Oil exports from entire Gulf region at risk

AT RISK: Khatibi warned any attack against Iran would have dire consequences for the region. (Getty Images)

Oil exports from the whole Gulf region would be at risk if Iran's exports were hindered by any threat, said the OPEC Governor of Iran, which has vowed to retaliate should its nuclear facilities come under attack.

Around 40 percent of global oil shipments leave the Gulf through the Strait of Hormuz off Iran's southern coast and Tehran has threatened to impose controls on shipping there if it is attacked, and warned Gulf neighbours of reprisals if they took part.

An intensifying war of words between Iran and the West over Tehran's nuclear programme helped push oil to a record over $147 a barrel on Friday.

"If there is a threat in our region this will not be just against our exports," Mohammad Ali Khatibi told newswire Reuters in a telephone interview.

"It will affect other producers, not just Iran. I mean the oil exporters Iraq, Kuwait, Saudi Arabia, Qatar and the United Arab Emirates. Any problem from the United States or Israel to the region would be a threat to 40 percent of all the world's traded oil."

The United States has refused to rule out military action against Iran if Tehran continues with attempts to enrich uranium. Tehran says it wants to develop nuclear power, while Washington says Iran wants nuclear arms.

Israel staged an air force drill last month that sparked speculation about a possible assault on Iranian nuclear sites.

Tehran has vowed to strike back at Israel as well as US interests and military bases and shipping if it came under attack.

President Mahmoud Ahmadinejad said on Sunday that even before its enemies "get their hands on the trigger" the country's military would cut them off, Iran's media reported.

Bellicose rhetoric from oil consumers is pushing up the price of oil, rather than any problems with supplies, Khatibi said, adding that producers were pumping more oil than needed in global markets.

"This is not a time to build more tension in the region," he said.

"The oil market is very sensitive right now. Some consumers are sending the wrong signals to the market and pushing up the price."

OPEC had no need to boost oil supply when it meets in September as the group was already pumping around 1.2 million to 1.5 million barrels per day (bpd) above demand, Khatibi said.

If buyers want it, the world's largest oil exporter Saudi Arabia has offered more, he said.

"There is no need to increase output," he said. "There is no additional demand. In fact, demand is slowing in the United States and Europe."

Iran was currently exporting around 2.5 million to 2.6 million bpd, Khatibi said. (Reuters)

Print | Email | Discuss this article |

READERS' COMMENTS

View all comments (1)

Have your say

Threat to the Gulf and Europe
Posted by C U Vaird, London, UK on Monday 14 July 2008 at 09:55 UAE time


The threat of an Israeli strike against Iran is a threat not only to the Middle East but also to Europe and the global community. Israel has been allowed to secretly become the 5th or 6th most powerful nuclear state in the world with a massive underground arsenal of warheads at their Dimona base in the Negev desert. The UN Security Council should pass an immediate resolution declaring that the Middle East should be a nuclear-weapons-free-zone and Israel's stockpile to be dismantled and disarmed.

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM