VIENNA - OPEC unexpectedly left its production levels unchanged yesterday, causing oil prices to jump, after senior officials said their meeting had ended in disarray - a stunning admission for an organization that puts a premium on consensus decision making.
OPEC officials said the group would maintain present output ceilings with the option of meeting within the next three months to consider a hike.
"We are unable to reach consensus to . . . raise our production," OPEC Secretary General Abdullah Al-Badri told reporters, in comments reflecting unusual tensions in the 12-nation Organization of the Petroleum Exporting Countries.
Saudi oil minister Ali Naimi called it "one of the worst meetings we've ever had," while analysts covering OPEC for more than 20 years said they could not remember any other time that the normally closed group had admitted to such divisions in its ranks.
Some even saw the abortive meeting as a harbinger of demise for the organization, which produces more than a third of the world's petroleum.
"OPEC is . . . on the point of breakup," said Marc Ostwald, of Monument Securities. "A broader perspective is that the post- World War II world order is fracturing in a spectacular fashion, be it the EU/Eurozone, the World Bank/IMF, [or] OPEC."
The news caught markets by surprise, sending oil prices sharply higher. Benchmark crude for July delivery was up $1.25 to $100.34 per barrel in morning trading on the New York Mercantile Exchange after trading lower ahead of the OPEC meeting.
Saudi Arabia had pushed to increase production ceilings to calm markets and ease concerns that crude was overpriced for consumer nations struggling with their economies. Those opposed were led by Iran, the second-strongest producer within the Organization of the Petroleum Exporting Countries.
The Saudis and the Iranians are frequently at loggerheads over pricing, but past meetings have usually fallen in behind Saudi Arabia, which produces the lion's share of OPEC output. But this time, the Saudi-Iranian rivalry, combined with major political and economic uncertainties, led to deadlock.