Saudi Arabia renewed an assurance on Saturday that it would take steps to calm world oil markets one day after Iraqi crude exports ground to a halt over Baghdad's insistence on a buyers' surcharge.
Saudi Arabian oil minister Ali Al Naimi said his country was evaluating the impact of Iraq's decision to halt oil exports and would consider collective action to safeguard market stability.
“The kingdom is currently discussing the situation in the oil market with OPEC states and the International Energy Agency (IEA),” Naimi told the official Saudi Press Agency.
“In case we are assured of a stoppage of supplies then these consultations will develop into a clear and practical position which would ensure the stability of the oil market.”
Iraqi oil exports dried up on Friday after Baghdad insisted that buyers of its crude pay a surcharge outside the terms of the United Nations oil-for-food programme.
Buyers said Iraq had insisted customers pay a 50-cent surcharge for December oil direct to an Iraqi bank account, in contravention of United Nations sanctions imposed for its 1990 invasion of Kuwait.
Iraq blamed the UN for the stoppage, saying the world body's rejection of Baghdad's proposals for December oil pricing had prevented customers from loading.
The UN earlier this week rejected Iraq's proposal for December price formulas. Traders said the prices were placed low enough to make room for a 50-cent surcharge.
UN rules mean Iraqi oil sale revenues go straight into an escrow account in New York where Iraqi purchases of humanitarian goods must be approved by a UN sanctions committee.
Naimi said the kingdom, together with all oil-producing countries, seek to distance oil markets from non-economic factors to avoid “harmful volatility.”
“Our aim is to distance non-economic effects from the oil trade, to ensure the continuity of oil as a basic source of energy and to boost international demand year after year,” Naimi said.
“Prices that are not linked to economic basics are not in the interest of oil producers who rely on oil as a basic source of revenue,” he added.
( Jordan Times )
© 2000 Mena Report (www.menareport.com)