- The Washington Times - Thursday, November 21, 2002

GENEVA Terrorist attacks in oil-rich Persian Gulf countries would disrupt crude oil supplies more than a war with Iraq, energy industry executives and experts said yesterday.
Boosting production and tapping emergency stocks and strategic reserves would be sufficient to cope with any short-term problems, they said at a United Nations conference on energy-security threats.
Terrorist attacks in Gulf countries during a war would eliminate 2.5 million barrels of oil a day from Kuwait and substantially more from Saudi Arabia, the biggest oil producer,said Robert McFarlane, former U.S. national security adviser to President Reagan.
The United States consumes 19.6 million barrels of oil a day.
Former Saudi Oil Minister Sheik Ahmed Zaki Yamani, in a paper presented at the conference, warned of the consequences if the United States were to move beyond the objective of finding and eliminating weapons of mass destruction in Iraq, toward a regime change.
"There could conceivably be dire consequences for oil supplies from the Gulf region if the aim is to enhance the security of supplies from a volatile region, one needs to tread carefully," Sheik Yamani said.
The United States obtains about 29 percent of its oil imports from Arabian Gulf nations. U.S. dependence on oil imports increased to 58 percent last year from 33 percent in 1985.
In the event of war with Iraq, the Organization of the Petroleum Exporting Countries (OPEC) would be able "to provide the world with the crude oil it needs," said Alvaro Silva-Calderon, secretary-general of the 11-nation cartel.
"OPEC is ready, the facilities are also ready to put additional oil on the market," he said.
The disruption of Iraqi supplies would remove about 2 million barrels per day from the market, Mr. McFarlane said. But that could be made up in the short term with national strategic petroleum reserves.
Togrul Bagirov, executive vice president of the Moscow International Petroleum Club, an industry grouping that includes companies that account for more than 90 percent of the Russian oil sector, recommended "not to overestimate the effect of the possible war in Iraq."
"Russia itself can supply another million barrels per day, very easily," to the United States and Western Europe, he said. Russia produced 8 million barrels a day in November.
Mr. Silva-Calderon declined to comment when asked if oil could reach $100 per barrel.
"The consequences of war are difficult to foresee," he said.
The spot price of a barrel of crude closed at $26.09 on the New York Mercantile Exchange yesterday.
While the oil markets might jump in the short term, the availability of oil in the strategic reserves and the speed with which excess capacity can be brought online would ease market fears, Mr. McFarlane said.
The International Energy Agency requires all industrialized member countries to keep in stock at least the equivalent of 90 days of oil and oil products.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide