OPEC president Iraq wants Hormuz assurance from Iran

Reuters News
Posted: Jan 18, 2012 9:00 AM
OPEC president Iraq wants Hormuz assurance from Iran

By Ahmed Rasheed

BAGHDAD (Reuters) - Iraq's Oil Minister Abdul-Kareem Luaibi in his new role as president of OPEC said he will visit Iran on Thursday to discuss oil market stability and seek Tehran's assurances on the protection of waterways and oil supplies.

His comments on Wednesday follow recent threats from Tehran that it would stop oil moving through the Strait of Hormuz if sanctions are imposed on Iran's oil exports.

"I will go to Iran to encourage our brothers to express real and important assurances to the world that everyone is keen to protect the waterways and to protect the process of production and export of oil in the region," Luaibi said.

"Otherwise, anything less will affect the whole world and will affect the global economy," he said.

He said Iraq was against the use of oil in politics and that OPEC was keen to seek stability in oil production and prices.

Tensions over the Strait of Hormuz - the world's most important oil shipping route - have risen in recent weeks after Iran threatened to block it.

Producers Saudi Arabia, Kuwait, Iran, Iraq and the United Arab Emirates all use it to move crude to customers around the world.

The West is considering sanctions on Iranian oil exports over its disputed nuclear program. Iran has threatened to shut the Strait of Hormuz if its exports are disrupted.

Asked if Iraq is worried that Iran will carry out its threat, Luaibi said: "The threats are not coming only from Iran. We have also European Union threats to ban Iranian exports and we will discuss both issues with the Iranians," Luaibi told reporters.

Iraq exports about 1.7 million barrels of crude per day from its Gulf oil terminals. Oil revenues fund about 95 percent of its government budget.

"Iraq is the best mediator in the region now as its regime has very close ties with Iran and has the ability to defuse the crisis," Baghdad-based oil analyst Hamza al-Jawahiri told Reuters.

Luaibi added that Iraq will begin test-pumping crude oil through its new single-point mooring (SPM) in the Gulf on January 25 and the terminal will be ready to receive vessels in February.

The opening of the terminal ultimately will add about 900,000 bpd to Iraq's export capacity. Two other SPMs will be brought online later in the year, Iraqi officials have said.

"We will start pumping with low quantities and this will increase gradually," Luaibi said.

(Writing by Patrick Markey; editing by Jason Neely)