As crude prices skyrocketed over the week on fears that tensions in the Middle East might result in a supply disruption, sources said on October 13th that Saudi Arabia has no plans to suspend its crude exports.
Some traders had worried that escalating violence between Israelis and Palestinians, as well as Washington’s unquestioning support of Israel, might lead to another oil embargo, but insiders have suggested that Saudi Arabia, the world’s largest oil producer and a major supplier of crude to the U.S., had not seriously considered the subject of halting or decreasing exports to the U.S. “Nobody is talking about this at all. It is not an item on the agenda,” said a source familiar with Saudi thinking.
Sources also say that Iraqi Vice President Taha Ramadan’s statement after the Caracas summit on September 28th that his country would not hold back supplies from world markets still stands. U.S. Secretary of Energy Bill Richardson said on October 13th that: “We have no reason to believe that OPEC governments will cut production.”
Richardson also indicated that several major U.S. oil companies have voluntarily agreed not to export heating oil with domestic supplies for the coming winter at low levels. The companies include Amerada Hess, Equiva Trading, Motiva Enterprises and Royal Dutch/Shell.
As Richardson and others sought to reassure markets that world supplies would not be disrupted, European Union (E.U.) leaders meeting in Biarritz, France expressed support for peace talks in the Middle East and called for a dialogue with oil producers to stabilize markets.
E.U. members would like to see a joint declaration targeting “stable and reasonable” prices at the November 17-19th meeting of oil producers and consumers in Riyadh.