Oil prices – which have shot up because of the Libyan uprising – fell back on Tuesday after Kuwait’s oil minister said OPEC was considering boosting production for the first time in more than two years.
However Iran – the current holder of OPEC’s rotating presidency – said there was no need for that as consumer worries over supply are mostly “psychological.”
Petrol prices near all-time highs in the US caused the White House to reiterate that it could tap its strategic oil reserves in order to safeguard economic growth.
The Obama administration is under pressure, particularly from the US Congress, to look to the emergency oil supplies as an option.
Oil industry experts believe that would actually make little difference in the long run. Oppenheimer’s Fadel Gheit said: “This time around it’s real fear and I don’t know if releasing 10 or 15 or 20 million barrels of strategic petroleum reserve will calm the market fears.”
And Alec Young, at Standard & Poor’s, added: “It doesn’t really change the overall dynamic, which is we need lots of oil, a lot of it comes form the Middle East and the region is getting increasingly unstable.”
OPEC member are discussing whether to call a special meeting to talk about increasing production. Saudi Arabia, the world’s largest oil exporter, is already pumping more to fill the gap left by Libyan exports.