KUWAIT CITY (Agencies): Oil prices will certainly sky-rocket to the unprecedented level of $200 per barrel in case the Gulf region witnessed dramatic developments, according to officials and experts. These executives and specialists, in exclusive interviews with Kuwait News Agency (KUNA), confirmed that the prices of the vital energy resource have been soaring unchecked largely due to the war of words and recurring sabre rattling pitting Iran against Israel over Tehran’s nuclear issue. Any military step by either side against the other will certainly plunge the whole region into a deep crisis and create an international energy crisis, they affirm. Israeli officials have repeatedly hinted at prospects of launching a military strike on Iran to wipe out the country’s nuclear sites and hinder the Iranians’ efforts, as the Israelis say, to manufacture nuclear arms that will eventually pose a serious threat to Israel’s very existence.

The Iranians for their part have recently stepped up rherotic dramatically, threatening, if attacked, to shut the strategic Hormuz Strait, through which bulk of the oil exports from the region’s producing countries pass, and launching destructive military attacks on Israel — warning in particular of using medium and long range missiles of high destructive capacity.  Kuwait meanwhile is developing precautionary plans to ensure oil exports in case Iran closes a vital oil route in the world’s largest oil exporting region, a top oil official told state news agency KUNA on Monday.  “There are precautionary plans to export Kuwaiti crude in cooperation with Gulf Cooperation Council (GCC) countries but those plans are not finalised yet,” KUNA quoted Saad Al-Shuwaib, head of state oil company Kuwait Petroleum Corp (KPC) as saying.

Tehran would impose controls on shipping in the Gulf and Strait of Hormuz if Iran was attacked, the head of Iran’s Revolutionary Guards said in remarks published on Saturday.
Oil hit a new record of $143.54 a barrel on Monday on rising tension between Iran and Israel over Tehran’s nuclear programme which the United States and the Jewish state say is meant to build an atomic bomb. Iran says the programme is peaceful.

“If any military tensions occurred oil prices will reach $200 (per barrel),” said Shuwaib.
Shuwaib, whose country is one of the six Gulf Arab nations that comprise the GCC loose political and economic alliance, did not give details of the plans.
Oil flows through the Strait of Hormuz, a narrow waterway at the mouth of the Gulf separating Iran from the Arabian Peninsula, accounts for about 40 percent of the world’s traded oil supply.
Speculation about a possible attack on Iran has risen since a report this month said Israel had practiced such a strike, prompting tough talk of retaliation, if pushed, from Tehran.
Any military action in the Strait of Hormuz would knock out oil exports from Opec’s biggest producers, cut off the oil supply to Japan and South Korea and hit the booming economies of Gulf states.

“There are limited Saudi pipelines to the Red Sea,” he said, adding that Saudi Arabia was likely to give priority to own oil.
Saudi Arabia, the world’s largest oil exporter, ships around a quarter of its oil exports through a Red Sea terminal, according to the US Department of Energy, but does not operate any major functioning international pipelines.
Ali Al-Baghli, a Kuwaiti former oil minister, said his country would probably use the same offshore facility near Oman it used during the 1980-1988 Iran-Iraq war when merchant shipping in the Gulf came under attack.
“Kuwait dealt with it during the Iran-Iraq war... It would be a major crisis... (but) certainly it will be dealt with,” said Baghli.

Saad Al-Shuwaib, Chief Executive Officer of Kuwait Petroleum Corporation (KPC), the umbrella authority of several national oil bodies, told KUNA that the current high prices of oil have been partly caused by political tension in the Gulf region and the tumbling rate of the US dollar. The prices of the crude would significantly drop if these two factors have been addressed, he said.
But if the region becomes scene of military developments, the prices of the crude will hit the level of $200, he said, indicating that the prices have already lept to $140 pb, driven by the current fears of a possible military confrontation pitting Iran against Israel, or the US or both.
Consumer nations will certainly be deprived of major resource of energy if the region witnesses such bleak events he said, noting that the region harbors bulk of the globe’s crude reserves, in addition to the fact that Iran puts out three million barrels of crude pd.
On prospects of closure of the strategic strait located at the tip of the Gulf south, Al-Shuwaib indicated at “some emergency plans to secure exportation of the Kuwaiti crude in coordination with other member states of the Gulf Cooperation Council,” though these schemes have not been finalized yet.

Kuwait, during the eight-year Iran-Iraq war, coped successfuly with circumstances of the war and continued exporting its crude with echoe of the blasting guns.
Issa Al-Oun, a former oil undersecretary, also attributed the record hike of the oil prices to the regional tension, namely in Iran and Iraq, noting that the Iranians’ latest threat of closing Hormuz had not been made for a long period of time.
The prices have also risen to that high level due to heated speculations resulting from possible shortage of crude supplies, increasing storage of the crude by major consumer nations, depletion of output by some non-Opec producers and the hike of globe oil consumtpion.

Oil prices have jumped to $140 pb “without aggression or war, so imagine how the prices will be in case a war actually erupts,” he said, “with such an eventuality, the prices will certainly leap to $200 pb at least!!” However, he ruled out prospect of blocking navigation through Hormuz “for the world will not allow such a drastic measure,” noting that Saudi Arabia can continue exportation of the crude via its Red Sea coast.
Other producers in the region have some options, but it will not be easy, he added.
He indicated at an old plan to establish pipelines from Kuwait to Oman but the scheme had been shelved for it was viewed as unnecessary.
For his part Talal Al-Bthali, an oil expert, expressed his belief that the prices of oil will reach $175 pb by the end of the year regardless whether a war has actually taken place or not.
The GCC states now have no plans to cope with conditions in the event the Iranians resorted to closing the vital strait, he said,, affirming that psychological jitters will continue to be main factors for the bullish prices of the crude.