Mahathir: Islamic states mull 'oil weapon'

Malaysia’s prime minister today confirmed that Islamic states had discussed using “the oil weapon” in a bid to head off US moves to wage war on Iraq.

But Mahathir Mohamad cautioned: “We should be very careful about using these double-edged weapons because it may hurt us more than it hurts the other parties.”

Delegates meeting for informal talks in Kuala Lumpur acknowledged that there would be “repercussions” if they sought to use their control over the world’s oil market to avert war.

“There was no consensus about using the oil weapon,” Mahathir said. “There was only consensus on thinking of the possibility of using the weapon – on that we all agree.”

Forty-seven of the Organisation of Islamic Conference’s 57 member states met at the informal talks, including representatives from major oil producers Saudi Arabia and Iran.

The group also discussed making “common cause” with anti-war protesters in Western countries, and line up behind France and Germany in efforts in the UN Security Council to avoid war, Mahathir said.

The idea of using oil as leverage to influence US policy on Iraq has been raised before, but has never achieved consensus among top producers, especially US allies in the Gulf region.

Saudi Arabia, the world’s largest oil producer, has never wanted to repeat the global economic recession triggered by the 1973 oil embargo launched in response to the Arab-Israeli war.

Even without an oil embargo, Mahathir last week predicted that war against Iraq – which has the world’s second largest proven reserves – could push oil prices up to an unprecedented €45 a barrel.