Prospect of Iraqi oil exports cuts prices

Terry Macalister Tuesday April 15, 2003 The Guardian

Global oil prices slumped further yesterday as traders feared Iraqi exports would be brought on stream more quickly than expected just as demand is falling.

Supply has already been boosted by Venezuela coming back to full production after a strikes, and a large quantity of crude from Saudi Arabia arriving at US refiners.

Technical obstacles are being fast overcome in Iraq while the political infrastructure is being prepared, with former Iraqi industry official Fadhil Othman tipped as a possible oil minister.

Crude futures in the US slumped 43 cents to $27.75 a barrel and North Sea Brent blend was down 29 cents to $24.46. Prices have fallen more than 30% since fighting began in the Middle East as fears of a wider conflict receded.

Tom Logsden, a senior member of the US army corps of engineers in Iraq, said it was a "definite possibility" that tankers could be loading exports from the northern region inside a few weeks.

The fields around Kirkuk are capable of producing up to 900,000 barrels a day out of the country's pre-war level of 2.5m barrels.

Many believe it is only the Opec cartel of oil producers that can stop prices plummeting further. But Opec warned that prices would remain volatile because of continued uncertainty about output from Iraq, Nigeria and Venezuela.