Iran referral to UN would raise oil prices: Libya, Venezuela





By Zoltan Simon
AFP
VIENNA
Petroleumworld.com 02 01 06

OPEC members Libya and Venezuela warned on Tuesday that oil prices would rise even higher if Iran was referred to the United Nations Security Council over its nuclear programme.

OPEC president Edmund Daukoru, while emphasising that the nuclear issue has nothing to do with the cartel, also cautioned: "If not well handled it could have repercussions" on the oil market.

The comments came after foreign ministers of the five permanent Security Council members agreed overnight to take Iran's nuclear case to New York.

A referral is likely to come at an emergency meeting of the International Atomic Energy Agency, which begins on Thursday. Venezuela and Libya are two of four OPEC members which are on the IAEA board of governors.

When asked on the sidelines of an OPEC meeting in Vienna what the impact would be of such a referral, Libyan Energy Secretary Fathi Hamed bin Shatwan said: a "very big effect".

His Venezuelan counterpart Rafael Ramirez agreed, saying: "If the pressure over Iran continues, the price will be higher."

A recent spike in the price of crude was caused by problems over Iran, Nigeria and Iraq rather than by fundamental conditions in the market, Shatwan continued.

"So all this problem now start(s) (to) effect the market very highly. Everybody's frightened that something will happen, and wants to secure supply. So that's why prices are going high," the minister said.

Despite the drama over Iran -- OPEC's second biggest producer -- Qatar's Energy Minister Abullah bin Hamad al-Attiyah said the nuclear issue was not discussed at Tuesday's meeting in which the cartel decided to keep its production ceiling at 28 million barrels a day.

The decision by the 11-nation Organisation of the Petroleum Exporting Countries had been widely expected.

Shatwan doubted that the OPEC move would have any impact on the market.
"It's just keeping everything as it is. As we know, the problem of high price is not due to fundamentals, but due to problems in Iran and Nigeria and others," he said, in comments made before the meeting started.

OPEC is actually producing more than 29 million barrels per day including output from Iraq, which is not included in the official quota.

But its members have limited room to increase output, with only Saudi Arabia able to pump significantly more oil. OPEC would struggle to compensate for any interruption in output from Iran or Nigeria.

Recent concerns about the two countries -- Iran's nuclear rift with the West and a string of attacks against Nigeria's oil installations -- have led to a three-dollar rise in the price of a barrel of crude.

Traders fear that Iran may use its energy weapon -- namely a threat to halt oil exports -- against the industrialised world in the face of possible sanctions.

World oil prices opened lower in New York after the OPEC meeting, with light sweet crude for delivery in March down 35 cents at 68.00 dollars per barrel.

AFP 01/31/06

Copyright © 2006 OPEC AFP. All rights reserved

 

 

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