U.S. and Iraq: Game Changers in the Global Oil Supply?

LONDON-The International Energy Agency's long-term forecast that the United States would exceed Saudi Arabia in production led to a clash between the OPEC secretary general, Abdalla El-Badri, and the executive director of the agency, Maria Van der Hoeven, at the Oil and Money Conference convened Tuesday in London by the International Herald Tribune and Energy Intelligence, an energy consultancy.

After a long and inconclusive debate about why oil prices remain high despite plentiful supplies, Ms. Van der Hoeven asserted that Iraq, an OPEC member whose production is growing rapidly, and the U.S. are the “game-changers” now. In other words, they will both put large new supplies of oil into the system over the coming years.

Mr. El-Badri, who had been conciliatory, appeared to lose patience. “Please, don't give this message to the market,” he said. He warned that OPEC states like Saudi Arabia won't invest in more capacity if they don't see a market for their oil. “They don't want to invest in something they don't use,” he said.

Interestingly, another OPEC kingpin, Abdulla Al Attiyah, who masterminded Qatar's rise as a gas power, said the U.S. shale gas boom was a good thing for the gas industry. Consumers used to worry about gas supplies, he said. “Today, shale gas gives trust that the world has 300 years of using gas,” he said.

Read more about energy issues in the IHT Special Report: Oil & Money.