UAE Energy Minister Suhail Al Mazroui said today, Wednesday, that he does not expect immediate risks to shipments of oil passing through the Strait of Hormuz, the vital shipping lane for the Strip, after Iran attacked two bases hosting American forces in Iraq. Al Mazroui added, on the sidelines of a conference in Abu Dhabi, that the situation is not a war, and that it should not be overstated about what is happening now.
He continued: "We will not witness a war. This is definitely an escalation between the United States, an ally country, and Iran, which is a neighboring country, and the last thing we want is more tension in the Middle East."
Oil prices rose about 1% today, Wednesday, but they are far behind high levels reached in a frenetic beginning of trading today after missile attacks increased the possibilities of escalating conflict and disrupted crude flows.
Al Mazrouei said that the Organization of Petroleum Exporting Countries (OPEC) will respond to any possible shortage of oil if necessary, but within its "borders", and there is no indication of a shortage in supplies, in light of strong demand and global oil stocks hovering around an average of five years. He said: "We do not expect any shortage of supplies unless there is a catastrophic escalation, which we do not see."
OPEC Secretary-General Mohamed Barkindo stressed during the conference in Abu Dhabi that the Iraqi oil installations are safe and that the production of the second largest producer in OPEC continues. He said that the surplus production capacity of oil amounts to between three million and 3.5 million barrels per day, most of which are in Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries (OPEC). He added that he was confident that leaders in the Middle East were doing everything they could to restore conditions to normal.
He pointed out that the expectations of global demand growth at about one million barrels per day, adding that this "is not strong and is not a cause for concern." When asked about the message he would like to send to US President Donald Trump, Barkindo said during the conference that the emergence of the United States as a major oil and gas producer holds it necessarily a shared responsibility for the stability of energy markets. "The continuing task of OPEC + to keep oil markets stable on a sustainable basis is a shared responsibility of all producers, including the United States," Barkindo added.
He said: "OPEC alone can not bear that responsibility. We invite the United States to join us in this noble goal."