8 hours ago
Kuwait warned to brace for $100 oil if conflict escalates
KUWAIT CITY, June 22: While the ongoing Israeli-Iranian war has led to a rise in the price of crude oil, several parties expect oil prices to reach $100 if the war escalates and the Strait of Hormuz is closed, but this possibility was ruled out by the experts that the newspaper interviewed recently. Economic expert Salah Al- Jimaz said it is in Iran's interest to continue the passage of oil tankers through the Strait of Hormuz; considering its closure will cause a huge financial loss for Iran, because its tankers pass through the Strait, especially after its oil production in the first quarter of this year reached 3.5 million barrels per day. He pointed out that it is difficult for Iran to sacrifice these revenues, particularly since the current war has cost and will continue to cost it a great deal from the State treasury, and it may suffer an economic decline for several years as a result of the war. He thinks the Iranian-Israeli war could raise oil prices to more than $100 per barrel if Israel targets strategic oil sites or Iranian refineries, or if the Strait of Hormuz is closed.
'However, realistically, Israel and Iran do not want this war to take on economic dimensions that could impact the oil commodity and its prices, because the victims will not only be Iran or Israel, but all other countries throughout the world. If Israel targets Iranian oil sites, this will be a provocation of the entire world,' he explained. He advised the Kuwaiti oil sector to expand oil storage projects near countries that primarily import Kuwaiti oil, especially since the sector has numerous previous experiences in this regard. He stated that in April, the country exported the first shipment of Kuwaiti oil to South Korea under a previous agreement between Kuwait Petroleum Corporation (KPC) and Korea National Oil Company, allowing the storage of four million barrels of Kuwaiti oil.
Moreover, economic expert and former advisor to Chevron Dr. Ali Al- Hababi revealed that oil prices have been gradually rising since the beginning of the Iran-Israel war. He stressed the need to take all precautions in light of the war. He warned that attacking the Iranian Bushehr reactor located in Bandar Abbas, which is overlooking the Gulf, will lead to extremely dangerous water pollution, especially since Kuwait and the rest of the Gulf Cooperation Council (GCC) countries depend on its water. He underscored the importance of expanding Kuwaiti storage facilities, in cooperation with the private sector, to ensure adequate water and food supplies for use in such hot conditions.
He called on the oil sector to take all the necessary measures if the Strait of Hormuz is closed, as such closure will halt Kuwaiti oil supplies to Asian countries. He added the Red Sea is not safe as well, indicating the regional developments will inevitably lead to a huge increase in oil prices as a result of the dependence of most countries -- including Europe -- on Gulf oil. He cited as evidence the role of Saudi Arabia in the 1973 War when King Faisal made his historic decision to ban the export of oil in the heat of that war, which led to the cessation of the use of cars in Europe and made the residents of European countries return to riding bicycles.
