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Oil prices rise on fears of attacks on Iraqi resources

Oil prices rose yesterday after the foiled weekend attempts to bomb Iraq's key Basra crude export terminal revived fears of more attacks on the country's oil infrastructure.

Iraqi Oil Minister Mohammad Bahr al-Uloum said yesterday exports resumed on Sunday from the terminal in southern Iraq, which handles about 85 percent of the country's daily exports of some 1.9 million barrels.

US light crude hit an early peak at US$36.89 a barrel, but eased to US$36.68 by 0636 GMT, a rise of US$0.22. London's Brent crude climbed US$0.27 to US$33.36 a barrel.

Suicide bombers launched three boat attacks on Saturday on the Basra oil terminal but were stopped by US-led coalition forces without damaging the facilities, which are about 10km offshore.

"Iraqi teams restored operations at 1700 GMT on Sunday. The damage was limited and exports are flowing back at the same rates," Uloum said.

He said living quarters, several electrical generators and minor installations sustained damage in the attempted bombings.

"This is a significant development in Iraq, the terminal is well guarded but the next targets will probably be the pipelines or tankers. There will be persistent attempts to disrupt Iraqi oil supplies in the next four weeks," said an oil broker.

Oil traders are nervous that any escalation in violence in the Middle East may disrupt oil supplies from the region, which holds two-thirds of global reserves.

"Security concerns look set to remain high, not helped by recent events in Madrid and in the Middle East itself," Standard Chartered Bank said in an overview this month of the oil markets referring to the bombings of four commuter trains in Madrid last month that killed almost 200 people.

Kuwait, also a major oil exporter, said at the weekend it had increased security across the country following a suicide bombing in the Saudi capital Riyadh last week and the surge in violence in Iraq between US-led forces and insurgents.

Security has also been beefed up in the oil-producing Niger delta in Nigeria after two US oil workers and at least four Nigerians were killed by armed militants in a botched robbery attempt.
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