Saudis Boost Oil Output

Saudi Arabia has largely given up hope of stopping a U.S. military strike against Iraq and is now working to reduce the impact of such a conflict on Saudi-U.S. relations and the world economy. While the Arab League may send a delegation to plead with Saddam Hussein to give in to U.S. pressure to disarm, Arab diplomats doubt that such a move will succeed. "The problem is no one can influence him. People have to realize that," says a senior Saudi official.

In the event that war interrupts Iraq's roughly 2.5 million barrels per day of production, OPEC will likely scrap restraints and produce all-out, a gulf official says. In January, the Saudis produced 8.4 million barrels per day, almost 1 million barrels per day over their quota, to compensate for lost Venezuelan output.

Edited by Rose Brady

    Before it's here, it's on the Bloomberg Terminal.