Newspaper article The Christian Science Monitor
Oil Production Appears Ample for This Winter but Crude from Kuwait, Iraq, and Soviet Union Remains in Doubt. WORLD PETROLEUM MARKET
FIREFIGHTERS should extinguish Kuwait's last blazing wells in less than a month, but only Iraqi President Saddam Hussein can take the heat off the world oil market.
There's enough oil production capacity to get through the cold months, says Cyrus Tahmassebi, chief economist at Ashland Oil Inc. But that could change, he and other analysts warn, if unusually severe weather or a surge in the global economy boosts demand, or if a source fails. The only excess production capacity in the world is in Iraq.
The countries in what used to be called the free world will consume 53.5 million barrels of oil per day (b.p.d.) this winter, Mr. Tahmassebi says. To meet the demand, the 13 members of the Organization of Petroleum Exporting Countries (OPEC) will have to produce 24 million b.p.d. - about what they are pumping now.
Oil traders in the United States, wary of a disruption, have run the price of domestically produced oil up to $24 per barrel lately. "I can see why some people are nervous," Tahmassebi says. He and other analysts are watching three countries:
Kuwait. Last spring the retreating Iraqi Army set fire to 745 oil wells in the Persian Gulf sheikdom. Well-control specialists first predicted that it would take two years or more to snuff them all.
But only nine months will be required because the government of Kuwait "spared no expense," says John Burton of Wild Well Control in Houston. The Kuwaitis deployed 28 teams of firefighters from North America, Europe, and even Iran and China.
Fewer than 100 wells are still burning, and those will be put out by Nov. 20, Mr. Burton says.
But much cleanup and repair work must be done to restore Kuwait's former production capacity of 3 million b.p.d. Kuwait is producing up to 400,000 b.p.d. now, Tahmassebi says. That figure could double by the end of 1992, but little increase will be seen over the winter.
The Soviet Union. Oil analysts have been concerned that economic and political disintegration would disrupt Soviet petroleum exports this winter.
The economic treaty signed by eight of the remaining 12 Soviet republics might help stabilize the situation there, says Robert Ebel, an expert on Soviet oil with Enserch Corporation. But he warns that the treaty is vague. "We've been through these kinds of economic agreements before and they've fallen apart" when the details were tackled. …