Taiwan's Chinese Petroleum Co (CPC) has been assured of stable crude oil supplies from the Saudi Arabia Oil Co in the event of war, said CPC President Pan Wen-yen (
The head of the Saudi oil company said in a letter to Pan that the company will fully honor the terms of the contract between the two companies by continuing to supply the CPC with crude oil even if war breaks out in the Middle East.
The international price for crude oil spiked earlier this month to US$31.5 per barrel soon after the Sept. 11 terrorist attacks in the US -- a rise of US$4 per barrel. Prices fell back and were at US$22.1 per barrel on Monday.
Pan said that he expects international oil prices to fluctuate between US$20 and US$30 a barrel.
The CPC is a state-run company which monopolized Taiwan's oil market before the Formosa Oil Co, an affiliate of the Formosa Group, entered the market last year.
The CPC still enjoys a majority share of the local market.
The US is poised to launch an all-out war against terrorism in Afghanistan, which allegedly provides shelter for Osama bin Laden, the prime suspect in the terrorist attacks by hijacked airplanes that left close to 7,000 people dead or missing in New York, the Pentagon and Pennsylvania.
Local consumers are worried that Taiwan may face oil supply shortages should war break out.
Pan said that the CPC has a sufficient stock of crude oil to ensure sales for 110 days.
Fifty-eight percent of the CPC's oil comes from countries in the Middle East, including Saudi Arabia and Kuwait, 25 percent comes from African countries and 10 percent comes from Indonesia, Australia and other oil producing nations.
The Formosa Oil Co is also fully dependent on foreign crude oil supplies.
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