There is no global fuel shortage
Idris: There’s no global fuel shortage
‘Price driven up by unreal speculation’
ISTANBUL: There is no shortage of oil in the
world and its present price level was driven up
by unreal speculation, said Malaysia Airlines
managing director and chief executive Datuk
Seri Idris Jala.
He said the present oil price at over US$135
was unrealistic and based on certain global
events that might have caused a shortage of
“These people (speculators and hedge
funds) buy oil futures and say that this or that
event may cause an oil shortage.
“Not very long after this, people react to this
and by then the message would be ‘there is a
shortage ofsupply’ even though there is none,”
Idris told the international media here at the
close of the 64th International Air Transport
Association annual general meeting.
lATA, which is an association of legacy full
service airlines with over 200 members, had
issued a statement at the end of its meeting
that the industry was now in a state of an
emergency because of the fuel price crisis.
Idris was a former senior executive with
Shell Pic based in London and the Hague for
almost 20 years. While there, he had headed
various departments, including business
Speaking as a former oilman, Idris said there
were two ways to see whether there was an oil
“First, look at the oil tankers at sea. If they
are not moving and just floating out at sea, that
means they have no crude or processed oil to
transport. That is not happening and that
means there is no shortage.
“Seconj:l, go to the petrol stations. If there
are long queues, that means there is a shortage.
Again, this is not happening and this can
only mean there is more than enough supply.
“As an ex-oilman, Itell you there is no shortage.”
Idris .pointed out that certain analysts and
financial companies that produced reports
about the shortage were also oil futures
»These people buy oil futures and say that this or that event may cause an oil shortage. Not very long after this, people would react to this« DATUK SERI IDRIS JALA
Asked what he thought was the fair value of crude oil at present, Idris replied: “US$4O.”
He. also criticised speculators and hedge
funds, saying that he did not trust anything
that he could not touch.
“I always believe in the brick and mortar something
I can touch. These people are trading
“Many years ago, we at Shell had wanted to
buy Enron. Iwas leading the team then and we
hired over 60 consultants to study how a company
with no oil fields, refineries or gas stations
could mal<e so much money.
“One of the consultants tried to convince me
to recommend to the Shell bosses to buy Enron
but I said no because I could not touch what
they were trading in,” Idris said in the onehour
briefin.g for the media about MAS’ pertormance
He only expressed his opinion on the oil crisis
after being asked by several journalists.
Idris was proven right on Enron because the
so-called energy company collapsed four years
ago under massive accounting fraud.
Source: The Star 5th June 2008 pg N10
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