 barrels a day off the open market.

He said he also plans to visit Iraq during his trip to the region.

Asked if it would be difficult to persuade Iran to accept Iraq’s longtime demand, he said: “I will try to do my best to persuade them.”

To achieve a price increase in the world oil market in the third quarter of this year, Subroto said OPEC would have to reduce its overall output to below 17.5 million barrels a day.

A recent Reuters survey put overall OPEC output at 18.98 million barrels a day in July, the cartel’s highest in 11 months.

U.S. oil company economists and industry analysts polled by Reuters estimated that demand for OPEC oil in the third quarter would average 18.2 million barrels a day through the end of 1988. Some estimates ranged as low as 17.1 million barrels, while others suggested that demand could top 18.5 million.