Asia vulnerable to oil supply disruptions: IEE
Asia vulnerable to oil supply disruptions: IEE
TOKYO (Reuters): Energy-hungry Asian countries remain
vulnerable to possible oil supply disruptions with their
stockpile levels far less than those in developed nations, an
energy think tank said yesterday.
"Most Asian countries have little more than running stocks
held by refiners when it comes to oil stockpiles, let alone
national strategic stockpiles," said Ken Koyama, senior economist
at the Institute of Energy Economics (IEE).
Koyama spoke to reporters regarding a recent IEE study on
energy security in seven Asian economies: China, South Korea,
Taiwan, Singapore, Thailand, the Philippines and Indonesia.
Among the seven nations, South Korea is the only one holding
national stockpiles, while China and Singapore do not even
require oil firms to maintain a certain amount of stocks for
emergencies, he said.
Stockpiles in China are estimated to cover only 20 days of
domestic demand, the lowest level among the seven countries.
The oil stockpiles of member nations of the Organization for
Economic Cooperation and Development (OECD) on average cover 89
days of domestic consumption.
Taiwan and South Korea maintain relatively high stock levels,
reflecting concerns over energy security amid ongoing tensions
with neighboring countries, Koyama said.
Taiwan maintains oil stockpiles covering 60 days, while South
Korea's stockpiles, including both national stockpiles and those
held by oil firms, amount to 53 days of domestic consumption.
Oil stocks in Indonesia, Singapore and Thailand total 34, 35
and 36 days of consumption, respectively, while the Philippines
holds a 50-day supply of oil stocks, he said.
Japan, which imports more than 99 percent of its domestic
crude oil needs, keeps about a 156-day oil stockpile, equally
divided between national stockpiles and private stocks held by
oil firms.
Although Asia is one of the world's fastest growing areas in
terms of oil demand, oil production in the region has been
stable, raising its dependence on oil imports from the Middle
East.
London
Meanwhile, oil markets opened higher in nervous early trade in
London yesterday after the United Nations Security Council late
on Wednesday condemned Iraq's decision to bar Americans from U.N.
weapons inspections teams.
Warning of "serious consequences" the 15-member Council late
on Wednesday demanded that Iraq cooperate fully with the U.N.
special commission (UNSCOM) set up after the Gulf War to
eliminate Iraqi weaponry.
London December futures for benchmark Brent blend opened 16
cents higher at $19.94 a barrel.
The U.N. warning followed an ultimatum from Baghdad giving
Americans in the U.N. arms team in Iraq a week to leave the
country.
UNSCOM immediately suspended all field operations in the
country, such as inspecting sites, but continued other duties.
The escalating tension triggered renewed concerns among oil
dealers that Baghdad might decide not to renew crude exports
under the U.N.'s oil-for-food exchange when the deal comes up
review in December.
Oil traders and analysts remained skeptical and feared
escalating tensions might put a halt to the oil sale program.
"At the moment the chances are the oil-for-food deal will get
renewed," said Mehdi Varzi, oil analyst at Dresdner Kleinwort
Benson Securities in London.
At stake for world oil markets are about a million barrels
daily of Iraqi sales in the special oil-for-food arrangement
aimed at getting food and medicine to Iraq's poor.
Amid booming oil winter demand a reduction in supply of that
stature could send crude spiraling, even though Western stocks of
oil are comfortable, dealers said.
"That would be serious for the market and could lead to a rise
of $2 or $3 a barrel," said oil analyst John Toalster at Societe
Generale in London.