LONDON Ñ For the first time, Saudi Arabia has warned that a U.S.
attack on Iraq will result in higher oil prices.
Saudi Oil Minister Ali Al Naimi told the London-based Al Hayat daily on
Friday that oil supplies would not be significantly disrupted by any war on
Iraq. But Al Naimi warned that rumors within the oil industry would lead to
panic buying and sharply higher prices.
The Saudi minister, speaking to the Saudi-owned daily from Osaka, said a
price of $25 for a barrel of oil was reasonable. Oil has been hovering
around the $30 a barrel mark.
On Thursday, OPEC oil ministers ended a meeting in Japan and decided to
maintain current oil production quotas of 21.7 million barrels a day.
Industry sources said OPEC members have exceeded that quota by two million
barrels.
Meanwhile, Russia plans to launch an effort to explore and develop
oil reserves in northern Iraq.
A Russian oil team will arrive next week to begin preparations for the
prospecting of oil near the area of Kirkuk, industry sources said. They said
the project is part of a major oil cooperation effort between the two
countries.
On Thursday, the Iraqi government weekly Al Zawra reported that Russian
engineers will arrive by October in Baghdad. The newspaper said Russia and
Iraq have agreed on cooperation for the exploration and development of oil
and natural gas reserves as well as the expansion of Iraq's petrochemical
industry.
Russia has been a leading backer of Iraq's efforts to end United Nations
sanctions. Russian officials said Moscow and Baghdad have been negotiating a
huge oil cooperation deal estimated at between $10 billion and $40 billion.
