Saudis Key to Securing Oil During Unrest

Former U.S. ambassador says U.S. needs to stand with Middle East allies.

HOUSTON -- A former U.S. ambassador to five Middle East nations said March 9 the United States should stand by its traditional friends in the region to secure oil supplies.

Ryan Crocker, who served as U.S. ambassador to Iraq, Pakistan, Syria, Kuwait and Lebanon, said Saudi Arabia is key to stabilizing markets with its 3.5 million barrels per day of excess capacity.

Wealthier Middle East regimes that have traditionally maintained friendly relations with the United States have been responsive and taken actions to stabilize markets, said Crocker, who spoke at the IHS CERAWeek energy conference in Houston.

But the unrest in Egypt, Libya and Tunisia continues to create uncertainty.

This is particularly true in Tunisia and Egypt where regime changes have already taken place, Crocker said.

"This is just beginning of story" he said. "Stand by for next 27 chapters."

Crocker predicts insurgents in Libya will not overtake Libyan leader Moammar Gadhafi. What that means for the region is uncertain.

In Iraq and Iran demonstrations are not threatening but they are a warning for the region, Crocker said. Dissatisfaction over utilities services in Iraq and economic opportunities in the nations could create future problems.

"In Iran a revolution is not coming to a theater near you any time soon," Crocker said.

Oil industry executives said on March 8 instability in Libya and across the Middle East reinforce the need for oil industry policies and collaboration that will open new energy supplies.

BP Plc CEO Robert Dudley remarked at CeraWeek that the current situation in Libya puts energy security at risk. Libya represents nearly 2% of the global oil supply and the Middle East and North Africa represent more than one-third of global production, Dudley said.

Dudley suggested that the industry coordinate efforts to address the situation in the Middle East through monitoring, security systems and planning.

Hess Corp. CEO John Hess suggested policy changes that would curb demand and open new energy sources for future energy security.

"Current political disruptions are a reminder we need to secure our energy future," Hess said in his March 8 speech. "We should not have to wait for a crisis to do something that is so important to our national interest."

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