UAE minister: No immediate risk to oil flow via Hormuz strait

The United Arab Emirates’ (UAE) energy minister said yesterday he saw no immediate risk to oil passing through the vital gateway of the Strait of Hormuz after Iran attacked bases housing United States forces in Iraq.

Iranian officials have said the missile strikes were a response to Friday’s killing of top Iranian commander Qasem Soleimani in Baghdad.

The situation was not a war, and what was happening now should not be exaggerated, said Suhail al-Mazrouei on the sidelines of a conference here.

“We will not see a war,” he added. “This is definitely an escalation between the US, which is an ally, and Iran, which is a neighbour, and the last thing we want is more tension in the Middle East.”

Oil prices were about 1.0 per cent higher yesterday, but well below highs hit in a frenetic start to the trading day after the missile attacks raised the spectre of a spiralling conflict and disruption to crude flows.

Organisation of Petroleum Exporting Countries’ (Opec) secretary-general Mohammed Barkindo told the conference here that oil facilities in Iraq, the second biggest producer in Opec, were secured and output was continuing.

He said spare oil capacity stood at 3.0-3.5 million barrels per day (bpd), the majority with Saudi Arabia, the top producer in Opec.

Mazrouei said Opec would respond to any possible oil shortages if necessary within its “limitations”. But he saw no grounds for supply shortage fears, with healthy demand and global oil inventories hovering around the five-year average.