Gulf crude to be in demand

Gulf crude to be in demand

Fallout from BP’s oil disaster will put region in the driving seat.

July 5, 2010 9:32 by Samuel Potter

The Gulf region is set to cement its place as a supplier of gas and oil following the BP spill, reports Khaleej Times.

Oil industry analysts say that, following the unfolding ecological disaster in the Gulf of Mexico, the Gulf is likely to play a critical role in ensuring that global oil markets remain well supplied.

Badr Jafar, Executive Director of the UAE-based group Crescent Petroleum, said, “We at Crescent have no doubt that the repercussions of the spill for the industry are going to be felt for many years to come. The Gulf will play a critical role in ensuring that global oil markets remain well supplied through this challenging period.”

In 2009, the region, boasting total oil deposits at more than 2,700 billion barrels, produced on average 23.6 million barrels of oil per day, equivalent to 30 per cent of world production, according to the paper. With the fallout from the oil spill in the US Gulf of Mexico, the Arabian region’s central role is set to grow.

However, analysts also said that the incident was unlikely to affect the global crude price.

“The US oil market is well supplied, with inventories above their five-year averages, and consumption remains subdued,” said Lee Hudson Teslik and Christian Menegatti, analysts at Roubini Global Economics. “Shipping lanes do not seem to have been affected much, and the United States could always tap its Strategic Petroleum Reserve in a pinch. The Gulf of Mexico produces only 1.7 percent of the world’s petroleum, and most of this production is continuing as scheduled.”