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King Abdullah to open oil summit

King Abdullah to open oil summit
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First Published: Sun, Jun 22 2008. 03 08 PM IST
Updated: Sun, Jun 22 2008. 03 08 PM IST
AP
Saudi Arabia: King Abdullah will open a high-level oil summit today, amid a standoff between it and the United States over who’s to blame for skyrocketing oil prices and how to calm the cost of crude.
A front-page editorial in the English-language Arab News said on Sunday that it was wrong to point fingers at oil producers and instead lashed out at oil consumers.
“Blaming foreign producers for their woes, especially if they are Arabs, may come easily to consumers who have long been fed an unrelenting media diet of anti-OPEC and anti-Arab bias and who need someone to blame for their present woes,” the editorial said.
“It is not OPEC members nor other oil producers who are to blame for the present wholly unjustifiable sky-high prices. Consumers must look nearer home,” it added.
The U.S. and many other Western nations have put increasing pressure on Saudi Arabia, the world’s top oil exporter, to increase production. Saudi officials have been hesitant to do so, arguing that soaring prices have not been caused by a shortage of supply but by speculation in the oil markets.
U.S. Energy secretary Samuel Bodman disputed that assertion, saying insufficient oil production has not kept pace with growing demand, especially from developing countries like China and India.
The kingdom has announced several small increases recently that it says were made to satisfy increased customer demand. The country has consistently said that it will produce enough oil to ensure the market is supplied.
Saudi Arabia increased oil production by 300,000 barrels a day in May, and a Saudi official confirmed Saturday that the country would add another 200,000 barrels a day in July. But neither announcement has done much to stem the run-up in the price of oil, which closed near $135 on Friday.
The kingdom called for this unusual meeting in Jiddah between oil producing and consuming nations as a way to show that it was not deaf to international cries that high oil prices have caused social and economic turmoil.
The Gulf nation has also become increasingly concerned that record oil prices could hinder growth in the U.S. and other major industrialized economies, potentially leading to a decline in oil demand and a sharp drop-off in prices.
Austria’s Federal Minister of Economics and Labor Martin Bartenstein cautioned placing too much pressure on Saudi Arabia to solve the oil prices crisis. “Let’s not put all the burden on the Saudis,” he told The Associated Press. Other oil producing countries should contribute to stabilizing the oil markets through drilling or oil investments policies, he suggested.
But Bartenstein said expectations for the summit, which brings together delegates from 36 countries and 22 oil companies, were “quite high.” Qatar’s oil minister, Abdullah bin Hamad al-Attiyah, said the purpose of meeting was so consumers and producers can get together “to see how we can tackle this issue without blaming each other.”
Rising demand for oil in the developing world has coincided with historically low levels of spare oil production capacity, which fell below two million barrels per day among OPEC countries in May for the first time since the third quarter of 2006, according to the International Energy Agency.
Many countries around the world have experienced social unrest by populations angry that rising fuel prices have driven significant increases in the cost of food and other basic goods.
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First Published: Sun, Jun 22 2008. 03 08 PM IST