MercoPress. South Atlantic News Agency

OPEC promises to compensate for any oil drop off by unrest in Middle East

Saudi Arabia's Oil Minister Ali Al Naimi in Riyadh

Trying to calm turbulent oil markets, Saudi Arabia's Oil Minister said on Tuesday that the Organisation of the Petroleum Exporting Countries (OPEC) was ready to pump more oil to compensate for any drop-off caused by unrest in the Middle East.

“OPEC is ready to meet any shortage in supply when it happens,” Mr Ali Al Naimi, said at a news conference after an OPEC meeting in Riyadh, Saudi Arabia. “There is concern and fear, but there is no shortage.”

The intensifying turmoil in Libya drove oil prices sharply higher again yesterday. With foreign oil companies in Libya beginning to shut down operations and evacuate workers, oil prices soared to a 2-1/2 year high above 108 US dollars a barrel during Tuesday trading.

Oil experts said traders were driving up prices because over concerns that the instability in the Middle East was just beginning.

With Libya's oil terminals blocked Italy, heavily reliant on energy imports, said it was ready to tap emergency gas stocks if Libyan supplies are interrupted.

Libya is Italy's biggest oil supplier and covers about 10% of its natural gas needs.

Gas moves to Italy from Libya through the underwater pipeline Greenstream, which is controlled by ENI.

“Supplies have not been interrupted, but the situation is very complicated,” Italy's junior minister in charge of energy, Industry Undersecretary Stefano Saglia, told a conference on Tuesday.

Saglia said the security committee for gas supplies had already been alerted in case flows were interrupted, adding that ordinary and strategic stocks would then be used.

“So there should not be a problem,” he added.

Libya pumps about 1.6 million barrels of oil per day (bpd) equal to about 1.9% of daily global output. Its crude oil mostly heads to Europe and is of high quality.

Operations at Libyan oil ports were disrupted by a lack of communications, trade sources said, and flows from marine oil terminals in Libya were halted on Tuesday, an Italian government source said.