Indonesia says OPEC losing control of oil prices due to Mideast conflictadmin
OPEC has lost control of rising oil prices and they could hit 80 usd per barrel due to geopolitical concerns sparked by the crisis in the Middle East, an Indonesian official said here.
Maizar Rahman, designated as Indonesia’s governor at OPEC, said the current high oil prices are mainly driven by tensions in the Middle East, home to nearly 80 pct of global oil resources.
‘Oil prices are high mainly due to geopolitical factors. The market sees geopolitical factors which can cause disruption of the oil supply,’ Rahman said.
These include the ongoing violence between Israel and Hezbollah militants in Lebanon, Iran’s nuclear standoff with the West and worsening sectarian violence in Iraq, the governor said.
‘The problem is not a shortage of oil. The problem is the fear of oil supply disruption due to geopolitical factors,’ he said.
He said oil could hit 80 usd a barrel ‘if the situation in the Middle East remains the same.’
Oil prices are currently around 74 usd.
Asked if the Organization of Petroleum Exporting Countries (OPEC) had lost control over soaring oil prices, Rahman said: ‘Yes’ but he added that OPEC is ready to raise output if the global market calls for an increase.
World oil demand in 2007 is set to increase by 1.3 mln barrels per day (bpd) or 1.5 pct to reach 85.9 mln bpd, according to OPEC.
Rahman was in Vientiane for a meeting of energy giants from the 10-member Association of Southeast Asian Nations (ASEAN).