The IEA reckons that if war cut off Iraq's two million barrels a day in exports from mid-March until May, and some 300,000 barrels a day of production were lost in Kuwait, the world would face a shortfall of 1.68 million barrels a day in the second half of this month. In April, the shortfall would narrow to 580,000 barrels a day. In May, OPEC could meet expected market needs in full, the IEA projects....
....the IEA figures Saudi Arabia could pump only an extra 400,000 barrels of oil now. This would rise to 600,000 barrels a day in April, and 900,000 barrels a day in May, based on early March production levels and assuming a ramp-up of capacity over the next six weeks....
....The IEA's executive director, Claude Mandil, has promised that the agency would act swiftly to release oil from its vast emergency stockpiles, if needed....
This suggests to me that we are looking at a shortfall of limited duration and of a quantity that can be made up by oil that the US and the IEA have in reserve. I just don't see this as a situation that can provoke a long term or major supply crisis.
At least as of the end of last week, the futures market was falling for April deliveries, so the market doesn't seem overly concerned either. |
