EC confident oil will flow
The European Commission said on Thursday it was confident Opec producers can cover a disruption in oil supplies should the US attack Iraq, without the need for any release of strategic reserves held by consumer nations.
"The view of the Commission is that there is today no threat of disruption of supply and we are confident in the responsibility of producer countries," European Commission energy spokesman Gilles Gantelet told a news briefing.
The comments further cast doubt on whether the Paris-based International Energy Agency (IEA), that represents European Union and other industrialised nations on energy, will order a release from government reserves in the event of war.
Gantelet's comments followed remarks on Wednesday by US Energy Secretary Spencer Abraham who said the Bush administration would only release government stocks in the event of a "severe" disruption.
Gantelet said exporting countries had shown "in the last months" that they were willing to tackle the problem of supply shortages.
The Organisation of the Petroleum Exporting Countries (Opec) producer cartel in January agreed to raise output to compensate for lower supplies from Venezuela, where an oil workers strike is now in its 11th week.
Leading Opec member Saudi Arabia is expected to produce close to nine million barrels per day (bpd) in February up from eight million bpd in December.
Riyadh says it is willing to pump at up to full capacity of 10.5 million bpd should war cut Iraq's 1.7 million barrels daily of exports.
Brent crude at two-year high
Gantelet said the Commission was not worried now about the high price of crude. Benchmark Brent on Thursday traded at a two-year high above $US33 a barrel and US light crude broke $US36 a barrel.
"If you accept the idea that war is not inevitable we have no specific worries today on this question," Gantelet said of the oil price.
Any release of strategic oil stocks by EU countries would be triggered by the IEA, which represents 26 industrialised countries, also including the United States and Japan.
IEA Executive Director Claude Mandil said last week that he hoped Opec would be able to fill any Iraqi outage and that the agency would leave a decision until hostilities started.
Member countries would be expected to decide within hours of war starting and the oil would reach consumers within 10 days.
Gantelet said all 15 European Union member states had at least the minimum IEA requirement of 90 days' worth of oil stocks and that the average was 114 days.
The Commission -- the executive arm of the 15-nation EU -- is pushing for a greater role in coordinating energy policy but the issue has not yet been discussed at a high level by member states.
Gantelet said the high value of the euro against the dollar had offset some of the concern in Europe over the high oil price.
"We've got to consider the reality of the prices and the exchange with the euro...$US31 or $32 three years ago is not what it represents today in terms of euros."
The European Central Bank, whose primary goal is to keep inflation in check, has expressed concerns about oil prices.
The ECB has said in recent months that an increasing oil price is one of the reasons for euro zone inflation overshooting its self-imposed two percent ceiling.