Oil prices to stay high 'for some time': ex-Saudi minister Yamani

London (Platts)--23Mar2006

Oil prices will remain high "for some time" until major consuming
countries reduce their dependence on oil, in particular from the Middle East,
former Saudi oil minister Zaki Yamani said Thursday.
"Prices will remain high for some time until major consumers are
independent of oil, especially that oil from the Gulf area," Yamani told a
London conference hosted by the Centre for Global Energy Studies, of which he
is chairman.
International oil prices, which fell to single digits just seven years
ago in 1999, are currently trading around $62/barrel, but reached an all-time
high $70.85/barrel in late August as Hurricane Katrina hit the US. A number of
factors have kept a floor under prices. These include the loss of more than
600,000 b/d of quality Nigerian crude production as a result of sabotage by
Niger Delta militants, the limited volume of surplus production capacity to
act as a buffer in the event of future supply loss, and concern that an
escalation of the international dispute over Iran's nuclear program could see
Iranian oil supplies disrupted.
"It's a frightening situation in Iran, and a I hope an attack doesn't
happen," Yamani said.
The West is convinced that Iran is working on a covert nuclear weapons
program, a charge denied by Iran. But the case has been referred to the UN
Security Council which could impose sanctions.
Indeed, Britain's Times newspaper said Wednesday that the UK was pushing
for a UN resolution that would open the way for sanctions and even the use of
force if Iran were to refuse to halt its nuclear program.
"There has never been so much politics involved in oil as there is now,"
Yamani said.

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