Iraq Talk Overshadows Oil Summit
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RIO DE JANEIRO, Brazil, (AP) _ At the Kuwaiti stand at the World Petroleum Congress, smiling women in flowing Middle Eastern gowns greet international oil executives in a faux desert setting.
Blond wood floors hint at faraway sands, potted ferns suggest a desert oasis and Arabic music flutters from loudspeakers as businessmen for the Kuwait Petroleum Corp. dole out literature and gush with enthusiasm about drilling for oil _ until talk turns to Iraq.
Iraq, it seems, is the one subject prompting jitters at the world’s biggest gathering of oil executives in Rio de Janeiro, Brazil.
``No one here will talk about Iraq!″ snapped one Kuwaiti executive, signaling it was taboo to comment publicly on the Bush administration’s rising vitriol against Saddam Hussein.
In private, however, U.S.-Iraq relations are dominating this 59-nation gathering as President Bush gets set to argue his case next week against the Iraqi dictator before the U.N. General Assembly.
Many oil experts recalled how the Persian Gulf War saw crude prices shoot up to $41 a barrel, albeit briefly, translating into higher prices at the pump and for home heating oil. They wonder again about prices today.
``Nobody wants war,″ said Yusuf Baba, a Nigerian oil executive. ``This would be an unnecessary conflict.″
``Going by previous wars, including the Gulf War, oil prices may rise and that will have a global effect,″ warned Baba. ``Maybe interest rates will go up and the cost of living in the developed world will go up.″
Saudi Arabian producers, who sit on a fourth of the world’s proven reserves, sought to reassure this conference Tuesday that they can ratchet up oil production come what may.
``We have experience from the Iran-Iraq war, the Iranian revolution, and during the Iraqi invasion of Kuwait,″ said Abdallah Jum’ah, chief executive officer of the oil giant Saudi Aramco, adding producers have weathered many a Mideast crisis.
He said Saudi Arabia, now producing 7 million barrels a day, could up the output by 3 million barrels daily if needed.
``During those (past) crises we put more oil in the market than required,″ said Jum’Ah. ``So, yes, we are confident.″
Others aren’t so sure.
Oil prices recently hit $30 a barrel over U.S. talk of war against Iraq. The benchmark West Texas Intermediate, a sweet crude oil, traded Wednesday on the futures market at $28.27.
Many here hope the bellicose talk will pass.
``We hope for a peaceful solution,″ said Chen Zubi, a Chinese oil executive, who hoped United Nations intervention would keep the United States from ``acting alone.″
Claude Mandil, chairman of the French oil research group Institut Francais du Petrole, said any conflict _ if limited only to Iraq _ would probably be taken in stride by world oil producers.
``If the problems lie uniquely with Iraq, probably more oil is available than in 1990,″ he said, adding there’s a big unknown. ``If any conflict were more dispersed through the Middle East, the situation would be quite different.″
But Carlos Augusto Pereira, of Brazil’s federal oil giant Petrobras said he expected any price volatility would be shorter in the event of hostilities.
``I guess at the beginning prices would rise, but that would depend on how long and how difficult any military action might last,″ Pereira said. ``But I don’t feel a war as an isolated event will determine the price of oil.″
He said global economic conditions, exploration decisions by companies and other factors would ultimately settle long-term prices.
Still, retired Brazilian oil executive Aldo Zucca sounded worried: ``If you start some action, you don’t know how it will finish. It’s dangerous.″
Konstantin Efimov, a Russian whose company cleans up oil spills, warned of other costs of conflict _ not just the price of a barrel of crude oil.
``In Kuwait you had heavy damage to oil facilities,″ he said in Russian-accented English, noting the millions of dollars in cleanup costs that followed the Persian Gulf War. ``What about the cleanup?″