TNAG-1324-FCO40-1736-Future-of-Hong-Kong-Parliamentary-debates-1984 — Page 120

to about 10%. Moreover, reserve stocks held in the industrialised

countries are considerable and would be adequate to cover such a shortfall

for a substantial period.

28. That said, experience has shown all too clearly that oil is a highly

political commodity. Prices can swing sharply whatever long term supply

and demand trends might suggest. Expectations of crisis can be as damaging

to price stability as any actual shortfall. Though the UK is a net oil exporter, we nevertheless import 140,000 barrels per day from the Middle

East.

Most of our trading partners import relatively very much more, and

our economies are inter-dependent. Neither developed nor developing

None

countries could escape the consequences of oil price destabilisation.

will want to risk the possible effect on the recovery of the world from the

worst recession since the war. The free flow of oil from the Gulf is a

matter of very great international concern.

29. But our interests in the Gulf are not confined to the security of the oil supplies. Many of the countries in the region have links with the UK

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