Kuwait ready to hike output to meet any market shortfall
Kuwait is ready to pump more oil into the market to help make up any shortfall in supply caused by Iraq's decision to halt its crude exports, Foreign Minister Sheikh Sabah al-Ahmad al-Sabah said Tuesday.
"Iraq can halt its exports as it wishes. But we have a responsibility towards the world. If OPEC reaches an agreement (to hike output), Kuwait will be a part of it," Sheikh Sabah told reporters in parliament.
"Kuwait is not capable of compensating the shortage, but OPEC (Organisation of Petroleum Exporting Countries) is," said Sheikh Sabah, who is also chairman of Kuwait's highest oil body, the Supreme Petroleum Council (SPC).
Oil Minister Sheikh Saud Nasser al-Sabah said Monday Kuwait saw no need to hike oil production despite the Iraqi decision because the market was already saturated.
But Sheikh Saud did say "Kuwait, Saudi Arabia and the United Arab Emirates are capable of pumping enough crude oil to compensate for any shortage" on the market.
Iraq halted crude exports on December 1, effectively taking 2.4 million barrels per day (bpd) off the market, following a pricing row with the United Nations.
Iraqi officials are demanding that buyers for their crude pay a surcharge of 50 US cents per barrel from December, and that the extra money be paid to banks not controlled by the United Nations.
Under the UN-supervised oil-for-food programme initiated in 1996, Iraq is authorised to export crude in return for imports of essential goods, while surplus revenues are held in an escrow BNP-Paribas account in New York.
On Tuesday, Baghdad resumed pumping crude oil to a southern Turkish port but not for export, a spokeswoman for Turkey's state-run oil and gas company BOTAS said.
The current production capacity of Kuwait, which sits on 10 percent of world's reserves, stands at between 2.2 and 2.3 million bpd, but will increase to 2.6 million bpd in the first quarter of next year, Sheikh Saud has said.
Despite the Iraqi move the price of oil moved below 30 dollars a barrel on Tuesday, to levels last seen almost four months ago, as the market began to believe that there will be enough crude available to satisfy demand this winter.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)