If U.S. attacks Iraq

Indonesia, which strongly opposes the U.S. led military attack against Iraq, could however receive windfall profit of about Rp 6.24 trillion a month from the estimated sharp increase in the oil price resulting from the possible war, Kompas reported on Monday.

Quoting noted oil analyst Kartubi, the newspaper estimated the attack against Iraq would lead to the surge in price of crude oil to US$40 per barrel. It means that the price will be far higher than the oil price reference of $22 per barrel used in calculating the 2003 state budget. The surplus in oil price from the price reference in the state budget is considered as a windfall profit because it will not be included in the government?s spending.

Kartubi said that with such a price scenario, Indonesia?s oil exports would produce a windfall profit of $18 per barrel. "With production of about 1.3 million barrels per day, the windfall will reach about $23.4 million per day," he added. "Based on Rupiah-US dollar exchange rate, the daily windfall will reach as much as Rp 208.26 billion or Rp 6.24 trillion a month," he added.

According to Kartubi, the war would cause fears among major oil importers, leading the rush in the oil purchase in the world market as the buyers would increase their oil stocks as much as possible. The war will also immediately reduce the oil supply from Iraq which at present produces about 2.6 million barrels per day. The oil supply in the world?s oil market at present reaches about 76 million barrels per day.

Kartubi said the oil price during Arab-Israel war in 1973 rose to $12 per barrel from $3 per barrel after the Organization of Petroleum Exporting Countries (OPEC) imposed an embargo on their exports. During the Iran Revolution in 1879, the oil price also increased to $33 per barrel from $13 per barrel. (*)