With the war between Iran and iraq dragging on, and little hope of a ceasefire in the near future, the two countries have gone out of the oil exporting business.
LV ZOOM INTO GV Abadan refineries burning at night ZOOM OUT AND PAN ACROSS burning refinery and oil tanker. (4 SHOTS)
TV & GV Oil tankers in the Straits of Hormuz. (4 SHOTS)
AERIAL VIEW Month of the Hormuz Strait.
GV 1956: Sign "Banias terminal" and oil pipelines. (2 SHOTS)
GV PAN ACROSS Damaged pipelines.
GVs Men repairing damage on site. (4 SHOTS)
SV Vienna 1980: OPEC meeting, Sheik Yamani of Saudi Arabia speaking to other ministers at end of conference.
GVs Oil ministers chatting, OPEC flags on table and LV conference table with delegates. (3 SHOTS)
LV Motorway streaming with cars in France.
GVs Sign urging conservation of petrol in window and on car. (3 SHOTS)
GVs Cyclist down road.
GV INTERIOR International Energy Agency meeting in Paris, Japanese and United States delegations. (4 SHOTS)
GV Iraqi flag flying on Iranian territory and tanks across desert.
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Background: With the war between Iran and iraq dragging on, and little hope of a ceasefire in the near future, the two countries have gone out of the oil exporting business. Attacks on oil installations and terminals have resulted in damage that will take more than a year to repair. But, the world has lost seven percent of its petroleum supply, the immediate impact on consuming countries has been negligible, since oil stocks are more plentiful than they have ever been.
SYNOPSIS: The Abadan installations are a main target for the Iraqis as they continue to try and gain complete control of the Middle East's biggest refinery. Iran's output had already fallen before the war. Under the Shah, the country was the second largest OPEC producer after Saudi Arabia. But, since the revolution, maintenance has been neglected, and there has been a shortage of spare parts and skilled workers to maintain the level of production reached in the early seventies.
When the war began, there was fear that the vital Straits of Hormuz would be closed. The late Shah once called the thirty-six mile-wide strait at the southeastern end of the gulf "the West's jugular vein". But the Iraqis assured the world's oil consumers, who receive forty percent of their supply through the straits, that they would not interfere with the movement of oil tankers. So the straits have remained open.
Iraq also exports its oil through mainland pipelines that end at Mediterranean ports in Turkey and Syria. The Banias pipeline in Syria has always been a prime target in Middle East wars -- in 1956 the Syrians themselves blew it up over a dispute with Iraq. The Iranians have bombarded the Kirkuk oil installations in the north of the country and both the Iraq-Turkey and Syrian pipelines are currently out of commission.
Shortly before the current Gulf war began the Organisation of Petroleum Exporting Countries (OPEC) met in Vienna and, after a difficult conference agreed to cut their production by ten percent. Their meeting took place when the world had a substantial glut of oil which had prevented shortages or spiralling prices. But apparently, the countries have delayed their proposed cuts in production until the war between two of their members ends.
France received almost a quarter of its oil supply from Iraq before the war. But with other OPEC countries making up the current shortfall, French consumers have not felt the effects. In June 1979, the French government released plans to reduce oil consumption by fourteen percent over the next six years, hoping other members of the European Community would follow its example. recently, worldwide demand for oil has fallen as a result of a global recession.
The United States and twenty other industrial nations which form the International Energy Agency made contingency plans for events like a war in the Gulf. In May 1979, they agreed to share any future oil shortfall.
The Gulf war shows little sign of winding down, with the Iraqis currently pounding Iran's oil centre of Abadan. So former customers have simply looked elsewhere for oil.