Oil-producing nations in the Middle East and Africa said current crude prices at $125 a barrel are “high” as a result of international political tensions.
Crude prices are “on the high side,” Mohamed Al-Hamli, oil minister in the United Arab Emirates, said today in Kuwait at a meeting of the International Energy Forum. International politics are pushing up oil prices, Angolan Oil Minister Jose Maria Botelho de Vasconcelos said. His country would prefer to see Brent oil at $110 to $115 a barrel, he told reporters as he arrived in Kuwait.
Brent crude has gained 17 percent this year in London to more than $125 a barrel, mainly on concern that a conflict involving Iran may choke off exports from the Persian Gulf and limit market supplies. Oil surged last year after a revolution in Libya stopped exports from the North African country.
The IEF is a gathering that takes place every two years where government and company officials from producing and consuming nations meet to discuss issues that will determine future supply and demand in the global market. Oil-consuming nations are trying to sustain growth in the face of rising crude price, while producers seek to supply at a price that will balance their national budgets without hurting demand.
Strait of Hormuz
Iran is seeking outlets for its oil after U.S. and European sanctions cut off transactions with the country’s banking system to pressure the Islamic republic into reining in its nuclear program. The country has threatened to shut the Strait of Hormuz, a transit point for a fifth of oil traded worldwide, if sanctions are imposed on its crude exports.
State-run Kuwait Petroleum Corp. has a contingency plan if the strait is closed, Chief Executive Officer Farouk Al-Zanki said today in Kuwait, without providing details. Demand for the company’s crude oil “still looks good,” he said.
Prices are “a bit high” and should be at $100 a barrel, Mohammed Al-Rumhy, Oman’s oil minister, said in an interview at the IEF. The sultanate will produce an average 900,000 barrels a day of crude and condensate this year, little changed from the end of last year, he said.
Kuwait pumped about 3 million barrels of oil and condensates a day last month, Al-Zinki said. The U.A.E. produced 2.6 million barrels of oil a day in February, Al-Hamli told reporters. Angola is currently producing 1.7 million barrels of oil a day, according to Botelho de Vasconcelos.
Members of the Organization of Petroleum Exporting Countries boosted supplies last year during the Libyan conflict to meet demand. The 12 members of OPEC, which pumps 40 percent of the world’s oil, are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.