OIL: OPEC Assures Steady Supply in Case of Attack on Iraq

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Nov 20 2002 (IPS) - The Organisation of Petroleum Exporting Countries (OPEC), source of a third of the oil consumed in the world, rejected the possibility Wednesday that a U.S.-led attack against Iraq could trigger an international energy crisis.

OPEC secretary-general Alvaro Silva Calderón assured that the 11-country cartel is prepared to provide the oil and natural gas that the world needs "in the short and long terms".

Silva Calderón, a Venezuelan national, took part in a round table of international petroleum experts and executives, organised in Geneva by the United Nations Economic Commission for Europe to study the security of world energy supplies.

OPEC, comprising Algeria, Indonesia, Iran, Iraq, Kuwait, Liberia, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela, possesses enough reserves to handle the potentially complicated circumstances arising from a Middle East conflict, Silva Calderón said.

Iraq is currently under the scrutiny of UN weapons inspectors who are investigating Baghdad’s alleged possession of weapons of mass destruction.

Sources from the U.S. government have indicated that their country would launch an attack if the inspectors find Iraq to be guilty of holding such weapons.

Silva Calderón said OPEC has enough reserves and the capacity to provide the oil the world needs, but intends to do so "in conditions of peace" and in cooperation with consumer countries.

U.S. businessman Robert C. McFarlane, who served as national security adviser to the Ronald Reagan government (1981-1989), said that if there is an attack against Iraq, he would "expect that perturbations (of the oil market) would be relatively short term."

"The disruption of the Iraqi supplies would remove some two million barrels a day" from the world markets, calculates McFarlane, president of the New York-based company Energy and Communication Solutions.

Iraq’s petroleum exports are currently under UN control in a an "oil for food" programme that also involves reparations for the damages incurred in the 1991 Gulf War, which ended when a western military alliance forced Iraq out of Kuwait.

McFarlane put forth the possibility that, in the case of military conflict, if attacks are aimed at an Arabian Gulf country like Kuwait, the international market would be deprived of some 2.5 million 159-litre barrels a day. If Saudi Arabia were targeted, the figure would be substantially higher, he said.

The removal of Iraqi oil from the market could be covered by the strategic reserves of the industrialised countries and some developing countries, said the executive.

Cristobal Burgos Alonso, chief of energy security for the European Commission, confirmed that the 15-nation European Union have sufficient petroleum reserves available.

"In the case of crisis, the EU countries have mechanisms that can be automatically activated," said the official.

Torgul Bagirov, vice-president of the Moscow International Petroleum Club, said Russia is ready to boost production by a million barrels a day.

Russian oil output has been growing approximately 10 percent a year, and this month reached a record eight million barrels per day.

Bagirov assured that Russia could supply Europe and the United States with sufficient oil if production or distribution problems arise as a result of conflict in the Middle East, though he warned against "overestimating the effect of a possible war in Iraq."

OPEC, minus Iraq, places some 24.5 million barrels of crude on the international market daily, according to the average recorded in October.

But the bulk of global oil supplies comes from countries outside the cartel, which put out nearly 48 million barrels a day.

Ged Davis, an official from Shell International, estimated that daily petroleum output worldwide surpasses demand by some 3.5 million.

With that figure, and keeping in mind the existence of strategic reserves, an eventual petroleum shortage would not last more than six months, even during the northern hemisphere winter when demand peaks, Davis ventured.

OPEC secretary-general Silva Calderón said the group is committed to maintaining international market stability at reasonable prices for all countries, for exporters, investors and consumers.

The official stressed that in case of a war against Iraq, "OPEC is ready" and has mechanisms in place to ensure that demand for oil is met.

But the ultimate consequences of such a conflict cannot be known, said Silva Calderón.

OIL: OPEC Assures Steady Supply in Case of Attack on Iraq

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Nov 20 2002 (IPS) - The Organisation of Petroleum Exporting Countries (OPEC), source of a third of the oil consumed in the world, rejected the possibility Wednesday that a U.S.-led attack against Iraq could trigger an international energy crisis.
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