Oil prices could rocket to $200-
$300 a barrel if the world's top crude exporter Saudi Arabia is
hit by serious political unrest, former Saudi oil minister
Sheikh Zaki Yamani said on Tuesday.
Yamani said he saw no immediate sign of further trouble
following protests last month calling for political reforms but
said that underlying discontent remained unresolved.
"If something happens in Saudi Arabia it will go to $200 to
$300. I don't expect this for the time being, but who would have
expected Tunisia?" Yamani said on the sidelines of a
conference of the Centre for Global Energy Studies (CGES) which
"The political events that took place are there and we don't
expect them to finish. I think there are some surprises on the
horizon," he said in a speech.
Saudi King Abdullah offered $93bn in handouts in March
in an effort to stave off unrest rocking the Arab world.
So far, demonstrations in the Kingdom have been small in
scale and police were able to easily disperse a Shi'ite protest
in the oil-producing eastern province last month.
But Yamani said that the reluctance of people to participate
in popular protests was merely concealing underlying discontent.
"Some people relax about the situation in Saudi Arabia
because the Saudi Islamic brand prohibits people to go to the
street and to talk," he said in a speech.
Oil traded at two-and-a-half-year highs above $121 a barrel
on Tuesday. Libya's rebellion has shut its oil exports,
stoking fears of disruptions in other major producers.
Yamani, responsible for Saudi oil policy from 1962-1986,
famously predicted in 1990 that crude, near $20 at the time,
could rise to $100 a barrel if Iraq's invasion of Kuwait led to
In the event, oil peaked at just $41 because Saudi oilfields
escaped damage in the first Gulf War and it was another 18 years
until oil finally broke the $100 mark.
While some analysts at the CGES conference were sceptical
that protests will break out in Saudi on the same scale as Egypt
or Libya, Jaafar Al Taie, managing director of Manaar Energy
Consulting, said political change in the kingdom was inevitable.
"I don't think that what the King is doing now is sufficient
to prevent an uprising. Saudi Arabia is a time bomb, but one
that is constantly being reset," said Al Taie, whose firm
advises foreign oil firms operating in the region.
Saudi Arabia is the effective leader of the Organization of
Petroleum Exporting Countries and the only country with any
significant spare production capacity.
Riyadh has lifted output to replace some of the lost Libyan
production but many traders and analysts doubt its potential to
expand output further.
Yamani said it was struggling to quickly get extra volumes
of a new grade of the low-sulphur low-density "sweet" crude required by European refiners missing Libyan oil to the market.
"It is not that easy when there is an interruption of the
supply in oil in Libya...We don't forget that Libyan oil is very
light and it's a short-haul. There is a replacement, but not
Leo Drollas, deputy executive director at the CGES, said the
kingdom had provided over half or 550,000 barrels per day of the
extra barrels pumped by Gulf countries to replace lost Libyan
supplies. Kuwait and the UAE have also contributed additional