OPEC raised its oil production ceiling Friday to 25.033 million barrels a day, hoping this will make room for Iraq to return to the market without a price collapse.
Traders showed no immediate reaction, with crude oil prices fluctuating by just a few cents a barrel on the London futures market as headlines of the decision flashed across their computer screens.Iraq's allocation was increased by 800,000 barrels a day, to 1.2 million, OPEC Secretary-General Rilwanu Lukman told reporters.
Iraqi oil minister Amer Mohammed Rasheed has said he soon plans to export 800,000 barrels a day in Iraq's food-for-oil deal with the United Nations - but Rasheed says Iraq's production will be at about 1.5 million barrels daily when oil for domestic consumption is included.
OPEC has had to contend with Iraq's eventual return to the oil market since the gulf war. Analysts have said prices will suffer if the cartel doesn't make real cuts in output.
"This is, in our belief, the best ceiling for the market, and we will see the market's response," Lukman told a news conference.
Iraq, with the world's second-largest oil reserves, has been banned from oil exports since its invasion of neighboring Kuwait in August 1990 - but the United Nations will allow it to now sell limited amounts of crude to buy food and drugs for suffering Iraqis.
OPEC's production ceiling was previously 24.52 million barrels a day. Other OPEC members had no changes in their quotas, but the new arrangement started from a lower base because tiny Gabon, with a quota of 287,000 barrels a day, was finally removed from the group after trying to get out for nearly two years in a dispute over membership dues.