The threat of an Arab oil embargo against the United States in
retaliation for its attack on Libya is an empty one, say Oklah
oma-based energy experts.
"In the current world oil glut that's not much of a threat," said
Bill Dutcher, senior vice president with The RAM Group Ltd.
Tuesday, the Organization of Petroleum Exporting Countries refused
to discuss an embargo, reportedly called for by Libya. The 13-nation
cartel did agree to protest the U.S. bombing of Libya, but neither
the attack nor the OPEC meeting appeared to have any effct on
financial markets - including oil prices.
United States imports from Arab nations amount to not more than
500,000 barrels a day, less than 10 percent of all U.S. imports,
Loss of that amount could easily be made up by purchases from
non-OPEC sources such as Canada or Mexico. Non-Arab OPEC countries
like Venezuela are also likely sources, Dutcher said.
Any embargo by Libya itself would be "negligible," Dutcher said.
Since President Reagan imposed economic sanctions on Libya, the U.S.
imports less than 4,000 barrels of Libyan oil a day.
"It probably would not have that much effect on us," agreed John
Spears, analyst with Tulsa-based Spears and Associates.
"There's plenty of oil around and it would not have much affect on
prices," he said. "If they didn't sell it to us, they'd sell it to
"It would all be kind of a wash. Embargos are only influential
when supply and demand are tight.
Conoco Inc., the only Oklahoma-connected oil company with
interests in Libya said Tuesday it had received no indication its
operations would be affected.
Conoco has one-third of a Libyan-based company named OASIS. It is
licensed by the U.S. government to do business in Libya, said Conoco
spokesman John Gehbauer. Since February Conoco has sold about
500,000 barrels of oil, by tanker, to European refiners.
"There has been no indication of any change of attitude on our
operations," Gehbauer said.
Libya production averages about 1 million barrels a day.
- Crude oil futures prices Tuesday closed at $12.70 a barrel,
down 27 cents from Monday's settlement. Traders appeared sceptical
that OPEC will reach an effective agreement to limit
production,according to wire reports.
Saudi King Fahd said in a statement distributed by the official
Saudi news agency that his kingdom was opposed to any cut in
production below the current unofficial OPEC ceiling of 16 million
barrels a day.
- Stock prices were up slightly but the dollar was mixed against
other major curriencies. The bond market was also mixed. …