Bahraini Minister of Energy Abdul Hussein Mirza said in an interview that $100 per barrel is reasonable price for crude oil.
Mirza, interviewed by state-controlled Kuwait News Agency (KUNA), explained that states are investing heavily into the energy sector as time of easy drilling is long gone. Therefore, a fair and reasonable price for the crude would be $100 per barrel, the Bahraini oil minister suggested.
“In the past times, prices were linked to basic factors, such as supply and demand, but nowadays, politics have become the dominant influential factor,” said Mirza in the interview with KUNA.
Speaking on the eventuality of an Iranian blockade of the strategic Hormuz strait, Mirza dismissed the possibility as such a ‘drastic measure’ would be harmful to ‘all the parties and any country that threatens to close the Hormuz strait is actually threatening itself.” He added that such possible closure of the vital energy passageway would not last for a long time because nations of the globe could not bear a 40% shortage of oil supplies.
Iran has threatened to shut down the Strait of Hormuz in the wake of an Israeli or US attack on Iran’s nuclear installations, leading to a surge in global oil prices. “The prices now should not go up but they are being affected with geopolitical events,” he added. Speaking on sidelines of the International Energy Forum, held in Kuwait City, Mirza thanked the Kuwaiti authorities for hosting the event.
On Bahrain’s oil output, Mirza said the country produces 195,000 barrels per day, including 45,000 barrels from Bahrain field and 300,000 bpd from Bou-Safah field — shared by Saudi Arabia.
Bahrain’s share of the crude from Abu-Safah, 150,000 bpd, is exported, and the 45,000 barrels extracted from Bahrain field is sent to the national refinery.
However, the country buys daily 230,000 barrels via a pipeline from Saudi Arabia which was laid back in 1945. This amount is also sent to the refinery for production of derivatives for exportation, 10% of which is used for local consumption.
Regarding new development projects in the sector, Mirza disclosed plans to develop Bahrain field, the oldest oil field in the whole Gulf as it was discovered in 1932. He also indicated at a planned project for extracting gas from 15,000-20,000 cubic feet depths.