WASHINGTON -- While oil prices may temporarily climb to more than $40 a barrel, analysts said yesterday, supplies in the leading industrial nations are at the highest level since 1982 and there should be no shortages even if war breaks out.
To alleviate any possible disruption, however, a Bush administration energy official said the United States would make a "major contribution" from its Strategic Petroleum Reserve to buttress global emergency supplies. The amount that would be sold from the 590 million-barrel reserve has not been decided, the official said.
"The oil-supply situation today is dramatically better than it was in August 1990, when a world-class oil disruption occurred, and is a good deal more comfortable than it was even three months ago," said DanielYergin, president of Cambridge Energy Research Associates and author of a new history of oil.
Citing U.S. air power, government and industry analysts played down the risk war would pose to the oil fields in the Middle East, which contain an estimated two-thirds of the world's supply.
Some production crews might abandon their facilities if war erupts, especially near Kuwait, but analysts said that would reduce output only temporarily.
Energy Secretary James D. Watkins said on returning from a trip to the Middle East two weeks ago that there should be "virtually no effect [from a war] on the availability of supplies to the market."
Many economists expect oil prices, now buoyed by speculation, to reverse course if the United States scores a quick victory.
"There's a lot of oil out there, and if we can resolve the uncertainty about oil delivery, prices are going to fall," said Donald Ratajczak, an economist at Georgia State University.
The dominant view among economists is that a short war, with oil prices falling after an initial jump, would leave few marks on the U.S. economy, already mired in a recession.