The Organization of Petroleum Exporting Countries has unexpectedly cut oil production quotas. The oil cartel also welcomed Iraq back into the fold.
OPEC ministers agreed on a surprise cut in production quotas effective November 1, in a move aimed at protecting crude prices. Ten OPEC countries will take 900,000 barrels per day off the market, reducing daily production to about 24.6 million barrels.
The 11th member, Iraq, has not been included in official production quotas since the United Nations imposed sanctions in 1990. But Iraq has returned to take full part in the cartel's meetings.
Iraqi oil minister, Ibrahim Bahr al-Uloum, told reporters in Vienna that Iraq, which is among the founding member countries, will remain a full member of OPEC.
Mr. Bahr al-Uloum, a close U.S. ally, said his country is going through a difficult phase, and has managed to bring oil production to only at about two-thirds of what it was before the war. But he said that exports are rising and full pre-war production could be achieved next year.
"We have hopes and faith in our people and we believe we shall pass through this turbulent quarter to reach our final destination of a free and democratic Iraq," he said. "We are planning to use our oil wealth in the most useful way for the welfare of our people and country."
Mr. al-Uloum said Iraq plans to increase oil production to almost four million barrels per day by the end of 2005 and to six million by the end of the decade.
Current production is running at about a million barrels per day. The Iraqi oil chief said about $2 billion in investment would be necessary to rebuild existing oil fields suffering from wars, sanctions, looting, and sabotage.