Posted on 04/08/2002 6:44:26 AM PDT by Cincinatus' Wife
LONDON (Reuters) - World oil prices soared on Monday when Iraq announced an immediate suspension of oil exports in protest at Israel's incursion into Palestinian controlled areas of the West Bank.
The news prompted a frenzy of buying by traders who already feared a halt in shipments from the world's No. 4 crude exporter Venezuela.
International benchmark Brent crude oil jumped $1.01 to $27.00 per barrel by midday in London, resuming an assault on a six-month high of $28.15 seen last week.
U.S. crude futures rose 73 cents to $26.94.
Iraqi leader Saddam Hussein said all oil exports were suspended from Monday for a month or until Israel withdrew unconditionally.
Israeli Prime Minister Ariel Sharon vowed to press ahead with its sweeping military offensive in defiance of U.S. demands for a withdrawal.
OPEC Secretary-General Ali Rodriguez (Venezuela) said he will consult with cartel oil ministers on Tuesday and the group could hold an emergency meeting to decide policy.
Sanctions-bound Iraq is the sixth largest oil supplier to the United States, and ships four percent of world exports. Saddam has already called on other Arab producers to embargo the West for its support of Israel, and Libya has backed the call.
Fellow Gulf oil exporter Iran has said a total blockade by all Islamic states would be very a effective weapon, and supreme leader Ayatollah Ali Khamenei called on Friday for Arab states to launch a one month embargo on the West.
The world's No.1 exporter Saudi Arabia has said it had ample capacity to respond to any major disruption.
Industrialized countries fear high oil prices could damage the nascent economic recovery.
VENEZUELAN CONFUSION
Industry sources said Venezuelan oil loadings were halted at the weekend and oilfield output was already down by half, although the Venezuelan leader insisted on Sunday that production and exports were normal.
Venezuelan state oil company executives are protesting against the government's choice of a new board of directors.
Oil market traders said as many as 25 empty oil tankers were at Venezuelan ports waiting to load on Sunday, and one source said production was already cut by 60 percent.
Venezuela supplies about 15 percent of U.S. oil imports. Latest U.S. government data shows it accounted for about 1.4 million barrels per day of crude imports and another 300,000 bpd of products such as gasoline and diesel.
President Hugo Chavez announced the sacking of seven dissidents from the state oil company on Sunday, labeling them "saboteurs."
The Organization of the Petroleum Exporting Countries has cut production by five million bpd since January 2001 to buoy prices, and in March agreed to extend output restrictions until at least its next meeting in June.
Russia and Norway, which both agreed to join OPEC in crude supply curbs, said on Monday it was too early to reconsider the policy now.
Damn straight, it does.
Heres a thought.......Why doesn't "dubya" come out with a JFK type plan like apollo?
We announce that all these mexicans that want work can have it : in ANWAR!
Build the rigs the infrastructure and use OUR own resources to build our future, while at the same time expanding tax credits for solar and wind power......and yes nuclear power.
We got to the moon in ten years...we can power ourselves in the same amount of time or less!
If it means we sacrifice for a few years so be it....this is war, plant a victory garden tighten your belt and act like Americans.
Yes we did and yes we could, and it would be fun too.
Or, in plain English, 'entrepreneurs' or 'capitalists'........My opinion is that the free market is the most efficient method, you know "the invisible hand?"Another word for scumsuckin' thievin' international oil companies. It's apparent you believe Venezuela's oil belongs to the oil companies, not to Venezuela. Not to worry your pretty little head about it. It's already been decided that if President Chavez doesn't want to go along with this arrangement, he can have a tragic fatal "accident", and a president more in keeping with the wishes of big oil will be brought in in his place.
PS: My head's not to purty anyway...
:O)
It seems to me that if Venezuela is going to allow the oil companies to expend their capital to drill these oil wells and build all the facilities that go with it, that yes, the oil companies do have a right to that oil. It requires an enormous amount of capital to get an oil well producing and a lot of oil needs to be pumped out before this investment is paid for. If Venezuela has a problem with this, they should have done it themselves. As it stands, I'm sure Venezuela is well compensated by the oil companies for the use of their resources and they apparently didn't even have to put any money up front (I'm just assuming on that last point because if Venezuela had the capital to do it themselves without involving US corporations, they would have done so).
Deal.
Good post. I also believe it is possible to eliminate our dependence on Middle East oil if we commit to it as a nation in the same manner we committed to landing on the moon back in the 1960s. It would be priceless to see the reaction of the Middle East to such a proclamation!
As well, it would be nice for the United States to start paying more attention to its neighbors (like Mexico) and give them a chance to become wealthy nations. Make Mexico successful and our current border/immigration problems with them will be resolved.
Instead, it's due to Mr. Chavez's support for FARC, which has threatened to run terrorist operations against targets in the U.S.
I think part of the pay would be 5 years and you and your "Immediate" family....wife and original kids...are full citizens.
From other post today we are giving enough welfare and banking privledges, plus now state college tuition away....Wouldn't it be a good thing for this generation to know they made a difference?
The oil is in Venezuela and Chavez's government takes the lion's share while the companies do the hard work of getting it out of the ground. It wouldn't do Chavez much good if it sat in the ground.
The clerics have the people at their command while the princes have the money from oil sales.
It wouldn't serve the princes to annoy the clerics. So it is a wait and see situation.
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