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IEF concerned at high oil prices PDF Print E-mail
Saturday, 26 April 2008

Ministers from 74 countries attending the International Energy Forum here expressed “concern” yesterday at high oil prices, which topped a record 119 dollars, reports AFP.

“Ministers expressed concerns over the current level of oil prices,” the IEF said in a final statement issued after three days of talks. “Oil prices should be at levels that are acceptable to producers and consumers to ensure global economic growth, particularly in developing countries,” it said.

The IEF, held every two years, brought together oil producers and consumers for three days of closed-door talks in the Italian capital to tackle issues such as soaring energy prices, growing demand, security of supply and concerns about global warming and the environment.

But it was prices, rising to records on an almost daily basis of late, that dominated proceedings. International Energy Agency chief Nobuo Tanaka warned that high oil prices could tip the world economy into recession.

British Energy Minister Malcolm Wicks said: “Many of us feel that it would be a good thing for the world economy if prices were significantly lower than where they are at the moment.”

Nevertheless, the Organization of Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world’s oil, denied that it was in a position to change the situation, which it blamed on speculators. OPEC also pointed to soaring production costs, which have risen by 50- 60 percent in the last few years as a result of wage inflation and equipment costs.

“Oil prices haven’t really been a boon to producers,” said OPEC’s secretary general Abdalla Salem El-Badri. Italian Economy Minister Perluigi Bersani who co-hosted the meeting, said stabilising prices was paramount, since it was high volatility rather than actual price levels that harmed investment.

The IEF also had to work against perceptions that world oil and gas resources were about to dry up in the face of soaring energy demand, the forum said. Global oil and gas resources were “sufficient to meet world needs over the next decades,” the IEF insisted. Saudi Arabia Petroleum Minister Ali al-Naimi agreed. “I can assure you unequivocally that the world is not running out of oil,” he insisted, pleading for calm.

The root of the problem was primarily due to “limited capacity along the entire supply chain .... at its heart, this is not an energy resource issue; it is primarily an investment issue,” he said. OPEC coincidentally announced it would raise production capacity by five million barrels per day (bpd) by 2012 and by nine million bpd by 2020 from current output levels of about 32 million bpd.

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