Iran gives reassurance on world crude oil supply

Reassuring words from Iran on the Gulf's oil exports in case of a US attack, and the end of exclusive dealerships for imports in Lebanon made this week's Middle East business headlines. Iranian Defence Minister Admiral Ali Shamkhani denied that a senior military officer had warned that Tehran could target the Gulf's oil infrastructure in case of a US military attack on Iran. Shamkhani said remarks by Iran's elite Revolutionary Guard second-in-command, Mohammad Baghr Zolghard, had been misinterpreted.
Zolghard warned on February 10 that if Iran is prevented from exporting its oil "no other oil in the region would be exported." Some 20 % of the world's oil supply is shipped through the Gulf, with regional states holding 65 % of the planet's crude oil reserves.

Other petroleum-related developments in the region included statements from the United Arab Emirates and Qatar expecting OPEC to roll its current crude oil production ceiling over the second half of the year. OPEC slashed output by 1.5 mm bpd in January 1 for a six-month period, under a deal with major non-OPEC producers to push the price of the barrel above $ 20.
Kuwait reopened an oil refinery after a 10-day halt in operations following a gas leak. But the Kuwait National Petroleum Company was unable to confirm if the Shuaiba plant, one of the emirate's three oil refineries, was back to its full 200,000 bpd capacity. In Iraq, authorities have arrested five senior oil ministry officials charged with taking "personal profits" from oil sale contracts with foreign firms under the UN oil-for-food programme.

On the macroeconomic level, the Lebanese government has taken another step on the road to economic liberalisation with a bill to end a 40 year-old law granting dealers exclusive rights to market imported products. But the move was perceived by some economists as a blow to the old and notably Christian merchant class, while benefiting the nouveau riche businessmen who sprang up and prospered during the 1975-1990 civil war.

Moody's Investors Service has kept Qatar in the investment grade category, in its yearly report on the credit health of the small Gulf emirate. The ratings agency reported a "stable outlook" for Qatar's Baa2 foreign-currency ceiling, based its effort to diversify away from crude oil production by developing its massive natural gas reserves -- third in size only to Russia and Iran. But Moody's pointed out that Qatar's external debt ratios remained high. The emirate's foreign debt is estimated at around $ 12 bn for a $ 16 bn GDP.

In another report, Moody's expected 2002 to be a "challenging year" for Saudi Arabia's banks as interest rates are expected to remain at low levels, and because of a slowdown in the economy and on-going economic reforms. Moody's said "business confidence" in the kingdom, the world's top crude oil exporter and the largest Arab economy, "is expected to suffer as a result of low oil prices."
In corporate results, the Arab Banking Corporation (ABC), posted a net profit of $ 102 mm in 2001, down 20 % on the year. The Bahrain-based bank, the Arab world's largest, blamed the slide on the economic slowdown resulting from the September 11 terror attacks on the United States.