Producers and consumers expressed conflicting views on the daily rapid rise in oil prices, which topped 110 dollars and are moving towards the price of 120 dollars per barrel, while some speculate that they may well exceed the 200 dollar level. In the assessment of oil producing countries (OPEC), there are a clear policy and objectives adopted by OPEC. The organization's priorities thus are, first the balance of supply and demand, second ensuring adequate oil supplies are delivered to the market to meet consumption levels, and third, the creation of a surplus production capacity sufficient to meet any emergency supply shortage, be it for political or industrial causes. Indeed, there is clear equilibrium in the markets, and no one has yet spoken of any shortages in oil supplies, and for some time now. In other words, oil producing countries are managing to fulfill all the sales agreements signed with international oil companies. Also, there is an additional crude oil production capacity for OPEC member states that amounts to 5-6 million barrels per day, including 4 million barrels per day in Saudi Arabia alone, with the rest distributed between Kuwait and the United Arab Emirates. Oil officials in OPEC countries have also reaffirmed their countries' readiness to compensate any shortfall that may occur as a result of a halt in Libyan exports. In truth, European countries are already being compensated for the lost Libyan oil. Hence, OPEC and major producers are focusing their attention on providing the necessary supplies to the markets. In addition to this surplus production capacity which is available to compensate supply interruptions – as is the case now in Libya -, a strategic inventory of nearly 2 million barrels per day over six months is present in the Western industrialized countries that are members of the International Energy Agency. This inventory, as its name indicates, is intended for emergency situations only, i.e. in the event of an emergency shortage in supplies. It is only tapped after OPEC's surplus production capacity is used. In addition, there are commercial inventories maintained by international oil companies. This means that there are between 6 and 8 million barrels per day (between OPEC's surplus production capacity and the strategic inventories in industrialized countries) available to the markets in emergency contingencies, whereas Libya's exports do not exceed 1.5 million barrels per day. With regard to consuming nations, they only perceive oil through the looking glass of its prices, and their rapid daily rise. These countries are observing the implications of rising prices for their economic growth in particular, and that of the global economy in general, for fear of their repercussion on recovery from the global financial crisis. In other words, the criticism voiced by the representatives of these nations focus mainly on the issue of prices, and their adverse economic effects. The primary concern in the financial markets is that oil prices may exceed the 120 dollar level, as this may lead the world to remain in the limbo of the global financial crisis, without ever being able to escape it. OPEC's stance here is as follows: Prices are determined by global markets and by speculation allowed by these markets, and thus by the regulations of the countries in which such speculation takes place (in the U.S and UK in particular). Therefore, the onus is on these countries to curb speculation that pushes prices to higher levels rapidly, regardless of the facts of the markets themselves. Naturally, OPEC is not comfortable with this rapid increase in prices, given its negative impact on the global economy and subsequently, demand for oil in the future. OPEC is also well aware that soaring prices are caused by uprisings in Arab countries. In fact, OPEC's members have already started to gradually increase production, and international companies and consuming nations are aware of this. Hence, current price hikes are the result of legitimate fears in the markets due to the unrest taking place. However, these fears are not real because it is very possible to compensate interruptions quickly, and with the same type of crude oil (i.e. the light crude which Libya produces). *. Mr. Khadduri is an energy expert
