Saudi Arabia will start pumping oil at close to full capacity in an attempt to prove that the current terror attacks will not affect its ability to pump oil, a Jordanian economic expert told Menareport.com.
Experts assess that the terror attacks in the eastern region of Saudi Arabia - the kingdom's richest oil reserve - and Khobar in particular, are considered an attempt by Al Qaeda to influence global oil prices which could shift the global economy – now on the recovery – into another recession.
Therefore, Dr. Jawad Anani, former Chief of the Jordanian Royal Court, expects a strong effort to be exerted by Saudi Arabia in order to prove that the terror attacks have no effect on the oil industry. The average daily production of Saudi Arabia is estimated at around 9-10 million barrels a day.
Osama bin Laden's Al Qaeda network claimed responsibility for the latest attack on residential compounds populated by foreigners in Saudi Arabia – most of whom were Westerners employed by the local oil industry.
Anani explained "the disturbing thing about the Khobar incident is that the region's residents are mostly Shiite Muslims…they are very close to Bahrain where a large Shiite population lives. Although those behind the Khobar attack were Sunnis, I am very worried about future instability in this region (East of Saudi Arabia)."
When asked about the security concerns, Anani said that "the operation took place in a very sensitive region in Saudi Arabia that is supposed to be heavily protected. This will make people question the efficiency of the local security set-up. I expect many foreigners will leave Saudi following these events, especially the Americans," Anani concluded.
On his part Dr. Abdullah Al-Otaibi, assistant professor of political science at King Saud University, told Arab News "Al-Qaeda terrorists are out to strike against the Kingdom’s oil infrastructure and also Western expatriates manning those facilities as part of their sinister game to cripple the Saudi economy.”
Al-Otaibi has been monitoring various websites with Al-Qaeda links. "They (al Qaeda leader) are taking calculated steps aimed at crippling the economy."
According to him, the strikes at economic targets resemble the strategy of the Tamil Tigers of Sri Lanka - to paralyze the economy of the country and sow seeds of panic among the people.
Saudi oil minister, Ali Nuaimi, has recently expressed the kingdom's readiness to increase its production in order to keep world prices within “normal” prices.
Rising oil prices have led to rioting in several countries across the world – the most notable being in Lebanon last week that left six people dead.
Nuaimi said that the sharp rise in oil prices was due to many reasons although the most prominent reason would be the fear amongst the world markets that the terror attacks in the region might disrupt the flow of oil. Other reasons voiced were that market traders are long crude oil futures (bought at cheap prices) and are unwilling to trade in anticipation of higher prices, hence artificially keeping the prices high. Additionally, Nuaimi justified part of the rise by attributing it to the growth in the world economy, low interest on foreign currency and a shortage of gasoline in the US.
"The Saudi policy regarding oil industry is very clear…we seek to balance between supply and demand while maintaining prices that are agreeable by both importers and exporters. It is very important that we raise our production by 1.5 million barrels a day should such prices become unbalanced," Nuaimi told a recent OPEC meeting. (menareport.com)
© 2004 Mena Report (www.menareport.com)
