|
||||||||
  |
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||
Asia weighs impact of war on growth
By Geoff Hiscock
(CNN) -- Malaysian Prime Minister Mahathir Mohamad's comments about Muslims using oil as a weapon come as analysts weigh the impact a war in Iraq will have on Asia's growth outlook. Mahathir, speaking after the opening of the third Malay and Islamic world convention in Malacca on Thursday, said oil was the only thing Muslims had that was needed by the rest of the world. "They (Muslims) can determine the supply. If they cut back on the supply, then people will not be oppressive to them," Mahathir was quoted by Malaysia's Bernama news agency as saying. (Full story) There is a general consensus that if the U.S. launches a strike against Iraq, oil prices will spike by as much as $10 a barrel to about $40. That will push up costs for Asian economies, most of which depend heavily on oil imported from the Middle East. Malaysia and Indonesia are the only net oil exporters in Asia. Cut in growth
A short spike will have little impact, but if the price rise is sustained, it could lead to a cut of 1 percentage point in Asia's growth rate, according to Morgan Stanley's Hong Kong-based regional economist, Andy Xie. This week oil has hovered around $30 a barrel. In Asia Friday, Nymex crude is about $29.80 a barrel, having eased a little after Hurricane Lili moved inshore and spared Gulf of Mexico refineries from any serious damage. Also keeping a lid on prices is opposition to the U.S. push for a tough new United Nations resolution against Iraq. Traders see that as making an early strike against Iraq less likely. Still, the price of oil is now about 18 percent above the average for 2001. Nomura Australia strategist Eric Betts says prices are likely to stay high for the short term at least. While there is no way of knowing how long a price spike might last, the first Gulf War provides a pointer. Fell below $20Oil jumped to $40 a barrel soon after Iraq invaded Kuwait in August 1990, but fell below $20 within weeks of the start of hostilities in January 1991, when it was clear the U.S.-led coalition would be successful. Since 1973, the biggest oil disruption to supplies has been the 1978-79 Iranian revolution, when the International Energy Agency says there was a supply shortfall of about 5.6 million barrels a day for six months. In comparison, the Gulf War disruption was about 4.2 million barrels a day. Japan, which gets 86 percent of its oil from the Middle East, is regarded as Asia's most exposed economy to a new war in Iraq. Oil accounts for 52 percent of Japan's total energy supply. (Full story) South Korea and Taiwan are also heavily dependent on imported oil. China, destined to be the world's No. 2 oil importer, is looking to diversify its sources of energy supply as its own fields run down. It recently took equity stakes in gas fields as part of long-term LNG contracts with Australia and Indonesia, and also has just taken a 75 percent stake in an Algerian oil field. (Full story) China imports risingAccording to the Paris-based International Energy Agency, China's oil imports by 2030 will equal the imports of the United States today. Between now and 2030, China will account for a fifth of the growth in world energy demand, according to IEA executive director Robert Priddle. He said this would make China a strategic buyer on world energy markets. China is already the biggest oil user in Asia after Japan, consuming 5 million barrels a day. It is followed by South Korea on 2.23 million barrels and Indonesia on 1.1 million barrels. But Indonesia also produces 1.4 million barrels a day and China pumps 3.3 million barrels. In net terms, the Asian country with the biggest exposure to imported oil after Japan is South Korea, followed by China, Taiwan, Singapore and Thailand. Malaysia produced 788 million barrels a day, and consumed 407 million barrels. Morgan Stanley's Xie sees higher oil prices from a short-term war in Iraq as having a relatively limited impact on the region's economy, trimming growth by perhaps 0.3 percentage points. But in a research note, he warned that this impact could rise to a growth rate cut of 1.0 percentage point if an extended period of hostilities kept the price of oil at $40 a barrel for a year.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
