By Amena Bakr and Peg Mackey
VIENNA Dec 4 What is Saudi Arabia's bottom line for propping up oil prices before it starts to arm-twist the rest of OPEC into sharing the burden?
At $112 a barrel for Brent crude, well above OPEC's preferred $100, it may not look like a hot issue just yet.
As Ali al-Naimi, oil minister for Saudi Arabia, OPEC's biggest producer said this week, the oil market is in "the best situation it can be" and at "the right price."
That was reflected in Wednesday's straightforward decision by the Organization of the Petroleum Exporting Countries to renew for six months its 30 million barrel-a-day output cap for the first half of 2014.
But Iraq and Iran, second and third in the OPEC league table, wasted no time in making clear they have no interest in contributing to a collective cut should one be required next year.
With oil production from the United States rising fast and a number of OPEC members aiming to restore full output after sanctions and civil strife, a new OPEC deal may be needed as early as the next meeting on June 11.
"It's not a question of if but when," said one OPEC delegate. "Maybe we'll talk about cuts in six months time," conceded a delegate from one of OPEC's Gulf Arab producers.
Iran and Iraq both feel they are special cases because of production lost to sanctions, Iraq over decades under Saddam Hussein up to 2003 and Iran over the past two years for its nuclear programme.
Iranian Oil Minister Bijan Zanganeh said Iran will take oil production back to 4 million barrels a day once sanctions are lifted, following an interim deal with Western powers, even if oil prices drop to $20 a barrel.
"Under any circumstances we will reach 4 million bpd even if the price falls to $20 a barrel," said Zanganeh. "We will not give up on our rights on this issue."
Zanganeh was quick to qualify that, saying OPEC previously "has shown it's smarter than that" and normally made way for countries that suffered setbacks to production.
NO QUOTA FOR IRAQ
His Iraqi counterpart said Baghdad would not contemplate being roped into an OPEC allocation that limits its output next year and wouldn't cut.
"Why should we cut? There is no reason," said Iraqi Oil Minister Abdul Kareem Luaibi.
Add Libya, hoping to convince armed separatist protesters to stop blocking production, and a significant slice of OPEC will plead special status should OPEC need a new deal.
That would leave its most reliable producers, the core Gulf Arab countries - led by Saudi Arabia with Kuwait and the United Arab Emirates - to turn down the taps.
Saudi's Naimi shrugged off the prospect of a flood of additional supply next year.
"One source comes and another source disappears," he said. Reporters, he added, were "preoccupied with Iran."
"They are welcome, everyone is welcome to put in the market what they can, the market is big and has many variables - when one comes in another comes out."
The three Gulf Arab producers clearly don't share Iran and Iraq's optimism about how fast they can lift output, privately forecasting growth next year from the two countries combined of about 500,000 barrels a day.
But if Libya restores full production that would add a million barrels daily.
And many are now forecasting that the U.S. energy renaissance, buoyed by shale, will add a million barrels a day for an astonishing third year in a row to reach 12 million bpd.
WILL SAUDI GO BELOW 9 MBPD?
That might require Saudi Arabia to drop towards 9 million by the middle of next year, already having eased half a million bpd from above 10 million bpd earlier this year.
"The Saudis would be prepared to cut back towards 9 million," said an OPEC delegate. "But they would be reluctant to give up further market share without an all-inclusive OPEC agreement."
"The Saudis will be prepared to trim production to make room for Libya and a bit of Iraq, but I think 9 million barrels a day is their line in the sand," agreed Yasser Elguindi of Medley Global Advisors.
David Fyfe, a former official at the International Energy Agency and now head of research at trading house Gunvor, said it could be some time before volumes from Iran and Iraq were an issue for OPEC.
"In the mid-term, if Iraqi output rises come on schedule and some substantial volumes of Iranian oil return, it will put pressure on the Saudi market share. At various past moments, Saudi sources have said they would like to retain market share of 8.5-9 million bpd."
Oil markets may marvel at OPEC's ability to squabble about the next meeting or the one after, when there is nothing to argue about at the current one.
"This is shadow boxing. Iran has no way of bringing output back to 4 million immediately, said Bill Farren-Price of Petroleum Policy Intelligence.
"As for Iraq, recent history indicates their targets are unlikely to be met. If the oil price really looks like over-shooting on the downside, it will be in everybody's interest - including Iran and Iraq - to find ways to stabilise the price. At that point, pragmatic decision-making will replace cheap rhetoric."
(additional reporting by Alex Lawler, Georgina Prodhan, editing Richard Mably and William Hardy)