State has enough oil reserves to last 3 years if supply drops 10%

The Republic would have enough oil in reserve to last almost three years if global supplies were squeezed by 10 per cent, the Minister for Communications, Marine and Natural Resources, Mr Ahern said yesterday.

The Minister said the Republic could match its oil requirements for 111 days if the world's oil supply was entirely cut.

The International Energy Agency recommends that states hold at least 90 days of imports from the previous year.

In practice, the Republic's reserves could be expected to last much longer than 111 days, since it would be inconceivable for global oil supply to dry up entirely.

A 10 per cent drop in supply would, the Minister said, see Irish reserves, which are mainly held in the Republic, lasting 1,110 days.

Only during the Suez Crisis of 1956 have supplies previously fallen back by more than 10 per cent.

"They would last even longer if account is taken of the reduction in consumption which would be achieved by the demand restraint measures which would be triggered by a crisis of this magnitude," the Minister said.

He added that the "consensus view" was that an outbreak of war would have "no significant adverse impact on global oil supplies", particularly since OPEC countries have said they will increase production should any shortfall occur.

Oil prices steadied yesterday after a four-day rout that knocked 18 per cent off the cost of a barrel, as dealers braced for a US invasion of Iraq.

International benchmark Brent crude oil rebounded by 20 cents, or 0.7 per cent, to $27.45 (€25.97) a barrel by mid-afternoon in London, having fallen 8 per cent on Tuesday.

US crude futures for May delivery slipped five cents to $30.00, following Tuesday's 9 per cent drop which took prices to their lowest level in nine weeks.

Brent has tumbled $7, or 18 per cent, in the last four trading days as uncertainty over an attack lifted and dealers bet on an easy US victory.

They expect only a brief disruption to Middle East exports, which make up 40 per cent of global oil trade. - (Additional reporting Reuters)