Geopolitical tranquility in the Middle East region does not mean that strategic hedging for Arabian Gulf countries is dispensable in oil supply, a Kuwaiti oil expert believed here on Tuesday.
Now that the Middle East region is always so volatile that suspension of oil supplies through the Strait of Hormuz is on the cards, other alternatives should be found whether through pipelines or strategic stockpiles in floating silos in different world areas, Mohammad Rashed, former deputy managing director of Kuwait Oil Tanker Company for operations, financial affairs and planning, told KUNA.
He called on the Gulf Cooperation Council (GCC) member states to establish a strategic oil pipeline from the Arabian Gulf to the Red Sea, saying that pipeline transport does not cost so much compared to tanker transport.
China and Korea has already started to form strategic oil stockpiles in order to avoid a possible manufacturing suspension, Rashed added.
Transport is often negatively affected by geopolitical events, thus causing trouble to producers and consumers altogether and, thence, oil prices, he pointed out.
However, he expected that the current oil price, which ranges between USD 100 and USD 110 per barrel, would remain unchanged in the coming period as the cost of oil production in major producers like Canada is so high.
Such prices would not lower as long as those countries have to produce and supply in other countries is not higher than demand, he anticipated.