The high price of oil poses a serious risk to the global recovery, especially in advanced economies, and could derail growth, a senior executive at Freeport McMoRan Copper+Gold (FCX) said Tuesday.

Javier Targhetta told the CRU copper conference in Santiago that while the world has pulled itself out of the downturn that hit at the end of 2008, the situation in the Middle East and North Africa could knock the recovery off track.

"Geopolitical scenarios in MENA are highly uncertain, and the fallout on oil markets depends on many unknowns," Targhetta said. "We expect oil prices to remain high and we don't think the unrest in MENA will be fleeting--it seems to be here to stay for a period of time."

Targhetta said a number of factors are at play that will determine the oil price. These include the true extent of the reduction in oil output due to problems in Libya, and the true level of spare capacity held by OPEC.

He also pointed to the possibility that the Organization of the Petroleum Exporting Countries will look for a new target price; the willingness of the Organization for Economic Co-operation and Development countries to use their strategic reserves; and the lingering geopolitical risk.

Targhetta, who is senior vice president for marketing and sales, and heads up the company's Atlantic Copper division, said policy moves to deal with the high oil prices could significantly slow the recovery.

-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413; andrea.hotter@dowjones.com
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