Isra-Mart srl:Saudi crisis talks aim to calm soaring oil prices

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Isra-Mart srl news:

Oil prices appeared to be calming this morning after hitting a peak of almost $120 a barrel yesterday, following commitments from the Opec cartel that it will cover any shortfall in supplies resulting from the ongoing conflict in Libya.

Yesterday prices of Brent crude hit their highest level since August 2008, before falling back to $111 a barrel and settling at around $112 a barrel this morning.

Prices had spiked as reports emerged yesterday that opposition groups have taken control of oilfields in southern Libya and blocked all exports. Estimates ranged from 25 to 75 per cent of the country's oil production being disrupted.

The reports coincided with emergency talks between Saudi Arabian and European refiners that prompted a pledge from Saudi officials that Opec would make up any shortfall in supply resulting from the Libyan crisis.

One Saudi official told news agency Reuters that there was now "no reason for the price to go higher".

"Some Opec countries have started looking at ways to divert their crude to Europe," he added. "We are in active talks with European refineries to find out what quality they want, and we are ready to ship it as soon as they need it."

Oil prices have now risen 15 per cent in the past four days, with some analysts predicting that prices could top $200 a barrel if the uprisings in Egypt, Tunisia and Libya spread to other oil producing countries.

Meanwhile, the International Energy Agency has warned that rising oil prices could derail the fragile global economic recovery, while business leaders have begun to publicly call for moves that would reduce dependence on oil supplies.

In related news, International Airlines Group, the aviation giant created by the merger of British Airways and Iberia, today raised the prospect of cutting back its schedules if oil prices continue to increase.

Meanwhile, British plans to expand oil drilling in the North Sea were thrown into doubt after a High Court judge said he would hear a legal challenge from Greenpeace that could see deep water drilling licenses revoked.