Arab Oil Producers Assure Customers of Reliable Supplies
By Alex Lawler and Sean Evers
Cairo, May 12 (Bloomberg) -- Saudi Arabia and other Arab oil- producing countries dismissed traders' speculation that oil supplies from the Middle East would be disrupted to punish Israel and its allies in the West.
Saudi Arabia's minister, Ali al-Naimi, told the Organization of Arab Petroleum Exporting Countries that the nation will maintain spare capacity to guarantee supplies should output be disrupted elsewhere. Egyptian President Hosni Mubarak said Arab nations shouldn't use oil as a weapon in the Israeli conflict.
``OPEC always does its best to defend and ensure security of supply,'' said Abdullah bin Hamad al-Attiyah, Qatar's oil minister, in an interview. ``History shows that OPEC countries have been reliable suppliers, even in the most difficult of circumstances,'' such as during the 1991 Gulf War.
Crude oil rose to an eight-month high of $27.99 a barrel in New York Friday as Israeli preparations for a retaliatory strike against the Palestinians for a suicide bombing on Tuesday renewed concern that flows from the region might be disrupted. Iraq last month halted exports in support of the Palestinians.
Arab producers, with the exception of Iraq, haven't restricted supplies for political reasons since the oil crisis of 1973, when Saudi Arabia and other states cut off exports to the U.S. because of its support of Israel. Saudi Arabia no longer favors such tactics.
``We have an interest in a stable oil market both in the short and the long term, at a level that guarantees a fair price for producers and consumers,'' Saudi minister al-Naimi said.
The Organization of Petroleum Exporting Countries holds almost 80 percent of known oil reserves yet pumps only about a third of world supply, restraining output to inflate prices.
No `Battles'
``We respect the consumer,'' said Mubarak in a statement read to the OAPEC conference by Prime Minister Atef Ebeid. ``We are not concocting any battles.''
While other oil producers haven't followed Iraq's call to restrict supplies, the events of Sept. 11, fighting between Israelis and Palestinians and Iraq's action have heightened consumers' concern about supplies.
Ministers at a meeting of the Group of Eight countries in Detroit on May 3 said oil importers can prepare for disruptions by diversifying into energy sources such as coal and nuclear power.
``Energy security and flexible emergency response are critically important in today's world,'' a statement from the G8 said. ``Countries can improve their ability to respond to changing energy supply conditions through increased energy efficiency and a mix of energy sources.''
The U.S. and other nations hold emergency inventories in a bid to prevent shortages in the event of an embargo.
Consuming countries have also used oil as a weapon, such as through U.S. sanctions on investment in Iran and Libya, said Robert Mabro, a professor at the Oxford Institute of Energy Studies. Oil ministers echoed the point.
``Insecurity of supply may be self-generated by the West and the U.S. by political embargoes preventing companies investing in countries such as Iran, Iraq and Libya,'' said Chakib Khelil, Algeria's oil minister, in an interview.
Other nations at the meeting of the Organization of Arab Petroleum Exporting Countries in Cairo include OPEC members Kuwait and Libya and non-OPEC states Bahrain, Egypt, Syria and Tunisia. The group gathers to discuss topics ranging from trends in oil markets to financing the next generation of oil fields. |
