Indonesia rejects proposed oil embargo against U.S.
Indonesia rejects proposed oil embargo against U.S.
A'an Suryana
The Jakarta Post
Singapore
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said on Friday Indonesia would reject any attempt to use oil as a
"weapon" to prevent a possible war in Iraq, an issue which came
up during an informal meeting of the Organization of the Islamic
Conference (OIC) in Kuala Lumpur this week.
"Such a move would be difficult to carry out," Purnomo said
after inspecting an Indonesian oil and gas drilling rig being
built for PT Apexindo Pratama Duta in Singapore.
He said the members of the Organization of Petroleum Exporting
Countries (OPEC), most of whom also are members of the OIC, only
represented some 40 percent the world's oil producers.
He said other oil producers could boost their supplies in the
international market to fill any gap caused by an oil embargo
against the U.S. and its allies.
He added that an embargo also would be costly and jack up oil
prices, which in turn would negatively affect OIC members who are
oil importers.
The remarks come in the wake of Wednesday's call by Malaysian
Prime Minister Mahathir Mohamad for Muslim states to at least
consider using oil prices as a "weapon" to force a peaceful
resolution to the Iraq crisis.
Meanwhile, when asked if the government would impose a price
cap on domestic fuel prices to avoid short-term shock in the wake
of a possible war in Iraq, Purnomo said such measures were
unlikely.
A war in Iraq would disrupt oil exports in the international
market, and thus could boost oil prices. As a consequence, the
price of fuel in Indonesia could also jump.
But Purnomo said this scenario was unlikely because Saudi
Arabia and other countries would increase their supplies if the
Iraqi oil supply was interrupted by war.
Separately, the Financial Times quoted Saudi Arabia's oil
minister as saying the country could pump an extra 2.5 million
barrels of crude oil a day if a Gulf war interrupted Iraq's
exports.
Minister Ali al-Nuaimi said his country was currently
producing no more than between 8.0 million and 8.1 million
barrels per day against its 10.5 million barrel per day capacity.
But al-Nuaimi scoffed at suggestions that output curbs by
members of OPEC had contributed to the recent rise in oil prices,
which on Thursday surged to their highest level in more than 12
years in New York.
"Current inflated prices have nothing to do with a shortage of
supply, but everything to do with the uncertainty arising out of
a possible war and its consequences," al-Nuaimi was quoted as
saying.
Many analysts believe the kingdom's current output is probably
closer to nine million barrels of oil per day.