Matusic: Impact of Iraqi oil suspension
Editor's Note: CNN Access is a regular feature on CNN.com providing interviews with newsmakers from around the world.
WASHINGTON (CNN) -- Iraqi President Saddam Hussein announced Monday a month-long suspension of oil exports to protest Israel's incursion into the West Bank. The move withholds about 2 million barrels a day, or 4 percent of the international supply -- most of which would be purchased by the United States. Karen Matusic, editor of Oil Daily, discussed the possible impact of the boycott.
CNN: What are your short-term predictions here?
MATUSIC: Well, I think immediately you're seeing a reaction in market. Already oil is up [more than] a dollar a barrel. There has been talk that it could spike as high as $30 a barrel if there are not replacement barrels this way any time soon.
It's dovetailing at the same time with an outright strike in Venezuela that is cutting off potentially 1.7 million barrels a day of imports into the United States as well.
CNN: How will this affect the United Sates? Can other countries supply the oil needed to fulfill U.S. demands so we do not have to worry about Iraq?
MATUSIC: Absolutely. OPEC [Organization of the Petroleum Exporting Countries] is sitting on about 5 million barrels [a day] of unused capacity that they have been cutting off since January of last year. I don't know how soon that oil will get here.
Of course, futures markets always jump on any news story, even last week with the intifada, which really doesn't impact on oil exports at all, they immediately went up to six month highs.
CNN: How does OPEC make that decision? What are the factors?
MATUSIC: Well, already they were a bit worried about this impact on the nascent U.S. economy recovery and the prices were already at six month highs, and over that sort of uncomfortable level that economists might like to see to help economic recovery along.
Ali Rodriguez Araque, who is the OPEC secretary-general, said he will be speaking with OPEC ministers tomorrow [Tuesday]. So, they can make a decision immediately on the telephone.
CNN: What are your thoughts about other Arab countries joining in with Saddam Hussein?
MATUSIC: I don't think there will be any support for him. Already you see Libya saying, yes, they will support it if other Arab and Islamic countries will go along, Iran saying, yes, it is a good idea. But they want to see others. I am sure they would want to see Saudi Arabia involved, and Saudi Arabia has already said they will not use oil as a political weapon.
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