Powerful energy watchdog the International Energy Agency will not order the release of emergency oil reserves if a war on Iraq stops only Iraqi exports, the head of the IEA said on yesterday.
"No, I don't think so, no, because we have had such an erratic performance in output from Iraq," IEA Executive Director Robert Priddle said in an interview.
The comments may raise eyebrows among oil traders who already are pricing a large war premium into US$30-a-barrel crude, for fear of a US military effort to oust Iraqi leader Saddam Hussein.
Iraqi supplies under the UNs oil-for-food programme have slipped this year to below a million barrels a day (bpd)
from 1.7 million bpd last year. But sales are just beginning to pick up again because Western majors are signing direct contracts for the first time in two years.
Outside the UN program Baghdad also ships up to 400,000 bpd to neighboring countries.
Its total deliveries account for about three percent of world oil trade.
Priddle also said the Paris-based agency would not order an emergency release of stocks held by its 26 industrialized member nations just to quell an oil price spike.
"We would not act simply to prick a price bubble. We would need clear evidence of an impending loss of supply," he said in the interview on the sidelines of the International Energy Forum of producer and consumer nations.
Set up in 1974 to protect energy security in the West after the Arab oil embargo, the IEA requires member countries to hold at least 90 days of inventory in case of serious supply disruption.
But its rules forbid it from intervening in the market to quell prices.
It last released stocks after Iraq's invasion of Kuwait in August, 1990 that hit some three milllion bpd of exports.
Fears are that a US attack could see Saddam retaliate against Saudi or Kuwaiti oilfields, a scenario that might well prove enough for IEA action.
Some IEA member countries are showing signs of discontent with the agency's strategy. A few EU nations want to add another 30 days of stocks and trigger an inventory release when prices go too high.
The European Commission, which drafts legislation for the EU, says it will propose the use of increased stocks to control prices. The plan may face heavyweight opposition from Britain, Germany and France.
Priddle called the idea "absurd."
He said that in the event of war the IEA expected OPEC to act first to control prices that already are near the top of the group's US$22 to US$28 target band for an index of its crudes.
"They're the producers, they actually act collectively to manage the market, so let them do it. Consuming countries would look to producing countries to act first."
Priddle's comments follow last week's decision by the Organization of the Petroleum Exporting Countries not to raise production quotas from 10-year lows. It is leaking plenty in excess of the formal limits.
OPEC ministers have given no clear commitment to preventing the sort of price spike that saw oil hit US$35 in late 2000.
The group has a formula that indicates it could pump more when prices for its basket stay over US$28 for 20 days.
But many ministers are reluctant to pump more to control prices forced higher by war fever. They argue OPEC should only act to fill a real disruption.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such