OPEC supply cushion offsets Iran oil worry -Kuwait
OPEC's spare capacity would lessen the impact on oil prices of any disruption to Iran's oil supply if the dispute over Tehran's nuclear programme escalates, a Kuwaiti OPEC delegate said in a newspaper column, Reuters reported.
Iran is the world's fifth-largest oil exporter and is locked in a dispute with Western powers, which suspect Tehran aims to develop weapons rather than just nuclear power. Tehran says its objectives are peaceful.
The nuclear dispute is supporting oil prices [O/R]. The potential for escalation is among factors that could affect the market in the near future, Mohammed al-Shatti said in a column for Kuwait's al-Rai newspaper on Wednesday.
"But the presence of OPEC spare capacity of above 5 million barrels per day (bpd) would lessen the negative effect on the prices if any cut happened to oil supplies from Iran," Shatti wrote.
A combination of a sharp fall in demand due to recession and the completion by top OPEC exporter Saudi Arabia of crude capacity expansion has left the producer group with the largest supply cushion in years.
Saudi Arabia alone has around 4 million barrels per day of capacity idle, more than enough to cover for any disruption of Iran's exports of around 2.1 million bpd.
The United States is weighing more sanctions against Iran as it and France, Britain, Germany, Russia and China prepare to meet Iran on Thursday. Possible measures include targeting firms that supply fuel to Iran, rather than disrupting Iran's oil exports.