The energy minister of the United Arab Emirates said on Wednesday he saw no immediate risk to oil travelling through the vital gateway of the Strait of Hormuz after Iran attacked bases hosting United States‘ forces in Iraq.
The situation is not a war, and what is happening now should not be exaggerated, Suhail al-Mazrouei said on the sidelines of a conference in Abu Dhabi, the UAE capital.
“We will not see a war,” he added. “This is definitely an escalation between the US, which is an ally, and Iran, which is a neighbour, and the last thing we want is more tension in the Middle East.”
Al-Mazrouei said he saw no situation that would provoke a fear of supply shortages, with demand healthy and global oil inventories hovering near the five-year average.
The Organization of the Petroleum Exporting Countries (OPEC) would respond to any possible oil shortages if necessary, but it also had “limitations”, he said.
“We can’t replace any quantity with the spare capacity we have.”
Al-Mazrouei stressed that he did not forecast any shortage unless the situation changed.
“We are not forecasting any shortage of supply unless there is a catastrophic escalation, which we don’t see.”
At the same conference, OPEC Secretary-General Mohammed Barkindo said Iraqi oil facilities are secured and the country’s production is continuing.
“It’s a big relief that the facilities continue to be secured in Iraq, the production is continuing and effective,” Barkindo said.
He added that he was optimistic Iraq would reach 100 percent compliance with OPEC cuts in time, despite current tensions.
In a message to US President Donald Trump, Barkindo said OPEC alone could not shoulder the responsibility of maintaining a stable oil market.