OPEC ministers urge balky Iran to accept increase in oil output

VIENNA, Austria -- Iran is the only OPEC member holding out against an agreement to increase petroleum output by up to 7 percent, the Saudi oil minister said today as delegates met to try to forge a consensus that could lead to price relief at the gas pumps.

OPEC ministers failed to reach agreement Monday on how much crude oil to add to global supplies. The 11 ministers were to resume formal discussions today.

''The biggest difference is between the position of Iran and the rest. Their position is consistent -- that they don't want any change,'' Saudi Arabian Oil Minister Ali Naimi told reporters.

Prices fall in city

Gas prices fell at most stations in Brainerd this morning. Prices at many of the stations were down to $1.39 a gallon for unleaded gasoline, the lowest prices in the area since mid-January.

After a local high of $1.55 on March 1, gas prices have slowly eased a bit this month.

Saudi Arabia and Kuwait have backed a production increase of 1.5 million to 1.7 million barrels a day. The upper limit of their proposed increase would amount to about 7 percent more than what OPEC members agreed to pump after sharply curtailing output last March.

Iran has proposed boosting daily production by no more than 1.2 million barrels of crude -- an amount that probably would do little to reduce world oil prices.

The United States, the world's biggest consumer of oil, has gone to exceptional lengths to lobby the cartel to raise production.

Alarmed at the tripling of oil prices during the past 12 months, the U.S. government has said that an increase of 2 million to 2.5 million barrels per day is needed to replenish depleted inventories and satisfy growing world demand. U.S. Energy Secretary Bill Richardson pressed home the point recently, visiting eight OPEC countries.

''This is the first time that the United States has been really involved'' in OPEC decision-making, said Bill Edwards of Houston-based Edwards Energy Consultants. ''This time it's the big power play.''

For global consumers of refined products such as gasoline, much depends on efforts by moderates led by Saudi Arabia, OPEC's No. 1 producer, to win Iran over to their point of view.

Naimi suggested that Iran is only willing to back an agreement that would legitimize the estimated 1.2 million ''unofficial'' barrels that OPEC members are currently pumping each day in excess of their quotas.

Nonetheless, an OPEC source speaking on condition of anonymity said today that the group might agree to boost production starting next month despite Iran's objections. The source said there are precedents for such an action by a majority of OPEC members. However, it wasn't immediately clear how an agreement to boost output would work without Iran's consent.

OPEC, which normally reaches decisions by consensus, must decide whether to extend cuts it made in 1998 and 1999 that have propelled oil prices to their highest levels since the 1991 Gulf War. The latest round of cuts expires at the end of the week.

Kuwaiti Oil Minister Sheik Saud Nasser al-Sabah suggested Monday that political considerations, including U.S. diplomacy, played a bigger part than economic factors in his country's decision to push for a comparatively large increase in production.

OPEC pumps more than 26 million barrels of crude each day, or about 35 percent of the world's supply.