OPEC can cover any disruption in Iraqi supply if war breaks out
www.channelnewsasia.com First created : 27 February 2003 2003 hrs (SST) 1203 hrs (GMT) Last modified : 27 February 2003 2220 hrs (SST) 1420 hrs (GMT)
OPEC said on Thursday it could cover any stoppage of Iraqi oil during war without the need for consumer countries to release emergency reserves.
OPEC Secretary-General Alvaro Silva said the group "won't use oil as a weapon" if war breaks out in Iraq.Advertisement "Yes, we are confident we can manage the situation given the level of production in Iraq," he told reporters at a news conference at OPEC headquarters.
"OPEC has been managing the case of Iraq for more than 10 years. We will try to alleviate the situation in the normal way and meet our commitment to stabilise the market."
Silva said the producer group was already pumping beyond official output limits but could not stop speculators driving oil prices higher.
Speaking as US oil prices set a post-Gulf war high of US$38.66 a barrel, he said: "This is not a problem of oil in the market, it is a problem of speculation."
"We put 2.8 million barrels a day more in the market in December and January and you can see the result," he said of extra OPEC output.
Industrialised consumer nations have yet to decide whether or not they will release crude from emergency stockpiles, should the United States launch an attack against Baghdad.
OPEC is hoping it has convinced the Paris-based International Energy Agency, which controls the reserves, that a repeat of its 1991 Gulf War emergency release will not be required.
OPEC says it has the capacity to fill any shortage from Iraq, as well as compensate for shortfalls from Venezuela, where a strike is in its 12th week.
Silva said OPEC had another four million barrels a day of spare supply ready to call on, easily enough to cover Baghdad's 1.7 million bpd of exports.
But with leading OPEC member Saudi Arabia already thought pumping nine million of its available 10.5 million bpd, independent experts put spare supply in the cartel at little more than two million.
OPEC meets on March 11 and is expected to leave official supply quotas unchanged.