WORLD COULD COPE WITH HORMUZ CLOSURE, SUBROTO SAYS
Oil prices would skyrocket for a time if
conflict in the Gulf closed the Strait of Hormuz, but oil
supplies could be adjusted to take care of world demand,
Indonesian Energy Minister Subroto said.
    He made no explicit reference to the latest U.S. Military
action in the Gulf.
    But in an address to a conference of the Indonesian
Petroleum Association, he said, "If worst comes to worst and say
the flow of oil through the Straits of Hormuz is completely
shut off, I believe the world oil supply, given time to adjust,
can take care of the situation."
    "But this is not to say that prices, at least for a short
duration, will not skyrocket as speculators take advantage of
the situation," he declared.
    Tensions in the Gulf, however, usually had a relatively
short-term impact on prices, he added.
    Assessing future price trends, he said, "Short-term spot
prices will probably still fluctuate, but they will most likely
hover around the official Opec price basket of 18 dlrs per
barrel.
    "The upward deviations, however, are likely to be greater
than the downward ones."
    "The balance between supply and demand in the short term
will still be delicate," he added. "Non-Opec production may still
go up, competing with Opec for the expected additional increase
in world demand."
    Subroto, a member of Opec's three-man quota committee which
has been touring cartel members, said speculation may play
havoc with spot prices, but Opec was trying to stabilize the
situation by urging cooperation by non-Opec producers.
    In the medium term, non-Opec production would reach a
plateau in the early 1990s, leaving Opec much stronger, he
said.
 REUTER
