Kuwait refutes oil embargo notions

The oil rich nation rebuffs Malaysian suggestions of Islamic oil embargo as a means of changing US-UK stance on Iraq.

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By  John Irish Published  February 27, 2003

Kuwait strongly opposed any suggestions last night (February 27) that members of the Organization of Petroleum Exporting Countries (OPEC) should consider using oil as a weapon to influence the US-UK position on Iraq.

In a statement to the state-run Kuwaiti News Agency (KUNA), the acting Kuwaiti Oil Minister, Ahmed Al Fahad Al Sabah, responded to earlier calls by the outspoken Malaysian Prime Minister, Mahathir Mohamad that an oil embargo could be considered as a way of exerting pressure on the West.

“For us, oil is an economic tool and it’s not a weapon. Kuwait pumps oil in accordance with our OPEC quota to assist the world economy, which is witnessing a slowdown since the September 11 attacks,” said Al Sabah. “Using oil as a weapon would have serious consequences on importers and producers on the political, economic and social side,”

Sabah’s comments followed a special meeting held by the Organisation of Islamic Conference (OIC), where the 49 OIC members discussed the current situation in the Gulf.

The Malaysian PM, speaking at the end of the meeting insisted, however, that no decision had been reached on the idea and that further discussions on the subject would be held at an OIC emergency summit scheduled next week in Doha, Qatar.

“There has been a suggestion that we look at using our oil wells in order to exert pressure. How this can be done is something else, but there is a consensus as to the need for us to think about these things,” said Mohamad.

The Malaysian viewpoint will not help in calming the oil markets, which are already nervous about the prospect of losing the dominant Middle East output in the event of a US led attack on Iraq.

The price of Brent crude was up 58 cents to $32.85 a barrel and US light crude 65 cents higher at $36.23 on Tuesday. On the New York Mercantile Exchange, the front-month April crude oil futures contract climbed about 5% to $37.93 a barrel, which exceeded the post-Gulf War high of $37.80 a barrel in September 2000.

Analysts are forecasting that a second war in the Persian Gulf could take prices above the $41.15 a barrel high set in October 1990, after Iraq’s invasion of Kuwait.

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