VIENNA, March 13 (Xinhua) — Since early February, the prices of the Organization of Petroleum Exporting Countries’ (OPEC) basket of 12 crudes have been soaring, up by more than 15 percent, with some saying the price could reach 200 U.S. dollars a barrel.
While former U.S. Federal Reserve Chairman Alan Greenspan considered the Gulf War and the Iraqi War as the causes of the previous two oil crises, the ongoing unrest in some countries in the Arab region are triggering the fear for a third.
OPEC crude oil production meets 40 percent of the global demand, while most OPEC member countries are in North Africa and the Middle East.
OPEC said it has significantly increased crude oil production, and the oil output of its 12 member states in February has reached the highest level since September 2008. Meanwhile, the reduction of oil production in Libya has been compensated by the rising output from Saudi Arabia.
In addition, many countries of the world including the OPEC member states and especially the industrialized countries have currently sufficient reserves of crude oil.
Yet there is no room for complacency, as Saudi Arabia, a major oil producer and exporter, has also witnessed demonstrations in recent days.
According to estimates of the International Energy Agency (IEA), Saudi Arabia’s crude oil output accounts for 11.6 percent of world production, and its spare capacity equals about 60 percent of that of the entire OPEC, or 2.5-3.0 million barrels a day.
Experts say any serious turmoil in Saudi Arabia would definitely have a great impact on the global oil supply.
Calling the recent developments in those unrest-hit Arab countries a “domino” effect, Ronald Stoeferle, economic expert of Austria’s Erste Bank, said the situation “will not soon return to stability.”
The situations in North Africa have a particular influence on the energy supply to the European Union (EU), as 16 percent of natural gas of 15 EU countries is offered by the Middle East and North Africa. Spain and Italy are extremely dependent, with 55 percent and 43 percent, respectively.
Also, although the Libyan crude oil output only has a small share in the world market, the impact of a possible production pause cannot be underestimated.
Figures show that among Libya’s 14 export destinations, 11 are European countries. Libya’s oil exports to Italy, Ireland and Austria account for more than one-fifth of their total crude oil imports.
Additionally, it is hard for the increase in Saudi Arabia’s production to totally ease the negative impact on energy supplies to Europe, given its less favorable oil quality and some geographical reasons.
But not all experts are pessimistic. Anas Alhajji, chief economist of the energy investment company Energy Capital believed that oil price would drop significantly after the situation of Libya and other parts of the Middle East becomes stabilized.
“When there is no reason for a continual rise in oil prices, the speculators will be out of the market,” Alhajji said.
At present, it is widely believed that OPEC and the world’s oil reserves remain sufficient till the beginning of April.
Therefore, so long as no other turbulence occurs in the major oil-producing countries, the international oil prices are unlikely to surge again.
Meanwhile, some experts hold that the destructive 9-magnitude earthquake on Friday that hit Japan, the world’s third largest oil consumer, may cool down international crude oil speculation.
Institutions like the German bank Commertzbank said the earthquake would reduce their oil consumption at least for a short term.