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GPIGP FOR THE GOVERNOR'S VISIT TO CHINA
Possibility of Oil Shortage :
The instability in Iran has created an oil shortage which may have a significant effect on Hong Kong. Iran exports had been running at about 5 million barrels/day at the start of 1978. In the 4th quarter of 1978 they ceased completely. They were reported to have re-started in this month at a level of 1 million barrels/day. But the chances of exports returning to normal are uncertain.
2. For the two main suppliers in Hong Kong, Esso and Shell, developments in Iran have resulted in the loss of about 15% and 10% of the crude oil supplies to their refineries. The oil companies have warned that unless the Iranian situation returns to normal very soon, oil supplies to Hong Kong would
be curtailed.
3.
A whole range of possibilities for reducing demand is at present being examined, ranging from low key publicity to conserve fuel to enforced restraints on consumption. They will be implemented if necessary in the light of the developing situation.
4.
Additional supplies are always available if
But ensuring one is prepared to pay a higher price. an adequate supply in this way could lead to a general oil price spiral which would pull the world into depression. There is some evidence that this has already begun to happen. Several OPEC countries have already announced arbitrary price increases and the spot price is now in the region of 50% above the normal price.
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