The industrialized world should be able to get through the winter with little or no oil supply problems even if the Iranian-Iraqi war goes on for some time, the governing board of the International Energy Agency concluded today at the end of a two-day review of the current outlook.
"Everything looks manageable for now," Assistant Secretary of State Deane Hinton, the U.S. representative at the session, said in an interview.
The agency's executive director, Ulf Lantzke, told a press conference that Iran and Iraq's fellow members of the Organization of Petroleum Exporting Countries are expected to raise their overall production by 1.4 million barrels a day by mid-November and that this, along with a drawdown of industrial nations' record petroleum stocks, should get the consumers through the end of March with minimal difficulties.
Hinton estimated that the total loss in expected oil from Iran and Iraq was about 3.5 million barrels. This estimate indicates that the U.S. government accepts the OPEC view that there was about 2 million barrels of surplus daily production by the oil cartel before the war in the Persian Gulf.
The U.S. representative said that the best current guess is that Iraqi production capacity has not been badly hurt and that the country could return to prewar production levels in one to three months.
Iraq was OPEC's second-largest producer before the war, after Saudi Arabia. It is assumed that about half of the additional 1.4 million barrels from OPEC will be Saudi.
The International Energy Agency decided today to take special measures for Turkey, which has been the country most heavily affected by the conflict since it got most of its oil by pipeline from Iraq. The Turkish stockpile is down to a 30-day supply, compared to 100 days or more in most of the agency's member countries. Hinton, an assistant secretary of state for economic and business affairs, said Turkey is still getting minor amounts of petroleum from Iran.
Among developing countries that do not belong to the agency, the countries that seem to have the worst problems are India, Brazil and Somalia, Hinton said, adding that their problems seem manageable. The agency groups all the major noncommunist industrial countries except France.
Agency officials said so far no effect of the war has been felt in oil supplies on the international market. There is still Iraqi and Iranian oil at sea in tankers.
A key indicator, the state of the spot market for the relatively small amounts of oil not tied up in long-term contracts, also indicates a comfortable situation for the consumers.
Lantzke attributed this to the success of the emergency decision the agency announced Oct. 1, calling on the 20 member-states to use their high stockpiles and to stay away from the psychologically volatile spot market.