Iran Takes a Hard-Line Stance in Oil Pumping, Arms Buildup

VIENNA, Austria — As OPEC ministers look for a way to prop up the price of oil, Iran has become something of a wild card.

The cartel’s No. 2 producer, which has taken a hard-line stance in OPEC talks that continued here Thursday, has been pumping more oil and alarming Persian Gulf neighbors with a vast military buildup that includes the recent purchase of a Russian-built submarine.

Iran now seems to be flexing its muscles at the Organization of Petroleum Exporting Countries’ winter meeting. While pushing for lower production ceilings to drive up prices, Iran has increased its own production, potentially giving the Islamic state more bargaining power within OPEC.

Teheran has said little about its strategy, but two OPEC sources said Thursday that Iran appeared at odds with the other 12 cartel members.

Oil ministers reported little progress as they filed out of an afternoon session in a second day of talks.

During OPEC’s last meeting in September, Iran refused to go along with the others on a production agreement. OPEC sources, speaking to reporters on condition they not be identified, said this could happen again.

OPEC is hoping to avoid a collapse in oil prices by cutting back on production, but as usual, delicate issues about who should cut and by how much have proven difficult to resolve.

Analysts predict that oil prices will fall sharply if OPEC does not back off its current production of about 25.3 million barrels a day, the highest in years.

But OPEC’s price is now more than $2 below the cartel’s target of $21, and oil markets seem unconvinced that the ministers have the discipline to push oil higher.

Venezuela’s oil minister, Alirio A. Parra, said during a break in Thursday’s meetings that OPEC is discussing a production ceiling of 24.7 million to 24.8 million barrels a day.

But Iran has been pushing for a production ceiling of just 24.5 million barrels a day.

Iran’s tougher stance in OPEC negotiations follows two years in which the cartel was able to avoid difficult decisions about production because Iraq’s oil exports have been banned by the United Nations--ever since shortly after the invasion of Kuwait on Aug. 2, 1990--and Kuwait’s oil industry has still not been fully rebuilt from its war damages.

This has allowed other members to produce crude oil at or near their capacity without worrying about creating an unmanageable supply glut.

Iran has traditionally sought high oil prices, putting it at odds with OPEC superpower Saudi Arabia, which favors moderate prices for fear that consuming nations would otherwise seek out alternative energy sources.

Since the Gulf War, many analysts believe that Saudi Arabia, with about one-third of the cartel’s production at 8.4 million barrels a day, has generally had its way in OPEC’s dealings.

But Iran claims that it has pushed its production to about 3.9 million barrels a day.