Oil embargo 'will not be extended'

 

OPEC sought yesterday to reassure world markets by dismissing fears that Iran and Libya could join Iraq in suspending oil exports but admitted supplies could be affected if the Middle East conflict spread.

"I have been officially informed by Iran and Libya that they will not join the embargo," the cartel's head Mr Ali Rodriguez told reporters at the headquarters in Vienna of the Organisation of Petroleum Exporting Countries (OPEC).

But he added: "Supplies can be affected according to the extension of the conflict" in the Middle East.

Iraq's decision on Monday to suspend crude exports for 30 days in retaliation for Israel's West Bank blitz "will not help the Palestinian cause", an OPEC source said, adding that OPEC remained opposed to "any form of oil embargo".

Iran said on Tuesday that it would halt oil supplies to countries with ties to Israel "at the appropriate time", after Iranian supreme leader Ayatollah Ali Khamenei called on Arab and Muslim oil producers to implement a "symbolic" one-month embargo in support of the Palestinians.

Libya immediately backed Iran's call "on condition that Arab and Islamic crude producers agree to it". Tehran and Tripoli were exporting oil as usual yesterday.

In Paris, US Treasury Secretary Mr Paul O'Neill said yesterday he understood Saudi Arabia to be prepared to make up any shortfall caused by the Iraqi move.

A barrel of Brent North Sea crude for May delivery ticked up 13 US cents to $26.21 in early deals. In New York overnight, the May light sweet crude fell 72 cents to $25.82 a barrel.

But Mr Rodriguez blamed the recent surge in oil prices solely on speculation and fears about the Middle East flare-up, saying that supplies were right to meet demand. - (AFP/Reuters)